Artificially Equalizing Unequal Views on Inequality by @Batocchio9

What she wanted, [Heather] Boushey said, was to fund an intellectually honest investigation of arguably the hottest issue in American economics right now: the widening gap between the richest Americans and everyone else. She wanted to learn more how and why that gap might hurt the nation’s overall economic performance.

Boushey was hoping to sign up an ideologically diverse cross-section of thinkers to her effort. . . .
The grant recipients, she explained, would examine questions of inequality and growth from every possible angle, liberal and conservative. They’d report what was true and what wasn’t. Her think tank would live with the findings, whatever they might be.

There are no identifiably conservative economists among the grantees, however.

No conservative economists applied for grants, among the 70 submissions the center received, Boushey said.

Perhaps that’s because the center has, in its early months of existence, engaged in some high-profile blog-and-social-media fights with conservatives over questions of data and policy when it comes to inequality.

Perhaps it’s because it’s relatively rare in Washington for liberal and conservative thinkers to team up to pursue big questions – especially ones that, depending on the answer, could shake party platforms or basic ideological beliefs.

It’s also true, in this case, that a lot of conservative economists have already decided that inequality – as opposed to mobility or the even broader “economic opportunity” – isn’t a problem.

This is the real challenge posed faced by Boushey, and her center, and the work that will now begin thanks to their grants: If most of the research into an economic issue is being conducted from one side of a political debate, consumers of that research could – and should – look skeptically on its conclusions, until persuaded otherwise. The burden is on the researchers, on their data and the stories they tell from it.

It’s a heavy burden. It would help to have a more diverse group of thinkers shouldering it.

Of course if [Jonathan Haidt] believes there’s no real difference between left and right, it’s a problem that the right is poorly represented in academia.

But what if there is a real difference, a difference of substance, in how left and right approach the evidence and how they respect the methods of science? I think the field of social psychology is suffering because they haven’t hired enough serial killers for their tenure line positions. They’d certainly do a good job of making psychologists question their assumptions about the importance of health, happiness, and security in human welfare, and also, someone would be around who could finally intimidate those prissy-pants on the Human Subjects Review Board. Should we complain about the deficiency, or should we recognize that some behaviors are antithetical to the cooperative and responsible pursuit of knowledge?

The problem isn’t that academia excludes conservatives. It’s that it is a rare conservative who doesn’t prioritize the moral foundations (to use Haidt’s own terms) of respect for authority and loyalty to the ingroup above breaking through conventions and assumptions to test the truth. Also, it’s the rare conservative who will accept a job with high admission requirements that also pays a pittance.

The Republicans are not the party of equality. They're the party of liberty and they're the party of efficiency. . . .

Liberty leads to inequality just as attempts to reduce equality lead to adoption of liberty.

It’s true that market economies need a certain amount of inequality to function. But American inequality has become so extreme that it’s inflicting a lot of economic damage. And this, in turn, implies that redistribution — that is, taxing the rich and helping the poor — may well raise, not lower, the economy’s growth rate.

You might be tempted to dismiss this notion as wishful thinking, a sort of liberal equivalent of the right-wing fantasy that cutting taxes on the rich actually increases revenue. In fact, however, there is solid evidence, coming from places like the International Monetary Fund, that high inequality is a drag on growth, and that redistribution can be good for the economy.

Earlier this week, the new view about inequality and growth got a boost from Standard & Poor’s, the rating agency, which put out a report supporting the view that high inequality is a drag on growth. The agency was summarizing other people’s work, not doing research of its own, and you don’t need to take its judgment as gospel (remember its ludicrous downgrade of United States debt). What S.& P.’s imprimatur shows, however, is just how mainstream the new view of inequality has become. There is, at this point, no reason to believe that comforting the comfortable and afflicting the afflicted is good for growth, and good reason to believe the opposite.

Specifically, if you look systematically at the international evidence on inequality, redistribution, and growth — which is what researchers at the I.M.F. did — you find that lower levels of inequality are associated with faster, not slower, growth. Furthermore, income redistribution at the levels typical of advanced countries (with the United States doing much less than average) is “robustly associated with higher and more durable growth.” That is, there’s no evidence that making the rich richer enriches the nation as a whole, but there’s strong evidence of benefits from making the poor less poor.

The conventional wisdom on inequality is built on three assumptions: (1) Income inequality is inherently unjust; (2) it is bad for the economy; and (3) government redistribution is the best way to remedy it. According to this narrative, narrowing the gap between what wealthy and working-class Americans earn should be our top political priority, and policies such as raising taxes or increasing the minimum wage are the answer.

Like most Americans, I believe in equality of opportunity and not equality of outcome, which is clearly neither desirable nor attainable.

Not only do the usual suspects continue to deny the obvious, but they keep rolling out the same discredited arguments: Inequality isn’t really rising; O.K., it’s rising, but it doesn’t matter because we have so much social mobility; anyway, it’s a good thing, and anyone who suggests that it’s a problem is a Marxist. 

What may surprise you is the year in which I published that article: 1992.

At the risk of giving too much information, here’s the issue. We have two sources of evidence on both income and wealth: surveys, in which people are asked about their finances, and tax data. Survey data, while useful for tracking the poor and the middle class, notoriously understate top incomes and wealth — loosely speaking, because it’s hard to interview enough billionaires. So studies of the 1 percent, the 0.1 percent, and so on rely mainly on tax data. The Financial Times critique, however, compared older estimates of wealth concentration based on tax data with more recent estimates based on surveys; this produced an automatic bias against finding an upward trend. 

In short, this latest attempt to debunk the notion that we’ve become a vastly more unequal society has itself been debunked. And you should have expected that. There are so many independent indicators pointing to sharply rising inequality, from the soaring prices of high-end real estate to the booming markets for luxury goods, that any claim that inequality isn’t rising almost has to be based on faulty data analysis. 

Yet inequality denial persists, for pretty much the same reasons that climate change denial persists: there are powerful groups with a strong interest in rejecting the facts, or at least creating a fog of doubt. Indeed, you can be sure that the claim “The Piketty numbers are all wrong” will be endlessly repeated even though that claim quickly collapsed under scrutiny. . . .

This picture makes some people uncomfortable, because it plays into populist demands for higher taxes on the rich. But good ideas don’t need to be sold on false pretenses. If the argument against populism rests on bogus claims about inequality, you should consider the possibility that the populists are right.