Updated: Jan 22, 2021
Dear Mrs. Clinton and Mr. Trump,
Like many Americans, I tend to stay away from political campaigning and personalities. We’re too busy turning the gears of American industry to spend time fawning over the elected officials that we hire to represent us. We are ready to hire one of you for the highest office in our nation, but it’s not looking good so far. Every time I catch a news story, it sounds more like tabloid hysteria than professional and respectful discourse about your candidacies. As an American who sacrificed my own personal health, savings, and security to publish game-changing economic research, I’m not amused by the opportunists who are swarming around you and poisoning your teams with agenda-driven misinformation. My discoveries have overturned their claims, and my greatest concern is that your speeches will reflect their falsehoods. From your speeches promises will emerge, and from your promises, policies will take hold.
There is a lot at stake for our families if you proceed with misconceptions about American economic inequality. You will slam the door shut on the American dream and leave our children in desperation. Your tax and spending policies that are based upon these falsehoods will cripple all Americans who struggle to earn a safety net for their families during the good years of their careers.
The upper-end of the statistically impoverished class will continue to languish in state dependency, and the truly destitute will be relegated to meagre subsistence. As those policies manipulate the price of labor and siphon tax redistribution, they will continue to explode the outrageous costs of essentials, including rent, real estate, healthcare, education, energy, and government services. Any pittance that your inequality policies send through Americans’ front doors will be overshadowed by the taxation and price inflation that you send through their back doors.
So let me set the record straight: there is too much income equality in our nation. Mistaken economic advisors have certainly arrived at their conclusions with authoritative methods. The problem is that they constructed their models without full and accurate data. Consequently, their ardent assertions of “income inequality” are statistical artifacts rather than truth. They calculated income distribution based upon households, and without including all forms of subsidies, welfare, and taxation. So their inequality claims do not represent the actual money that individual Americans have in their pocket – they represent changing household characteristics, inflated income for the wealthy that is whittled away by taxation of various forms, and deflated income for the poor that ignores most of the resources they actually use.
Americans who are considered statistically poor by the Census Bureau spend 2.6x the income that inequality advocates report. In the rare event that they include some form of taxation, they do not include local, state, or ad valorem taxes such as property, sales, and other massive taxes that are levied unequally. Even worse, the household income that they measure does not represent equal numbers of people or earners. For instance, in 2012, the lowest household income quintile had only 0.45 earners and 1.7 people per home, while the highest had 2.04 earners and 3.2 people per home. Do I even have to explain that houses with 4x the workers should be earning at least 4x the income, or that houses with twice the number of mouths to feed need twice the amount of income? Is your blood starting to boil yet, with how the inequality advocates have bamboozled you?
In addition to their exclusion of total welfare, subsidies, taxation, and household composition, the inequality advocates do not correct for part-time labor or cost of living index. There are people with high salaries that work fifty- to sixty-hour weeks, and there are those with low wages who only work twenty-hour weeks. If a person is getting by with half to one-third of the labor that a higher-income worker is earning, they are not getting a raw deal. Remember that time is money. Why would any honest analyst pretend as if the sixty-hour worker is living the same quality of life as a person who could fill their week with two more jobs on top of the one they have?
That’s not exactly a “fair” comparison, is it? As for the cost of living, you should be intimately familiar with that concept due to your relentless business travel. In a state like New York, the per diem payments for travelling government employees fluctuate by 300%! Nationally, the typical variation for cost of living falls within a 30% range. All inequality statistics must be compressed by cost of living if we wish to accurately compare the actual buying power commanded by incomes in different locations.
When corrected for all of these factors, the real inequality measure (Gini ratio) has barely fluctuated since 1984, and is overestimated up to 300% by inequality advocates. The inequality that remains is due to normal factors – industry and age. The industry that a person works in is more or less productive for society. Mining and oil is more productive than landscaping. Although industrial income inequality has more than halved since 1929, it is still a third of modern real income inequality. Age income inequality is even greater. A person earns much more at the end of their career than they did in their youth. The inequality storytellers just lump workers of all ages together, as if their experience shouldn't make a difference for their productivity. Did your inequality advisors explain these crucial details to you?
Finally, you must realize that these income statistics are all a snapshot of one year. Most people are not confined to these income levels for their entire lives. Your “poor” stats include elderly with paid-off houses, and your “rich” stats include successful married couples at the height of their career, with a mountain of debt.
Wealth is not income; wealth is surplus, and income is only a pathway to wealth. Please do not put more barriers in that pathway. There are very few mega-wealthy Americans. Your inequality policies that increase taxes, inflate prices, add value-based tax, and use financial repression in central banking do not affect those few wealthy Americans in the way you imagine. In fact, they bolster the wealth of wealthy Americans, as they artificially inflate their financial accounts, stocks, and bonds.
Your inequality policies will ensure that every endeavoring American never gets to reap the rewards of a prosperous career in the few good years that they earn an impressive income. They also make labor in some industries even more corrupt than it is today. Did you ever wonder why the most advanced industrial nation in history must search the globe for foreign workers? Did you consider that reducing prices for essentials is the best way to help low-income Americans, instead of imposing high minimum wages that will leave many of them unemployed and unable to get their foot in a door that could give them the skills they need?
The inequality storytellers have already manufactured too much equality with government policies. But manufactured equality has severe consequences for workers, and we are already enduring too much of that harmful equality. Misconceived inequality policies garner class separatism and deconstruction of the American dream. I humbly beseech you to reconsider your inequality rhetoric and advisory teams that failed to accurately disclose these facts to you. Not only is their tale of inequality incontrovertibly false based on accurate analysis, but it is harmful to American households. With this knowledge, we have the exciting opportunity to reclaim economic sovereignty for Americans; if you fail America in this, you will be a pariah of history instead of a champion.
Respectfully, Thomas E. Kurek
(This article refers to section 3.2 in Economic Sovereignty. All citations for the arguments here, are within the book)