John Quiggin Confronts Once Again the Puzzle of John Cochrane
The facts about inequality in the US, and increasingly in other developed countries, are now so clear-cut that the defenders of the status quo have little solid ground left on which to stand. So, they are mostly confined to arguments that have already been effectively rebutted. As new talking points emerge, it’s become increasingly easy to pick them out before they are fully formed and have a prebuttal ready. That’s the case with data showing that income inequality arises mainly from differences in current incomes rather than from inheritance. As I pointed out a couple of months ago, the absence of large inherited inequalities is a logical consequence of the fact that the distribution of income in the postwar generation was relatively equal.
Sure enough, here’s the prebutted talking point, stated by John Cochrane, who asserts
There are a lot of facts: the widening distribution comes from a skill premium, not inherited wealth.
He goes on with some older points, long rebutted:
It’s new people getting rich, not the old rich keeping more money. It’s pretax income, not the rich keeping more money. Consumption inequality is much less than income inequality. And so on.
In reality, income mobility is falling not rising, and the tax system has become less progressive not more. And I’ve dealt with the consumption inequality point here and here.
The only answer I can find to the puzzle that makes any sense at all is the simplest one: he's just playing for Team Republican...
