Tuesday, September 23, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Isn’t it time to pick on Piketty?

By
From page A8 | May 26, 2014 |

It can happen, I suspect, to any of us. Someone comes along with major thoughtfulness, lays it out in an enticing book that happens to lend aid and comfort to our ideological druthers, and we shout its praises and sneer at those who don’t.

I’ve been there. I’ve quoted my heroes at length and, on a couple of occasions, embarrassingly learned later of faults and fallacies hidden in the bushes. My question is whether leftists will give up their sneers as critics raise serious questions about a new book by French economist Thomas Piketty.

Called “Capital in the Twenty-First Century,” it says capitalism is heading for virtually inevitable catastrophe in the absence of taxing the tarnation out of the rich – or something very close to that. There has seldom been such rejoicing among leftists who clearly see the work as a powerful means of wining political battles, thanks to the well-argued, clearly expressed thesis and research that is nothing short of mountainous.

Piketty’s central point is that growth of capital significantly exceeds the rate of economic growth, meaning that income from stocks, bonds and other assets is vastly outstripping the income of  labor. For historical reasons, income inequality was held in reasonable check during some periods, he says, but no longer. It is getting crazier all the time, and, to stop the madness, he wants a tax of 80 percent on incomes over $500,000 or maybe a million in highly developed countries and a progressive, global, wealth tax on our assets.

Here comes Martin Feldstein of Harvard. He disputes the thesis, saying capital only grew minutely more than the U.S. economy in recent decades once you take tax rule changes into account. As for a disastrous future, others contend, there are just too many variables to allow reasonable predictions.

Piketty says his proposed confiscatory taxation won’t hurt, but critics say it will deter innovative entrepreneurialism and other diligent efforts while enlarging bloated government. He makes it seem the wealth of the rich stays put while critics note the well-off are now paying most of our taxes, generate vast economic activity by spending on their lifestyles and invest in companies that are then enabled to expand and produce more jobs.

Another notable complaint is that Piketty left out something big in assessing U.S. income, namely $2.3 trillion in government transfer payments to the poor and middle class. In the end, it is also noted, the problems of the poor have far less to do with capital than with such social factors as single-parent households.

And hey, if Piketty is right that capital will keep growing at great rates while other income sinks,  why not help fix the inequality issue by hitching more wagons to this star? Investing a percentage of Social Security contributions in stocks could pay off big time, right? President George W. Bush was beaten up badly for this idea, but some point to how the Piketty thesis gives extra credit to a proposition that had merit before he spoke up.

John Cassidy, who reviewed “Capital” in the New Yorker, makes a point I especially applaud. He says Piketty barely deals with the incredible economic good happening in the developing world. In 1981, Cassidy says, about 40 percent of everyone lived on one dollar a day. Today, it is 14 percent. In the 1950s, people on average did not live past 42 in poor countries.  The life expectancy has now risen to  68. China’s economy may be creating new inequalities, but it has raised hundreds of millions out of excruciating destitution.

This brings me to a book that I believe is worthy of more attention than Piketty’s. It is Matt Ridley’s “The Rational Optimist,” which demonstrates how it is exchange, specialization, innovation — the work of free markets and trade – that are leading us not to a forlorn future, but to a great one worldwide if we let it happen.

Jay Ambrose is an op-ed columnist for McClatchy-Tribune. Readers may email him at speaktojay@aol.com.

LEAVE A COMMENT

Discussion | 1 comment

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

  • rlw895May 26, 2014 - 2:30 pm

    Picketty's book will rank up with transformational literature like "Silent Spring" and the proceedings of the World Meteorological Organization's 1989 Toronto conference: "The Changing Atmosphere: Implications for Global Security." First comes denial...eventually ending in acceptance. But will acceptance come too late?

    Reply | Report abusive comment
.

Solano News

 
Weather for Tuesday, Sept. 23, 2014

By Daily Republic staff | From Page:

Police investigate deadly Vallejo shooting

By Glen Faison | From Page: A5

 
 
 
Police report missing man was found

By Glen Faison | From Page: A5

 
Support group to host domestic violence event

By Susan Winlow | From Page: A5

 
Lake Berryessa hike set in October

By Barry Eberling | From Page: A5

 
Work scheduled for Rio Vista Bridge

By Barry Eberling | From Page: A5

.

US / World

California wildfire crews brace for weather shift

By The Associated Press | From Page: | Gallery

 
LA County sheriff’s deputies testing body cameras

By The Associated Press | From Page:

 
Bear suspected to have killed New Jersey hiker

By The Associated Press | From Page:

Poll: Support for gay marriage may be leveling off

By The Associated Press | From Page:

 
Islamic State militants kill 40 Iraqi troops

By The Associated Press | From Page:

Sierra Leone, Liberia brace for new Ebola cases

By The Associated Press | From Page:

 
Islamist group kidnaps Frenchman in Algeria

By The Associated Press | From Page: , 1 Comment | Gallery

Pennsylvania governor confident ambush suspect will be caught

By The Associated Press | From Page: | Gallery

 
Focus on UVa employee in student’s disappearance

By The Associated Press | From Page: | Gallery

State police: 3 missing Afghan soldiers in custody

By The Associated Press | From Page:

 
Prosecutor: 800 rounds found in intruder case

By The Associated Press | From Page: | Gallery

Islamic State offensive poses problems for Turkey

By The Associated Press | From Page:

 
Study links changing winds to warming in Pacific

By The Associated Press | From Page: | Gallery

Crews work to clear debris from Shasta mudslide

By The Associated Press | From Page: | Gallery

 
.

