How much does the gap between rich and poor matter? In 1979, for every dollar the poorest fifth of the American population earned, the richest fifth earned nine. By 1997, that gap had increased to fifteen to one. Is this growing income inequality a serious problem? Is the size of the gap between rich and poor less important than the poor's absolute level of income? In other words, should we focus on reducing the income gap or on fighting poverty?
Peter Robinson: Today on Uncommon Knowledge, Rich Man, Poor Man. Does the gap between rich and poor really matter?
Announcer: Funding for this program is provided by the John M. Olin Foundation and the Starr Foundation.
Peter Robinson: Welcome to Uncommon Knowledge, I'm Peter Robinson. Our show today, income inequality. Monopoly, the classic game of cut throat capitalism, all the players start equal, but by the end of the game, one player ends up holding all the dough. Is something similar happening in America itself? Consider a couple of statistics. In 1979, for every one hundred dollars earned by the poorest one-fifth of the population, the richest one-fifth earned nine hundred dollars. By 1997, that gap, nine to one, had increased to fifteen to one. On the very face of it, income inequality this dramatic looks like a serious problem, but is it?
Joining us today two guests. Bruce Bartlett is a Senior Fellow at the National Center for Policy Analysis. Peter Orszag is a Senior Fellow at the Brookings Institution and a former Special Assistant for Economic Policy to President Clinton.
Title: Mind the Gap
Peter Robinson: The economist, Thorsten Veblen in his famous study, "The Theory of the Leader Class, " published in 1899, quote, "The accumulation of wealth at the upper end of the pecuniary scale implies privation at the other end," closed quote. Does Veblen's statement have any bearing on the American economy today?
Peter Orszag: Yes, it does have some bearing. Uh, there are, uh--the situation's different if the inequality associated with losses at the bottom instead of gains at the bottom, but regardless of the losses or gains at the bottom, higher in--inequality does impose costs on society.
Peter Robinson: All right, the rich getting richer implies that the poor are getting poorer?
Peter Orszag: Not necessarily poorer but there are, um, many reasons to think that even if the poor are getting slightly richer, if the rich are getting much richer, that that is--that causes problems.
Peter Robinson: Bruce?
Bruce Bartlett: Uh, I think Veblen was operating under an assumption implicit, uh, that the pie is fixed, and the pie is not fixed.
[Talking at same time]
Peter Robinson: So if John D. Rockefeller has more, than I have less.
Bruce Bartlett: That would be true if--if the size of the economic pie was the same, then obviously any--any one person's gain must come at somebody else's loss. Uh, but that's not true because the pie is getting bigger all the time. Uh, basically everybody's getting richer. It's just that some people are getting richer faster than others.
Peter Robinson: Which brings us to the question of the income gap. From a paper by the Economic Policy Institute, again I quote, "Income inequality, the gap between those at the top, middle, and bottom of the income scale has grown significantly throughout the past two decades and remains higher than at any other time in the post-war era. Would you explain that finding?
Peter Orszag: Sure, basically what's happened over the past twenty years is that, uh, income at the very top of the income distribution has increased very rapidly. According to data from the congressional budget office, the top one percent of income distribution between 1979 and 1997 increased their income by over a hundred and fifty percent, in real, inflation adjusted terms. The bottom twenty percent witnessed a decline in income of about three or four percent.
Peter Robinson: Okay, Bruce, do you contest the finding?
Bruce Bartlett: Oh--those--those data as he explain--uh, sites them, are--are correct, uh, but I think that it's--it all--it makes a lot of difference when you start the clock. Uh, basically, the re--uh, we've had a problem with--with the growth of productivity over the last three decades, uh, that has contributed to this situation.
Peter Robinson: So the seven--you'd include the 70's where…
[Talking at same time]
Bruce Bartlett: Yeah, I--I--I…
Peter Robinson: …in the 80's?
Bruce Bartlett: Right, and I think that using 1979 as many people do, uh, is--is not a fair base year for comparison. I think it's more, uh--because the whole idea of that is to try to, uh, use the--the big decline in--in--in income that oc--uh, occurred in 1980 and 81' and 82' as a res--purely as a result of the recessions, uh, to make it seem like that was somehow policy driven.
Peter Robinson: Okay, but let me ask you this. You're making various adjustments, but you would not deny the overall trend, which is that the dispersion--a dispersion has taken place, uh, and it has--and the income gap has widened. You don't deny that?
Bruce Bartlett: No I do not deny that at all.
Peter Robinson: Okay, so we have agreement on…
Peter Robinson: Our guests agree, the income gap is widening, now let's see whether they think they it makes any difference.
