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Government Doesn’t Fix Inequality Because it Can’t

Vox has one of their usual questions today, asking why our government doesn’t “fix” inequality.

Now before I get into this, I should say that I’m not entirely convinced that inequality is a problem needing fixing. Piketty’s book has been found to have some dubious data and his conclusion — that capital always grows faster than the economy — seems incredibly shaky and simplistic. The contention that inequality is increasing is subject to three assumptions that are all dubious. First, that the cost-of-living is being accounted for correctly. If it has been over-estimated — and there are reasons to believe it has been — then the wages of the middle class have actually grown. Second, most of these calculations are based on pre-tax wages. But wages are only a part of the compensation people get for working nowadays (in my grants, about 20% of the cost of hiring someone is in benefits, not wages and many countries have socialized medicine and other socialized benefits). Moreover, our tax system has been specifically canted to reduce income inequality by paying negative taxes to the poor and charging heavy rates on the wealthy. And most other tax systems are steeply progressive. Finally, a lot of this is based on “per household” data but households have been shrinking (quite drastically in Western Europe).

But let’s say that rising inequality really exists and is a bad thing. Why doesn’t government do anything about it? Please tell us, oh wise Vox:

The decline of labor unions has decreased the political importance of poor voters, because unions were an important “get-out-the-vote” machine. A recent study by Jan Leighley and Jonathan Nagler finds that the decline in union strength has reduced low-income and middle-income turnout. But labor’s influence (or lack thereof) is also important when the voting is done. Research finds that policy outcomes in the United States are heavily mediated by lobbying between interest groups, so organization matters.

Martin Gilens writes, “Given the fact that most Americans have little independent influence on policy outcomes, interest groups like unions may be the only way to forward their economic interests and preference.” His research indicates that unions regularly lobby in favor of policies broadly supported by Americans across the income spectrum, in contrast to business groups, which lobby in favor of policies only supported by the wealthy.

So … special interests. In fact, all five of Vox’s explanation for why government hasn’t dealt with inequality boil down to what I talked about recently — the need of the Left to see their opponents as mentally ill or mislead in some way. So, according to Vox, we overestimate income mobility, inequality ruins the camaraderie of society, we’re not voting enough, special interests control our government and we’re afraid of black people (seriously). If only we were as wise and informed as Vox, we’d embrace a grand redistribution scheme.

It never occurs to them that the reason people don’t support redistribution schemes is because they know that the government would inevitably fuck it up. A couple of weeks ago, George Will issued this you-really-should-read-the-whole-thing cri de coeur:

Resistance to taxation, although normal and healthy, is today also related to the belief that government is thoroughly sunk in self-dealing, indiscriminate meddling and the lunatic spending that lards police forces with devices designed for conquering Fallujah. People know that no normal person can know one-tenth of 1 percent of what the government is doing.

Contempt for government cannot be hermetically sealed; it seeps into everything . Which is why cupcake regulations have foreign policy consequences. Americans, inundated with evidence that government is becoming dumber and more presumptuous, think it cannot be trusted to decipher foreign problems and apply force intelligently.

The collapse of confidence in government is not primarily because many conspicuous leaders are conspicuously dimwitted, although when Joe Biden refers to “the nation of Africa,” or Harry Reid disparages the Supreme Court’s Hobby Lobby decision as rendered by “five white men” (who included Clarence Thomas), Americans understand that their increasingly ludicrous government lacks adult supervision. What they might not understand is that Reids and Bidens come with government so bereft of restraint and so disoriented by delusions of grandeur that it gives fighting knives to police and grief to purveyors of noncompliant cupcakes.

Bingo. Every day, we get examples of how incompetent our government is. From funding companies that can’t make solar cells to bungling wars to a disastrous website launch. In a comment to the last post, Xetrov linked a story about how the government is going to have to un-deport some people because it screwed up their deportation. They can’t even kick illegals out of the country without creating a mess.

So why on Earth would the American people trust this bumbling leviathan to redistribute wealth? And, more to the point, why should they do so when there is every reason to believe that our government has made inequality far far worse.

One of Piketty’s claims is that occasional disasters like world wars and economic crises level the playing field, reducing income inequality. Well, we recently had a disaster that should have leveled the playing field — the mortgage bubble and subsequent financial crisis. And what did the government do? By bi-partisan consensus, it bailed out the wealthy bankers and left the rest of us holding the bag.

How does the government deal with global warming? By making our appliances more expensive and shelling out billions to fund companies run by wealthy friends of the President.

How does it stimulate the economy? By borrowing money and spending it on boondoggles run by the wealthy and powerful.

What about job training? Ed Morrissey recently ran a great post showing that only does federal job training fail to place people in jobs, it often leaves them with thousands of dollars of debt from paying for expensive classes that gave them training no one needed.

What about higher education? As I’ve documented on this blog, our government doles out predatory loans that can not be discharged in bankruptcy. These loans help fund seven-figure salaries for university Presidents. (Incidentally, one of the few people who’s doing something about the cost of college? Mitch Daniels, former Republican governor, now President of Purdue).

In the 1960′s, government gave us “urban renewal”, a process by which they bulldozed functional but poor neighborhoods and gave rich developers money to build slums. And as Ta-Nehisi Coates showed, they redlined black neighborhoods to keep federally-guaranteed loans away from working class black people.

This is the government you want to redistribute wealth?

Look at the story below on Chelsea Clinton’s ridiculous salary at NBC. One of my points was that this is not unusual. Our political elite make tons of money telling us how they are going to make society fairer. Sometimes literally. Paul Krugman is getting $250,000 to teach about income inequality at CUNY (in an industry that employs thousands upon thousands of adjunct professors who do most of the teaching and are paid a pittance for it). And the Left vigorously defended how “fair” it was!

In the end, redistribution usually ends up the same way — with a massive class of “equal” serfs and a small class of “more equal” rulers. If you don’t believe that … all you have to do is look at the current system. Vox, like most liberals, is just surprised that the American people are smart enough to realize this.

3 comments

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  1. Biggie G says:

    I don’t know if you have seen this map before, but according to this, the highest paid public employee in every state is college related.

    http://tinyurl.com/c928blx

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  2. Seattle Outcast says:

    These things are based on such flawed and corrupt ideas that actually taking the time to debunk them is a waste of your efforts. Those that embrace them are so indoctrinated that you would never be able to reason with them.

    Everyone else automatically sees them for the poison that they are.

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  3. AlexInCT says:

    Whenever some asshole, but particularly those in government, tells you they want to “fix” inequality, poverty, or injustice, just to name a few of the usual canards, grab your wallet and your gun, because what they are after is to ass fuck you without the benefit of a reach around.

    The world isn’t fair. One of the things that helps mitigate a lot of that unfairness is hard work and a positive disposition (positively hate everyone like I do). People that think they can tamper with that and “fix” it, will always cause worse pain and harm, indubitably as they line their pockets at the expense of the morons. You name the doo-gooder, and we can discuss their bank account before and after their crusade. I would much rather deal with people whose motivations are not hidden behind the façade of caring for you. Those lying do-gooders are real evil monsters, but for some reason the left has convinced people that the bad guys are the ones that don’t lie about what they are doing. Human beings I understand, but scum like the do-gooders the left loves, the ones that pretend they want to help, always give me the heebee-jeebees.

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