NY Times: Poverty's a Huge Issue, Though We're Better Off Than Ever; Wealth Redistribution is Centrist Policy
The June 10 issue of The New York Times Magazine scrutinized the income gap and showcased Democratic presidential hopeful John Edwardsâ âWar on Povertyâ in a 34-page, 21,000-word article co-authored by four people.
But, buried deep within this collection of articles, in the portion written about political solutions, co-author Matt Bai admitted the middle- and lower-income classes are much better off than they were in the early part of the 20th century:
âAccording to the economists Thomas Piketty and Emmanuel Saez, the average income of an American taxpayer in 1929, using todayâs dollars, was about $16,000 a year; the entire middle class, in other words, was poor by modern standards. Itâs true that the official poverty rate, while fluctuating quite a bit, is pretty much unchanged from where it was 40 years ago (it was 14.2 percent in 1967, compared with just under 13 percent at last count), but itâs also true that what we call poverty has changed strikingly. When Johnson stepped onto that front porch in Inez, there were still rural poor who had no electricity, no running water, no primary-school education. Now most rural towns have access to satellite TV, and even the worst of the housing projects built in the 1960s â though thoroughly horrid places to live â come with solid roofs and indoor plumbing.â
So are things getting worse or better? It all depends on your perspective. And Bai attempted to explain differing perspectives on economic policy â with some wild results.
Redistribution of Wealth = Moderate âCenterâ of Politics
A system that encourages personal initiative within a free market has long been the American tradition. Everybody is afforded the opportunity to follow the path they desire and make the most of it. Not according to Bai.
Bai described this system as a creation of the âfar rightâ in America â where free markets are seen as âenabling some of the money flowing into Wall Street and corporate boardrooms to âtrickle downâ to the middle class through spending and investment.â
If free markets are âfar right,â whatâs moderate? Redistribution of wealth.
This âcenterâ of the economic debate, according to Bai, agrees with the âfar rightâ that creating wealth is good â but âgovernment has to redistribute some of the wealth by progressively taxing the affluent and giving the money back to the poor through carefully incentivized social programs and tax breaks.â
That system is eerily similar to Hillary Clintonâs philosophy of âshared prosperity.â "I prefer a 'we're all in it together' society," said Clinton to the Associated Press last month. "I believe our government can once again work for all Americans. It can promote the great American tradition of opportunity for all and special privileges for none."
Even further to the left on the spectrum, and the focal point of the article, are the âpopulist Democrats,â or the ones who âtend to gravitateâ toward Edwardsâ candidacy. The theory on this end of the spectrum is called the âpredistributionâ of wealth â âusing the tools of government to divert money from the wealthiest Americans before they earn itâ â and is romanticized by Bai.
These âPredistribution Democratsâ advocate a system that requires little more than a high school diploma to achieve prosperity, according to Bai. Budget deficits are deemed a necessity in order to make âlarge-scale social investments in health care and job training.â The threat of inflation is ignored because âlower interest rates lead to tighter labor markets, lower unemployment and higher wages.â