Title: Movin' On Up
Peter Robinson: University of Michigan has what it calls the panel survey in income dynamics has been collecting detailed information on fifty thousand and more Americans since 1968. Now, this is for you; the study found that of those in the bottom quintile, the bottom fifth in 1975, only five percent were still there in 1991. That is to say, over a period of sixteen years, ninety-five percent of those who started in the bottom one-fifth of income distribution, moved up.
Bruce Bartlett: And some at the top moved down.
Peter Robinson: And some at the top moved down but if we're concerned with the--with--with the disadvantage in society, those at the bottom, they're moving up. Let me quote to you; economist Michael Cox and Richard Alan have studied all this data, quote, "These results go a long way toward quelling fears that the United States is becoming polarized between rich and poor. What's particularly encouraging is the ability of those who start out in the lowest income brackets to jump into the middle and upper quintiles, most Americans are making their way up the income ladder," closed quote. Peter?
Peter Orszag: That data set is a very useful data set. Unfortunately those authors have, uh, not studied the data in a rigorous way. Peter Gottschalk at Boston College, Tim Smeeding and others who have examined the same--exact same data set have found that if you look at families in the bottom quintile…
Peter Robinson: As opposed to individuals?
Peter Orszag: As opposed to individuals, and we'll come back to that in a second. Families in the bottom quintile in the late 1960's and then look at where they are in the early 1990's, the answer is, roughly forty-percent of the people--the--sorry, the families in the bottom quintile in the late 1960's are still there in the early 1990's. Two-thirds are either in the bottom quintile or the second to bottom quintile, and only five percent have made it to the top quintile. Now why--why such dramatically different results? There are several reasons. One of the most important is, by looking at individuals, you're including in the bottom quintile people like my daughter in fifteen years, or sixteen years. She's going to college; she looks like she's got very low income.
Peter Robinson: You mean in sixteen years she'll be going to college?
Peter Orszag: Exactly…
Peter Robinson: Okay.
Peter Orszag: We hope. Uh, it looks--it will look like she has very low income but that's a very misleading, uh, indication of her financial resources and lifetime resources. Basically, to look at the family is a more illuminating perspective. That's the first point. The second point, which is very important, is there is no evidence that this mobility has increased over time. So if we're looking at the trends in inequality over time, the only way that that would be offset by mobility is if mobility were rising over time. And regardless of the level of mobility, there is no evidence that it's increased over time.
Peter Robinson: Okay, I know you to have a rigorously analytical mind, and it sounds to me as though he's put an analytical conundrum for you. If indeed the income dispersion is widening, we must not merely have mobility but increased rates of mobility.
Bruce Bartlett: That's not true. Why should there be increased rates in mobility? I think you're--you're setting up a straw man. You're making an argument that has nothing whatsoever to do with the point. Uh, historically the people who are worried about inequality have denied the existence of mobility, and they've only responded to it because people like myself and people like, uh, Cox and a--a--and a number of other people have made this argument. And now they're trying furiously to undermine it by setting up a straw man and saying, well the rate of increase of, uh, mobility has not risen. But the point--the very fact that mobility, and the fact that it's very high and we can quibble about whether it's extremely high or only moderately high…
Peter Robinson: Do you have any idea how…
Bruce Bartlett: …undermines the whole point…
Peter Orszag: Let--let me give you some…
Bruce Bartlett: …because the whole--the fundamental point of this whole inequality debate from the point of view of people like Peter is that the--is that essentially, if you're born poor, you're going to stay poor your whole life. And the fer--the fact, the existence of mobility, undermines and undercuts that whole argument.
Peter Robinson: All right. So the Gospel tells us, the poor you--you will have always with you.
Bruce Bartlett: But not the same poor. Not the same poor.
[Talking at same time]
Peter Robinson: But your point is that it's a different poor from different--from--from…
[Talking at same time]
Bruce Bartlett: That's right. That's exactly right.
Peter Robinson: Let's get back to those who remain at the bottom of the income ladder, are they doing better or worse over time?
Title: For Better or Worse?
Peter Robinson: You said that in the University of Michigan study when you look at families rather than individuals, you get something like forty percent who stay in the bottom quintile for that period of a decade and a half.
Peter Orszag: Well longer than that, but…
Peter Robinson: Longer than that, excuse me.
Peter Orszag: Twenty, twenty-five years.
Peter Robinson: Okay, for a couple of decades.
Peter Orszag: Right.
