Howls from Left’s ‘disparity lobby’ undercut by facts
by Dan Joy
July 23, 2014 09:53 PM | 1935 views | 8 8 comments | 14 14 recommendations | email to a friend | print
Over the last several years, the issue of income and wealth disparity has re-emerged as an issue of political importance. It constitutes the foundation of government programs whose purpose is the redistribution of wealth and income. President Obama speaks frequently about requiring people with high incomes to “pay their fair share,” suggesting there is something sinister going on. In a recent MDJ column, Kevin Foley worried himself sick about the alleged growing disparity of wealth and income.

The disparity issue has been with us since the onset of the industrial revolution. In the 19th century, Karl Marx predicted capital would eventually become concentrated in the hands of the few. More recently, French economist Thomas Piketty, in his bestselling book, “Capital in the Twenty-first Century,” “confirms” the Marx prediction.

How correct are Barack Obama and Thomas Piketty? Has the Marxist prediction been realized? Have the well-to-do exploited the less well off? Has wealth become the domain of the few? Are many impoverished because others are successful?

The first problem is no reliable wealth data exists. People do not by and large report their net worth or make it public. They do report income. Piketty and his associates therefore rely principally on tax returns to extrapolate net worth. The method is not without its problems.

Most Americans’ principal asset is their home, the equity of which represents capital. About 65 percent of all Americans live in the house they own; half own it free and clear of debt. The sale of those principal residences falls for the most part outside of taxable income reporting and thus beyond the Piketty calculations.

Similarly, retirement accounts, such as 401-Ks, IRAs and the like, go largely unreported for tax purposes. Vested pension rights also lie beyond the scope of reportable income. The lack of dependable data that would demonstrate who owns what renders any argument calculating wealth disparity virtually useless.

When the disparity lobby howls, it is principally about income or lack of it. A poll taken about 10 years ago asked persons not in poverty what they understood “living in poverty” to mean. A majority defined poverty as homelessness and hunger.

The facts create a different picture. In 2007, the United States Census Bureau reported there were 37 million living in poverty, as the government defines it. That same agency now reports the number living in poverty increased to something in excess of 45 million. Definitions of what constitutes poverty change.

While there is material hardship, poverty in America does not for the most part involve being destitute. As of 2005, 43 percent of those “living in poverty” own their homes compared with about 65 percent of the population as a whole. The average home of those “in poverty” is a three-bedroom structure with one and a half baths, a garage and porch or patio, with a median value of just under $100,000.

Consider the following numbers: 80 percent of those living in poverty have air conditioning; the average person defined as living in poverty has more living space than the average person in virtually every major European city; 75 percent of those in poverty own at least one car and one third of those have two; 97 percent own at least one color television and half of that number have two or more.

Politicians trafficking in “envy” advocacy or “class warfare” rhetoric have a vested interest in voters not knowing what it means to live in poverty in the U.S. The darkest impressions are helpful to get working Americans to support government redistributionist programs. Forty-eight million Americans now get food stamps, yet we as a nation make virtually no effort to find out who they are, what they have or on what they spend their food “money.” We assume they need food stamps because they are “living in poverty.”

When assessing where we as a nation stand economically, it would be far more reliable to focus on what people have. Just because Bill Gates has billions and Barack Obama millions does not mean the 99 percent are without assets or income.

The modern economy (i.e. private enterprise in a competitive market system) has raised the standard of living for just about everyone. That is the critical fact that undermines the whole “disparity” claim.

Dan Joy is a lawyer in Marietta.

Comments-icon Post a Comment
August 07, 2014
Question for our progressive friends: who deserves credit for the good news you cite?


Ok, fine. But, you complain incessantly about how Obama can't get anything done because of the obstructionist Republicans in congress.

Ergo, the good metrics you cite occurred...IN SPITE OF...Obama.

Notwithstanding the good news (yes, I agree, certain economic metrics are improving), why aren't the folks feeling it?

Per today's Real Clear Politics averages, the Direction of Country is:

Right Direction: 24.6,

Wrong Direction: 66.8.

Mr. Foley's a smart guy. Maybe he'll 'splain it to us.

Foley Update
July 30, 2014
Hey, Dan "Denier" Joy:

The U.S. economy posted better-than-expected growth in the second quarter, bouncing back from its worst performance in five years.

U.S. gross domestic product, which measures the output of goods and services in the economy, expanded at a seasonally adjusted annual rate of 4% in the three months ended June 30, the Commerce Department said Wednesday. Consumer spending, business investment and inventory stockpiling all rebounded strongly. Economists surveyed by Action Economics expected 3% growth.

MORE JOBS: Firms added 218,000 jobs in July, ADP says

Dennis Boyle
July 25, 2014
From what I understand, Picketty thesis is that when Interest Rates exceed economic growth the rich will get richer at a faster rate than the poor can rise from poverty. Furthermore, it is almost always the case that people earn more from investments than from labor. The most well-known exception to this was post-WWII Europe an the United States had New-Deal and anti-communist economic policies that gave us our greatest rates of growth then. Reaganomics led to the Great Recession of 2008, and only the intellectually bankrupt still embrace Reagan's policies.
Tony Maddox
July 24, 2014
When will the Left leave (the country they hate?)
Ben Twomey
July 24, 2014
Very well said, Mr. Joy. The truth is that there is no poverty in this country. With all the social handout programs, including food stamps, the poorest family in this country lives better than the middle class in most of the rest fo the world. We are so spoiled that we think "living in poverty" means not being able to rush out and buy the latest electronic gizmo, or the most up-to-date "cell phone".

To KEVIN FOLEY: Kevin, please read this and learn something from it.
Kevin Foley
July 24, 2014
I did read it and learned just one thing. Mr. Joy is in full flight from reality. So are you.

