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Tag Archives: Income Distribution

Who is hurt most by inflation?

Tyler Cowen has a new Bloomberg column that starts off as follows: With inflation now rising faster than at any time in the last four decades, economists are debating which group suffers more from inflation, the poor or the rich. This kind of economy-wide question is not easy to answer, especially when rates of inflation have been so low in recent times and hard data are scarce. Nor is it obvious how exactly to compare the losses to the poor to the losses to...

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What’s Wrong With Social Mobility

In and of itself, social mobility is far from ambiguously good. Imagine a society of 10 individuals ranked by income from the poorest, No. 1, to the richest, No. 10. Assume that a good government (the one you would prefer) jacks up the income of No. 3 to between that of No. 6 and No. 7, putting its favorite in the 6th income slot. No. 3 has now become No. 6; No. 4, No. 5, and No. 6 have all fallen down one slot. The government could increase social mobility more if,...

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Capitalism has a disparate impact

Matt Yglesias has an excellent post discussing Ibram X. Kendi’s attempt to redefine the term ‘racism’ from personal animosity against another racial group to advocacy of policies that widen the gap between two racial groups: When the book was first published in 2019, that’s not how it was received. Kelefa Sanneh’s excellent review in the New Yorker heads straight for what I think is the core weirdness of Kendi’s ideas. If we accept the definition that a racist is a...

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Average is over

A while back, Tyler Cowen wrote a book entitled “Average is Over“. If my memory is correct, one idea was that technology would allow some people to become much more productive than others, and/or technology would make it easier to identify who has been more productive all along. I’d like to play with this idea using a simple model economy with one firm—a newspaper with 101 journalists. Let’s say the newspaper pays each journalist $100,000.  Yes, some journalists are...

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How One Short Story Changed Someone from Left to Libertarian

I gave a talk on Milton and Rose Friedman today to an audience of about 60 law school professors and judges. It went well, by the way. One of my slides, labeled “Equality of Outcome,” was a quote from Milton and Rose Friedman’s Free to Choose: The ethical issues [with fairness] involved are subtle and complex. They are not to be resolved by such simplistic formulas as “fair shares for all.” Indeed, if we took that seriously, youngsters with less musical skill should...

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The Friedmans on Equality of Outcome

The ethical issues [in equality of outcome] involved are subtle and complex. They are not to be resolved by such simplistic formulas as “fair shares for all.” Indeed, if we took that seriously, youngsters with less musical skill should be given the greatest amount of musical training in order to compensate for their inherited disadvantage, and those with greater musical aptitude should be prevented from having access to good musical training; and similarly with all...

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Eh, what’s happening?

Suppose that like Rip van Winkle you fell asleep in 1997 and woke up in 2017. You asked a friend for a quick summary of what had occurred over the previous 20 years. A complete explanation would obviously take a long time, but this graph (tweeted by Max Roser) provides a very elegant summary of how the world has been progressing: A few comments: 1. In principle, everyone over the age of 24 lies somewhere along each of those three lines.  You might visualize most...

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Whalen and Henderson on the Assault on Wealth

These two articles, “The Assault on Wealth” and “Capital Gains Tax Hike: No Gains, No Fairness,” led my Hoover colleague Bill Whalen to interview me last Friday. The result is this 47-minute audio. Normally Bill will ask questions and I’ll answer. He did that, but this was more of a two-way conversation because Bill has his own thoughts on the issue. It was fun. By the way, Hoover has made my Assault on Wealth article into a mini-book. Some highlights follow....

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Rosen versus Henderson on Child Tax Credits

Here’s a video of an interview that Paris Schutz of WTTW, the PBS channel in Chicago, did on the expansion of the child tax credit. Jeremy Rosen argued for and I argued against. Funny story: I got on the Zoom and within a minute or two Jeremy got on. I didn’t know who he was, figuring he might be the interviewer. We got into a friendly chat about where he lives, working during the lockdown, etc. Then he said words to the effect, “This Hoover guy is sure to have a...

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