Nov 25, 2011 11:13 PM GMT
Conservatives and free-enterprise advocates should seize the moment to show their own passion for the issues being debated—and, where appropriate, even embrace the protesters' moral critique of America's distorted and depressed system.
The most important area of disagreement concerns what our country needs today. The "We are the 99%" signs at every Occupy rally make it clear the protesters believe greater income equality—not more free enterprise—is what America needs. Unsurprisingly, the White House has found this class-struggle leitmotif quite handy to divert attention from its economic record. Last month White House spokesman Josh Earnest assured the public that the "interests of 99% of Americans are well represented" by Mr. Obama. This came after the president's well-worn attacks on "millionaires and billionaires," who, as we have heard many times, are not paying their "fair share."
Free-enterprise advocates should view this as a rare opportunity to expose mistaken and misleading arguments about income inequality. The dreaded top 1% earns about 20% of income today, we hear. Yes, and they also pay 37% of the federal income taxes, according to the Tax Foundation. Further, as my colleague Jim Pethokoukis has shown, wealth inequality is roughly unchanged from 20 years ago—and from 40, 60 and 80 years ago too, for that matter. According to the Congressional Budget Office, every income quintile has seen a real increase in purchasing power of at least 18% over the past 30 years.
The Occupy protesters are dead wrong on income inequality—but they are not so wrong in indicting our system today for unfairness, and for being wracked with crony capitalism, insider dealings and corruption. What is a fair economic system? Some define it in terms of forced income redistribution. The overwhelming majority of Americans, however, believe fairness means rewarding merit, even if that means some people have a lot more than others.