The moral paradox of extreme wealth: Why people oppose it yet are reluctant to take steps to reduce it. Really!

Some dim witted, naive psychology college professor wrote this piece! Most likely, she has no clue about a free market economy!

Her lifetime citation count on Google Scholar is 3466! This is very low!

This piece was published by

What a joke!

Caveat: I did not read her piece!

"... Given the prevalence of such stark inequality, it would be easy to assume that most people accept it as fair – but they don’t. As a psychologist who studies how people navigate moral problems, I suspect that one major challenge to effectively reining in extreme wealth is that doing so forces people to navigate between opposing moral demands. ...

Some argue that people chronically underestimate the scale of inequality – in the 2014 study, Americans underestimated the actual pay ratio at the time as being only 30-to-1.

Others argue that the primary driver of the disconnect is people’s unwillingness to abandon their beliefs in merit – that wealth is the product of hard work, talent and risk. ..."

The moral paradox of extreme wealth: Why people oppose it yet are reluctant to take steps to reduce it

The author Jennifer Cole Wright (Source)

This is her portrait photo on Google Scholar

Upward Mobility Is a Better Measure of Justice Than Income Equality (example France)

Agreed, concurred! What about e.g. ease of opening and doing business or government regulations affecting labor market, real and financial assets, businesses etc.?

Caveat: I did not read the entire article.

"A free society should be judged less by who becomes wealthy than by how easily people can improve their circumstances under impartial rules. Who gets wealthy matters less than how.  ..."

Upward Mobility Is a Better Measure of Justice Than Income Equality | The Daily Economy

Income inequality by country is declining significantly worldwide since 1995

Good news!

However, the Gini index/coefficient has some cons to keep in mind:

"Cons of the Gini Coefficient

• Ignores Demographic Context: It cannot differentiate between where the inequality exists (e.g., whether the disparity is driven by a massive gap at the top or widespread poverty at the bottom).
• Different Distributions, Same Score: Two very differently structured economies can yield the exact same Gini coefficient, masking structural realities like regional disparities or aging populations.
• Not a Poverty Measure: A low Gini coefficient does not mean an economy is wealthy; it simply means everyone is relatively poor. Conversely, a high Gini coefficient tells you nothing about the absolute living standards of the lowest earners.
• Data Sensitivity and Scope: The coefficient is highly sensitive to the quality and source of data. For example, measuring pre-tax income versus post-tax wealth will produce drastically different results for the same population.

" (Google search)

"... The number of people who live in extreme poverty — i.e., less than $3 a day — is an important indicator to track the first part of this vision. To capture shared prosperity, the second part, requires a measure that includes not just the extreme poor — who constitute 10 percent of the global population today — but everyone. In addition, the measure captures both higher living standards through income growth and how it is distributed. ...

A measure that captures prosperity should account for both the level of welfare and level of inequality. A measure that captures inequality, such as the Gini index, is an example of a measure of inclusivity. The World Bank reports the number of economies with high levels of inequality, defined as those with a Gini index greater than 40. Based on this, the number of economies with high inequality has declined by more than a third in the past three decades. ..."

Doomslayer: Progress Roundup - by Malcolm Cochran

High-Inequality Economies Have Declined by More Than One-Third

Shared prosperity constitutes both income growth and inequality reduction

The stalled progress of gender equality in the US labor market (Research Highlights Featured Chart by AEA). Really!

It is a disgrace for the American Economic Association to promote such demagoguery! See also my blog post here on this demagoguery of a gender pay gap.

What or how much does workforce participation have to do with this "gender equality"?

What is wrong with the chart below? 

1. Data stops with the 1990s. Why not more recent data?
2. Education, workforce participation and age do not determine wage outcomes as much as other factors! It is foremost the choice of jobs, changing jobs, relocating for jobs, prior job experiences, job promotions, career ambitions and so on!

The authors of this paper use again the old, false, and worn out trope of child rearing (why not elder care etc.)! Although, the US abandoned the draft in 1973, still predominantly men choose military service which may or may not negatively affect/impact their lifetime income as well.

