Rick Lowe

One of the things we hear an awful lot about in the US press is how the rich are getting richer and the poor are getting poorer.

In this Op-Ed for the New York Times, Nicholas D. Kristof tells us that:

"…the top 10 percent controls more than 70 percent of Americans’ total net worth."

"Emmanuel Saez, an economist at the University of California at Berkeley who is one of the world’s leading experts on inequality, notes that for most of American history, income distribution was significantly more equal than today. And other capitalist countries do not suffer disparities as great as ours."

In addition, it is always suggested that the rich do not care about the poor and the US should become more of a Social Democracy like Europe.

In this piece by Marian L. Tupy he suggests that:

"Europe's social democracies themselves, however, are also undergoing change. While the Bush and Obama administrations may have increased the size and scope of government in the United States, a number of European countries have turned to free- market solutions."

But if we only consider opinion without looking at the numbers we might find it's all myth. At least in this case.

Dr. Steve Horwitz sets the record straight about the myth that the rich are getting richer and the poor are getting poorer at this link… about Contemporary Economic Myths.

He tells us:

"A good deal of this is explained by demographic factors.  For example, the bottom quintile tends to be disproportionately young people and as they age, they move up the ladder.  Even if that explains a good deal of what we see here, so what?  It still contradicts the usual understanding of the data.   The real policy question here is income mobility.  How easy is it for folks who start poor to move their way up?  The answer to that is "pretty easy."  That paints a far different picture of how the poor are doing over time than the static and misleading idea that the poor are getting poorer that is taken from year-to-year comparisons of the quintiles."

My take is it's easy to cast aspersions at the rich, and I would like to be one of those one day, because of envy. But I would venture to say that as a result of Capitalism, people live far better today than ever before, the present economic decline notwithstanding.

What's your take?