I think professor David Reingold's facts and reasoning (Nov. 1 "Class-warfare battle lines come down to job creation") are wrong, and he is the one engaging in class warfare.
He misinterprets and misrepresents the nature and causes of the top 1 percent of earners and their wealth.
First, highly successful people do not necessarily work "400 times harder" as a physical scientist might conceptualize it. Although they may work harder, they are successful because what they do, in the eyes of society, is worth it.
Take Bill Gates. He developed a series of products and services that greatly enhance our lives at work, home and play.
I voluntarily purchase them as do billions of others. He is extraordinarily wealthy with a net worth of $56 billion or so. In my view, considering what he has done for all of us, he is a bargain at that price.
Second, Reingold wrote that some "inherited their wealth and do nothing at all." Dynastic-family wealth is a European, not an American, tradition.
Gates is devoting most of his time in charitable endeavors with a goal of giving away most of his wealth during his lifetime.
Reingold can find numerous examples of the charitable intent of the "1 percenters" by walking around his Juniata College campus and take note of every auditorium, gymnasium, library, administrative building, dormitory, classroom, office, scholarship program, etc., named for a person.
Each of these donors was very likely, at some point, part of the 1 percent he rails against.
Ironically, and perhaps hypocritically, Reingold receives his daily bread due to the beneficence of H. George Foster, a Huntingdon businessman who endowed the chemistry chair the professor occupies with a gift of $950,000. Very likely, Foster was a 1 percenter, too.
Third, the professor asserts that the Bush-era tax cuts were the reason the 1 percenters share of income increased since the early 1980s.
Jonathan Parker and Annette Vissing-Jorgenson of Northwestern University recently published an easily readable article, available on the Internet, that shows the top 1 percent income share rose and was as high as it is today during the 1917-47 - a period when income taxes rose substantially. This directly contradicts Reingold's assertion.
The authors also contradict Reingold's assertion that the rising income share of the 1 percenters is an American phenomenon. The authors find similar patterns in 15 countries during the same period, including Canada.
Clearly, something else must be going on. The authors posit another theory: "We conjecture that improvements in information and communication technology have increased the ability of the most talented workers to handle more work or scale their ideas and that this change naturally causes the income of the highest paid both to rise and to become more sensitive to economic fluctuations."
In other words, when the personal computer was developed in the early 1980s, it greatly increased the human capital and potential of those geeky nerds working out of their bedrooms or garages.
The development of the Internet in the early 1990s exponentially increased their ability to communicate with others and market their wares.
Interestingly, a recent National Bureau of Economic Research paper presents evidence that all net job growth was due to start up businesses.
The jobs created by the Microsofts of the world are offset by the job losses by the General Motors of the world, and all net new jobs come from enterprises from zero to 10 years old.
It may very well be that as those geeky nerds (the new 1 percenters) move out of their bedrooms and garages to start and expand their businesses, they become the "job creators" Reingold ridicules. We should encourage their risk taking, not discourage it.
To paraphrase Adam Smith in his book, An Inquiry into the Nature and Causes of the Wealth of Nations, (1776) "Individuals acting in their own self interest are led, as if by an invisible hand, to serve the interests of society."
I do not know the professor, but I am confident his work product in chemistry is better than his work product in economics. It better be.
Christopher Gable
Altoona
