54% of Republicans Say We’ve Got Too Much Inequality

It’s a Myth that Conservatives Don’t Care About Inequality

We’ve noted for years that it’s a myth that conservatives accept runaway inequality.

Conservatives are very concerned about the stunning collapse of upward mobility.

poll from Gallup shows that a majority of Republicans think we’ve got too much inequality:

Two out of three Americans are dissatisfied with the way income and wealth are currently distributed in the U.S. This includes three-fourths of Democrats and 54% of Republicans.

And the conservative website Townhall.com ran a story last month entitled, “Inequality is a Conservative Issue“.

In fact, there are at least 5 solid conservative reasons – based upon conservative values – for reducing runaway inequality:

(1) It has now finally become widely accepted by economists that inequality drags down the economy. Conservatives like economic growth;

(2) Inequality increases the nation’s debt.  Conservatives don’t like debt;

(3) Runaway inequality leads to social unrest and violence. Conservatives like stability and order;

(4) Much of the cause of our soaring inequality is bailouts for the big banks and socialism for the buddies of the high-and-mighty at the Federal Reserve, Treasury, and White House.   The government has consistently picked Wall Street over Main Street, and virtually all of the the big banks’ profits come from taxpayer bailouts. The Fed is still throwing many tens of billions a month at the big banks in “the greatest backdoor Wall Street bailout of all time”, which sucks the wealth away from the rest of the economy.  Conservatives don’t like bailouts or socialism; and

(5) One of the biggest causes of runaway inequality is that the big banks are manipulating every market, and committing massive crimes.  These actions artificially redistribute wealth from honest, hard-working people to a handful of crooks.  Conservatives hate redistribution … as well as crooks.  In addition, religious leaders haveslammed the criminality of the heads of the big banks; and the Bible teaches – and top economists agree – thattheir crimes must be punished, or else things will get worse. On the other hand, if the crimes of the bankers are punished, inequality will start to decline, because a more lawful, orderly and even playing field will be reestablished.

This is an area of agreement between people of good faith on the left and on the right. As Robert Shiller said in 2009:

And it’s not like we want to level income. I’m not saying spread the wealth around, which got Obama in trouble. But I think, I would hope that this would be a time for a national consideration about policies that would focus on restraining any possible further increases in inequality.

If we stop bailing out the fraudsters and financial gamblers, the big banks would focus more on traditional lending and less on speculative plays which only make the rich richer and the poor poorer, and which guarantee future economic crises (which hurt the poor more than the rich).

Indeed, if we break up the big banks, it will increase the ability of smaller banks to make loans to Main Street, which will level the playing field.

Moreover, both conservatives and liberals agree that we need to prosecute financial fraud. As I’ve previouslynoted, fraud disproportionally benefits the big players, makes boom-bust cycles more severe, and otherwise harms the economy – all of which increase inequality and warp the market.

And prosecutors could claw back ill-gotten gains from the criminals and use that money to help the economy:

The government could use existing laws to force ill-gotten gains to be disgorged (see this and this) [and] fraudulent transfers to be voided …

Postscript: If you want to know the stunning truth of how bad inequality has gotten, read this.

If you want to hear what top economists say inequality does to our economyclick here.

And if you want to find out whether government policy is making things better or worsehere’s your answer.

This piece is cross-posted from The Big Picture with permission.

One Response to "54% of Republicans Say We’ve Got Too Much Inequality"

  1. benleet   January 29, 2014 at 1:05 pm

    Since 2008 household net worth, the sum of all private wealth, has risen by $20 trillion, with a t, from $57 trillion to $77, according to FRB Flow of Funds report. Three quarters of financial assets are owned by 5% of society's households, their wealth increased by $15 trillion in five years. This increases the wealth of 6 million households by $2.5 million on average. Conversely, the median family saw its income drop from $55,000 to $51,000, and most households below the 90th percentile saw their incomes drop. Emmanuel Saez, professor at U.C. Berkeley, documents much of this in Striking It Richer reports.