Berkeley Arts & Letters: Tuesday, May 8: Timothy Noah: "The Great Divergence: America's Growing Inequality--and What We Can Do About It"
Liveblogging World War II: May 9, 1942

Questions for Tim Noah: Berkeley Hillside Club

  1. It was almost exactly 20 years that statistics prepared by Paul Krugman about the extent of rising income inequality began to show up in the New York Times on page 1. Back then we--or at least I--thought that this would quickly reverse itself: I remember one dinner at which Claudia Goldin challenged Paul, asking him to agree that rising inequality had made going to college such a no-brainer that we would soon see a flood of increasing investment in education that would bring income distribution back into balance. She was wrong. I was wrong. The American income distribution righted itself, at least for white guys, after the Gilded Age. It did so with mass education and the rise of the social democratic welfare state. What is different this time?

  2. Perhaps the most astonishing sociological fact about the rich in America today is how they, or perhaps we, really do not believe that they are rich. We are here in the heart of 94708, one of the top 1% zipcodes in California, with median household income here three times the nationwide median and at the ninetieth percentile of the nationwide income distribution, and where the biggest problem I faced today was that the industrial-strength milk frother at the Peets at Walnut and Vine was broken this afternoon, but very few of the Berkeleyites I know bringing home $130K/year or even $260K/year regard themselves as rich.

  3. Back when Larry Summers was through here in April, he meditated on the fact that a TV set today costs 1/50 of what one cost back when he was born but that a day in the hospital costs 50 times as much. How much of the declining tolerance of upper-middle class opinion leaders to tax themselves for the benefit of equal opportunity and a Great Society comes from the fact that they regard themselves as poorer than they should be--that they have cheap air travel and immense amounts of electronic and media toys, but houses are really expensive and traffic is awful. I know that, adjusted for inflation, I just paid 50% more for a house half the size and twice the commuting time from downtown SF than the house I grew up in was in DC--that's a factor of six tims as expensive.

  4. If I were a Stanford professor--which I hasten to say that I am not--this is the moment when I would demand that you justify concern with income inequality. Nearly everybody in America today, the Stanford professors would say, can afford enough food not to be hungry, enough clothing not to be cold, and enough shelter not to be wet. The rest of it is (a) playing status games and (b) keeping ourselves entertained--and the sheer number of people eager to keep us entertained for essentially free in this society is magnificent. Back in 1599 if you wanted to watch "Julius Caesar" in your own home, you had better be named Elizabeth Tudor--and that was pretty much the only thing you could watch either in your home or elsewhere. Today, by contrast, more than half of all Americans can at their whim watch not just "Julius" Caesar plus whatever other Shakespeare play they wish--plus "Rome", "Spartacus: Gods of the Arena", "Game of Thrones", the most bizarre 21st century adaptation of Sherlock Holmes I am ashamed to say that I watched Sunday night, etc. How much does it all matter?

Dean Baker emails some questions:

  1. If inequality is just technology then why haven't other wealthy countries everyone seen the same increase in inequality?

  2. How can we attribute inequality to globalization when many of our most highly paid workers are largely protected from foreign competition?

  3. If we had competent people running the Fed, and they burst the bubble before it got large enough to wreck the economy, wouldn't that have led to a situation where we had much higher employment, and therefore better wage growth today, and thereby lower inequality?