I'm not convinced that EJ Dionne is right to say that "Obama [has] cleared the way for a big debate on inequality." He has certainly embedded a number of new taxes on the rich into his budget, but the two are not the same, and Obama certainly hasn't sold those provisions based on abstract notions of distributional justice. Meanwhile, inequality is almost certainly going to drift down on its own: That top tenth of the top percent that people are always talking about had a lot of folks who worked on Wall Street and that top one percent had a lot of folks who were invested in Citibank. Indeed, as the graph on the right shows (click for full size), we saw just such a leveling when the tech bubble popped in 2000. We can expect a similar -- and probably more severe -- effect today.But I would like to see a debate on inequality. An honest one. The conversation as it currently stands is a bit muddled. Progressives are often unclear as to why inequality is a problem. Is it a policy problem that needs to be solved or simply an offensive state of affairs? Walking with a friend recently, he said conservatives didn't care about inequality because their "values" are different. That may be, in part, true, but if we're really just staring down a collision of abstract visions of distributional justice, then it's hard to argue that Obama should elevate that philosophical dispute to the top of his agenda. I'd argue that inequality actually is a pressing policy problem: A wildly unequal society has near insurmountable concentrations of political power that, in turn, shape every other economic and social priority. And inequality is usually symptomatic of something much worse: Stagnant median wage growth, which is as serious a problem as an economy can face. But it's a discussion worth having, if for no other reason then because it's hard to say how you should approach inequality unless you're clear on what you're ultimately attempting to correct. THE INEQUALITY CONVERSATION.
I'm not convinced that EJ Dionne is right to say that "Obama [has] cleared the way for a big debate on inequality." He has certainly embedded a number of new taxes on the rich into his budget, but the two are not the same, and Obama certainly hasn't sold those provisions based on abstract notions of distributional justice. Meanwhile, inequality is almost certainly going to drift down on its own: That top tenth of the top percent that people are always talking about had a lot of folks who worked on Wall Street and that top one percent had a lot of folks who were invested in Citibank. Indeed, as the graph on the right shows (click for full size), we saw just such a leveling when the tech bubble popped in 2000. We can expect a similar -- and probably more severe -- effect today.But I would like to see a debate on inequality. An honest one. The conversation as it currently stands is a bit muddled. Progressives are often unclear as to why inequality is a problem. Is it a policy problem that needs to be solved or simply an offensive state of affairs? Walking with a friend recently, he said conservatives didn't care about inequality because their "values" are different. That may be, in part, true, but if we're really just staring down a collision of abstract visions of distributional justice, then it's hard to argue that Obama should elevate that philosophical dispute to the top of his agenda. I'd argue that inequality actually is a pressing policy problem: A wildly unequal society has near insurmountable concentrations of political power that, in turn, shape every other economic and social priority. And inequality is usually symptomatic of something much worse: Stagnant median wage growth, which is as serious a problem as an economy can face. But it's a discussion worth having, if for no other reason then because it's hard to say how you should approach inequality unless you're clear on what you're ultimately attempting to correct. 