The first author Richard Blundell is a highly recognized, older economist, if I am not mistaken. His accumulated lifetime citation count is 109,830, which is quite good! He started publishing research articles in the late 1970s.

"The gender wage gap narrowed dramatically from the mid-1970s through the mid-1990s, with women's wages converging toward those of men across all income levels. Then progress stalled, and despite continued advances in women's education and workforce participation over the subsequent quarter century, the gap has persisted. [???] ..."

From the abstract:

"We estimate the full distribution of life cycle wages for cohorts of men and women in the United States using a quantile selection model to account for systematic differences in employment by gender and education group. 

Although common within-group time effects [???] are shown to be a key driver of labor market inequalities across gender, important additional differences by birth cohort emerge with more recent cohorts of women delaying child rearing [???] and, by implication, the onset of child penalties in wages.

These cross-cohort differences help account for the stalling of progress in gender wage gaps over the past quarter century."

The stalled progress of gender equality in the US labor market

Labour market inequality and the changing life cycle profile of male and female wages (original news release from 4/13/2023 plus working paper)

Labor Market Inequality and the Changing Life Cycle Profile of Male and Female Wages (no public access)

Figure 5 from the authors’ paper shows their estimates broken down by educational attainment.

On the false and frequently repeated Narratives of Inequality in America

Recommendable book review! The book: The Myth of American Inequality

by Phil Gramm, Robert Ekelund, and John Early

As an economics graduate and former professional economist myself I was intrigued among other things with the discussion of the very common practice of grouping of  households by income quintiles. This grouping seems superficially objective and fair, but it is not! The top quintile and the bottom quintile are actually very different and should not be directly compared as is often done by those propagandists!

False Narratives of Inequality – The portrayal of widespread poverty and economic inequality is a distortion of statistics by economists inside and outside the government.

Österreich: Ein Zehntel zahlt mehr als die Hälfte der Lohnsteuer

Die Situation ist ähnlich in einigen westlichen Ländern! Ist das nicht ungerecht, dass die Spitzenverdiener viel mehr zu den erzwungenen Staatseinnahmen beitragen als weniger Verdienende? Die offiziellen Rechtfertigungen dazu sind eher dürftig!

Die oberen 10% der Verdiener erbringen über 50% der Staatseinnahmen! In den USA, z.B. ist die Situation noch etwas krasser!

Grafik: Ein Zehntel zahlt mehr als die Hälfte der Lohnsteuer

New York state governor earned $225,000 Last Year And Is the Highest Paid Governor In America

I am surprised that governors of major states earn so little!

Compare that to the highest paid federal employee: The infamous 80 year old clown Anthony Fauci, who made "$417,608 in 2019"

Andrew Cuomo Earned $225,000 Last Year And Is Highest Paid Governor In American History With a $225,000 salary, New York Gov. Andrew Cuomo is the country’s highest paid governor. The next highest paid is California Gov. Gavin Newsom, who made $202,000 last year.

Dr. Anthony Fauci: The Highest Paid Employee In The Entire U.S. Federal Government Dr. Anthony Fauci made $417,608 in 2019, the latest year for which federal salaries are available. That made him not only the highest paid doctor in the federal government, but the highest paid out of all four million federal employees.

In fact, Dr. Fauci even made more than the $400,000 salary of the President of the United States. All salary data was collected by OpenTheBooks.com via Freedom of Information Act requests.

German Government Raises Flight Ticket Prices To Save The Planet

The German government under chancellor Merkel are going to significantly raise flight ticket prices especially on domestic flights beginning 

Flights from Germany to: 

1. Domestic and European destinations will be 13 Euros higher, up from 7.40 Euros.
2. Up to 6,000 Km distance add 33 Euros, up by 10 Euros
3. Long intercontinental flights add 59.40 Euros, up by 18 Euros

Which tourists/taxpayers will suffer the most? Low income tourists! So much for concerns about income inequality!

