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Kristof on Inequality and What To Do About It

Friday, October 21, 2011

Nicholas Kristof appears at the World Economic Forum in Davos, Switzerland on January 30, 2010 (World Economic Forum from Cologny, Switzerland/Wikipedia Commons)

Welcome to Politics Bites, where every afternoon at It's A Free Country, we bring you the unmissable quotes from the morning's political conversations on WNYC. Today on the Brian Lehrer ShowNicholas Kristof, New York Times columnist and co-author of Half the Sky: Turning Oppression into Opportunity for Women Worldwide, discussed inequality in the U.S.

Occupy Wall Street has cracked open a dialogue about inequality in the U.S., which has spurred some discussion around policy. Nicholas Kristof of the New York Times has started to paint a picture of what some of this policy might look like.

What does inequality look like?

Here are a few facts Kristof has exposed that demonstrate the current state of inequality in the U.S.:

  • The top one percent of Americans posses more wealth than the bottom 90 percent.
  • The 400 wealthiest American individuals have a greater combined net worth than the bottom 150 million Americans.
  • In the Bush expansion of 2003 to 2007, 65 percent of the gains went to the richest one percent of Americans.

Some level of inequality is needed to drive an economy, but no matter how you look at it in the U.S., it's become exponentially worse, Kristof said.

This is not just an issue of fairness, it's also an issue of economic inefficiency. When you reach the kind of levels that we have now then it becomes an impediment to growth.

As for how President Obama is responding to this problem, Kristof said the jobs bill would certainly help, but there's no one single answer.

There's no one silver bullet that is going to solve these kinds of problems. They relate both to the rules for the tree tops for financiers but also the grass roots issues of creating more opportunity for people at the bottom.

How do we fix it?

Kristof said he'd like to see bolder initiatives to regulate finance.

Things like closing the carried interest loop hole, which strikes me as one of the most egregious that we have, where by some of America's richest people pay only a 15 percent tax on what is effectively their earned income, even though it's taxed at a capital gains rate. I'd like to see a financial transaction tax, things like that.

He's also thinking of broader policy.

Above all, I'd love to see early childhood education because it seems to me that that more than any other single step would tend to promote greater equality in the country and create more opportunities for people at the bottom.

About five years ago, studies showed that when you test kids in Head start, for example, kids show gains but then those gains fade out. But Kristof said there have been more recent studies that follow these kids for a longer period of time.

It finds that indeed their test gains don't improve, but their life outcomes gain substantially. They're more likely to graduate from high school. They're more likely to attend college...

These are the kinds of improvements, according to Kristof, that could begin to shift the country's inequality.

 

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Comments [11]

C Milner from NY

While I am so hopeful re: new conversations about growing inequality, how do we fix the overt dependence on big money and potential corruption within our political system? A U Mass professor breaks down the most beholden and greedy political players http://www.washingtonspectator.org/articles/20111015postedprices.cfm

Oct. 23 2011 09:12 AM
The Truth from Becky

Inequality is never "necessary"

Oct. 21 2011 11:03 AM
John A.

HughSansom,
You have to accept that Some inequality is necessary to make life proceed. To fight that is to be taken as a 1970's era Socialist-Communist and to forget the 100+ years of successful growth of the USA. The point is that that inequality in the present has "run away" and needs to be brought back to something sane.

Oct. 21 2011 10:27 AM
alan from NYC

Sorry I'm late. I still don't know if a financial transaction tax will apply to DRIPs. Do you? Does anyone?

Oct. 21 2011 10:22 AM
Kris Diehl from Astoria, NY

Top 400 = bottom 150million is a bit abstract. To make it more concrete, consider this. I grew up in the small town of Titusville, FL, which has a current population of around 40,000, much like many small towns in the country. 40,000 fits into 150million 3,750 times. So those top 400 Americans could themselves support 3,750 towns like Titusville. Or, each of those 400 could support nearly 10 towns like Titusville, all on their own. The ENTIRE TOWN!!!!

Oct. 21 2011 10:22 AM
Barry from LES

What about universal healthcare, that would surely have some positive effects.

Oct. 21 2011 10:18 AM
tom from astoria

With the millions upon millions of jobs that are fueling China and other brick countries growth having come from our innovation and development over generations, haven't we given the future away? Aren't those CEOs relatively richer because they're exploiting overseas labour costs?! Isn't it imperative that we stop ousourcing and even bring back our industrial base to advance our economy?

Oct. 21 2011 10:18 AM

Why does Nicholas Kristof take as axiomatic that inequality is necessary as "incentive"? That requires argument, not mere assertion.

Another factoid: The US has _lowest_ level of social mobility of any nation in the G-20. A person born poor is more likely to remain poor in the US than in many _third world_ nations.

Republicans and _most_ Democrats, including the abysmal Obama, trumpet this as proof of "American superiority". Perfectly Orwellian.

Meanwhile, Nicholas Kristof's Harvard darlings (the only university whose scholars he seems to think worth interviewing, ever) include Gregory Mankiw -- who just a couple of years ago was offering arguments to support eugenics.

Pathetic. The amount of intellectual capital dedicated to justifying the obscene inequalities and injustices of the US is disgusting.

Oct. 21 2011 10:17 AM
Sheldon from Crown Heights

It's not just inequality, if the rich made 99% of the country's wealth but the living standards of working Americans were rising - there would not be such bitterness.

Oct. 21 2011 10:17 AM
The Outlier from Earth

Left to their own devices, Wall Street financial institutions will “stuff a portfolio with risky mortgage-related investments, sell it to unsuspecting customers and bet against it…without telling investors of its role or that it had made bets that the investments would fall in value (NY Times, Citigroup To Pay Millions to End Fraud Complaint, 10,20,11).” This is an abrogation of fiduciary responsibility, immoral, unethical, abusive and should be illegal. The reason I say “should be” is because neither the Justice Department or the Securities and Exchange Commission will say whether Citigroup had committed a crime.

When you perpetrate fraud to the tune of hundreds of millions of dollars, you are a first-rate, top of the line, head of the class, unsurpassed, consummate and sublime rip-off artist! Continue reading → http://outlierideas.com/

Oct. 21 2011 10:08 AM
Adam from Listening online in NC

Where were gaddfi's personal guard of ninja ladies in the fight? had they already been disbanded?

Oct. 21 2011 10:05 AM

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