Does anybody actually care what income inequality really is? Or are we all just trying to find a bigger stick to whack our enemies with?

Everybody is talking about inequality these days: "it's bad", "it's wrong", "it's nasty bad", "it's really, really wrong", blah, blah, really blah. Yet all they usually do is a little moaning and then pivot to the solution which invariably is some variation of "kick those rich sumbitches asses" with rich being defined 'a tad above my current income'. Now I stand second to no one in the joy I would derive from drop kicking rich keister, in particular, cynically self righteous rich keister: "Warren, drop your ukulele, get over here and assume the position."  I'm sure you have your top ten too.  And as I live in a relatively young, red state with low costs, wages and taxes I would love to see people with higher incomes and costs but the same standard of living in blue states taking it in their shorts to supplement my shorts - I see it as poetic justice for the sin of blue bossiness.

But it seems to me that if one wants to go around metaphorically whacking plutocrat posterior or screw the comfortable of Massachusetts to fund the comfortable of Mississippi, one should be rather precise about the whole income inequality thing.  Because I have to tell you:  when I get blah, blah, really blahed by people and then ask them to be precise they go all blah free:  'um, um, um, well just get 'em, make them pay, the bastards!" or something to that effect.  Which is great as catharsis but catnip for demagogues and cynical, savvy plutocrats who do know precisely what they want inequality to mean. Indeed, they have had their accountants model the options so they can advocate some very reasonable sounding poll tested policy that screws some other category out of their ill gotten booty but leaves the Bill gotten booty alone so he and Warren can both be the richest, most powerful swingers around and be hailed as righteous saviors of humanity.  Which is an awesome trick but frankly not what was advertised.  So in order to clarify precisely what we mean by 'income inequality', here are my list of questions that drive most so called 'egalitarians' to um, um, until they make their escape by saying 'because racism' or some other get out of rhetorical jail free word.

First of all what kind of inequality are we talking about?  Earned income?  Earned income plus invesment income?  Earned income plus investment income plus asset appreciation?  EIPIIPAA plus Government transfers?  EIPIIPAA plus transfers and minus taxes?  How about fringes? Or how about the big Kahuna (sorry Warren): wealth?

And how do you treat 'in kind' benefits?  For example, per hour worked, public school teacher comp is about the same as professional engineers. It's just that over the course of the year professional engineers work almost twice as many hours - is that the 'evil rich's' fault?  Or a choice by the Teachers?

Or how do you impute the really nice fringes that University employees get (not the enslaved, oppressed adjuncts and certainly not the comprehensively looted students, but 'the elect'?) awesome facilities, status, often the nicest towns in the state, free football tickets, sabbaticals, autonomy?

Is the difference in comp between say a psych professor and the guy that owns the plumbing business in town a manifestation of 'greed' given that one of them is routinely covered in human excrement while the other gets to plumb the depths of sex difference and deviance in air conditioned bliss with an endless stream of perky frosh and nubile coeds? Because the plumber would love to get nubile coeds to plumb the depths of water and sewage with him but they keep telling him that he smells. 

And how do you deal with the male vs. female comparisons?  According to the boffins at the BLS full time women work about 32 hours per week, full time men work almost 50 - is the difference caused by the evil plutocracy of men?  Is it brutal gender oppression that keeps women home, pregnant and barefoot for an extra 18 hours of cable programming a week?  Or do female preferences differ from men's?  I know, bad Bill, naughty Bill, sex differences are only allowed to help women get what they want.  

Second, what's the comparative Universe?  Within a state or region?  Within metro areas or outside metro areas? National borders?  Between Pig Knuckle Gulch where the 'good life' can be had for $50K and the kids entertain themselves tormenting groundhogs and Swineburne Towers, Manhattan, where it takes $175K and that's only if you find an inexpensive Sudanese au pair for the kids to torment?

Third, how should the Gini calculation be adjusted for cost of living?  By state?  By metro area?  By region?  And should Gini be the stat?  Or top over bottom 10%?  Or  fried chicken consumption?  And is that free range, organic or the Colonel's chicken?

