University of Chicago economist John Cochrane has written one of the most unique and insightful perspectives on inequality in his blog, The Grumpy Economist. Read Why and how we care about inequality in its entirety. It is about 6 pages long.
excerpts:
America has a real problem on the lower income end, epitomized by Charles’ Murray’s “Fishtown.” A segment of America is stuck in widespread single motherhood, leading to terrible early-child experiences, awful education, substance abuse, and criminality. 70% of male black high school dropouts will end up in prison, hence essentially unemployable and poor marriage prospects. Less than half are even looking for legal work.
This is a social and economic disaster. And it has nothing to do with whether hedge fund managers fly private or commercial. It is immune to floods of Government cash, and, as Casey Mulligan reminded us, Government programs are arguably as much of the problem as the solution. So are drug laws, as much of the earlier discussion reminded us.
Around the world, about a billion people still live on $2 a day, have no electricity, drinking water, or even latrines. If you care about “inequality,” minimum wage earners in the US should be paying Piketty taxes.
These cases all represent completely different problems. Where there are problems, we should fix them, but to fix them, not to “reduce inequality.”
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