Worst of all these new additional tax revenues will be classified as general tax revenues! They will not be dedicated to a special purpose!

Flugsteuer soll noch stärker steigen (10/15/19)

The Demagoguery Of Inequality Destructs Civil Society

Posted: 1/26/2014 Updated: 9/13/2014

Trigger

Just read articles about a recent Oxfam International study “Rigged rules mean economic growth increasingly “winner takes all” for rich elites all over world” dated 1/20/2014.

The subject of an alleged inequality or better demagoguery of inequality is rehashed on a daily basis by so sophisticated people or our so called intellectual elite.

Here is a recommendable article about this subject “Selling Envy/How governments promote the worst in us to redistribute wealth”.

The Bible And Civil Society

The Ten Commandments demand that you do not covet thy neighbor’s wife nor property. The ancient and universal Golden Rule rules.

I would argue that these two principles alone, i.e. thou shalt not covet and the Golden Rule, are the most fundamental principles of any civil society. You may want to add strict non violence.

John Stuart Mill in On Liberty about envy: “that most anti-social and odious of all passions, envy”.

Civil Societies rise and fall or perish if these two principles are abandoned.

The Great Recession And Its Scapegoats

With the Great Recession our elected politicians have been very busy trying to find and blame scapegoats, but not themselves, for massive government failure.

Insufficient economic growth breeds resentment against those who are still successful.

Big government (high taxes, over regulation, too many entitlements) has and still continues to smother economic growth, which would provide more opportunities for more people to improve their lives.

U.S. President Obama Is A Dangerous Populist

Or is he a demagogue?

U.S. President Barack Obama appears to be poised to exploit the ideology of inequality as his main talking point in the mid-term elections of 2014. As if there is something odorous about people who made money during or before the Great Recession.

U.S. President Obama is one of the worst offenders. The community organizers is economically illiterate and he is an enemy of business.

He is the latest incarnation of a U.S. President who is far removed from his predecessor U.S. President Calvin Coolidge perhaps one of the last U.S. presidents who understood that the business of free and responsible individuals in a free America is business not big government.

For any U.S. President to engage in such petty populism is a disgrace to the world.

Conclusion

More economic growth, free trade and free markets, more competition, and foremost less government!

More self-made millionaires!

Tesla Motors Primarily Profits From Selling Government Mandated Zero Emission Credits

Government Electric Motors

You wonder why the stock recently soared? The Wall Street Journal on its Opinion Page enlightened us with an article aptly titled “The Other Government Motors” published on 5/24/2013.

To quote from the article:

·         “Tesla's biggest windfall has been the cash payments it extracts from rival car makers (and their customers), via its sale of zero-emission credits.”

·         “A Morgan Stanley … report in April said Tesla made $40.5 million on credits in 2012, and that it could collect $250 million in 2013. Tesla acknowledged in a recent SEC filing that emissions credit sales hit $85 million in 2013's first quarter alone—15% of its revenue, and the only reason it made a profit.”

A Brief Remark On Zero Emission Credits

This is another attempt how big government tries to fool its citizens. Electric cars are anything but zero emission. To produce and maintain one vehicle and all its parts or to recharge its batteries etc., I bet you, the emissions necessary are very similar to conventional cars.

Lavish Government Loans & Subsidies On Top

Only the affluent can afford these vehicles at a sticker price of $70,000 or higher and they receive significant government subsidies for buying them. If that is not income inequality, even caused by government, what is?

To quote from the article:

·         “In 2009 the company received a $465 million Obama loan guarantee, supplemented last year by a $10 million grant from the California Energy Commission.”

·         “Any U.S. buyer of a Tesla car qualifies for a $7,500 federal tax credit, while states like Colorado throw in up to $6,000 more in state income-tax credits.”

This is shameful and should be stopped immediately!

The Business Of America Is Private Business Not Government Business

Too few elected representatives of public service employees have any foggy idea of running a business or free market economics.