On St. Patrick’s Day, some thoughts about wealth and opportunity from a great intellect, Mohamed El-Erian, and a considerably lesser one, Alexandria-Ocasio Cortez:
Democratic Congresswoman Alexandria Ocasio-Cortez is right about the negative effects of inequality but wrong when she says a society with billionaires is an immoral one, said Allianz’s chief economic adviser, Mohamed El-Erian.
“If you create Facebook in your dorm, of course, you should be a billionaire,” El-Erian said, adding that wealth inequality is “a good thing — you incentivize.”
But El-Erian said he agrees with New York’s Alexandria Ocasio-Cortez about how the gap between rich and poor unfairly narrows economic opportunity for many Americans.
“We’re going to risk a major alienation and marginalization of part of our country, which is a real problem,” he said.
It’s quite easy to say that people should just “pull themselves up by their bootstraps”. But that’s perhaps just a bit too glib.
Despite our culture’s neurotic obsession with the politics of race, gender, and sexual identity, there is indeed glaring inequality in the world.
The biggest source of inequality is: Who are your parent(s)?
If you are born to two married parents who care about your future, you are going to have opportunities. If you’re born to a single mother in the inner city, or the fringes of Appalachia (notice that this is race-neutral), your life is going to be an uphill climb from day one.
The real question here is not: Is there inequality of opportunity? Of course there is. The real question is: Can government bureaucrats do anything about it, or will they only make the problem worse?
At present, some 40% of American children are born out of wedlock. (For African Americans, the percentage is above 70%.)
These children were born into low-opportunity situations. They have been disadvantaged from day one.
We should also remember that single motherhood exploded after the implementation of LBJ’s “War on Poverty”, which made single motherhood a much more feasible (if by no means pleasant) situation.
The problem with big government programs is that they almost always create ten problems for every one they (partially) fix.
If we really wanted to do something for our nation’s children, we would change the culture to make out-of-wedlock birth a socially unacceptable situation–like it was before 1970 (and even, to a large degree, before 1990). Bring back the shotgun wedding.
But no one is going to take that one on. It is far more politically expedient to say, “We need a new government program!” “We need higher taxes!” blah, blah, blah.