The House Budget Committee, under Chairman Paul Ryan, has put out a report on income inequality that basically seems like a rebuke of the CBO report on inequality. Reading over the Budget Committee report, I was struck by how dishonest it was. It is my purpose to expose this dishonesty.
To do that, it is my purpose to go over the report with a fine toothed comb. Where it is inaccurate, I will point this out. This will be rare, blatant dishonesty is generally avoided with this kind of publication.
What I will be focusing on instead is a few things. First of all, lies of omission. In a number of places information that should be known to any budget analyst that would cast doubt on the commission's conclusions is withheld. Inequality is a topic I've done a significant amount of writing and research on, when possible I will provide exact information to show how deceptive the selective information in this report is. Unfortunately, however, I am not an expert on this. Where I do not have a current citation on a specific piece of information I will be forced to more generally direct you to a set of works that deals with the topic, rather than provide a specific citation.
The second major focus will be on deceptive manipulation of the numbers. There are a number of places where changes in type of expenditure are presented as if they were reductions in expenditure and other abuses of trust such as this. I will discuss these at some length.
The third focus will be on the rhetoric, which has been a topic of great interest to may lately. This report displays a number of the rules of propaganda (summarized in Europe by Norman Davies on pages 500 - 501 for an easy reference). In particular, the report tries to drive home a narrative that I see as dominating far right discourse, that individual responsibility and social responsibility are mutually antagonistic. Also, that equity concerns are necessarily in competition with efficiency concerns. Neither of these narratives have empirical supports, I will be showing where they are simply assumed. This flaw in reasoning falls under "the rule of unanimity: presenting one's viewpoint as if it were the unanimous opinion of all right thinking people" (in this case, it is displayed as a self-evident fact of the world, with no alternative conceptions even being addressed). The other main rule is the rule of simplification, for instance whereby the Budget Committee expresses the choices facing us as pie-growing vs redistribution, rather than differing views on how best to grow the pie (this also falls under rule 2, "the rule of disfiguration: discrediting the opposition by crude parodies).
I expect the analysis of this to take quite some time and a number of posts. Hopefully I'll be able to drive my point home of just how deceptive ideologues like Ryan are being in reports such as this. I believe that a primary cause of our current polarization is that manipulation such as this has inserted memes into our culture that have served to corrode what was a previous since of the country sharing our burdens at all levels, individual responsibility reinforced family responsibilities which reinforced community responsibility all the way up to the national level. By contrasting individual responsibility with social responsibility the far right corroded this basic consensus breaking down the bonds of trust that linked shared responsibility into a circle with each stage reinforcing the next. This was achieved not through the content of what was being argued but rather by framing and by controlling the narrative, my focus is on exposing the frame and narrative for what it is to expose the weakness of the content of these arguments.
I do wish to briefly address why I think inequality matters so much. It's not because of fairness, or even because I think inequality threatens growth and stability (which I think it does). It's because growing inequality has not been met by a corresponding increase in responsibility, for a given burden of costs the share of taxes paid by the wealthy has increased more slowly than their share of income. This means that the rest of us pay relatively more with a relatively lower share. Not only has income median income growth been comparable to 18th century rates of growth, we've seen our share of the burden of government increase proportionately faster than our share of incomes has declined. There is also the social problems that income inequality has historically led to, but fundamentally the issue is that the growing inequality has resulted in a real increased per capita burden on the rest of us.
I will also state that I come from an intellectually different universe than Ryan. His economics starts with an assumption that all economic growth is essentially consumption driven, the tendency to invest is ultimately driven by people deferring present for future consumption at a discount rate. From this view, increasing the gains to be had by success and the penalties to be had by success will motivate people strongly because their consumption function will alter more drastically.
I believe this is hogwash, I see people as being primarily status driven with a secondary concern of maximizing security. Investment and growth occurs because people strive for a greater relative position, when they see the path to this broken because all their efforts are taken up by necessary consumption, whether status consumption or the fulfillment of physical needs, they cut back on work and investment because they fail to see the point, they're not motivated by the potential future consumption but by instead the prospects for relative gain. In highly unequal societies people see their efforts as being insufficient to compete with others with so many advantages so they stop trying. The secondary goal is security, lacking a secure means of subsistence (which has expanded with expectations to include goods such as healthcare) means that people will fail to act on opportunities or take risks for fear of losing what little they have. People with a family based safety net tend not to consider this, the worst prospect of failure they face is moving home with the parents. This makes them believe that long term payoffs and risk taking are natural, having never had to face the prospects of living on the street they don't fully understand how this would shape their behavior if faced with this scenario.
As per usual, this introduction expanded beyond my original intention. I will now begin to dig into Ryan's report in earnest for future posts. I'm not sure how long this will be, but I can promise several posts for the level of detail I intend.