Is Income Inequality the New Climate Change?


Jim Pethokoukis writes: If you dare question the alarming claims about income inequality made by progressives and Democrats, including President Obama, does that make you a “denier” — akin to climate change “deniers” — whose arguments should no longer be taken seriously?

In a recent post, “Yes, Rising Inequality is a Problem,” excellent economics blogger Ashok Rao is sharply critical of Manhattan Institute scholar Scott Winship. Rao describes Winship as “a representative agent of those making the best arguments that progressives overstate the costs of inequality.” I myself have frequently quoted Winship or used his careful research in my blog posts and columns. It’s also worth noting that Winship’s profile has risen dramatically recently due to his role advising House Budget Chairman Paul Ryan, who may run for president in 2016.

Rao has a number of problems with Winship’s arguments, but his core criticism is that Winship sets an unnecessarily high bar for evaluating the “mountain of evidence” that rising inequality is a real phenomenon deserving of redistributive policy action. Rao:

Winship’s argument against inequality being a problem is a value judgement–a value judgement that those of us with a strong theoretical ex antecase must amass an enormous amount of high-quality, expensive, detailed evidence that rising inequality has in fact had the obvious consequences before we are allowed to even have a conversation about the subject, let alone make the case for policy changes. This does strike me as similar to some of the most sophisticated forms of climate-change denialism, which also focus not on reading the evidence we have differently but rather setting up a very different prior from the rest of us, and so redistributing the burden of proof. … Let us hope the future debate about inequality and its consequences does not mirror that on climate change.

Income inequality is an important issue deserving of honest and open debate. But if you’re worried about the issue becoming politicized and hopelessly muddied, Winship is hardly a concern. Unlike many center-right folks, he had conceded that high-end inequality likely has risen dramatically in recent decades. Winship, however, is highly skeptical of the supposed deleterious economic impact and disagrees with claims that middle-class incomes have stagnated since the 1970s.

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