Among the too numerous frustrations of the political process is that a lot of smart and talented people spend their time and energy fulminating about things that don’t really matter. That diverts attention from our nation’s real problems. There are few better examples than today’s debate about economic inequality.
America may well have an economic inequality problem, but it’s not a problem that will be solved by denouncing “the 1%” or blaming bankers, Republicans or tax rates that are too low. It’s not a problem that will be solved by senseless rhetoric about the false wage gap between the sexes or calling for large minimum wage increases that would reduce the number of entry-level jobs.
To the extent we have an economic inequality problem, it’s not because a small percenatge of our population—comprised of professional entertainers and athletes, corporate CEOs, internet pioneers, and others—are wealthier than the average American. Young graduates bearing large student loans while facing a weak job market, families facing unemployment or low wages, and single parents struggling to raise children do not find their situations any more difficult because some in our nation are wealthy.
Yet, liberals seem to think otherwise, and here we find a stark illustration of the converse mindsets of liberals and conservatives. Liberals seem to want to reduce economic inequality by bringing the people at the top down, while conservatives want to reduce inequality by bringing the people at the bottom up. The left wants to focus on class warfare while the right wants to focus on economic growth, the proverbial rising tide that raises all boats.
If we want to reduce economic inequality, the only logical solution is to raise the living standards of the middle class and those at the lower end of the economic spectrum. History, economics and sociology show that the optimal way to do this is not through political grandstanding or government diktats but through the pursuit of policies that have grown our economy in the past.
We must reform our almost Rube Goldberg-like tax code to remove its economic inefficiencies. We need a simpler, fairer and flatter tax structure, one that lowers rates across the board and eliminates most of the provisions that, while perhaps well-intentioned, serve as disincentives to economic growth. President Reagan enacted tax rate reductions and simplified the tax code in the 1980s, ushering in a quarter-century of economic growth. Certainly there were the usual economic cycles over that period, but this growth led to millions of new jobs and overcame the tax increases of t