While the president prattles on about the Buffett rule, it is interesting to note what real income inequality looks like and what causes it. The New York Times reports: “The number of New Yorkers classified as poor in 2010 increased by nearly 100,000 from the year before, raising the poverty rate by 1.3 percentage points to 21 percent — the highest level and the largest year-to-year increase since the city adopted a more detailed definition of poverty in 2005.”
The main culprit is the sluggish economy, the Obama economy if you will: “The recession and the sluggish recovery have taken a particularly harsh toll on children, with more than one in four under 18 living in poverty, according to an analysis by the city’s Center for Economic Opportunity that will be released on Tuesday.” The city reported that without federal and state aid, the poverty situation would have been worse. (The report indicates that New York City and the feds use different methods of calculating poverty.)
But that is not quite right. With more aid those people would have been less poor, but poverty is the state of habitual poorness characterized by unemployment (and unemployability), unstable family relationships, rotten schools, and high crime neighborhoods. David Brooks described those living in poverty this way: “They live in disorganized, postmodern neighborhoods in which it is much harder to be self-disciplined and productive.”
So the slow economic recovery, coupled with systemic problems of poverty, leave a large segment of the population, under whatever definition you like, far behind the rest of society. What the heck does the Buffett rule have to do with that? Nothing. Absolutely nothing.
The Buffett rule is for left-leaning elites who think voters are dolts and easily baited into becoming envious of others. It is for the economically illiterate who imagine that by taking more money from a tiny sliver of the population that already contributes a huge portion of the country’s taxes we will do. . . well do what, exactly? Not anything to address the debt. Not create jobs that might lift up middle class and poverty-stricken Americans. Not promote school choice or any other effective anti-poverty effort.
In fact, the poverty rate – the worst kind of income inequality – has increased under this president. Last fall figures showed we went from a poverty rate of 14.3 to 15.1 percent. The president, however, continues to burden employers with new taxes and regulations, increase the cost of labor for job creators (with Obamacare, for example), oppose school choice, and refuse to entertain a Republican plan to make Medicare more progressive. There’s a pretty good argument that the best thing America could do for income inequality would be to get a new president and a new set of policies.