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Comment crosspost from Daily Kos.

I have to say this, you've done a magnificent job here.

One brief, ironic, comment.

Economic inequality does matter, because it generates the deadweight social welfare losses (deadweight loss economic model) that are the abstraction which the Right uses to attack the idea of living wages and other measures that redistribute income from the economic elite to the working masses.

They've mispecified their model, and failed to recognize that the redisitribution of wealth from sectors of the economy where it will be recycled creating economic growth (e.g. $50 given to a single mother working at Walmart will create demand stimulus, while the same money given to Bill Gates will most likely be invested abroad.)  So what happens is that as income is redistributed from people who spend it creating demand to people who invest it expanding supply, is a collapse in demand and oversupply.  

Keynes lives!

Behind the economic models of the Right spouting economic welfare is a political reality where they endeavour to improve the relative gains of their donors even if it creates social losses.  Why?  Because, once one passes the point of material satiation,(e.g. I can't eat another piece of steak) they enter the world of positional consumption, conspicous consumption whose value is driven by how much one has relative to others rather than the absolute quantity.  And the economy becomes a zero sum game.

Economic growth harms social welfare, because it is directed at this status competition instead of satisfying material needs.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Dec 3rd, 2007 at 10:40:29 AM EST

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