An inane article about income inequality

This (via Digby) is stunningly bad reporting:

Income inequality has been on the rise for three decades in the United States, according to the Congressional Budget Office, with the gap between the “haves” and “have-nots” currently at its widest point since 1967.

But as Democrats and Republicans wrangle over fiscal “fairness” and taxation, some experts argue that income inequality is not such a bad thing. They even go as far as saying that America’s economy functions on the basis of it.

“There is income inequality in America. There always has been and hopefully, and I do say that, there always will be,” Santorum said during a speech to the Detroit Economic Club. “Why? Because people rise to different levels of success based on what they contribute to society and to the marketplace, and that’s as it should be,” he added.

But many others see income inequality as not only natural and necessary, but desirable.

In his 1975 work “Equality and Efficient: The Big Trade-Off,” the Harvard economist Arthur Okun argued that inequality was the price to be paid for an efficient economy. The view became the backbone of conservative policy.

Thomas Garrett, assistant vice president at the St. Louis Federal Reserve, wrote in 2010 that income inequality in the U.S. was “not so bad.”

“Although many people consider income inequality a social ill, it is important to understand that income inequality has many economic benefits and is the result of – and not a detriment to – a well-functioning economy,” Garrett wrote, insisting that U.S. Census statistics “exaggerate the degree of income inequality.”

No one in the US (Occupy Wall Street does not) believes that everyone’s income should be the same (ok, there might be a few people). We don’t have a problem with income inequality, we have a problem with excessive and increasing inequality. Given that the reporter puts this in the article:

The Congressional Budget Office reported in 2011 that between 1979 and 2007 the top 1 percent of households saw their income grow by 275 percent, while for the bottom 20 percent, income grew by just 20 percent. For the middle 60 percent of Americans, average incomes grew just under 40 percent.

you would think she would understand that that’s the problem. Here’s some more info:

In 2011, real median household income was 8.1 percent lower than in 2007, the year before the most recent recession, and was 8.9 percent lower than the median household income peak that occurred in 1999. The two percentages are not statistically different from one another.

Income inequality also increased between 2010 and 2011 when measured by shares of aggregate household income received by quintiles. The aggregate share of income declined for the middle and fourth quintiles. The share of aggregate income increased 1.6 percent for the highest quintile and within the highest quintile, the share of aggregate income for the top 5 percent increased 4.9 percent. The changes in the shares of aggregate income for the lowest two quintiles were not statistically significant.

That leads to the real argument by us leftys: all the income gains are going to the rich–since 1999 the median income is down while income for the rich is up. Do Santorum, Garrett, and the others denying the problems with income inequality think that’s a good thing? It would be interesting if this reporter asked them that.

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