Comments on: Fisking Posner on Inequality

By: Jack

Jack — Tue, 19 Dec 2006 10:57:05 +0000

The “conservatarian” sez”

So what – economies are not zero-sum games where the increases at the top are necssarily coming at the expense of those at the bottom.

jjjjjjj Isn’t the fact of CEO pay soaring by 300% plus and the “trickle down” drying up well above the 80th percentile of earners while the lower 40% have have gained NO purchasing power and the min wage folk dropping 40% what provoked the current discussion?

I’d surely posit that the US would have a LOT few problems if JFK’s hopes of a rising tide lifting ALL the boats had been true over the last 25 years. Productivity gains of 3% would have created a doubling for every standard of living bracket had these increases simply been distributed on the income curve of 25 years ago…… thus the min wage representing the bottom would be $15 ish and very close to the living wage it once was with all above that level rising accordingly.

Please! do not bring some “Marxist” arguement as I have not made such a case, the guy at the bottom who’d not improved his employability skills would have only seen a doubling in purchasing power of the former min wage while the $50k guy would benefit by another $50k, but yes it would “take from the top” if that’s what we can call limiting 1980 CEO and upper management pay to a similar doubling instead of the 300 – 500% that took place.

Paying for it? With most earning, at least a living wage, we’d not need nearly the transfer programs we have today. Bottom line for either case is that somehow, someone is going to cover a “basic living wage” for all who work, it’s just a matter of whether it’s going to be a government program, others subsidizing the “fee” med care of the working poor or being honest enough, and capitalist enough that the employer pay a living wage and making wise decisions how to use that labor, or….. not to use it.

By: M. Hodak

M. Hodak — Tue, 19 Dec 2006 04:35:30 +0000

And Frank is mistaken, I believe, on many of the points he tried to make in defense of taxing luxury. One point, for instance, begins with the claim, true enough, that most libertarians accept the necessity, if not the virtue, of taxation. But he overgeneralizes that acceptance by suggesting that since one accepts taxation in principle, that one could not object to the specific manifestation of taxation that he proposes for the purposes that he envisions qua taxation.

By: M. Hodak

M. Hodak — Tue, 19 Dec 2006 04:26:44 +0000

Actually, the premise that the ‘distribution’ of wealth has changed over the last 25 years is highly doubtful. The Piketty and Saez study that started this discussion is demonstrably flawed. I beleive that when all indicators, financial and non-financial, of what wealth enables are taken into account that there is very little real difference in the distribution of wealth between among all relatively stable societies, regardless of their political or economic differences. The top Soviet Kommissars making nominally more than the average Soviet citizen lived much better than that financial difference suggested, on par (relatively speaking) with corporate chiefs in the West.

By: Maryland Conservatarian

Maryland Conservatarian — Sat, 16 Dec 2006 22:46:12 +0000

So what – economies are not zero-sum games where the increases at the top are necssarily coming at the expense of those at the bottom. The fact that Mr. Frank has so influenced you and Mr. Sunstein doesn’t mean that he has to be addressed by everyone commenting on this matter.

Admittedly, my readings of Mr. Frank are not extensive as are my readings of Mr. Posner. and I suspect, much to many on the left’s chagrin, that this is more the norm than the exception.

I presume there are countries where the income gap between top and bottom are narrower; judging by the lack of a mad dash to get out of such an economic hellhole as our unfair system apparently is and re-populate in these more enlightened spots, I can only assume we’re too stupid to know what’s best for us and once again need to trust the Deep Thinkers that populate the left to save us from ourselves.

By: jeebs

jeebs — Sat, 16 Dec 2006 21:03:42 +0000

Do you really think that breaking out from, say, 200K p.a. to 1M p.a. is so highly correlated to IQ? Has anyone done good empirical work disaggregating positive things like drive, ambition, intellectual and personal skills, and negative or neutral things like connections, luck, nepotism, insider knowledge, etc.?

I wanted to ask you about this.

I would be a fool to say that the non-IQ factors you mentioned don’t help many people earn above their deserved level, but how many do you think it really effects? 10%, 20%, 50%

Turning to your underlying point, that you doubt the correlation of worth and increased pay, how soft does that correlation have to be before we ignore it?

And how should we ignore it? Exploding tax rates above a certain income because “the people up there probably didn’t deserve it anyway”?

By: Matt

Matt — Sat, 16 Dec 2006 19:28:10 +0000

This is a nice job, but it should not surprise anyone that Posner ignores work that goes against his views. He’s basically been pushing a bankrupt view for years now, one that has little philosophical or even economic support, but that fits quite nicely with his political views. The fact that it has no support except from his political views doesn’t seem to bother him at all. It ought to damage his reputation more than it does, though.