Have US Income and Wealth Inequality Actually Increased?

> Another glaring issue with the Gini coefficient is that it tracks income inequality and not wealth inequality.

Well, people more frequently cite the Gini coefficient of income, but you can take a Gini coefficient of any measure, including wealth [1].

> It's well known that the rich don't make their money via income but rather through ownership.

The money made through ownership is income -- making money is equivalent to income. Its true that source of that income is different for the richest than most other people (most of the richest derive most of their income through capital, while most of the rest derive most of their income through labor), but its still income.

[1] Gini coefficients of wealth are, e.g., presented here: http://en.wikipedia.org/wiki/List_of_countries_by_distributi...

> 1. Is anyone worse off because Mark Zuckerberg is very rich?

Mark Zuckerberg? Probably not directly; Facebook's employees are treated well, as far as I'm aware. But that's an awfully narrow example to cherry-pick. How about the Waltons, or Jeff Bezos? Employees in Wal-Mart stores and Amazon warehouses go without benefits, unemployment compensation, a living wage, and sometimes basic climate control, so that the wealthy can line their pockets.

The wealth of CEOs does not descend upon them from heaven as a divine reward for good management. Every million dollars they get is a million that is not being spent on compensating employees. (Or on growing the business, etc.) Obviously CEOs deserve compensation for their work just like anyone else, and I haven't done the math on how much the Waltons and Jeff Bezos are worth vs. how much it would cost to treat all of their employees decently; but when a boss is worth billions and their employees can't afford food or medicine for their children, it's obscene.

> 2. If policies to reduce income inequality made the poor worse off, would you be in favor of them?

No. Obviously. I favor policies in general that aid those who need it most. Reducing income inequality is only one obvious way to help do that.

You've got a "gotcha" planned here, I assume?

> Wealth is built by extracting that wealth from a shared economy.

This is wrong. First wealth is not extracted from people...it is created from a voluntary exchange. Think about why people handed over money to the "wealthy" in the first place. It was in exchange for a good or service that made that person wealthy where wealth is defined by being better off than they were before. Money is just a unit of exchange that we use to move wealth around. Following this logic the wealthy have already paid their dues so to speak by making other people more wealthy.

Again they do not EXTRACT wealth, they GENERATE wealth for their customers. People with a ton of money should be applauded for delivering so much wealth to society not vilified as if they stole it from them.

> (2) Policy should look at what the post-redistribution (in the form of taxes, credits, subsidies, etc) income and wealth disparities are. It seems as though that is lost in the conversation.

It's pretty hard to have a conversation about a problem and how to fix it, when the data being flung around doesn't measure the problem, and doesn't measure the fix either.

As an example, looks like any data on poverty (often the basis economic inequality conversations) from US govt prior to 2011 is useless to measure the "war on poverty", because it doesn't measure most of the financial efforts to fight poverty. http://www.nytimes.com/2011/11/04/us/experts-say-bleak-accou...

Most of the issue seems to comes down to "fairness". The natural world is not fair, but it is a working system. A elephant does not work harder than a an ant to survive, in fact you might say the opposite is true. The elephant won the ovarian lottery, this is not fair to the ant, but the system works.

I think it would be ridiculous to suggest that those 85 people worked 41 million times harder to get where they are compared to the other 3.5 billion, that's simply impossible. The successful seem to have a hard time grasping or accepting the amount of opportunity (luck) involved in their success.

I personally think its better to look at the economy as a game and the game must have arbitrary rules defined to "level the playing field". These rules must followed and enforced to maximize the enjoyment of the games participants. After all thats what a modern economy does, improve quality of life, not just survival. The rules will need to be modified and tuned over time to find the sweet spot. As with all games there will be super-stars and weak players that get compensated differently, however the ruleset will limit inequality to something "fair" and "enjoyable" to all participants.

One quote that always comes to mind: "The free market should be a prize fight not a barroom brawl".