[Obamacare architect Jonathan Gruber admits multiple times that "stupid Americans" had to be lied to in order to get President Obama's 'landmark achievement' into a law that now daily exposes how cynical and autocratic our government has become, and how the lickspittle lamestream is supporting the Big Lie (more here). But then RR reported that way back when it was happening.]
George Rebane
Income inequality in America was badly misrepresented in the recent book by Piketty and Goldhammer. Their Capital in the 21st Century (2014) continues to receive progressive paeans and lamestream’s lip service on a daily basis. Therein the authors cite the now notorious study by Piketty and Saez that is so full of holes in both reasoning and facts that it has motivated other economists to reexamine the data and point out the obvious fallacies with which Capital is littered.
Economists Phil Gramm and Michael Solon summarize the major errors in their ‘How to Distort Income Inequality’. There they write –
What the hockey-stick portrayal of global temperatures did in bringing a sense of crisis to the issue of global warming is now being replicated in the controversy over income inequality, thanks to a now-famous study by Thomas Piketty and Emmanuel Saez, professors of economics at the Paris School of Economics and the University of California, Berkeley, respectively. Whether the issue is climate change or income inequality, however, problems with the underlying data significantly distort the debate.
Collectivists of every stripe have latched on to their erroneous conclusions to justify a new bevy of socialist economic policy initiatives that they would like to have made into law and imposed on the ever shrinking cohort of Americans who create the country’s wealth. Gramm and Solon remind us again that –
Simple statistical errors in the data account for roughly one third of what is now claimed to be a “frightening” increase in income inequality. But the weakness of the case for redistribution does not end there. America is the freest and most dynamic society in history, and freedom and equality of outcome have never coexisted anywhere at any time. Here the innovator, the first mover, the talented and the persistent win out—producing large income inequality. The prizes are unequal because in our system consumers reward people for the value they add. Some can and do add extraordinary value, others can’t or don’t.
How exactly are we poorer because Bill Gates , Warren Buffett and the Walton family are so rich? Mr. Gates became rich by mainstreaming computer power into our lives and in the process made us better off. Mr. Buffett’s genius improves the efficiency of capital allocation and the whole economy benefits. Wal-Mart stretches our buying power and raises the living standards of millions of Americans, especially low-income earners. Rich people don’t “take” a large share of national income, they “bring” it. The beauty of our system is that everybody benefits from the value they bring.
And speaking of the infamous AGW hockey stick, did you hear what our President and China’s Xi Jinping are supposed to have agreed to during this week’s embarrassment in Beijing. The short of it is that the US will commit to immediately ramp up even more drastic cuts in carbon emissions while China will see what it can do over the next decades to reduce its emissions. Hopefully the new Congress will have none of it, but the big liberal guns are already unlimbered and touting this as ‘A Game-Changing Climate Agreement’ celebrated in an article of the same name by Fred Krupp, president of the Environmental Defense Fund.
In there Krupp revisits the joys of centrally planned economies that mandate arbitrary industries and market sectors which are supposed to produce marvelous new wealth from politically correct products, systems, and operations. Such nostrums have never worked before, and there is no promise that they will work now, no matter how many guns the government points at Americans to change their behavior. But that makes no never mind to people like Krupp who admits that the US will take an economic hit in its forced abandonment of fossil fueled energy production. He devoutly believes that we will overcome that self-imposed hardship by magically creating new wealth-producing industries –
I am an optimist about America’s ability to innovate and adapt. The price of solar panels has been cut 75% since 2008, and the U.S. added more solar capacity in the past two years than in the previous 30 years combined. Texas and Kansas are showing what is possible with wind power. (One day last year, wind generated nearly 40% of Texas’ electricity.) In Nevada, Tesla is building the world’s largest advanced automotive-battery factory. In New York, Solar City is building a massive solar-photovoltaic factory. Market leaders like Google and Wal-Mart are making huge investments in renewable energy and energy efficiency. The U.S.-China agreement will only increase the pace of this trend—which will, in turn, make the goals set this week easier to achieve.
So he and his have an ultimate and unfounded faith that our overregulated, overtaxed, and vilified (see above) entrepreneurs will ignore all market realities to commit their time and treasure chasing will o’ the wisp business enterprises whose success will depend solely on an eternal stream of ample subsidies from a cynical government that is already submerged in debt beyond counting, and that must continue to borrow heavily at artificially low interest rates just to service existing debt, having long ago abandoned any hope of stabilizing, let alone reducing, its principal amount.
Scary words indeed. It almost goes without saying that nowhere in Krupp’s piece does he evince a hint that AGW can at best be viewed as debatable science, and at worst as part of an obvious political movement to promote the fundamental transformation of America. The beat goes on and grows louder.
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