March 09, 2015
It’s too bad the NYT can’t find a conservative columnist who doesn’t have to resort to name-calling to make his arguments. Apparently he is upset that some of the economists close to Hillary Clinton now believe that the upward redistribution of the last three decades is a problem and that education is not the answer. He describes these people as “redistributionist” and insists that redistribution cannot do much to help the poor and middle class.
In fact, there is nothing inherent in the “redistributionist” agenda that should slow growth. Apparently, Brooks only wants people to think about tax and transfer policy, but that is not what Brooks’ “redistributionists” are talking about. Suppose, for example, that corporate directors were not all friends of the CEOs who get payoffs to turn the other way as the CEOs ripoff shareholders. We could have a corporate governance structure where the directors lose their generous stipends if they overpay the CEO (as determined for example by losing a “say on pay vote”). That would likely help to bring CEO pay down to earth while increasing efficiency.
Similarly if the government stopped subsidizing non-profits that are so inept that they can only get competent people by paying high six figure or seven figure salaries. This would also be a market oriented reform that would reduce inequality. And we can take away the tax breaks that make folks like Mitt Romney and Jeff Bezos incredibly rich. Again, this would increase efficiency and reduce inequality.
We can have more open trade for doctors to give these one percenters the benefit of international competition. And we can have a Wall Street sales tax to subject the financial sector to the same sorts of taxes as other sectors.
None of these are tax and transfer policies. These are all policies that make the economy more efficient while reducing inequality. Brooks wants to pretend such policies don’t exist, but ignorance is not much of an argument.
Note: Link and typos corrected, thank ltr and Robert Salzberg.
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