Curing the Healthcare Crisis

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How the Left and the Right Talk about Inequality

We face a growing divide—between how we look at wealth disparities.

If I were to reduce to a bumper sticker the way the left thinks about the world these days, it would read:

Inequality happens

If I were to reduce to a bumper sticker the way the right thinks about the same subject, it would read:

Inequality happens for a reason

This is not a small distinction. For President Obama, inequality is the public policy issue du jour. And like lemmings, left wing editorial writers and bloggers can think of nothing else to write about. But here is something that may surprise you. The most interesting analyses of the problem are on the right, not the left. For the most part, all the left does is deplore. They seem to have no interest in understanding why we have a problem. (I have a theory on that below.)

By contrast, both Charles Murray and Tyler Cowen argue that problematic change is occurring: the middle is disappearing and people are gravitating into the upper and lower strata of society. For Murray the reason is behavioral. For Cowen, it is technological.

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It isn’t that left-of-center scholars are ignoring these things. Work is being done by economists at the Brookings Institution, for example. But you are more likely to learn of this work in a David Brooks column than in one by Paul Krugman, Nicholas Kristof or Robert Frank—three other New York Times columnists who write about inequality frequently.

Let’s start with Murray, who says we are experiencing an ever widening cultural divide. As summarized in a previous post:

Upper-middle class professional types may pretend that they are cultural relativists, accepting of whatever lifestyle their fellow human beings happen to choose. In reality, they live by old fashioned puritan values, however. They get married and stay married. They work hard and work long hours.

Not so for the blue collar, never-got-beyond-high-school class, however. A shocking number aren’t even working at all. Many are not getting married in the first place. Of those that get married, the divorce and separation rates are soaring.

What about happiness and well-being? About 65% of the upper middle class professional types say they are in happy marriages. That number has been dropping steadily for the past 40 years for the working class types; and today it stands at 25%!

And Murray’s study leaves out blacks, Hispanics and other minorities—just so you don’t think the fundamental problem is racial or ethnic. His study focuses only on the white community.

Tyler Cowen has a completely different approach. Are your skills a complement to the computer or a substitute for it? If the former, he predicts that life for you is likely to be cheery. If the latter, life is likely to be dreary. “This is the wave that will lift you or that will dump you,” he says.  As I wrote in a forthcoming review in the NABE journal:

Cowen finds examples everywhere of intelligent machines substituting for human labor. Robot arms are doing the work of doctors in the operating room. Computers spend more time flying our planes than the pilots do. Smart software is being used to spot phony reviews on the Internet, to detect liars at online dating sites and to profile passengers in airports. Computers are creating music, playing chess and drawing pictures of human faces.

The growth of “mechanized intelligence” is likely to continue for two reasons: (1) Moore’s law and (2) the fact that it is an area of life that is basically unregulated.

So what can be done about any of this? Virtually no one has a compelling solution. And there may be no solution.

The only new idea the left seems to have is universal preschool. (They don’t know how to reform any existing programs, so why not throw money after one more?) But the more common tactic (e.g., Paul Krugman) is to use inequality as an excuse for enacting the traditional liberal agenda — deficit spending, minimum wage increase, more unemployment compensation. If you think any of that is going to solve the fundamental problem, I know a bridge in Brooklyn that is for sale.

For the scholars, behavioral remedies are paramount. From the Cato Institute and the National Center for Policy Analysis comes the observation that if you do these four things, it’s almost impossible to remain poor:

1.     Finish high school,
2.     Get a job,
3.     Get married, and
4.     Don’t have children until you get married.

Those who do these things have only a 2 percent probability of remaining in poverty and a 75 percent probability of joining the middle class.

From Elizabeth Sawhill at the Brookings Institution comes a similar observation:

…[A] significant number of kids stay on track through the early years, but then fall off the rails as teenagers. Sawhill set a pretty low bar for having a successful adolescence: graduate from high school with a 2.5 G.P.A., don’t get convicted of a crime, don’t get pregnant. Yet only 57 percent of American 19-year-olds get over that bar. Only one-third of children in the bottom fifth of family income do so.

One suspects that for Paul Krugman and others on the left this counts as “blaming the victims.” In any event, I have never seen a Krugman column discussing how the solution to inequality is for those at the bottom of the income ladder to change their behavior. Instead, we find the ever-present hint that those at the top are somehow to blame.

Background: For know-nothings on the left, there has always been the belief that the reason there is poverty is because there is wealth; that the high income earned by some is the cause of the low income earned by others. I’ve never seen Krugman say that. He’s too good of an economist to go that far.

But his columns give aid and comfort to people who harbor those beliefs. A Krugman column the other day entitled “The Undeserving Rich” had not one word to say about how a single billionaire had undeserved income. It made not a single connection between one person’s wealth and another person’s poverty. But it would be easy for an uncareful reader (especially a non-economist) to finish the column with the impression that there is a connection.

If your goal is class warfare—to inflame the passions of those who have less by making them angry at those who have more—writing about the behavioral causes of poverty does not advance your cause.

[Cross-posted at John Goodman’s Health Policy Blog]

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For the pivotal alternative to Obamacare, please see the Independent Institute’s widely acclaimed book: Priceless: Curing the Healthcare Crisis, by John C. Goodman.

John C. Goodman, Ph.D. is Research Fellow at The Independent Institute; President in National Center for Policy Analysis, & author of Priceless: Curing the Healthcare Crisis.

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