ShareThisCan government do anything about rising income inequality? Perhaps spurred by the Occupy Wall Street protests, there has been greater focus lately on the topic of income inequality in America.
The Congressional Budget Office earlier this month released a report showing that rich Americans had seen their incomes rise by more than 200 percent since the late 1970s; middle-class Americans saw a bump of just 40 percent, and the poor just 18 percent.
Liberals want action, but conservative writers such as The Weekly Standard's Matthew Continetti say it's not the job of government to do anything about that.
Should government try to reduce income inequality? Joel Mathis and Ben Boychuk, the RedBlueAmerica columnists, debate the matter.
MATHIS: Let us briefly concede the conservative position -- that it isn't government's job to either promote or reduce income inequality.
Regardless, that is what government actually does: By virtue of taxing, spending and making laws, federal and state governments have some bearing on how wealth is distributed in the United States.
Here are three quick examples:
? Rick Perry's flat tax proposal could, if adopted, add hundreds of dollars to the tax bills of households making less than $50,000 a year -- and slash nearly $500,000 a year off the tax bills of America's millionaires. It would literally make the rich richer and the poor poorer. Tax policy makes a difference.
? While the rest of the country has been mired in high joblessness and recession, the Washington Post reports that Wall Street firms have made more money during half the Obama administration than they did during the entire eight-year Bush era. Why? Because the bank bailout saved those companies from ruin and freed them to make risky investments that added to their profits. Little or no such help was available for small businesses and homeowners. Spending priorities make a difference.
? Many state legislatures have recently promoted legislation to undermine the ability of private- and public-sector unions to organize and advocate for their membership. The decline of union strength over the last 30 years is believed to be one reason that middle-class wages have stagnated during that time, and many governments are taking action to accelerate the process. Policy makes a difference.
Continetti writes that the rise of income inequality "does not mean the entire structure of our polity should be designed to achieve an egalitarian ideal." Why not? In the absence of egalitarian aims, government tends to produce inegalitarian ends. We can and should expect better.
BOYCHUK: Do you know what else tends to produce "inegalitarian ends"? Freedom.
At the risk of gross simplification, when people are free to cultivate their talents, pursue their interests, start a family, start a business, the results will not always be the same. Some will win and some will lose. Some will make wise choices, some will just have rotten luck.
Americans have always believed in equality of opportunity, and ours is a long history of ensuring everyone has a fair shot in life. Where we've gone wrong is in the vain search of equality as a result, and picking winners and losers.
Truth is, government has pursued egalitarian aims for nearly a century. Teddy Roosevelt busted the trusts, his cousin Franklin believed government should guarantee "freedom from want" and Lyndon Johnson unleashed a multitrillion-dollar War on Poverty. To what end?
To pluck just one example from a constellation of failed federal programs, taxpayers have spent more than $167 billion since 1965 on Head Start preschool programs aimed at low-income and underprivileged children. Study after study shows high-quality preschool programs give kids a performance edge in elementary school and beyond.
Head Start is not a high-quality program. It doesn't work. And yet, somehow, inequality remains.
Government's egalitarian aims encourage bad habits and perversely create unequal outcomes. Deciding some investment banks, insurance companies and auto manufacturers were simply "too big to fail," the government bailed them out with hundreds of billions of taxpayer dollars.
Did the Troubled Asset Relief Program work? Well, sure. Most of the companies paid most of the money back -- and with interest. But now companies can safely assume that, along with greater regulation, bailouts are a fact of life. No wonder the Occupy Wall Street crowd asks, "Where's my bailout?" Little by little, "managed capitalism" replaced the real thing, regulation has replaced freedom, and egalitarian policies have yielded inegalitarian results. Funny how that works.
(Ben Boychuk is associate editor of the Manhattan Institute's City Journal. Joel Mathis is a writer and editor in Philadelphia. Reach them at bboychuk(at)manhattan-institute.org and joelmmathis(at)gmail.com.)
(Ben Boychuk and Joel Mathis blog daily at www.infinitemonkeysblog.com and joelmathis.blogspot.com.)
