10 February 2008

As the Economists Say "When Things Look Sketchy, Try Like the Dickens to Change the Subject!"

As I have commented here again and again and again, income and wealth are mal-distributed in the U.S. in obscene ways. And that mal-distribution has well established, largely quite negative consequences for politics and economics. Rather than try to figure out remedies, economists are more interested in trying to persuade us that everything really is OK. - "Don' Worry, Be Happy!" Here is a recent version of this mantra from that liberal rag The New York Times; an Op-Ed by two economists on the government payroll. Their essay comes complete with this nifty graphic.

So, yes most U.S. households now have such "luxuries" as electricity, telephones and automobiles. But a car, for instance, is a necessity in the U.S. given the lack of any alternative transportation system. (Try getting around, say, Rochester by bus.) And the spread of electricity (can you recall the Rural Electrification Project) and road systems are government accomplishments. All that is beside the point, really.

And, yes some proportion of those in the lowest income groups are retirees who are spending down pensions or savings. Obviously, too, the smaller size of poor households is due to in part to the age of the family members (retirees typically have no kids living at home); but it is no doubt skewed by the prevalence of single parent households too, And the latter bring with them a whole host of economic pressures not offset by access to a microwave. S0 why not control for age in all this? Probably because we'd have to recognize massive inequalities in wealth as well as in income. Ooopps! Probably too because we'd learn that there are lots and lots of poor kids in the U.S. and that the families of those poor kids don't have property to sell or 401K reserves from which to buy groceries.

The bottom line is that massive inequalities do not become any less objectionable in rich countries. My question to these economists is the same as one I posed to some of their callous compatriots in this earlier post - even if we were to focus solely on the consumption differentials, would you change places with someone in the lowest quartile of the income distribution? If you are not willing to do so, perhaps you should take that as evidence that what you are peddling is bullshit. I do.

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2 Comments:

Anonymous John said...

The trading places argument is a strawman. It does not help your ideological cause (crusade).

Here's a similarly false strawman:

Would you trade places with an aborted fetus? If not, take that as evidence that your pro-abortion rights position is bullshit.

It's a bad argument. Abandon it. There are better arguments against inequality than some perversion of the "veil of ignorance".

11 February, 2008 15:20  
Blogger Jim Johnson said...

John,

No crusade here, just an effort to poke a few hypocrits in the eye. The problem, in my experience, is that most economists are not self-reflective enough to see their own hypocrisy. The failing htere is theirs not mine.

Beyond that your analogy holds no water. It trades on the notion than a human embryo is an unborn baby. Unless you prove your metaphysical point, I don't see the analogy at all. Poor people already are people, they are just poor. An embryo is not a person.

I can give lots and lots of reasons why inequality is bad. Most economists don't give a shit, precisely because they cannot think beyond their own (often) idiotic models. And you can trick up a model to reach any conclusion you want.

The challenge is plain and simple: don't recommend what you won't accept for yourself. One of my old teachers usd to say that no economist should give advicce to those elsewhere unless he (note the gender) were willing to invest his retirement accounts in the local economy in local currency.

Sorry, but the sort of economic argument in this Times Op-Ed is sheer flim-flam.

11 February, 2008 17:23  

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