I’ve been arguing that while inequality is a real problem, it is far down the list of serious problems faced by this country. Certainly behind unemployment, poverty, and the war on drugs and probably behind global warming, access to health care, and government waste. According to the Boston Globe, the public seems to agree:
THOUGH PRESIDENT Obama insists that income inequality is the “defining challenge of our time,” most Americans beg to differ.
“What do you think is the most important problem facing this country today?” asked Gallup in a nationwide survey this month. Dissatisfaction with the federal government “” its incompetence, abuse, dysfunction, venality “” topped the list, with 21 percent of respondents saying it was their key concern. The overall state of the economy was second, at 18 percent. Unemployment and health care were tied for third, with each cited by 16 percent as the nation’s most pressing problem.
How many shared Obama’s view that the gap between rich and poor is the issue that should concern us most? Four percent.
And even that 4% figure is misleading. If you take away all the economics bloggers blathering on about inequality, it would probably be closer to 3%.
BTW, Free Exchange has a wonderful post by G.I. (Greg Ip?) on the myth that microeconomics is more scientific than macroeconomics. The post also contains some excellent analysis of the minimum wage debate.
The people who claim micro is more scientific are the same sorts of people who claim physics is more scientific than economics. Economists can predict business cycles more accurately than applied physicists can predict the stuff we really care about, like weather and earthquakes and tsunamis. The retort is that applied physicists are good at predicting stuff we don’t care about, like the orbits of Jupiter’s moons.
HT: Joel Lidz
Update. Some commenters pointed out that these problems are interrelated, at least to some extent. Here’s my response:
Sure, all problems are at least somewhat correlated and interrelated. But policies like a higher minimum wage that (supposedly) reduce inequality also (supposedly) increase unemployment. We can address inequality much more effectively by direct subsidies like the EITC, although I agree that ending the War on Drug Using Americans would indirectly reduce inequality. Think about the specific problem you are trying to address, and address that problem in a way that doesn’t worsen other problems.
Transferring money from Bill Gates to the middle class doesn’t reduce poverty, it makes it worse. If you had not taken the funds from Gates and given it to the middle class, he was planning on donating the money to reduce poverty in places like Africa.