Larry Summers says we need to worry less about income inequality and more about inequality of opportunity.
Summers, a former Treasury Secretary, Harvard president and economic adviser to President Obama, said in a video posted by Harvard Kennedy School on May 30 that people need to stop attacking the rich for their achievements and instead focus on addressing the shrinking equality of opportunity.
"I think we can accept, I think we should accept inequality of results, recognizing that those who earn more are in a position to contribute more to support the society," Summers said. "But if you look at the last generation, the gap in the life prospects of the child of a rich father and the child of a poor father has widened."
Summers may be correct to note that the opportunity gap has grown, but so too has the income gap between rich and poor. Between 1979 and 2007, the incomes of the top 1 percent of earners spiked 275 percent, while the incomes of the middle 60 percent rose by less than 40 percent, according to a report by the Congressional Budget Office. The top 1 percent also captured 93 percent of all income gains from the first year of the economic recovery, according to a study by Emanuel Saez, economics professor at the University of California at Berkeley.
Summers said it is troubling that though "for 200 years, the story of America was a story of more equality of opportunity," now "we are a country with more inequality than most others, and inequality has risen very sharply."
There aren't Summers' first comments on inequality. He wrote an op-ed for the Washington Post in November listing three ways to fight the "strong and troubling shift in market rewards for a small minority relative to the rewards available to most citizens." Summers argued that the U.S. could fight income inequality by not giving special concessions to the rich, by making the tax code fairer, and by giving more educational opportunities to the middle class.
But some economists interviewed by The Huffington Post in November said that Summers probably criticized inequality for political reasons.
"These are issues of the day, and he's out marketing and branding himself," Derek Shearer, a professor of diplomacy at Occidental College who served as an economics official in the Commerce Department during the Clinton administration, told The Huffington Post at the time. "All he's doing is stating reality. It's like, 'Oh my God, there's global warming.'"
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