July 24, 2014
Let's go back to February 24, 2014, and review Mr. Foley's piece, "Billionaire fears Holocaust", that relates to the same subject - income inequality.

The punchline of Mr. Foley's piece was:

"Income inequality is an undeniable economic trend that can be traced back 30 years to the Reagan tax cuts."

In response, I wrote:

"Progressives love their talking points. Talking points appeal to their low info voters.

Blowing off income inequality as the result of nothing more than tax rates is tantamount to saying global warming (or climate change or whatever they are calling it these days) is only dependent on the level of additional carbon dioxide in the atmosphere coming from human activity.

Of course income inequality exists, as does talent inequality, looks inequality, effort inequality, choice inequality, and, yes, circumstances inequality.

Sidebar: yes, I'm in favor of some assistance to those experiencing circumstances inequality. But that is a topic for another time.

Bill Gates and Steve Jobs (RIP) became fabulously wealthy. Because of their talent, effort, and choices, how many folks now have a computer at home? How about a smart phone? Said differently, who out there (raise your hand) was HARMED by Gates's and Jobs's accumulation of wealth? On the contrary, I'd say our lives have been enriched by them.

Income inequality is a red herring. It is more useful to look at consumption inequality that has, and continues, to decrease. My dad could have spoken about the time when not many folks had automobiles. I remember when color TVs were a luxury. Remember the gigantic car phones 30 years ago? I could go on, but you see the point, right? Consumption inequality is decreasing and we can thank free markets for that.

So, please, let's stop the "income inequality" envy foolishness.

Let's have some fun, shall we?

Assume that income inequality really is a problem. How do you rectify it? Mandate that every working person in the U.S. earns the exact same salary?


How about a Gubmint agency to set various levels, or bands, of income by industry, job title, education, etc.?

KF, would you mind having U.S. Auditor Billy Bob from the "Income Distribution Bureau" (IDB) come to your business for the purpose of conducting an audit to determine compliance with the IDB statutes?

U.S. Auditor Billy Bob: KF, I see Bubba has a Masters Degree, but you're only paying him $X.

KF: True, but Bubba has only been here one year. He's on track for an increase provided his work product meets our standards.

U.S. Auditor Billy Bob: Doesn't matter. According to the Prevailing Income Tables, education is the only income factor for your industry. Increase his salary to $1.5X, retroactive to his date of hire. In addition, you will pay a penalty of 20% of one year's salary to the IDB."


Now, in response to my Comment, Mr. Foley's gifted pen waxed eloquent. He bestowed upon us the following erudite commentary:

Cobb County Guy (whoever you are) - There you are in your double wide, the 1984 Crown Vic parked out front. You're seated at your linoleum topped kitchen table that once belonged to your grandmother, jaw slack, picking your nose, wearing stained underpants, and staring at the screen on your IBM PC circa 1995 with its dial up connection.

You don't make a lot of money. Your life is unfulfilling. I'm guessing you work the grill on the graveyard shift at WaHo or perhaps you're on the overnight floor crew at Publix.

You probably smoke unfiltered Camels and enjoy Duck Dynasty in back-to-back-to-back episodes as you eat bag after bag of Cheet-ohs. The last movie that really, really touched you was "Joe Dirt."

Your wife left you years ago to take up with that tow truck driver in Jonesboro and thought she'd moved in with Hugh Jackman compared to her time with you.

Just read what you wrote below out loud to yourself and you'll know why you've painted this picture of yourself for all of us to marvel at.

No wonder you stay anonymous.


You know what they say, right? When you have no argument...
Kevin Foley
July 24, 2014
Daniel Joy, aka East Cobb Senior, continues to deny and equivocate (see my nearby blog post, "Denial is not a river in Egypt," dedicated to Mr. Joy, his fellow denier, Matt Nash, and all the other conservatives unable to accept reality).

So income disparity is "alleged"? No, Mr. Joy, it's a fact:

A 2011 study by the CBO found that the top earning 1 percent of households increased their income by about 275% after federal taxes and income transfers over a period between 1979 and 2007, compared to a gain of just under 40% for the 60 percent in the middle of America's income distribution. In spite of this data, only 42% of Americans think inequality has increased in the past ten years (Mr. Joy, that's you).

In 2012, the gap between the richest 1 percent and the remaining 99 percent was the widest it's been since the 1920s. Incomes of the wealthiest 1 percent rose nearly 20%, whereas the income of the remaining 99 percent rose 1% in comparison.

Mr. Joy, who I am pretty sure is not a billionaire, ignores the crux of my recent column, which highlighted an article by Ted Hanauer, who is a billionaire concerned about growing income inequality leading to a bloody's the part I couldn't include due to space limitations:

"I know there are many of you who are convinced that because you saw a poor kid with an iPhone that one time, inequality is a fiction.

Here’s what I say to you: You’re living in a dream world.

"What everyone wants to believe is that when things reach a tipping point and go from being merely crappy for the masses to dangerous and socially destabilizing, that we’re somehow going to know about that shift ahead of time. Any student of history knows that’s not the way it happens.

"Revolutions, like bankruptcies, come gradually, and then suddenly. One day, somebody sets himself on fire, then thousands of people are in the streets, and before you know it, the country is burning...That’s the way it always happens. If inequality keeps rising as it has been, eventually it will happen.

"The most ironic thing about rising inequality is how completely unnecessary and self-defeating it is. If we do something about it, if we adjust our policies in the way that, say, Franklin D. Roosevelt did during the Great Depression—so that we help the 99 percent and preempt the revolutionaries and crazies, the ones with the pitchforks—that will be the best thing possible for us rich folks, too. It’s not just that we’ll escape with our lives; it’s that we’ll most certainly get even richer."

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