Peter Robinson: So would that suggest to you that about forty-percent, four out of ten families that start out poor relative to the rest of the nation, remain poor over time. We're talking about…
Peter Orszag: Yeah, and--and…
Peter Robinson: …forty percent who are persistently poor…
Peter Orszag: That's correct and another…
Peter Robinson: …and would you agree with a figure like that or what would you think it is, twenty percent?
Bruce Bartlett: I don't deny that there is an element we used to call the underclass, maybe we still do…
Peter Robinson: Okay.
Bruce Bartlett: …of--of people who tend to stay in the…
Peter Robinson: Fine--fine, I have now--this is an achievement for me, I have now got--I have now got the conversation squared up for my next question which is this. If we grant that there is an element, it may be forty-percent, it may be lower, but there's an element, and it's not negligible, of folks who stay in that bottom quintile, that is to say, who are persistently poor. The question is, are they doing a little bit better over time, that is--or are they getting poorer and poorer--how bad off are they, is my question? Now, I revert to the Michigan study. 1991, two-thirds of those who started in the bottom quintile had achieved a better living standard than those in the middle quintile in 1975. This is all quite confusing, but the point that they're trying to make is that this rising tide lifts all boats, it lifts boats at the to--it lifts the yachts faster, but the little rowboats are rising too. That is to say, Peter, the rich are undoubtedly getting richer, but the poor are getting richer too. So what are you worried about?
Peter Orszag: Well first, it depends on the time period and so it's not necessarily true. But let's take the time periods in which the poor are getting, um, somewhat richer. What's the problem?
Peter Robinson: Yeah, exactly.
Peter Orszag: I think there're several things to say. First, even if you don't think it's a bad thing for income inequality to be going up, it's certainly not a good thing and it's not something that policymakers should be encouraging, so we can come back to that.
Peter Robinson: Okay, yeah, I'd like--actually I will come back to that.
Peter Orszag: But secondly there--there is a problem and the problem has to do with the social fabric of society. As the rich get much richer and the poor get only a little bit richer, you--you pull at the social fabric that holds together society, part of which is irrational or psychological. People just--if you look at surveys, they don't like--they would prefer not to have an income gain, than to have a little income gain and have someone else get a much larger income gain.
Bruce Bartlett: Does this mean the social fabric has gotten enormously better over the last year when something like three trillion dollars of Nasdaq wealth just evaporated? We've taken that all out of the pockets of the rich. The rich are about three trillion dollars poorer today than they were a year ago.
[Talking at the same time]
Peter Robinson: Does that gladden your heart?
Peter Orszag: No it doesn't, because what I was saying had to do with all else being equal.
[Talking at the same time]
Peter Robinson: Let me--let me frame up the question a different way. We have a nation in which, thanks be, the poor in this country--now there are people with--who have problems with addiction, I mean there are--there are pockets of--of undeniably serious poverty, but generally speaking, poor people in this country look at any study and they are able to eat, they have housing, they have VCR's, automobiles, washing machines, microwaves. This is not poor by the standards of humanity down through the ages.
Peter Orszag: I think you have to be a little bit careful. There have been lots of studies that suggest that the poor have TV's and VCR's. One of the reasons is, as Bruce pointed out in a paper that he wrote, the price of television sets has fallen substantially over the last twenty…
Peter Robinson: But that's precisely what you would expect in an economy like this, a dynamic economy. Even to be poor, you're better off than poor folks were a few years ago…
Peter Orszag: But you…
Peter Robinson: …or in almost any other country.
Peter Orszag: Sorry. But you can't eat a--you can't eat a television set. If you look at…
Peter Robinson: Yeah, but food prices have been falling too.
Peter Orszag: If you--if you look at deprivation in terms of was your gas or electric, um, turned off, do you live in substandard housing, um, were you evicted? A recent study in The Monthly Labor Review said--looked at nine of those indicators and found that fifty-five percent of poor families suffered from one of those problems, only thirteen-percent of the rest of the population. So there is still a significant difference, reg--despite the fact that a high percentage of the poor have television sets.
Peter Robinson: Okay, let's clarify something, why should we pay attention to income inequality rather than to absolute levels of poverty?
Title: Hoop Dreams
Peter Robinson: Robert Nozick, philosopher at Harvard uses this example, an example similar to this, to talk about patterns of income distribution. Professional basketball game, look at the people inside the stadium. You've got people in the stands who are poorer as a result of the game, they paid money to get in. On the court, you've got a huge dispersion of incomes from the refs who get--I don't know what they get per game but it's not all that much, up to the top two or three stars on either team and they have a huge income from one night bouncing a ball up and down the court. Is anybody alarmed? Is anybody harmed? Of course not, the people who are poorer are happy to be poorer, they wanted to see the game. The stars are simply benefiting from what their strange skills command in a market economy. The point is this, the mere pattern of wealth distr--income distribution tells you nothing about whether the in--whether that pattern has any moral content, whether it's good or whether it's bad. So, how do you respond to that? That you look at a pattern and somehow say this is bad?
