| By niralshah - Mar 9th, 2007 at 5:01 pm EST |
| Also listed in: Campus Progress Blog |
Income inequality? Conservatives say it’s not happening. Libertarians don’t care. Sadly, Reason Editor-in-Chief Nick Gillespie bucks the trend, seeming to have no problem with deliberate misrepresentation.
Predictably, Gillespie dismisses concern for the financial security of the middle-class as mere politicking. While this may be true to some extent, a closer look at his evidence reveals selectivity and misdirection. He cherry-picks a few self-fulfilling statistics, failing to recognize the inevitably more complex nature of these economic issues, and ignores more pertinent indicators of economic mobility and security.
- Responding to claims that income inequality is widening, Gillespie admits that the rich are getting richer, but then points to Census data showing that each income group is becoming wealthier. What matters, however, is not income growth itself, but relative rates of income growth. This Census table paints a more accurate picture: the share of aggregate income for the bottom 80% of Americans has declined over the past 30 years. The income levels accessible to the vast majority of Americans clearly do not correspond to the same status within the national economy as they once did.
- Gillespie points out a study showing that overall economic mobility has not changed much over past decades, that roughly the same percentage of Americans change income quintiles. Underneath this aggregate measure is evidence that mobility no longer means what it once did. A larger percentage stays in the same quintile, while a smaller percentage moves up or down by two quintiles. Furthermore, except for those who enter the fifth quintile, moving up by one quintile no longer corresponds to the same increase in purchasing power.
- Gillespie notes that more Americans than ever before own homes. There is a flipside, however. With housing especially, the value of these assets is less impressive when debt is taken into account. Though all income groups have increased debt as a percentage of income, the trend is more pronounced with lower income levels. In fact, middle-income families devote the highest percentage of their income to debt payment. Further more, these middle-class homes, as a larger percentage of total assets, make net worth less liquid than in the past.
- Finally, though it is encouraging that more Americans go on to college, we here at CampusProgress don’t need to rehash that, despite becoming an increasingly important component of upward mobility, obstacles to higher education are mounting.
Of course, if libertarians couldn’t engage in gross over-simplification of economics, they wouldn’t have much to go on, would they?
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My definition of a free society is a society where it is safe to be unpopular. ~Adlai Stevenson, speech, Detroit, 1952
Liberty means responsibility. That is why most men dread it. ~George Bernard Shaw, Man and Superman, "Maxims: Liberty and Equality," 1905
Also, the amount of freedom in America is limited to the extent of the capital one has access to. If I am starving and there is a Red Lobster near by, I do not have the freedom to come inside and eat without the money to pay for a meal. To a larger and more relevant extent, with out resources freedom is severely limited for the working class and the poor. We are reduced to living meager lives free to consume, and free to work, but can rarely afford the many freedoms and luxuries of the wealthier classes. Liberty in America for most of it's citizens is a fantasy world they only witness on television. If you were really dedicated to the ideal of liberty, you would also believe in economic justice.
The most basic conception of freedom goes beyond absence from interference. True freedom doesn't exist if it is only within a constrained set of options. Freedom depends on equality of opportunity. These arguments about economic inequality are arguments about freedom - nobody should be denied (whether directly through discrimination or de facto through socioeconomic factors) the opportunity to achieve something greater. But as bad economic policies compress national wealth into the hands of a few, not only does that make for terrible national economic health, but also, individuals themselves with restricted means and fewer opportunities are denied their liberty.