LOS ANGELES, January 8, 2014 — President Obama delivered an address at the Center for American Progress highlighting what he argued is the negative impact of severe income inequality on the economy and our society. There can be no doubt that there is great inequality of wealth and income in our country. But does income inequality really matter?
Should it be a matter of concern to most people that some people make more money than others?
Or that a small group of people, the so-called 1 percent, make so much more than other Americans?
There is a strong argument to be made that wealth and income inequality really does not matter. The problem is not that some are rich; it is that others live in poverty. Poverty is not the same as inequality.
Fiscal conservatives believe that because wealth and productivity have been maximized across all classes, poverty is minimized. They believe that wealth for some creates opportunity for others.
The only reason to be indignant over income inequality at that point is because of envy or irrational bitterness towards others because of their success. Margaret Thatcher once said of a liberal opponent “He would rather have the poor poorer, provided that the rich were less rich. That is the liberal policy.”
Conservatives tend to decry inequality of opportunity more than inequality of results. If people have equal opportunity, they all have the chance to make the most of themselves.
In this President Obama adopted a conservative tone, saying quite accurately that “the premise that we’re all created equal is the opening line in the American story. And while we don’t promise equal outcomes, we’ve strived to deliver equal opportunity — the idea that success doesn’t depend on being born into wealth or privilege, it depends on effort and merit.”
He even seemed to say during the course of his speech that a certain level of income disparity is to be expected, and is acceptable as long as social mobility — a theme conservatives are quick to emphasize — is available to people across the income spectrum.
The president went on to identify the various problems associated with the dramatically greater income inequality that has developed over the last three decades, problems conservatives are presumably insensitive to. He linked declining social mobility to rising income inequality, pointing out that Americans born in the bottom fifth income quintile have dramatically lower odds of moving upwards than do those born closer to the top. He said that there is less social mobility in our country than in nations like France and Canada. The president also observed that greater gaps in incomes cause American to distrust their institutions, creating a cultural divide that is bad for our society.
That widening income divides and falling mobility exacerbate social divisions between people is a compelling argument. It puts the impact of income inequality beyond just dollars and cents, though some of that social friction comes from the very people who decry it, because of their demonization of the upper class.
The remedy to the problem of falling social mobility is to improve equality of opportunity, and that remains, even in the president’s formulation, the fundamental problem. President Obama argues that what conservatives see as the redistributive policies of an ideologically driven, government behemoth is actually the process by which America has created the conditions for equality of opportunity in the past.
By funding education through land grants, the G.I. Bill and federal loan programs, by securing health care through Medicare and the Affordable Care Act, a proactive government secures peoples’ opportunity to advance in America. It ensures that they are not held back by the supposedly insurmountable costs of healthcare and education, much less by the social anchors placed upon them on account of race and class.
Whether or not the president is right or wrong about the remedies to social mobility is up for debate. America is not the same as France or Canada; for one thing, we still enjoy a higher income base than they do. Moreover, it is not a settled issue that income disparity alone actually leads to declining social mobility, though that is a question worthy of earnest investigation.
What is clear is that, whether you ask conservatives or progressives like President Obama, it is not inequality of income that matters fundamentally, but only the inequality of opportunity that prevents too many of us from achieving the American dream. Perhaps this is a point on which Americans can agree.
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