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How much inequality is too much inequality?

How much inequality is too much inequality?

From Why Poverty?:

740 Park Ave, New York City, is home to some of the wealthiest Americans. Across the Harlem River, 10 minutes to the north, is the other Park Avenue in South Bronx, where more than half the population needs food stamps and children are 20 times more likely to be killed.


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William F. Hammond

@Chip, Re: “two ways to reduce income inequality”

Beginning in the 1980’s federal income tax rules were changed in ways that led to an increasing advantage for the wealthy over the middle class in the percentage of income kept after (all) taxes. In 1981 the top 1% had 10% of all income. Now it’s 20%.

With the wealthy, who already have more, being able to save a greater percentage each year and with that surplus being re-cycled back into investments resulting in further income gains, the gap is bound to keep growing.

Reversing the tax rule changes is the obvious thing to do unless we are to view the actions taken 30 years ago as a cynical attempt to bring about an ever-growing income gap rather than a step toward better outcomes for all.

Jonathan Galliher

Mankiw comes across as a delusional racist in that piece. Seriously, we’re going to go with poor people are poor because of their genes? And family of origin has nothing to do with opportunity even though it fairly strongly shapes which schools you get to go to through high school, which in turn strongly shapes your later educational attainments and economic options? And then there’s the loony tunes claim that pay has something to do with productivity instead of being based on relative power and relationships.

Jim Naughton

Actually, Chip, there is another way. It involves slowing the pace at which the rich get richer and quickening the pace at which the poor get richer.

Chip M

Thank you, John, for posting the Mankiw article. Greg introduces some welcome sanity into what has sadly become an overwrought emotional rant party.

There are two ways to reduce income inequality–make rich people poorer, or make poor people richer. Focusing our efforts on making the rich poorer makes everyone poorer in the end. That is not good policy.

{Editor’ note: Thanks for the comment. Please sign your full name next time.]

John B. Chilton

Greg Mankiw has a readible essay just out, to be published in the Journal of Economic Perspectives entitled, In Defense of the One Percent. Worth reading if you disagree with him,

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