On Inequality

I don't think the case Sebastian Mallaby makes here against public policy measures aimed at increasing unionization makes very much sense, especially since he himself concedes that "the case for unionization appears better than it has in a generation." Nevertheless, he's still quite right about what he says about taxes -- lurking beneath the mildly progressive structure of the income tax code is a series of shockingly regressive tax deductions. Eliminating or reforming them would be a good idea.

On inequality more broadly, I have a take vaguely along the lines of what Max Sawicky says here. The challenge isn't to try and devise some one specific good anti-inequality policy initiative. Probably there is no such initiative. Probably if you pushed hard enough on any one lever to singlehandedly reverse the trend, you'd break the machine. The decisive issue is one of political will. Were it the case that there was mass concern with inequality -- the fact that someone as rightwing as Mallaby is writing about the topic is a good sign -- then the dynamic would be different. How?

Well, simply put, if policymakers and opinion elites found it necessary to ask themselves what about inequality? every time they were thinking about an issue, then inequality could be combatted in dozens of different ways. As Mallaby suggests, we could eliminate the swiss cheese of deductions-for-the-rich in favor of a better tax code. But we could also have a more unionized workforce. We could also have higher top marginal tax rates. And didn't corporate governance schemes. And a higher minimum wage. More investment in training and infrastructure that are useful to the downscale. A trade policy that tried harder to create foreign competition for the goods and services that rich people produce. A copyright policy that cared more about the interests of consumers than the bottom line of existing companies. A monetary policy more favorable to workers and debtors than to employers and creditors.

You'd be talking about a lot of changes. Some of them might be very subtle. Probably no single change, on its own, would make an enormous difference. What would make an enormous difference would be a national commitment to making prosperity more broadly shared. Such a commitment would change lots of policies in different ways and all together it would make it difference. It would probably also make CEO's simply ashamed to pay themselves too much -- it would be bad for business to do so if companies with that kind of pay structure were regarded as shady.

There's a lot that could be done. The question is whether people really want to.