San Antonio Express-News (Sunday)
The bottom line this election? No one talking about money
Yes, hello? Is this the national elections hotline? Can you hearme now? OK, yes, I’d like to register a complaint.
My complaint: Can we get back to talking about something simple? Like, money. Please?
Guys, no more talk about flies or lies. Let’s erase statue defacement and candidates in their basement. Speak less about conspiracies at the USPS.
My complaint is that all these distractions get in the way of the real issue — money!
In a book published in September — “United States Income, Wealth, Consumption, and Inequality” — I gotmy wish. A group of economists and financial thought leaders from a wide range of perspectives wrote about the stuff I want to talk about.
In the first chapter, just to give you a sense, we learn that accurately measuring incomes is hard. Defining inequality is also hard. But our best estimates are that while real incomes have risen since the 1970s, income inequality has also increased — dramatically — in the United States.
In chapter two, economist Emmanuel Saez explores wealth inequality and explains that the bottom 90 percent of society has approximately asmuch wealth as the top 0.1 percent.
We are an increasingly wealthy, and increasingly unequal, society.
Which begs the question: Does our society look the way we want it to look? This level of wealth concentration and inequality feels like the preconditions for revolution. We were this unequal before, in the late 1920s — right before the Great Depression and FDR’s New Deal.
If we wanted more equality, how would we get it? In Chapter 3, Jared Bernstein, economist and former adviser to Vice President Joe Biden, offers a combination of infrastructure spending, earned income tax credits, expansion of renewable energy investments, health care and help for small manufacturers. From Bernstein we get a sense of how the brain trust around the Democratic candidate thinks about economic policy.
But do we all want more equality? In Chapter 9, we get a discussion of American public opinion from a scholar at the right
leaning American Enterprise Society. The extent to which we would want a more equal society depends on where people believe inequality comes from. Which is something directly addressed in the final chapter.
In Chapter 10, Edward Conard makes the case for what I think of as the Mitt Romney — or previously orthodox Republican — view of economic policy. If we are unequal, Conard asks, what explains it? Is it unfair crony capitalism? Or is it from innovation and gains to productivity? Conard firmly believes it’s the latter.
Conard argues it would be reckless to attack or diminish — meaning tax and regulate — the innovators in the United States. Conard’s diagnosis of wealth and income inequality is that we have too few highly educated, highly skilled workers. Rather than bemoan inequality, Conard points to just the opposite, writing, “We should celebrate rising payoffs for successful risk-taking as good fortune.”
As for transfer payments and social safety nets, Conard has a warning: “It would be reckless to confiscate outsized rewards for success, whether from companies or individuals.”
And further, “redistributing the ownership of future cash flows to consumers will not only demotivate risk-taking, but it will also diminish the amount of risk and investment owners demand businesses take. Less risk-taking and investment will slow growth and diminish prosperity.”
I’ve been a fan for a number of years of Conard, whose bestselling books are “Unintended Consequences,” about the 2008 mortgage debacle, and “The Upside of Inequality,” about, well, exactly what the title says.
I’m not saying I’m a fan because I agree with everything he advocates. I’m a fan because he is clear, rational and consistent. He’s somebody you can debate with. He takes his pro-market ideas seriously. He makes capitalism sound like something to be proud of.
Taken as a whole, “The United
States Income, Wealth, Consumption and Inequality” sets the table for the money conversation we should be having.
There is so much I want to talk about when it comes to money that we aren’t debating in this national election.
Government debt: Does it even matter? We’ve broken every precedent and previous rule of thumb about public debt in the past decade. Hello? Does anyone care?
Wealth inequality: Where does it come from? Is it fair or not? And finally, is there a point at which inequality itself, however fair or justified, threatens to rip apart society?
Household income: To what
extent are we perfectly fine with children growing up hungry? If we are not fine with that, can we agree on any policies that would eliminate childhood poverty? Tax policy: Can you name at least three bedrock tax policies that are hideously unfair and only explicable if you understand who pays to shape tax law? I can.
By contrast, I’m so over the following narratives, on which everyone in America apparently agrees: that it’s the other side of the political spectrum that has been exploiting identity politics to create divisions for years. That 2020 has ramped up the other side’s nasty tactics in what had been a successful 200-year civic experiment in running a democratic
republic. We wouldn’t be in this horrible condition if it wasn’t for the other side’s terrorists, masked as protesters.
At this point we all believe this narrative, right? Demonizing the other side’s voters creates the conditions for a contested election, a constitutional crisis and civil unrest. (Yeah, I’m worried about that, too.)
I somewhat understand reasons why we can’t have nice things like clear discussions about money. I was tongue-incheek about it being simple. Of course, it’s not simple. Money drives everyone crazy.
Second, as I learned from one of my favorite books this year — Ezra Klein’s “WhyWe’re
Polarized” — protecting and strengthening our personal identity has a much more powerful hold on our brains than almost any other motivating force. We’d always much rather default to an identity discussion than to a money discussion.
I write a column called “Smart Money S.A.,” not “Smart Polarized Identity Politics S.A.,” so maybe my complaints are to be expected.