The “growth in inequality drives poverty”

http://www.theatlantic.com/business/archive/2015/06/what-matters-inequality-or-opportuniy/393272/  A new argument.  The way I read it, inequality correlates to de facto residential segregation, ie poor people don’t live in affluent neighborhoods.  That’s intuitive.  And it follows, affluent neighborhoods have better educational resources.

I dunno, I think it’s merely a different way of saying education correlates to wealth and income inequality.  But maybe this phraseology aims better to articulate the root cause.  In any event, I think my complaint from yesterday stands, that I think arguments like these backed up by examinations of people’s college vs. their income is myopic and flawed because of the exclusion of people who have done well plying a trade.

It’s worth relating, my fascination with questions of income is not really ‘money’, so much as I am eager to say ‘well that guy must make $xxx,xxx’.  It’s that there is a job to pay heuristic keen in my mind from having been assigned to read Studs Terkel’s ‘Working’.  That was in college for me, and just a couple years after that time in the 90’s the Millionaire Next Door was out, which I think in one way or another described how admirable it was to be mundanely affluent (by plying a trade and saving, generally).   And I think that’s been a good prism to try and read through as I have earned a living in life.

As an exercise here, I’m trying to think of who has ‘done really well’ among people I am even vaguely acquainted with here in the valley.

The people who are not some entity’s W2 employee are commonly realtors that lasted and made it.  I can think of 3 or 4 people, and I’m not sure any of them have college degrees.

Very good friend of mine is a sales VP in a large, corporate mortgage operation.  He’s got a liberal arts bachelor’s degree that probably encompassed zero business classes.  Fair to say, he got preparation to thrive in the milieu he’s in …  but that preparation came from being exposed to people and businesses of kinda ho-hum sophistication and prosperity here in the ho-hum suburbs.

BIL is an operational VP at a very large financial institution here in town.  Got his masters after he started working.  He has exceptional qualities, ya pick any 100 corporate workers, he’s probably going to be among the 5 most truly diligent.

There are probably a couple local remodeling contractors and real estate wheeler dealers I can put my finger on.  They’re not college educated.

I’m mindful that I’m not very worldly though, and that my milieu in the bucolic exurbs, affluent as it is,  might not be representative of the kind of wealthy enclave that speaks best to ‘structural inequality’ the inequality people would use to demonstrate distortion of the ginis.

Still, what I think probably translates across enclaves that makes for a preponderance of these affluent people are late middle age dudes, plying a semi-boutique professional services trade, probably white collar… engineering or law or brokerage or content… in some sort of partnership arrangement with a few similar dudes, and they been doing this for 30 years.  And they’re splitting some nice accrued profits annually.  These guys may or may not have benefitted from an elaborate post-secondary education.  I doubt it correlates, or correlates overwhelmingly.  So there’s my beef with the epidemiology again, I don’t think it’s sufficient to make the inequality argument.

Broadly, a thing to note is that people who do well are generally not other people’s W2 employees.  And a lot are in sales.  Ibid, I doubt that’s highly correlated to college.

Side point – another thing to note is that owning a successful business practice that pays out handsomely after 20 or 30 years of operation… that’s not ‘luck’, which is the other observation the inequality people proffer to discredit markets and justify income / wealth redistribution. IE, if the fairness of unequal distribution through meritocracy is an illusion, there’s no justification in not seeking a fairness achieved by arbitrary redistribution.… What they are calling ‘luck’ is most often diligence.  “You built that” and a function of being at a particular spot in a working lifetime.  As is a lot of functions of income and getting paid.

The education thing is actually kind of a distraction.  Not that it isn’t true, but we can fix that…probably.  If the bottom is lagging we can make their schools better and send them all to college, and thus close the inequality gap.  But that’s only secondarily emphasized by people who make these studies with the gini coefficients and then quote them endlessly.  Top of mind and first order of business seems to be to construct an observation that justifies exorbitant taxes for people prospering in affluent commercial milieus, and close the gap that way, from the top down.

I’d say endeavoring to close a gap by leveling the top with no real focus on raising the bottom is ‘class warfare’.

It would be one thing if we we’re really talking about the .1 %.  Much as we’re supposed to think we are, we’re not.  Duh, you encounter those people at a rate of 1 in 1000 instances, it’s mathematically impossible that they are responsible for measured inequality.

So we’re talking, the ‘1%’, which is much more mundane.  Prosperous small business, both urban and suburban and rural.  Yeah, that’s your inequality, statistically….    I just don’t see…strike that… I posit there’s not really a serious argument to be made that the 1% thriving contributes to economic immobility or listlessness or lack of well-being at the bottom deciles that’s to be thoughtfully remediated with different tax rates.

So that’s why I reject it as BS more or less.

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