Tales of Redistribution
Robert Frank offers an anecdote:
Some months ago, I was asked to join a panel to review The National Council on Economic Education’s curriculum standards for the teaching of essential principles of economics, a task not normally entrusted to Marxists. On a conference call last Friday, the panel debated the Council’s content standards, including Content Standard 16, which reads in part,
There is an economic role for government in a market economy whenever the benefits of a government policy outweigh its costs. Governments often provide for national defense, address environmental concerns, define and protect property rights, and attempt to make markets more competitive. Most government policies also redistribute income.
Discussion focused on a proposal by one of the panel members to change “Most” to “Many” in the last sentence of this standard. I asked whether anyone could think of a government policy that didn’t entail at least some degree of direct or indirect redistribution of income. No one could, which is hardly surprising, since government policies are paid for by taxes and create benefits and costs that generally fall unevenly on different people.
In other words, to say that Barack Obama favors the redistribution of income is to say that, like John McCain, he doesn’t favor completely dismantling the federal government.
19 Responses to “Tales of Redistribution”
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October 29th, 2008 at 5:29 pm
Hey Matt, an interesting historical tidbit I came across recently: on March 2, 1934, Norman Thomas debated Huey Long in NYC on the proposition “Resolved, that capitalism is doomed and cannot now be saved by a redistribution of wealth.” Thomas took the affirmative, Long took the negative. (The debate served a double purpose for Long, it was one more platform to sell recently announced Share the Wealth program, and to distinguish it from socialism at the same time.)
There’s an article in the New York Times on the meeting in the March 3, 1934 edition on page seven. It’s behind the pay-to-view wall on the Times’ website, but it’s easily recoverable if your public library has microfilm.
Needless to say, Obama isn’t proposing anything even so far as Long’s Share the Wealth program.
October 29th, 2008 at 5:30 pm
“There is an economic role for government in a market economy whenever the benefits of a government policy outweigh its costs.”
Damn, that’s a terrible way to describe it. Shouldn’t there be some reference here to concepts of market failure? I’m not saying every instance of market failure means we should have government intervention, but just to say, “when the benefits outweigh the costs” is a pretty stupid and circular way to describe it.
Also, that’s a normative statement, presented as a fact. It seems like a textbook shouldn’t do that. Instead, it should say something like, here are the conditions where the benefits of government intervention can be greater than the costs: tragedy of the commons, etc.
I also disagree that “most” government policies “redistribute income.” Maybe “most” if you measure as a percentage of the federal budget, because the redistributive policies are the most expensive (Medicare, Social Security). That’s not to say they’re progressively redistributionist — Social Security, for example, redistributes from the young to the old, not the rich to the poor.
But many (dare I say “most”?) government policies deal with actual public goods. There’s nothing redistributive about a road or national defense or clean air or other things that anyone can use. At least, not without really stretching the definition of “redistribute.”
October 29th, 2008 at 5:35 pm
Needless to say, Obama isn’t proposing anything even so far as Long’s Share the Wealth program.
Obama isn’t proposing socialism. He’s not a terrorist. He wouldn’t rather lose a war than win an election. He’s not Muslim. He is an American citizen. He doesn’t support killing children. He doesn’t hate America.
I don’t know if I’ve ever seen more outright fabrication by a campaign than what McCain has been churning out for months. McCain is divorced both from reality and morality. (Toss in a divorce from a wife that was all banged up, so he no longer found her desirable, and he’s “hit the trifecta”).
October 29th, 2008 at 7:12 pm
McCain’s Jane the Doctor’s Daughter moment.
October 29th, 2008 at 9:47 pm
Is someone paying MattY to be so dumb? There’s a huge difference between progressive taxation to pay for infrastructure and what BHO’s quote revealed: he wants to “spread the wealth around” in order to normalize incomes, make things fairer, and just generally be a nice guy.
And, here are nineteen (so far) reasons not to vote for BHO, all from a non-partisan perspective.
October 29th, 2008 at 11:14 pm
Re: He doesn’t support killing children.
Er, LFC, you’re right on the other points, but very dubious on this one. Obama DOES think that abortion should be legal, even up to the moment of birth, which amounts to proposing that a particularly grave form of homicide should be tolerated by society.
October 30th, 2008 at 1:17 am
Did anyone notice that since George W. Bush became president that most of the gains in the economy went to the upper 5% of the population, with most of the gains going to the uppermost 1%?
I saw a graphic the other day which showed that the uppermost 1% of the population gained something like 75% of the income gains, and another 20% was gained by the next 4% of the population. That means that 95% of all the gains in income was limited to the uppermost 5% of the population. NO WONDER THE PUBLIC IS IN DEBT UP TO THEIR EARS!
The really, really galling thing about this is that many of those “gains” took place in these extraordinary trading venues, unregulated by order of Congress, wherein the originators of the wealth were also the originators of the legislation that governed them. How sweet was that?
But wait! The Federal Reserve Board has just lowered the prime rate to 1%. Now the indebted nation can get further in debt, just at a slightly lower interest rate.
October 30th, 2008 at 1:47 am
Funny, I said the same thing yesterday.
October 30th, 2008 at 4:46 pm
Of course he is preparing to redistribute income, that is what government does.
Over the last 8 years we have seen the republicans use tax policy to redistribute income to the top income groups.
Does anyone seriously thing the Obama will be able to offset the Bush redistribution of income upward. It probably was the largest upward income redistribution in world history. There have been larger redistribution downward, but I can not think of a single example that comes anywhere near matching the Bush upward redistribution.
Buheler, anyone????
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