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Today displaced workers wait for entrepreneurs, companies, investors, and other properly trained risk-takers to create jobs that employ them at high wages.
The Upside of Inequality
The success of the 1% isn't the plague of America's economy—quite the reverse. The fundamental issue is the government's well-intentioned but misguided attempt to decrease success payoffs.
Edward Conard's controversial bestseller Unintended Consequences, published four years ago, clarified the 2008 financial catastrophe and explained why the United States' growth was outpacing other high-wage nations. He warned that loose monetary policy would result in neither growth nor inflation, that expansionary fiscal policy would have no long-term impact on growth in the aftermath of the crisis, and that ill-advised attempts to rein in banking based on misplaced blame would stymie an already sluggish recovery. Regrettably, he was correct.
Now he's back with a new controversial argument: our present concern with wealth disparity is foolish and will only limit development even more.
Conard follows the consequences of an economy now confined by both its capacity for risk-taking and a scarcity of properly educated talent—rather than labor or capital, as was the case previously—using fact-based logic. He utilizes this new perspective to question liberal economists like Larry Summers and Joseph Stiglitz's conclusions, as well as the misconceptions of "crony capitalism" in general.
Instead, he contends that the middle and working classes' stagnant salaries are not due to the increased wealth of the most successful Americans. If anything, the 1%'s success has put upward pressure on employment and salaries.
High payoffs for success, according to Conard, drive talent to obtain the training and take the risks that eventually relax development limits. Well-intentioned initiatives to reduce inequality through redistribution progressively erode these incentives, harming not only the top 1% but everyone else as well.
Conard lays forth a strategy for raising middle- and working-class salaries in a labor-scarce economy that is migrating away from capital-intensive manufacturing and toward knowledge-intensive, innovation-driven professions. He advises us to quit blaming the 1%'s success for slow wage growth and instead embrace the benefits of inequality: quicker growth and more prosperity for everybody.
Today displaced workers wait for entrepreneurs, companies, investors, and other properly trained risk-takers to create jobs that employ them at high wages.
