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David Azerrad – Income Inequality

David Azerrad – Income Inequality


ROB MCCLENDON: WELL WITH
THE CHANGES IN OUR ECONOMY
THIS PAST DECADE, IT IS THE MIDDLE CLASS MOST
OFTEN PINCHED BY
EVERYTHING FROM THE RISING COSTS OF HEALTHCARE AND
HIGHER EDUCATION TO SIMPLE
JOB UNCERTAINTY, WHICH IS WHERE OUR FIRST GUEST
TODAY SAYS WE SHOULD FOCUS
OUR ATTENTION WHEN WE TALK ABOUT INCOME INEQUALITY. DAVID AZERRAD IS
WITH THE CONSERVATIVE
HERITAGE FOUNDATION. WELL DAVID, WHEN IT COMES
TO INCOME INEQUALITY, YOU
KNOW, THERE’S A FEELING OUT THERE THAT IN A JUST
SYSTEM WE REALLY SHOULDN’T
SEE THIS GREAT DISPARITY BETWEEN INCOMES. BUT IN LISTENING TO YOUR
TALK, YOU SAY IT’S NOT THE
WORRY THAT A LOT OF PEOPLE PAINT IT TO BE. WHY IS THAT? DAVID AZERRAD: WHAT THE
AMERICAN DREAM PROMISES
IS ECONOMIC MOBILITY, MOVEMENT UP AND DOWN THE
ECONOMIC LADDER, FORTUNES
BEING MADE, FORTUNES BEING LOST, PEOPLE STARTING OFF
POOR MAKING IT TO MIDDLE
CLASS, PEOPLE MOVING FROM MIDDLE CLASS
TO UPPER CLASS. WHAT INCOME INEQUALITY
LOOKS AT IS THE STATIC
DISTRIBUTION OF INCOME AT THE END OF THE DAY. IT TELLS YOU NOTHING ABOUT
THE OPPORTUNITIES THAT ARE
AVAILABLE FOR PEOPLE WHETHER OR NOT THEY
ARE MOVING UP AND DOWN
THE ECONOMIC LADDER. SO TO ME, IF YOU CARE
ABOUT WHAT REALLY MATTERS
WHICH IS CAN YOU STILL MAKE IT TODAY IN AMERICA
IF YOU WORK HARD, INCOME
INEQUALITY HAS NOTHING TO DO WITH THAT. IT’S A, I THINK WHAT IS
ULTIMATELY FUELING IT IS
EITHER A MISUNDERSTANDING AS TO HOW ECONOMICS
FUNCTIONS, THAT THINKING
THAT IT’S A ZERO SUM GAME, THAT IF THE RICH ARE
GETTING RICHER THEY’VE
DONE SO AT THE EXPENSE OF THE POOR WHICH
IS NOT THE CASE. OR OFTEN TIMES, IT’S
SOMETHING UGLIER CALLED,
ENVY, THAT YOU SEE THIS GROWING RESENTMENT AGAINST
THE WEALTHY, AND I WOULD
ARGUE, THAT’S NOT THE WAY WE LOOK AT THE
WEALTHY IN AMERICA. IN AMERICA, WHEN WE SEE
SOMEONE WHO HAS MADE IT,
WE THINK BY GOD IF I WORK HARD, I’M GOING
TO GET THERE TOO. ROB: NOW YOU MENTIONED
A ZERO SUM GAME. AND WHAT YOU’RE SAYING IS
THAT ECONOMICS IS MUCH
MORE DYNAMIC THAN THERE IS JUST THIS AMOUNT OF MONEY
AND HOW WE DIVIDE IT UP? AZERRAD: IF I COULD, IF I
HAD A MAGIC WAND, AND I
COULD CORRECT ONE ECONOMIC FALLICY IN THE WORLD, IT
WOULD BE THIS NOTION THAT
ECONOMICS IS A ZERO SUM GAME, THAT THERE’S ONLY
ONE PIE TO GO AROUND AND
THAT IF I GET A LARGE SLICE, YOU’RE
LEFT WITH CRUMBS. THAT IS FUNDAMENTALLY
MISTAKEN. THE RICH DON’T GET RICH AT
THE EXPENSE OF THE POOR
WHAT YOU HAVE IN A FREE MARKET ECONOMY SUCH AS
OURS IS A SYSTEM THAT
ALLOWS YOU TO GROW THE PIE, TO EXPAND IT
AS MUCH AS YOU WANT, IN
ORDER TO SERVE EVERYONE. SO IF PEOPLE ARE GETTING
