by Kevin Morris

Created on: February 11, 2007   Last Updated: June 21, 2007

Any discussion of wealth distribution is treacherous at best. Any proposal that aims to redistribute wealth to the working poor runs the risk of stifling investment and initiative. At the same time, however, an economy is sustained by the purchasing power of consumers, something that cannot exist in the presence of extreme income inequality.

There are other mitigating factors as well. In addition to a tax policy that could easily be described as regressive, the poor and middle classes have been forced to labor under threats of outsourcing, illegal immigration, and skyrocketing living costs. Stagnant real wages and a (realtively) low minimum wage have compounded these problems.

Nonetheless, class warfare and vindictive indictments of the rich don't help anyone. The wealth gap in this country has indeed grown and the rich are keeping more of their income than any time since the 1920s (fact). However, the greater culprits are our government's inability or unwillingness (or both) to ensure that housing costs, education costs, and health care remain affordable.

I leave you with a fact that illuminates how much our economy has changed since the 1950's (that industrial era for which much of our institutions are designed): in 1950, the largest employer in the United States was General Motors, which built engines, cars and trucks. The largest employer in the United States today is Wal-Mart, which sells consumer goods built by a tremendously low-cost labor force in China.

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