Paul Krugman asks, “Is vast inequality necessary?” His answer is that some inequality is “inevitable,” but “the rich don’t have to be as rich as they are.”
But maybe the problem isn’t the rich are too rich. Maybe the problem is the poor aren’t rich enough. Like Bernie Sanders, who accuses Trump of being a demagogue and then spends most of his speeches lambasting the wealthy, Krugman wants to blame the wealthy for being rich. But the wealthy aren’t the ones who put policies in place that keep the poor oppressed.
The Antiplanner recently met Alan Graham, who helps homeless people in Austin. He says the homeless have too many health problems to make good employees, but they are very entrepreneurial. But the only entrepreneurial activity they are legally allowed to engage in is begging, because the courts have ruled that begging is a First Amendment right. Anything else they would like to do, even just open a lemonade stand, requires fees they can’t afford and permits from a bureaucracy they can’t understand. These rules were made by middle-class bureaucrats and progressive elected officials, not the wealthy.
As the Antiplanner documented in American Nightmare, homeownership is such an important route out of poverty that working-class families actually had higher homeownership rates in 1890 than middle-class families. Since then, middle-class bureaucrats have layered zones upon rules upon fees on land available for housing.
Despite this, homeownership continued to rise until around 1970, which happens to be about the same time that income inequality in the United States bottomed out. The continued rise in homeownership was possible because working-class homebuyers could always escape the regulated cities into unregulated suburbs where they could afford to buy or build homes.
Then some states and urban areas began regulating the suburbs as well. Since then, national homeownership rates plateaued at a little over 60 percent. But this disguises the continued growth in homeownership in relatively unregulated states and the declines in homeownership in more regulated states. Homeownership rates in California, Oregon, and Washington, for example, all peaked in 1960. Were it not for anti-sprawl regulation, national homeownership rates today would probably be above 70 percent.
The wealthy didn’t pass such land-use laws and regulations (though they and many upper-middle and middle-class families benefitted from it). Instead, progressive politicians and bureaucrats passed this regulation.
So quit blaming the wealthy. If people like Krugman, Naomi Klein, and Bernie Sanders want to know who is responsible for growing inequality, they should look in the mirror.