Thursday, December 26, 2013

Editorial: Rising incomes matter more than disparity | percent, income, obama - Opinion - The Orange County Register

If President Obama is to be believed – and few conditional clauses give us more pause – the greatest economic challenge facing the nation is income inequality. He referred to it this month as "the defining challenge of our time," the sort of superlative that always makes us suspect that a politician is up to something.
In this case, the strategy seems to be attempting to distract the nation from two undeniable realities that have much more plausible claims as "defining challenges": an economy that has been lethargic for half a decade and a health care overhaul that may yet go down as the single-most conspicuous failure of big government in American history.
Political calculations aside, we'll take Mr. Obama at his word that he genuinely believes income inequality is a serious problem. Here's our question, asked in earnest: Why?
Mr. Obama errs when he emphasizes economic inequality because he socializes the analysis. Consider this hypothetical example: Two individuals, one of whom makes $40,000 a year and one of whom makes $1 million. If both were to realize a 50 percent increase in income, the former would make $60,000 a year, while the latter would make $1.5 million. The inequality between the two has grown, but both are better off.
This hypothetical underscores the key point: Individual wealth is a meaningful metric; wealth disparity is not.

No comments:

Post a Comment