Is Income Inequality 'Morally Wrong'?

President Obama isn’t the only liberal who suggests that the growing gap between rich and poor in America is morally wrong. But I believe he’s the first president to make that argument and hence, brought the issue squarely into the realm of politics.


The Hill:

President Obama is changing gears on the economy, highlighting income inequality as a growing problem in advance of pitched fall battles with congressional Republicans over funding the government and raising the debt ceiling. [WATCH VIDEO]

The focus is intended to make it easier for Obama to argue that new taxes on the rich — and not cuts to social spending — should be imposed to lower the deficit.

It also dovetails with Obama’s call for Congress to raise the federal $7.25 minimum wage and to end the automatic spending cuts known as sequestration.

“This growing inequality is not just morally wrong, it’s bad economics,” Obama said in remarks last week in Galesburg, Ill., where he began a new push on the economy.

“The income of the top 1 percent nearly quadrupled from 1979-2007, but the typical family’s incomes barely budged,” he said.

The president reiterated that message in an interview with The New York Times last week.

“If we stand pat, if we don’t do anything … income inequality will continue to rise,” he told the newspaper. “Wages, incomes, savings rates for middle-class families will continue to be relatively flat. And that’s not a future that we should accept.”

Obama is also discussing the matter in private.

During a meeting earlier this month with members of the Congressional Black Caucus, Rep. Keith Ellison (D-Minn.) said he pressed Obama to issue an executive order requiring federal contractors to provide higher wages.

“He said it’s something that he would take a close look at,” said Ellison, the co-chairman of the Congressional Progressive Caucus. “He should seriously look at doing that because he might be able to help a whole bunch of workers.”


First of all, the idea that any raise in the minimum wage or other mandated pay rate ordered by the government can close the equality gap to any significant degree is a futile gesture, made more for politics than any practical effect it would have. The growing gap between the top 1% and the bottom 50% is a function of a changing economy — a loss of millions of good paying factory jobs coupled with a rise in the lower-paying service sector. Globalization has contributed to the stagnation of middle class wages as competitive pressures keep pay low.

One can argue that this has been detrimental to the economy overall, and a case could be made that the transition from a production to a consumer-oriented economy has helped create these disparities.

But is it “morally wrong”?

If true, perhaps the president and others who support that notion could tell us how big a gap would have to be present for it not to be morally wrong? At what point is the gap morally acceptable? What spread in dollars and cents between the very rich and the middle class would the president pronounce “moral”? The problem with declaring the wealth gap immoral is that it presupposes there is a gap that isn’t. And unless the president has something specific in mind as to what would be morally acceptable, he’s just blowing smoke, stoking the anger and resentment of his supporters.


Unless the president wants to argue that there should be no gap between rich and the middle class and that everyone should have an equal share of wealth, some disparities are going to be present. The fact that a large percentage of wealth created in the last few decades has enriched some while the middle class has stood pat may be disturbing, even unfair, but it is not “morally wrong.” No crime was committed in acquiring this wealth. The myth that the rich have gotten richer by climbing on the backs of the working class is laughably passe. And unless you can look into the hearts and minds of the rich and accuse them of the morally repugnant sin of greed as the driving force in their acquisitiveness, one can’t assume that a moral transgression has occurred. In fact, the driving force for many in wealth creation is to prove themselves a success — the best at what they do. Money is a by-product of that motivating force, not the sole, desired end.

The president knows he can’t do much about the income gap between the very rich and the middle class. He is simply trying to frame the debate in moral terms to claim an illusory high ground. Anyone who argues with him about the income gap on that basis appears to be a moral cretin. Meanwhile, he confirms the anger of his supporters and plays to their resentments of those better off than they.


Effective politics, but not very presidential.


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