Mythbusting: Income Inequality

Alan Reynolds of the Cato Institute goes a long way to show that the current NYTimes series on "class", which is interesting reading but a poor basis for policy, is quite spurious in their assertion that class mobility has shrunk. He goes through a series of statistics to show that all Americans have done better in the last 25 years, and most inequality is due to (a) non-work and (b) age. Age inequality is easy to accept, and non-work-based inequality needs to be addressed by compelling more people into work, either by withdrawing welfare benefits or providing work incentives like lower taxes/EITC. So don't believe the hype: life may not be fair, but it's not becoming significantly less so.