The New York Times retains its bizarre obsession with the left-wing hobbyhorse of “income inequality.” Former economics reporter Binyamin Appelbaum, who betrayed liberal viewpoints in his reporting, is now free to issue unadulterated left-wing opinions from his perch on the paper’s editorial board. His latest Sunday Review piece suggests “Blame Economists for the Mess We’re In.” The text box: “Why did America listen to the people who thought we needed more millionaires?”
It began with a history lesson on how the government got over its distaste for economists in prominent positions, while getting off the paper’s latest mean-spirited crack at Nobel winning economist Milton Friedman:
....As the quarter century of growth that followed World War II sputtered to a close, economists moved into the halls of power, instructing policymakers that growth could be revived by minimizing government’s role in managing the economy. They also warned that a society that sought to limit inequality would pay a price in the form of less growth. In the words of a British acolyte of this new economics, the world needed “more millionaires and more bankrupts.”
In the four decades between 1969 and 2008, economists played a leading role in slashing taxation of the wealthy and in curbing public investment. They supervised the deregulation of major sectors, including transportation and communications. They lionized big business, defending the concentration of corporate power, even as they demonized trade unions and opposed worker protections like minimum wage laws....
Ill-defined “inequality” was the problem, with harmful minimum wage mandates posed as a solution:
The revolution, like so many revolutions, went too far. Growth slowed and inequality soared, with devastating consequences....
Rising inequality also is straining the health of liberal democracy. The idea of “we the people” is fading because, in this era of yawning inequality, there is less we share in common....
One wonders what renowned free-market economist Milton Friedman ever did to the Times:
The most important figure, however, was Milton Friedman, an elfin libertarian who refused to take a job in Washington, but whose writings and exhortations seized the imagination of policymakers. Friedman offered an appealingly simple answer for the nation’s problems: Government should get out of the way. He joked that if bureaucrats gained control of the Sahara, there would soon be a shortage of sand.
And it got worse as not even Friedman’s championing of a liberal cause (ending the military draft) could save him from criticism:
He won his first big victory in an unlikely battle, helping to persuade President Nixon to end military conscription in 1973....The Nixon administration also embraced Friedman’s proposal to let markets determine the exchange rates between the dollar and foreign currencies, and it was the first to put a price tag on human life to justify limits on regulation.
Accounts of the rise of inequality often take a fatalistic view. The problem is described as a natural consequence of capitalism....But much of the fault lies in ourselves, in our collective decision to embrace policies that prioritized efficiency and encouraged the concentration of wealth....
And the fact that we caused the problem means the solution is in our power, too.
Workers of the world, unite?
Markets are constructed by people, for purposes chosen by people -- and people can change the rules. It’s time to discard the judgment of economists that society should turn a blind eye to inequality. Reducing inequality should be a primary goal of public policy.
It’s already a primary goal of socialist economies. How is that working out around the world?
After a pro forma paragraph admitting “The market economy remains one of humankind’s most awesome inventions, a powerful machine for the creation of wealth,” Appelbaum’s sophisticated analysis wandered into juvenile comics.
This is not just bad for those who suffer, although surely that is bad enough. It is bad for affluent Americans, too. When wealth is concentrated in the hands of the few, studies show, total consumption declines and investment lags. Corporations and wealthy households increasingly resemble Scrooge McDuck, sitting on piles of money they can’t use productively.
Scrooge McDuck? Really?
Appelbaum made it into print on Tax Day 2019 with an argument for stripping away confidentiality in the way Americans make their livelihood: “Everyone’s Income Taxes Should Be Public -- Disclosure of tax payments would make it easier to hold politicians accountable. It also would help to reduce fraud and economic inequality.”