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Smart v. Stupid

Why income inequality is a losing issue and how to fix it

Liberal messaging 2.0

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With Occupy Wall Street sputtering during its spring reboot, it looks like the movement that dominated last year’s political discussion may not repeat. That’s not entirely unexpected. OWS promoted two concepts, one that resonated with Americans and one that didn’t.

The first was that governing for the “1 percent” – coddling and pampering those moody rich folks – is contrary to American interests. “The 99 percent” resonated with Americans for its simple reasonableness and because two Bush terms of (take your pick) supply-side, trickle-down or tinkle-on economics had essentially destroyed our economy. It further fit because Wall Street got a bailout but “Main Street” didn’t. It drew bright lines.

The second concept, "income inequality," generated considerable press but never really caught on. That’s no surprise either. It’s a statistical term that migrated to popular use. No one checked to see if people would actually hear what was being said. People didn’t, and the enemies of OWS were able to reposition the idea as socialist-style redistribution of wealth (which it wasn’t.)

Still, Americans aren’t really for income equality – never have been. Our entire viewpoint is based on the idea that anyone can be rich if he or she works extra hard. What Americans do believe in – almost universally – is equality of opportunity. Anyone can …  is rooted in the idea that everyone could.

Unfortunately, opportunity equality is still entirely aspirational. A Princeton Research Study finds more than half of those under 30 believe they will be rich. By the time they reach 50, barely one in five still imagine it. Only a small few actually will. Reality intrudes.

And only a tiny slice of the poor will end up rich. Today, crossing from poor to rich is virtually impossible. In recent years the very rich have doubled their share of the nation’s income but the number of rich people hasn’t increased markedly. The United States lags behind all leading European Union countries in the possibility of moving up.

It is no accident that today’s corporate moguls attended Harvard or Yale, and it is no secret that it wasn’t hardship scholarships that paid the freight. Mark Zuckerberg grew up in the affluent exurb of White Plains New York. His parents were both doctors. That’s doesn’t undermine his substantial accomplishments, but it goes a long way toward explaining them. He didn’t have to worry about his future while he was busy creating it.

Similarly Bill Gates entered adulthood with a million-dollar trust fund, compliments of his grammy. His expensive prep school had computer access years before most high school students had even seen one. Again, his advantages didn’t make him successful, but they allowed him to devote 100 percent of his intellectual energy to getting there – without worry, doubt, fear, or responsibility.

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Compare that to an imaginary guy named Ned. His family was lower middle class. His father worked; his mother worked part-time. In today’s dollars, his family’s income was $45,000 – if his mom was working. His folks constantly worried about having some savings and keeping health insurance, often enough that he noticed. Dad was working toward a pension, back when those still existed. In the house on the right was a disabled vet, a nice man who didn’t work. On the left side, a father went to work at the plastic straw factory every day.

If you grow up in a wealthy family, you are virtually guaranteed to be able to go to college. You know well-off people. You won’t have to give up on your business idea because you need health insurance. You don’t have to work two jobs to pay your bills. And you are more likely to marry someone who is also expecting a significant family inheritance.

So how can we create greater opportunity equality? It is pretty simple actually:

  1. Make sure we can compete with entrepreneurs in European countries by decoupling health care from jobs and making it universal.
  2. Make community college free so that everyone gets the opportunity to qualify for merit scholarships even if they attended an awful high school.
  3. Establish entrepreneurship institutes in every high school. Give students access to mentors and backing to start a real microbusiness. Stop thinking of high school as just a place to train workers.
  4. Realign our economic policy and federal spending to revitalize manufacturing. Policy should actively discourage a dollar-store economy based on selling cheap stuff to poor people. We can’t compete with China on crap, but we can still compete with Germany in precision manufacturing.
  5. Realign our economic policy and spending to focus primarily on new energy. It’s time to graduate from fire, even if it is still cheaper. Non-combustion energy is the key product and the key to product-development in the next century.

Most Americans are unmoved by the idea that hard work should pay equally. But most of us believe that opportunity should be available to all. That’s an explanation that works.

Jimmy Zuma splits his time between Washington, D.C. and Tucson. He writes the online opinion journal, Smart v. Stupid. He spent 5 years in Tucson in the early ‘80s, when life was a little slower, swamp coolers were a little more plentiful, Tucson’s legendary music scene was in full bloom, and the prevailing work ethic was “don’t - unless you have to.”

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Courtesy Jimmy Zuma

Occupy Wall Street 2011

He didn’t have to worry about his future while he was busy creating it.

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