On Technology and Inequality

Also over at the G-Spot, Kathy has a post on the limited role of technological change on inequality in America.

In a recent post, Mickey Kaus attacks Barack Obama for blaming the middle-class squeeze on, in Obama’s words, “a corporate culture rife with inside dealing, questionable accounting practices, and short-term greed; a Washington dominated by lobbyists and special interests.” But Kaus attributes inequality to something entirely different. Sayeth Mickey:

I would tend to blame … increasing returns to skill produced by trade and technological change! They are hard to personify and demonize–they’re just problematic trends we all need to confront.

That is a deeply problematic statement. Yes, a decade or so ago most economists probably would have attributed ever-growing levels of inequality to increasing returns to skill produced by trade and technology. But Mickey, the World’s Most Annoying Democratic Concern Troll™, obviously hasn’t been paying much attention lately, which is not surprising.

Kaus, whose brain seemed to stop functioning sometime during the Reagan era, is not exactly doing a lot of intellectual heavy lifting these days. Because if he were, he’d know that more and more economists and policy types are coming around to the view that something other than “increasing returns to skill” is going on here. The short answer to why our society is experiencing near-record levels of economic inequality? It’s the politics, stupid.