The Corner

Should Republicans Ignore Income Inequality?

In an earlier post, Ramesh gently critiques the mission statement of Jeb Bush’s new Rise to Rise Super PAC for suggesting there is some mix of policies that could “solve” the “income gap.” Ramesh: “It can’t credibly be promised that any mix of conservative policies would reduce the income gap, let alone ’solve’ it (whatever that would mean). I don’t think that promise is politically helpful, either. All the public-opinion evidence I’ve seen suggests that most people are much more concerned about middle-class living standards than about the ratio between those living standards and those of the rich.”

I agree the Republican focus should be on upward mobility and inequality of opportunity, as well as middle-class income stagnation. A blockbuster study last year found that while it hasn’t gotten any harder to climb the opportunity ladder over the past 40 years, it hasn’t gotten any easier either. Nor is upward mobility in America better than other advanced economies such as Canada or Sweden. Praying that your kids have more opportunity you did is at the heart of the American Dream.

Yet I would advise Republicans not to ignore income inequality (not that I’m saying Ramesh is recommending that). To the extent high-end inequality has risen, it increases the penalty imposed by barriers to mobility such as poor schools, pricey college, and onerous occupational licensing schemes. And some kinds of income inequality, in particular, are worth fighting. We should want more billionaire entrepreneurs. But that’s not everybody at the top. As I wrote for NRO awhile back:

Inequality has increased across advanced economies. Macro factors such as globalization and technology deserve most — but maybe not all — of the “blame.” Big Government loves to pick winners and losers in the private sector. Some lucky ducks owe their place in the 1 percent or 0.1 percent or 0.01 percent to federal favoritism. Conservatives shouldn’t mind at all when value-creating innovators and entrepreneurs strike it rich while crony capitalists do not. The precious tax breaks and subsidies that go to rent seekers, such as those in the agriculture and alternative-energy sectors, should get the ax. Sorry, Big Sugar and Big Solar.

At its core, such an anti-cronyism, anti-inequality agenda would use competition and markets to fight Washington’s natural bias for elite and entrenched interests. 

Does Jeb Bush want to “solve” — right, whatever that means — income inequality by attacking crony capitalism? We’ll see.

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