The PBS NewsHour did a pretty strong piece last month (8/16/11) on inequality in America. So perhaps it was a sense of "balance" that drove them to do a follow-up segment on September 21 that argued that things aren't so bad after all.
As anchor Jeffrey Brown put it:
NewsHour economics correspondent Paul Solman has been examining that subject, including studies showing an alarming rise in the so-called wealth gap. But tonight's interview takes issue with that view.
It turns out that one of Solman's old friends, American University economics professor Bob Lerman, didn't much care for that piece: "It would be nice if there was more equality, but let's not overdo it."
In case that doesn't sound convincing to you, he elaborated:
I think it's somewhat of a problem, but you way overstated it. There were no nuances to the report. You ignored a big source of wealth, which is the wealth embodied in Social Security.
Lerman and Solman go on to visit a nursing home, where older people are apparently enjoying their staggering wealth–mostly in the form of healthcare. As Lerman put it: "Take a lot of the people right here at this nursing home. Medicare is a source of wealth that finances their stay here." Solman seemed to see the logic in this, telling a woman at the home, "Medicare is like a stash of wealth that you're now drawing on." She must have been relieved to know about her secret wealth!
It's hard to imagine comparing assets like a house or cash to the healthcare one receives (or might receive one day)–much of which is derived from taxes you've paid over the years. By that logic, someone who gets really ill and requires massive amounts of care is actually striking it rich!
As we pointed out recently (in response to a Robert Samuelson column about the lucky duck senior citizens), half of all Medicare beneficiaries had incomes below $22,000, and half had less than $2,100 in retirement account savings.
The argument shifts a bit as the segment moves on, as Solman's friend seems to want to argue…well, I'm not sure exactly what you'd call this:
Today, you could have a Ferrari or you could have a Kia. You could stay at the Taj Boston or you could stay at the Holiday Inn. Is there that big a difference? So, let's be clear. The rich do have more opportunity to consume than everyone else, but I'm not sure that we need to be as concerned about it as implicit in your program.
So there's inequality, but the difference between luxury and poverty isn't as wide as you might think. Thanks, PBS.