At issue, rather, is how we as a culture speak about life and work: Will we speak of opportunity and exhort people to pull themselves up by their bootstraps, work hard, and give it all they have, or will we sap their spirits by emphasizing all that is unfair in life and channel their energies toward demanding more from others? Will we ask “what can I do for myself and my fellow citizens?” or “what must my country do for me?” Will we draw inspiration from those who have succeeded or foster resentment by recasting their success as inequality?
To borrow again from Douglass, the divide is over whether we think people are born with legs or whether we believe all men and women are in need of crutches. Because cannot stand on their own two feet, let us not mistakenly conclude, as many do, that can. And let us never mistake Americans for a nation of helpless dependents, waiting for a federal program to solve all of life’s problems. As Paul Ryan emphasized in a speech at The Heritage Foundation:
As the preceding section has made clear, income inequality is not an obstacle to advancement in the United States, but obstacles do exist. Specifically, six factors undermine and threaten the long-term prospects of the American Dream most seriously by attacking the twin pillars—economic freedom and a culture of work—upon which it rests. Growing statism and the country’s catastrophic fiscal situation threaten the former, while the welfare state, the erosion of a work culture, the collapse of the family, and the failures of the public education system undermine the latter.
And so the floodgates of regulation and legislation were opened, with all of the attendant consequences, both foreseen and unforeseen, for those who were forced to comply with the plethora of red tape. Over the course of the 20th century, as the liberal heirs to Progressivism implemented and expanded the omnipotent and omnipresent state, the red tape kept rising, entangling all Americans in a web of costly, cumbersome, and often ill-designed laws and regulations.
This is absurd. In reality, we ought not to preoccupy ourselves with the rise in income inequality over the past several decades because it has affected neither economic mobility nor economic growth. Standards of living have increased for everyone—as have incomes, for that matter—and mobility, whichever way you measure it, remains robust. Countless Americans are still making it every year through hard work, perseverance, and dedication.
Robert J. Gordon and Ian Dew-Becker, “Controversies About the Rise of American Inequality,” National Bureau of Economic Research Working Paper No. 13982, May 2008.
David S. Lee, “Wage Inequality in the United States During the 1980s: Rising Dispersion or Falling Minimum Wage?” The Quarterly Journal of Economics, Vol. 114, No. 3 (August 1999), pp. 977–1023, and David H. Autor, Alan Manning, and Christopher L. Smith, “The Contribution of the Minimum Wage to U.S. Wage Inequality Over Three Decades: A Reassessment,” National Bureau of Economic Research Working Paper No. 16533, November 2010.
Most studies have found that consumption inequality is much less than income inequality, but there are some exceptions. Orazio Attanasio, Erik Hurst, and Luigi Pistaferri, for example, argue that consumption inequality increases as fast as income. See Orazio Attanasio, Erik Hurst, and Luigi Pistaferri, “The Evolution of Income, Consumption and Leisure Inequality in the US, 1980–2010,” National Bureau of Economic Research Working Paper No. 17982, April 2012. This study looks especially at non-durable goods, which are goods that are going to be quickly consumed such as food or gasoline. Many other studies that use a variety of consumption and income data have not found this corresponding increase in consumption inequality.
Robert Rector and Rea S. Hederman, Jr., “Two Americas: One Rich, One Poor? Understanding Income Inequality in the United States,” Heritage Foundation Backgrounder No. 1791, August 24, 2004, .
David Autor, “The Polarization of Job Opportunities in the U.S. Labor Market: Implications for Employment and Earnings,” Center for American Progress and The Hamilton Project, April 2010, .
There is also a fourth part to the inequality argument: the various redistributionist policies put forward to address the widening gaps in income. Since income inequality does not threaten the American Dream, we will ignore these policies.
Timothy Noah, The Great Divergence: America’s Growing Inequality Crisis and What We Can Do About It (New York: Bloomsbury Press, 2012), p. 27.
Paul Krugman popularized the notion that we live in a “New Gilded Age” in an essay for the New York Times Magazine in 2002. See Paul Krugman, “For Richer: How the Permissive Capitalism of the Boom Destroyed American Equality,” New York Times Magazine, October 20, 2002, pp. 62–142. It seems that the term itself first appeared two years earlier in a collection of New Yorker essays. See The New Gilded Age: The New Yorker Looks at the Culture of Affluence, ed. David Remnick (New York: Random House, 2000).