In America, the Have-Nots Have Plenty

by Dave Blount | January 23, 2014 3:05 pm

If you are tempted to take Obama’s rhetoric regarding income inequality at face value, have a look at this graph from the book The Haves and the Have-Nots by World Bank economist Branko Milanovic:

income inequality

Amazingly, it was published by the New York Times a few years ago, along with this explanation:

Here the population of each country is divided into 20 equally-sized income groups, ranked by their household per-capita income. These are called “ventiles,” as you can see on the horizontal axis, and each “ventile” translates to a cluster of five percentiles. …

Now on the vertical axis, you can see where any given ventile from any country falls when compared to the entire population of the world.

Quasi-socialist Third World Brazil is an example of a country with extreme income inequality.

Brazil’s bottom ventile – that is, the poorest 5 percent of the Brazilian population, shown as the left-most point on the line – is about as poor as anyone in the entire world, registering a percentile in the single digits when compared to the income distribution worldwide. Meanwhile, Brazil also has some of the world’s richest, as you can see by how high up on the chart Brazil’s top ventile reaches.

Despite all the rhetoric from incremental communists, America stands in sharp contrast.

Notice how the entire line for the United States resides in the top portion of the graph? That’s because the entire country is relatively rich. In fact, America’s bottom ventile is still richer than most of the world: That is, the typical person in the bottom 5 percent of the American income distribution is still richer than 68 percent of the world’s inhabitants.

Now check out the line for India. India’s poorest ventile corresponds with the 4th poorest percentile worldwide. And its richest? The 68th percentile. Yes, that’s right: America’s poorest are, as a group, about as rich as India’s richest.

But don’t take that for granted. With the wrong people in charge, our standard of living can certainly be reduced to that of India or Brazil, neither of which is known for its devotion to free market capitalism.

The wrong people would be Marxist demagogues who would have us believe that income inequality is inherently bad. Would you rather make $40,000, knowing that others make as much as Hollywood actors, or $4,000, knowing that only government bureaucrats are allowed to make more?

Income inequality isn’t the problem; poverty is. Fortunately, America found the cure for it: leave people free to create wealth. Unfortunately, the deliberate dumbing down of this country is causing us to forget it.

By the way, another reason not to take Obama’s rhetoric at face value is that income inequality has dramatically increased in the USA under his rule.

On a tip from Shawn R. Cross-posted at Moonbattery.

Source URL: