My latest post to Health Justice CT takes on income inequality and the best way to improve health: increase prosperity.
If someone offers you half of pie #1 or all of pie #2, the first thing you should ask is, “How big are the pies?”
I don’t know when it started, but many Americans have forgotten to ask this question when they look at income inequality and the redistribution of wealth.
The conventional wisdom is perhaps correct that wealth is now more concentrated, but that is relatively unimportant because the amount of wealth is not fixed. It is entirely possible for wealth to become more concentrated and for EVERYONE to be better off.
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One of the major divides in American politics today – if not the biggest – is whether government should care more about the size of the pie as a whole or the size of the piece each individual gets. We can’t have our pie and eat it too because these goals are counterproductive, at least in part.
It would be one thing if government operated as a perfect Robin Hood, stealing from the rich and giving to the poor. I can assure you government is neither perfect nor Robin Hood.
In the process of transferring money from the rich to the poor, government takes a cut. Politicians, special interests, bureaucrats and other government employees all get something. If there is any left it goes to the poor.
But wait. It goes to the poor in the form chosen by the politicians, special interests and bureaucrats. That’s why $10 of help to the poor often does not feel like $10 to the person receiving it.
It feels like much less.