WEALTHY IN A FREE MARKET
SYSTEM, IT’S NOT BECAUSE THEY’RE DEFRAUDING THE
REST OF US, IT’S BECAUSE
THEY ARE GENERATING WEALTH, THEY’RE CREATING
WEALTH AND IN SO DOING,
THEY ALSO CREATE OPPORTUNITIES THAT THE
REST OF US BENEFIT FROM. THERE ARE MORE
JOBS, HIGHER WAGES,
SO ON AND SO FORTH. SO WE REALLY NEED TO MOVE
AWAY FROM THIS STATIC VIEW
OF ONE PIE, AND HOW DO WE DIVIDE IT UP TO A PROPER
UNDERSTANDING OF FREE
MARKET ECONOMICS WHICH IS HOW DO WE KEEP ON
GROWING THE PIE. ROB: IS THERE A CONCERN
ON YOUR PART, AND I’LL
BORROW A PHRASE, CRONEY CAPITALISM, WHERE BEING
PRO BUSINESS MEANS
BEING PRO BIG BUSINESS. AZERRAD: I’M NOT
PARTICULARLY CRAZY ABOUT
THE SENTENCE PRO BUSINESS. I THINK AS CONSERVATIVES
WHAT WE NEED TO
BE IS PRO FREE MARKETS. FREE MARKETS
BENEFIT EVERYBODY. I’M FINE WITH PRO BUSINESS
SO LONG AS WE’RE CLEAR
THAT IT INCLUDES ALL BUSINESSES FROM THE
SMALLEST MOM AND POP
SHOP TO THE BIGGEST OIL CONGLOMERATE. WHAT YOU OFTEN TEND TO SEE
IS THAT BUSINESSES ARE
ACTUALLY NOT PRO BUSINESS. THEY’RE PRO THEIR OWN
BUSINESS, AND THEY’RE IN
FAVOR OF REGULATIONS AND LAWS THAT PUSH OUT
THE COMPETITION. SO I THINK THIS IS A
WINNING MESSAGE FOR
CONSERVATIVES, AND IT’S SOMETHING, IT EXTENDS
WELL BEYOND CONSERVATIVES
ACTUALLY IS, WE NEED TO HAMMER AWAY AT THIS POINT,
THAT WE STAND FOR FREE
MARKETS AND THAT MEANS HEALTHY COMPETITION
AND OPEN OPPORTUNITIES
FOR EVERYBODY. WE NEED TO BE VERY MINDFUL
OF CRONEY CAPITALISM, OF
CORPORATE WELFARE WHEN BIG ENTRENCHED BUSINESS
INTERESTS HIJACK THE
LEGISLATIVE AND REGULATORY APPARATUS TO KEEP OUT
THEIR COMPETITION. THAT IS UNFAIR, AND IT’S
A PROFOUND DISTORTION OF
WHAT CAPITALISM AND FREE MARKETS ARE ABOUT. ROB: LET’S TALK A LITTLE
BIT ABOUT THE AMERICAN
DREAM, AND REALLY THE AMERICAN FAMILY AND THE
DISENTIGRATON THAT WE’VE
SEEN OVER THE PAST COUPLE OF DECADES OF THE
AMERICAN FAMILY. AZERRAD: IN 1970, ABOUT
TEN PERCENT OF AMERICAN
KIDS WERE BORN OUT OF WEDLOCK. TODAY THAT NUMBER, FORTY
YEARS LATER HAS SHOT
UP TO FORTY PERCENT. NOW SOCIAL CONSERVATIVES
AND RELIGIOUS
CONSERVATIVES ARE RIGHTLY CONCERNED ABOUT THE
COLLAPSE OF THE FAMILY
AS THEY SHOULD BE. MY MESSAGE IS, EVERYBODY
SHOULD BE CONCERNED ABOUT
THAT, BECAUSE IT’S NOT STRICTLY A RELIGIOUS
ISSUE, IT’S NOT
STRICTLY A SOCIAL ISSUE. THE HEALTH OF THE FAMILY
IS AN ECONOMIC ISSUE. WHY? BECAUSE IT’S DEEPLY
INTERTWINED WITH
UPWARD MOBILITY. IF YOU LOOK AT ANY
INDICATOR, LIFETIME
EARNINGS, HIGH SCHOOL GRADUATION RATES, COLLEGE
ATTENDANCE, KIDS WHO GREW
UP IN INTACT FAMILIES FARE BETTER THAN KIDS WHO
EITHER ARE BORN OUT OF
WEDLOCK OR HAVE BROKEN HOMES. THIS IS, THE DATA IS
ABSOLUTELY CLEAR ON THIS
