I recently saw this chart in an article I was reading. It indicates that income inequality increased greatly after the early 1970s in the United States.
I don’t care all that much about income inequality, except as it is perceived by others. The problem I have is that the top 1% have prospered while most of the rest have been stagnant in terms of income.
While the statistics aren’t perfect, real household income is a good measure of whether living standards are increasing as they should. There is no question that we are better off today in terms of technology and communication. The problem is that our incomes have not increased in real terms for basic needs such as housing, food, medical care, and education.
Of course, 1971 was the year that Nixon took the U.S. off the international gold standard. The U.S. was already inflating, which is why Nixon was essentially forced to do this. Otherwise, all of the gold would have been gone quickly.
The last 4 decades have seen unprecedented growth in government spending and deficits. This has gone hand in hand with easy money policies and artificially low interest rates. I don’t think it is a coincidence that the top income earners have done well in this system while the rest have been left behind.
We have to hear all of this complaining by the anti-capitalist left about income inequality. But it is the anti-capitalist policies that are driving the increased inequality. It is corporatism and central banking that favor the rich.
If everyone were prospering at approximately the same rate, there would be nothing wrong with inequality. Anyone who complains about it just because it is exists is doing so out of envy or just to be a demagogue. I don’t care if billionaires make billions more, as long as it is not being done at anyone else’s expense. If all classes are rising, there is no problem.
Therefore, the solution is to get rid of central banking and corporatism. We also need much lower taxes and government regulation in general. We need to drastically cut government spending.
This will eventually lead to real rising income for lower class and middle class Americans. It may mean rising income for the upper class too, but that is good for them.
In a true free market, the rich don’t get richer at the expense of others. They get rich by serving others and making people’s lives better.