A Modest Proposal To Reduce Income Inequality

Income inequality is the latest liberal crusade. It is also a load of crap. Here is just one of many analyses to support that statement.

Income by Household	% in 1967	% in 2009
Less than $50,000	61.4%	50.1%
$50,000 to $200,000	38.0%	45.9%
Over $200,000	0.6%	3.8%

The table shows that the amount of people making over $200,000 per year has certainly grown while the middle group has also grown and the amount of people in the lowest economic strata has declined. More households have moved into the middle-class and more people have joined the highest income group.

(The data comes from the US Census Bureau ... (it) is in constant dollars to remove the impact of inflation/disinflation from the analysis.)

But refuting the notion of income inequality is not the point of this post. Most people (myself included) can cherry-pick and torture numbers to support any position we care to take. What I would like to do today is to offer a suggestion to help decrease the (perceived and alleged) rise of income inequality.

I've spent the last five years working in South Texas, which is enjoying an unprecedented economic boom as a result of energy-related activity in the Eagle Ford Shale region. It's not just the energy companies that are benefiting. Good-paying jobs are plentiful. Landowners are reaping windfall profits, and not just from mineral rights or drilling fees. Housing, grocery stores, restaurants, shops, commercial developments ... all are going through the roof.

The same results can be seen in the Bakken Shale Oil region in North Dakota.

In 2006, North Dakota ranked 38th among the states in average personal income. By 2012, it was sixth. Department of Commerce data show that over those six years, North Dakota’s per capita personal income went from 14 percent below the national average to 25 percent above.

Granted, having a heaping helping of energy reserves in your back yard helps raise income levels. But that's missing the point. Take a closer look at a tale of two states.

...the Marcellus shale, which has been the biggest new source for the nation’s natural gas renaissance, is for the most part located beneath New York and Pennsylvania. Pennsylvania has allowed landowners to rapidly develop the reserves they own, while New York has maintained a moratorium on the smart-drilling technology (hydraulic fracturing and directional drilling) that unleashes the gas.

The farmers on the New York side of the state line gnash their teeth, while the farmers in Pennsylvania cash their checks. One state grabbed the brass ring while the other thumbed its nose at jobs, income and lower energy prices.

The picture on the national level is strikingly similar.

Our stunning increase in petroleum production (nearly 40 percent in the past three years) has occurred almost exclusively on state and private land. In fact, production on federal land dropped over the past couple of years.

One statistic epitomizes why that is so: In North Dakota, it takes about 10 days to get a drilling permit. In contrast, the delay for a federal drilling permit is about 10 months—double what it was in 2005.

Money quote:

You’d think that an administration that is so intent on redistributing income would be a little more sympathetic to generating the income in the first place.

Bottom line, if obama and his cronies are serious about increasing income for the majority of American workers, they'd devote more time to removing impediments to innovation and job growth, and less time to political posturing.

When pigs fly...