Economic inequalities around the world are so obscene even the Economist has taken notice.
In the latest issue, Zanny Minton Beddoes has assembled a special report examining the growing inequalities within countries—with special attention to the most unequal of the advanced countries, the United States.
The report is a useful overview of the available information, in an attempt to repair mainstream economists’ general neglect of the topic.* And it goes beyond the usual Economist advice to the jet-setting business elite, that serious problems might be present in the world today but they can be solved without much disruption to existing ideas and institutions.
The conclusion is particularly stark with respect to the United States:
ON AUGUST 31ST 1910 Theodore Roosevelt, by then America’s ex-president, addressed a crowd of 30,000 at a civil-war commemoration in Osawatomie, Kansas. In one of America’s most famous political speeches, he laid out his progressive philosophy. The federal government had a responsibility to promote equality of opportunity and attack special privilege and vested interests. “In every wise struggle for human betterment,” he argued, “one of the main objects, and often the only object, has been to achieve in large measure equality of opportunity.” . . .
The most shocking shortcomings are in America, the rich country where income gaps are biggest and have increased fastest. The Republicans are right to say that Medicare, America’s health-care system for the old, must be overhauled. But by slashing government spending on basic services such as education and advocating yet more tax cuts at the top, they undermine equality of opportunity.
The Democrats are little better. Barack Obama gave his own speech at Osawatomie last year, wrapping himself in Roosevelt’s mantle. Inequality, he said, was the “defining issue of our time”. But his response, from raising the top income-tax rate to increasing college-tuition subsidies, was just a laundry list of small initiatives. Roosevelt would have been appalled at the timidity. A subject of such importance requires something much bolder.
*However, none of that information will be particularly new to regular readers of this blog.