Tuesday, March 25, 2014

The University & Inequality—Laughable

In a column of 24 March, Lexington Herald-Leader's Tom Eblen pointed to the upcoming UK conference titled “Economic and Political Inequality in the United States,” with keynote speaker columnist Ellen Goodman, whose subject will be “Inequality: Working Moms, Designated Daughters, and the Risks of Care-giving.” Among her awards is the Media Award for Outstanding Newspaper Columnist from the Gay & Lesbian Alliance Against Defamation.

Warning caveat: I'm a retired railroader living on a blue-collar pension. Economic inequality is not definable because it accrues to so many variables such as degrees of education, risk-taking, innate abilities, health, inheritances and even luck – especially as when a UK freshman signs an NBA contract for a couple million or so. There's no such thing as economic inequality in a capitalist society such as in the U.S., just as there's no such thing as economic equality. The income of a life-saving surgeon is not to be compared to that of a railroader or columnist.

Eblen wrote: “Consider ... a recent study that found incomes in Kentucky rose 19.9 percent from 1979-2007, but that 48.8 percent of that money went to the top 1 percent of earners. According to the Economic Policy Institute, that 1 percent saw their incomes rise an average of 105.1 percent, while the average income of the other 99 percent of Kentuckians grew only 11.2 percent.” He didn't break down the various percentiles according to income.

This is from the Congressional Budget Office (November 2011): “For the 1 percent of the population with the highest income, average real after-tax household income grew by 275 percent between 1979 and 2007. For others in the 20 percent of the population with the highest income (those in the 81st through 99th percentiles), average real after-tax household income grew by 65 percent over that period, much faster than it did for the remaining 80 percent of the population, but not nearly as fast as for the top 1 percent. For the 60 percent of the population in the middle of the income scale (the 21st through 80th percentiles), the growth in average real after-tax household income was just under 40 percent. For the 20 percent of the population with the lowest income, average real after-tax household income was about 18 percent higher in 2007 than it had been in1979.”

So, Kentucky, a poor state by any reckoning, didn't hold a candle to the rest of the nation 1979-2007 with respect to what the conveners of the upcoming conference call economic inequality. That 275% figure is breathtaking as are the numbers of some other percentiles. It needs remembering, however, that these figures essentially have virtually nothing to do with government but with private enterprise and private individuals heavily taxed by government.

Inequality is a pet project of the president, a multi-millionaire who rails constantly against that 1% to which he belongs and finally got the top federal tax rate raised to nearly 40% – a chump-change increase for him and at least half of the members of Congress, who are also millionaires. He is officially in favor of junking the U.S. Constitution and revising it to mandate “redistribution of wealth.” One can only cringe when thinking of the government setting all wages and profits in addition to taxes. That would be socialism or communism at its economic worst but it's the president's position.

Eblen used China's economic success under an oligarchic dictatorship to warn that the moneyed class could take over government in this country, as if the moneyed class hasn't always had much to say (or buy) with respect to government. Obama's solution to this problem would be to tax the 1% to near bankruptcy as if that would solve the problem.

This is from the Heritage Foundation (based on 2010): “The top 10 percent of income earners paid 71 percent of all federal income taxes in 2010, though they earned only 45 percent of all income. The bottom 50 percent paid 2 percent of income taxes, but earned 12 percent of income.” This is from American Enterprise (December 2012): “... the top 1 percent (1.35 million) of American taxpayers paid almost as much federal income tax in 2010 ($354.8 billion) as the entire bottom 95% of American tax filers ($388.4 billion).” The article also noted that “about half of the bottom 95% of American “taxpayers” paid nothing or got a tax refund.” All citizens receive the same amount of services from government but some pay far more for them than others.

The top tax rate each year 1950-63 was either 91% or 92%, as the costs of World War II were paid off. The average bottom rate for those years was 20%. As late as 1980, the top rate was still at 70% and the bottom at 14%. During 1988-90, the rates were down to 28% and 15%, respectively, as the nation took off economically and the beneficiary was Bill Clinton. The rich have always paid the freight but punishing them is Obama's chief objective while the economy tanks and the nation borrows from China.

I begrudge the highly inflated government salaries (including university- and public school-administrators) but feel no jealousy whatever for those in the private sector who manage to legally work the system for all they can get. As long as UK can pay wages greater than the U.S. vice president's to assistant football coaches, it would do well to forget inequality and let Goodman do her whining elsewhere.

And so it goes.
Jim Clark

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