Monday, January 18, 2016

Is vast inequality necessary?

Paul Krugman says no

By Rolf Dumke

Economist Paul Krugman’s January 15 piece in the NY Times, “Is Vast Inequality Necessary?” is a very readable argument explaining the rise of inequality in the US since the 1960s as a combination of forces:
  1. productivity,
  2. luck,
  3. power.
    He has links to articles that show
  1. that the US is not particularly entrepreneurial among countries; 
  2. that many rich persons are rich because they were lucky to have rich parents, like the GOP candidate Trump; and
  3. that the top 0.1 percent of persons who have gotten most of the rising incomes in the last decades were largely executives who were climbing up corporate career ladders in established companies, not entrepreneurs of new start-ups.
    Thus, to tax some of this income to provide a stronger safety net for Americans is possible without undermining incentives for growth.

Copyright © 2016 by Rolf Dumke

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