Fourth, what is the ideal 'Gini'? Nil?  Should an 18 YO have the same income as a 58 YO if does the same work?  How much more should a neurosurgeon be paid than a sanitation worker?  If it's your kid's neurosurgeon?  What is the optimal slope for income to maximize industry, thrift, personal skill investment?

Fifth, when we compare ourselves to other countries and say 'we suck inequality-wise', who's in our Multi-Culti Continental Megastate league?:

• Other multi-culti continenatl Megastates - Brazil and the EU have higher Ginis, Russia about the same and Indonesia and India much lower.  Of course their rich live in the US now.  Damn, they're doing everything  right.
• Monoculture Megastates - China just published their first gini (up until now it had been 0.0 because they're communists), and let's just say that they make us look good.
• And then there's the 'T-Ball' countries with little diversity of geography, weather, ethnicity or economics? - Countries like Norway, Australia, S. Korea - OMG small, low diversity monocultures have less income diversity than us? I am shocked, shocked to find the obvious here. 
• Or to our faux fantasy utopia of choice - "Well yer socialist yewtopia would pay poor people more to be poor while rich people would do the dishes, and yer National Socialists would give everyone snappy uniforms but then yew'd hafta have a war."
• And can we compare our individual states to the T-ball countries?  Because if we do, we've got some states that kick even Scandanavian ass on gini off of the Tee.

Do we look at our time series performance and use a change in our 'gini' to argue that we 'rock' or 'suck'?  And if so, do we adjust it for the inevitable natural variation during different stages of the business cycle or just routinely piss and moan for half the cycle and gloat for the other half with absolutely no insight or content?

Do we compare pre- or post-government transfers and taxes? Does that include business and ag subsidies?

If so, do we adjust for the obvious non-economic changes that affect gini?  Family structure changes?  Immigration levels and what kind of immigrants we get (unskilled, skilled, wealthy buying residency? Legal, illegal, family reunification vs. H1B?), where those immigrants come from (developed, vs less developed, Asia vs. Latin America?) or changes in the age distribution?

And do we compare households?  Individuals? Do we include full time students? Disabled households?  Prison damaged households?  And while we're on the subject, how has our world leading incarceration rate affected inequality?  

Do we take into account economic mobility?  In other words, are we measuring lifetime inequality or point in time?  For example, if 'our lows start lower but end up higher which results in more cross sectional inequality but less longitudinal inequality Is that good? And how has that changed over time as we go to school longer? Retire earlier?

And how about religious diversity?  Some religious communities (Orthodox Jews, Amish, Heroin Worshippers) eschew the pursuit of worldly goods in favor of spiritual enlightenment and we've got a lot of them. So how do we account for a willful lack of materialism in what is a purely materialist argument? 

Or is our primary goal to demagogue the stat and concept to win votes and then parcel out 'protection' to powerful groups that play ball with our party?  Groups with tax privileges that give them all of the benefits of plutocracy:  power, luxury, status without having to pay the 'piper' - you know, in today's world, the Hedge Funds, Hollywood, Personal Foundations, law and accounting partnerships, Fabulously endowed Ivy League finishing schools and silicon valley yuckety yucks - while sticking it to the politically weak and vulnerable - oh and the oil companies, always the oil companies.

Game plan 2 certainly is a lot easier and because as demonstrated above, no one has a frigging clue what they're talking about, it has the added benefit of being perfectly plausible no matter what you do.  But if we're not going to really try to do the work that it would take to do the right thing let's just not pretend that we're doing anything more than lashing out at targets that the political class (both R and D divisions) find profitable to whack.

I mean why let ethics and fairness interfere with one of the best election slogans of all time:  "Make Them Pay!".  Because after lust, the sweetest of the mortal sins is envy.  Indeed it combines the lust for money with the lust to bring others low - what could be sweeter?

"Pipe down Warren, I'll get to you when I'm good and ready, you should have thought of that before you produced all that wealth."