Chequer-Board friend Nick Schulz has a very good column discussing its shortcomings:
The Occupiers are right about American incomes: They’ve definitely grown more unequal. But this fact presents three inconvenient truths for the Occupy Wall Street movement.
First, let’s look at the top end of the income ladder. It’s true that the rich — especially the top 1% — are getting richer, widening the gap between the top earners and everyone else.
So why are earners at the top doing so well lately? Two forces — globalization and advanced technology — have combined to heap enormous rewards on the top of the income distribution.
We can see the effect most clearly on display in the bluest parts of the country: in the financial corridor that runs from Boston through New York and Philadelphia to Washington and includes outposts like Chicago and Santa Monica; in the technology clusters of deep blue Seattle, San Francisco and the Silicon Valley; and in the entertainment hubs of Hollywood, Nashville and Manhattan.
Expanding global markets for financial services mean the rewards for those at the top of the Wall Street heap are much larger than they were a generation or two ago. The same goes for gigantic worldwide markets for technology products such as software and computers, and entertainment goods such as music and movies.
The phenomena driving this wealth explosion go by various names — “winner-take-all markets,” “superstar economies” and the like. Spend time in Greenwich or Chevy Chase or Portola Valley or Malibu and it is impossible to deny that thanks to these effects, the top 1% is doing spectacularly well.
What makes this truth inconvenient is that the proposed remedy — tax these haves and redistribute that income to the have-nots — has an upper boundary. Indeed, blue states such as California and New York, where these superstar effects are most pronounced, are already trying to remedy inequality with some of the highest state income taxes in the country, and they have bumped up against the limits of economic reality.
It’s telling that New York Gov. Andrew Cuomo has been a staunch critic of new tax increases, including on the wealthy, saying recently that “you are kidding yourself if you think you can be one of the highest-taxed states in the nation, have a reputation for being anti-business — and have a rosy economic future.”
Read the whole thing, which goes on to point out that wage depression also comes from immigration (though immigration into the United States serves the long term interests of the country), and the collapse of the family. As Nick points out, most of the members of the Occupy movement support immigration liberalization–as do he and I–which means that they will have to face the challenge of reconciling that support with their opposition to wage depression. Additionally, few if any in the Occupy movement care about the state of the family, or even understand how the breakup of the family can augment wage depression. Those who wonder why people like me have such scorn for the movement need wonder no more; Nick cogently shows that while the Occupy movement is long on sloganeering, demonstrating, and drawing attention to itself, it is short on actually understanding the problems it inveighs against, and offering solutions for those problems. About the only thing that I would add to Nick’s observations on this issue is the thought that–as Tyler Cowen has said–we ought to be less concerned with the issue of income equality, and more concerned with the issue of income mobility.