ONE, SO I WANT TO REMIND PEOPLE THAT THE FAMILY IS
NOT STRICTLY A SOCIAL
ISSUE, IT IS NOT STRICTLY A RELIGIOUS ISSUE. IF YOU CARE ABOUT THE
AMERICAN DREAM, IT’S AN
ECONOMIC ISSUE THAT IS DEEPLY INTERTWINED
WITH MOBILITY. ROB: NOW THAT REALLY LEADS
TO ANOTHER ISSUE THAT
YOU’VE TALKED ABOUT AND THAT’S THE EROSION OF THE
WORK CULTURE THAT WE’VE
HAD HERE IN THE UNITED STATES THAT’S REALLY
PROPELLED US FORWARD
OVER, YOU KNOW, DECADES. BUT IS THAT NOT JUST
AN ISSUE OF MAYBE THE
DISADVANTAGED BUT ALSO ISSUES OF THE
OVERLY ADVANTAGED? AZERRAD: MEANING? ROB: MEANING THAT TRUST
FUND BABIES THAT SIT ON
THEIR BUTTS YOU KNOW WHAT I’M SAYING? AZERRAD: WELL LOOK,
YOU’RE, IN ANY FREE SYSTEM
YOU’RE GOING TO HAVE THE ACCUMULATION OF WEALTH AND
YOU’LL HAVE PEOPLE WHO ARE
BORN INTO A LOT OF WEALTH AND DON’T NEED TO WORK. IN THE LONG RUN, THIS
TENDS TO NOT BE
SUSTAINABLE BECAUSE THIS WEALTH IS DILAPIDATED AND
YOU NEED TO BUILD IT UP. SO, I, TO ME, I DON’T,
THERE’S NOTHING UNFAIR
ABOUT INHERITING A LOT OF MONEY AND NOT
DOING ANYTHING AND
JUST SPENDING IT. MAYBE THAT’S NOT HOW I
WOULD CHOOSE TO LEAD MY
LIFE, OR THAT’S NOT HOW I’D WANT MY KIDS
TO LEAD THEIR LIVES,
BUT IT’S NOT UNFAIR. THE PROBLEM I SEE IS THE
CULTURAL INDICATORS WE’RE
SENDING IN MOVIES, IN TELEVISION, IN BOOKS AND
NEWSPAPERS, THAT WORK, IF
YOU’LL PARDON MY FRENCH, KIND OF SUCKS AND THAT
GOING TO THE OFFICE
EVERYDAY IS REALLY FOR SUCKERS AND THAT
IT’S OKAY TO JUST LOUNGE
AROUND WITH YOUR FRIENDS. I THINK THAT’S A VERY,
VERY BAD MESSAGE TO BE
SENDING TO PEOPLE. WE NEED TO HAVE A CULTURE
THAT IS ROBUST WHEN IT
COMES TO WORK, THAT ENCOURAGES, EXTOLS AND
HONORS HARD WORK, AND WE
NEED TO HAVE A CORROLARY SENSE OF SHAME WITH
PEOPLE WHO DON’T WORK. IF WE DON’T HAVE THAT
TODAY AS MUCH AS WE ONCE
DID, I DON’T THINK IT’S THE RESULT OF SOME TRUST
FUND BABIES NOT WORKING
AS HARD AS THEY DO. I WOULD POINT THE FINGER
MUCH MORE AT HOLLYWOOD AND
THE CORROSIVE MESSAGE THEY SEND IN THE MOVIES, THE
SITCOMS WHERE ALL THESE
GROWN MEN ARE DEPICTED WHO AREN’T REALLY WORKING. AND IT LEGITIMIZES
INDOLENCE AND THE PEOPLE
WHO ARE MOST IN NEED OF SOUND CULTURAL
INDICATORS ARE THE POOR. AND WE’RE DOING A PROFOUND
DISSERVICE TO THESE PEOPLE
AND TO THE COUNTRY AS A WHOLE BY MAKING
PEOPLE, BY LEGITIMIZING
SUCH BEHAVIOR. I REALLY THINK WHEN IT
COMES TO WORK WE SHOULD
SPEAK IN ONE UNIFIED VOICE AND MAKE IT CLEAR
THAT AMERICA IS
THE LAND OF LABOR. THIS IS WHERE YOU
COME, IT’S A COUNTRY
WHERE YOU WORK. BENJAMIN FRANKLIN WAS
ONCE SENT A LETTER BY A
EUROPEAN ARISTOCRAT WHO WANTED TO IMMIGRATE TO
THE U S. AND HE SAID CAN
YOU TELL ME ABOUT THIS COUNTRY? AND FRANKLIN SUMMED IT UP
THIS WAY, HE SAID AMERICA
