There are two things that get me fired up; “free” stuff from politicians and inequality. Nothing is free, of course. And nothing is equal. So exactly what are we striving for? The link below does a good job of explaining the causes of disparity in income.
The constant drumbeat of “inequality” from the left merely relates the facts, a few people have a large share of the wealth, which, of course, they earned one way or the other … mostly through the growth in value of equity which they earned through investing, entrepreneurial activity or as part of total compensation. When you see the figures showing CEO pay, that amount rarely is only cash which more likely is the minority portion of compensation.
When the value of stocks grows faster than cash compensation, equity compensation will outpace the growth in wages. Likewise, a market crash will cause greater loss than is likely to occur in cash wages.
If you and your best friend earn the same salary, but you invested in the stock market starting twenty-years ago and your friend put his savings in the bank, today there would be a great deal of difference in your wealth … you would have much more. Is that inequality? Does your friend deserve some of your wealth?
More important, how have you been negatively affected by all this inequality? And in answering that question also consider how your life has changed as a result of what some of the 1% have done during their lives; like Gates, Jobs and the founders of scores of large and small companies in the U.S. that directly improve consumers lives.
The causes of income levels and growth rates for the average American are many and complex from technology to global competition and even individual life choices. All this needs to be better explained and understood.
To simply spout rhetoric condemning inequality and imply you can make it go away and thus directly benefit average people is doing a disservice to Americans.
National Bureau of Economic Research
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