Opinion

Editorial cartoon for Sept. 23, 2014

By Daily Republic Syndicated Content | From Page:

 
Still searching for the bottom in Iraq

By John M. Crisp | From Page: , 1 Comment

Academia needs to act to protect college women

By Dan K. Thomasson | From Page:

 
Question of the week: Will the drought end this year?

By Daily Republic | From Page: A8

.

Living

Today in History: Sept. 23, 2014

By The Associated Press | From Page:

 
Community Calendar: Sept. 23, 2014

By Susan Hiland | From Page:

 
Horoscopes: Sept. 23, 2014

By Holiday Mathis | From Page: B7

.

Entertainment

Kris Jenner files to divorce Bruce Jenner

By The Associated Press | From Page: | Gallery

 
Alaska TV reporter quits on air to promote pot

By The Associated Press | From Page:

Shonda Rhimes lays claim to Thursday nights on ABC

By Frazier Moore | From Page: | Gallery

 
Giuliani to help fight Noriega’s video game suit

By The Associated Press | From Page: | Gallery

‘The Lion King’ earns record box office

By The Associated Press | From Page:

 
Eric Lynch, Howard Stern’s diminutive foil, dies

By The Associated Press | From Page:

TVGrid Sept 23

By Daily Republic Syndicated Content | From Page: A11

 
.

Sports

Giants get closer, beat Dodgers 5-2 in 13 innings

By The Associated Press | From Page:

 
Prep boys water polo: Mustangs go 3-0 in Dixon tourney

By Daily Republic staff | From Page:

 
Prep boys soccer: Mustangs hold Indians to 0-0 draw

By Daily Republic staff | From Page:

 
MNF: Bears hold on to beat Jets 27-19

By The Associated Press | From Page:

Jeff Samardzija pitches A’s past Angels 8-4

By The Associated Press | From Page:

 
Nebraska’s Abdullah: Jameis Winston must grow up

By The Associated Press | From Page:

Raiders have to settle for moral victory

By The Associated Press | From Page:

 
Home of 49ers lineman Ray McDonald burglarized

By The Associated Press | From Page:

Undisciplined play sends 49ers to 1-2 start

By The Associated Press | From Page:

 
Kicking game: It is called football, after all

By Barry Wilner | From Page:

US Soccer stands by Solo decision

By The Associated Press | From Page:

 
FIFA ethics judge hesitates on World Cup

By The Associated Press | From Page:

 
Braves fire GM Frank Wren after missing playoffs

By The Associated Press | From Page:

Royals beat Indians 2-0, gain on Tigers

By The Associated Press | From Page:

 
Bettman says NHL proactive about off-ice conduct

By The Associated Press | From Page:

Silver: NBA will review domestic violence policies

By The Associated Press | From Page:

 
Concern over McIlroy, McDowell more about results

By The Associated Press | From Page:

NFL vetting process: There are no sure things

By The Associated Press | From Page:

 
Owner: ‘No misinformation’ by Ravens on Rice

By The Associated Press | From Page:

This date in sports history for Tuesday, Sept. 23, 2014

By The Associated Press | From Page:

 
Kent creates scholarship for Cal women’s athletics

By The Associated Press | From Page:

 
.

Business

Treasury to unveil steps to curb tax inversions

By The Associated Press | From Page:

 
Tesco suspends execs over inflated profit report

By The Associated Press | From Page:

GM expert says 21 deaths eligible for compensation

By The Associated Press | From Page: | Gallery

 
Apple: 10 million iPhone 6 and 6 Plus sold

By The Associated Press | From Page:

US existing home sales fall in August

By The Associated Press | From Page:

 
Investors fret Yahoo’s future, stock dips

By The Associated Press | From Page: | Gallery

Businesses and investors pressing for green policy

By The Associated Press | From Page: | Gallery

 
.

Obituaries

.

Comics

Garfield Sept 23

By Daily Republic Syndicated Content | From Page: B6

 
Baldo Sept 23

By Daily Republic Syndicated Content | From Page: B6

Dilbert Sept 23

By Daily Republic Syndicated Content | From Page: B6

 
Baby Blues Sept 23

By Daily Republic Syndicated Content | From Page: B6

Cryptoquote Sept 23

By Daily Republic Syndicated Content | From Page: B7

 
Zits Sept 23

By Daily Republic Syndicated Content | From Page: B6

Beetle Bailey Sept 23

By Daily Republic Syndicated Content | From Page: B6

 
Bridge Sept 23

By Daily Republic Syndicated Content | From Page: B7

Crossword Sept 23

By Daily Republic Syndicated Content | From Page: B7

 
Word Sleuth Sept 23

By Daily Republic Syndicated Content | From Page: B7

Pickles Sept 23

By Daily Republic Syndicated Content | From Page: B6

 
Frank and Ernest Sept 23

By Daily Republic Syndicated Content | From Page: B6

For Better or Worse Sept 23

By Daily Republic Syndicated Content | From Page: B6

 
Rose is Rose Sept 23

By Daily Republic Syndicated Content | From Page: B6

Sally Forth Sept 23

By Daily Republic Syndicated Content | From Page: B6

 
Get Fuzzy Sept 23

By Daily Republic Syndicated Content | From Page: B6

Sudoku Sept 23

By Daily Republic Syndicated Content | From Page: B7

 
B.C. Sept 23

By Daily Republic Syndicated Content | From Page: B6

Wizard of Id Sept 23

By Daily Republic Syndicated Content | From Page: B6

 
Blondie Sept 23

By Daily Republic Syndicated Content | From Page: B6

Peanuts Sept 23

By Daily Republic Syndicated Content | From Page: B6