IS THE LAND OF LABOR, PEOPLE HERE WORK HARD, AND
THEY EXTOL WORK, AND THEY
VIEW WITH SHAME THE NOTION OF NOT WORKING OR
LIVING OFF OF HANDOUTS. ROB: A FINAL QUESTION
ABOUT INCOME INEQUALITY. YOU SAY WE SHOULD FOCUS
LESS ON THAT TOP ONE
PERCENT AND MORE ON THE BOTTOM FIVE TO
TEN PERCENT. EXPLAIN YOURSELF. AZERRAD: WHEN I WAS A KID,
MY FATHER WOULD ALWAYS
TELL ME THAT IF YOU LOOK INTO SOMEONE ELSE’S PLATE,
IT’S TO MAKE SURE WHETHER
OR NOT THEY HAVE ENOUGH TO EAT NOT TO SEE WHETHER
THEY HAVE MORE THAN YOU. I THINK THIS SHOULD BE
THE GUIDING PRINCIPLE. IF WE’RE GOING TO LOOK AT
HOW MUCH OTHER AMERICANS
ARE EARNING, IT’S NOT TO BE ENVIOUS OF
THEIR SUCCESS. IT’S NOT TO COMPLAIN ABOUT
HOW THEY’VE MADE IT. IT’S TO MAKE SURE THAT
EVERYONE HAS ENOUGH, BOTH
IN TERMS OF WHAT IS IT LIKE TO BE POOR IN
AMERICA, IN TERMS OF
ABSOLUTE MATERIAL CONDITIONS ON THE GROUND. AND SECOND, WHAT ARE
THE OPPORTUNITIES
THAT ARE AVAILABLE? IF YOU ARE BORN INTO THE
POOREST FAMILIES IN
AMERICA, DO YOU STILL HAVE THE OPPORTUNITIES TO MOVE
UP, OR ARE YOU TRAPPED IN
A FAILING SCHOOL SYSTEM? SO I THINK, WHENEVER I
HEAR SOMEONE COMPLAINING
ABOUT THE TOP ONE PERCENT, MY ANSWER IS, I DON’T CARE
ABOUT THE TOP ONE PERCENT,
I WANT TO KNOW HOW THE BOTTOM ONE PERCENT ARE
DOING, I WANT TO KNOW HOW
THE BOTTOM FIVE PERCENT ARE DOING, HOW THEY’RE
DOING BOTH IN TERMS OF THE
QUALITY OF THEIR LIFE AND IN TERMS OF THE
OPPORTUNITIES THAT ARE
AVAILABLE FOR THEM TO MOVE OUT OF THE BOTTOM ONE
PERCENT AND MAKE IT INTO
THE TOP TEN, TWENTY, THIRTY OR YOU NAME IT. ROB: DAVID AZERRAD,
THANK YOU FOR YOUR TIME. AZERRAD: MY PLEASURE.

Comments (3)

  1. Point 1- If the top is growing relatively more than the bottom, then the top is still taking from the bottom just in smaller and smaller increments over time because of the depreciation of monetary value but that's still not even true if the top is cutting corners and deregulating the market enough to counter balance the monetary depreciation resulting in sustained profit growth, point 2- envy? surely thats not your only two counter points. Seems like a weak argument…

  2. Bravo! The ambitious will prosper as an entrepreneur under a free market or as a bureaucrat under socialism, thus the object of envy will always exist. Why not look to the system that rewards creativity rather than the one that relies on government hand-out? Answer: the Socialist needing to regulate everything can't stand the randomness of any another system.

  3. This is patent nonsense. That system is best which produces the best outcomes for the most people. It really is that simple.

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