Feb19
Income Inequality
on February 19, 2013 at 9:21 am[Update a few minutes later]
This sentence encapsulates why this president is such a disaster economically: “The President thinks he can redistribute income without stifling economic growth.”
[Update a few minutes later]
This sentence encapsulates why this president is such a disaster economically: “The President thinks he can redistribute income without stifling economic growth.”
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Growth economics is like thermodynamics. In the latter, you have to have a temperature differential in order to get work done. In the former, income. If there is no reason to strive to get ahead, why put yourself through the pain of it?
Good analogy Bart.
Again the problem is government. If some are getting too rich unfairly it’s because they have the government protecting their business. Without the government protecting them, they’d have to compete with others providing a less costly service.
The best regulation is letting people be screwed. They’d fix that fast.
And, the greater the temperature differential, the more efficient the engine. Until the engine melts, or produces other adverse effects (e.g., generation of nitrous oxide in an auto engine).
Thus in economics, as well. There is some optimal level of income differential before robber barons start suppressing competition, and the peasants make for the pitchforks.
What is that optimal level? That, Detective, is the right question.
Regarding his Pareto analysis: He is assuming a constant dollar value.
Playing devil’s advocate (not that we don’t have enough devils here already) if the dollar value goes down and the gap is great enough then the overall value may go down.
The Holy Grail of Leftism – that economic policy that would castrate the “undeserving” rich without inflicting collateral damage on the lower economic classes or the “deserving” rich – does not exist.
Amazing how he derides the ‘rich’ while doing all he can to make his friends rich.
If I can only receive for what I make as much as the other person; I will only work as make as much as the other person.
When economic growth is not related to the material benefit of the citizens in the end the growth is meaningless. Take the way the Chinese inflate their GDP: they build whole empty cities and hence artificially inflate the amount of economic activity making the GDP figures irrelevant.
Ever since they started counting economic activities of US based firms abroad as US GDP the metric has been broken in the US.