Peter Orszag: There--there--there is evidence suggesting that--again, for any given level of aggregate income, the more unequal that income is, uh, there are a variety of problems that could arise in the long-run. Studies have suggested that long-term growth rates are lower the more unequal the society is. Studies have also suggested, although the evidence here is less clear in my opinion, that the health for the average person--the health status of the average person is worse the higher that level of inequality--whatever the aggregate level.
Peter Robinson: Why?
Peter Orszag: The--the argument--the argument--the argument…
Bruce Bartlett: It's based on statistical comparisons of different countries, uh, poorer countries tend to have more unequal distributions. We all know you go to Latin American, there's very wide, uh, disper--uh, you know.
Peter Orszag: Even if you look across states in the United States, the relationship holds, for example, on health. And the reason, presumably is, people--I mean--it's a--it's a very difficult question, but one of the reasons is--that's been hypothesized, and I should say no one knows the answer--that the more unequal society, the more likely it is that you have political contention and squabbling, and that restrains growth and also harms health.
Peter Robinson: You reject that notion?
Bruce Bartlett: Well, there's other studies that make--that--that have different points of view.
Peter Robinson: 1999, the typical CEO earned a hundred and seven times more than the typical worker and that was almost double the multiple of just ten years earlier. All that is, is a pattern of distribution--income distribution, don't you find that offensive in and of itself?
Bruce Bartlett: No, I don't because one of the reasons why the CEO's of this country--uh, in this country have gotten a lot richer, relative to the workers that--who--who they employ is because it became apparent to the shareholders of the world, the people who owned the corporations, that giving the CEO's more incentive was in their interest. Uh, because the vast bulk of that, uh, CEO pay is coming in the form of stock options, uh, that it is essentially coming out of the pockets of the shareholders not--it's not coming out of the pockets of the workers, it's not coming out of the pockets of the customers…
Peter Robinson: So you…
Bruce Bartlett: …it's coming out of the pockets of the shareholders and they approve of it because their shares have gone up as a result. And there's been a number of studies of this as well. Uh if you'll…
Peter Robinson: It doesn't offend you? You're not worried about placing stresses on society?
Bruce Bartlett: No, I don't see any evidence at all. I think--I think this is all made up.
Peter Robinson: Okay, now…
Peter Robinson: Next topic, income inequality and the role of public policy.
Title: At the (Head) Starting Line
Peter Robinson: Income inequality grew not only under the republicans Reagan and Bush, but under the democrat, the President you served, William Jefferson Clinton. Did President Clinton do an inadequate job of addressing income inequalities?
Peter Orszag: Well first the--uh, the trend really depends on the survey that you use. Under some surveys, the trend in inequality topped off during the 1990's. President Clinton did several things that were very crucially important for, uh, reducing poverty. Remember, the poverty base is now 11.8%
Peter Robinson: Wait, wait, wait--poverty rate--okay, and that's a way of addressing the income inequality problem?
Peter Orszag: It's--it's related. Um, but let…
Peter Robinson: Go ahead.
Peter Orszag: …let's look at the policy measures. Uh, a dramatic expansion in earned income tax credit, which is, uh, uh, …
Peter Robinson: Okay, go--go quickly though this because I don't want to…
[Talking at same time]
Peter Robinson: … relive this--lord knows, I don't want to relive the Clinton years.
Peter Orszag: I don't think anyone wants to but earned income tax credit, minimum wage, um, dramatic increase in the Pell Grant which--which boosts, uh, enrollment in college for low income students and, I mean, we don't need to go through the whole list. But, uh, doubling of Head Start…
Bruce Bartlett: There's an extremely important point that--that needs to be made right here and that is that the official data that one sees in the newspapers, on the front page of the--of the Wall street Journal and the Washington Post, uh, that come out usually in the fall are from the United States Census Bureau. They are before tax income without in kind government benefits. So, basically everything he's talking about did nothing to improve the--the official statistics because most of the stuff is in kind benefits. It did nothing to reduce the incomes of the--of the rich, or help the, uh, the earned income tax credit as a tax program. Uh, you put--we put higher tax rates on the rich in 1993--had zero impact because by definition, the data exclude those things that we have done…
Peter Orszag: As you know, there are alternative series that the census…
Bruce Bartlett: That's true.
Peter Orszag: …also publishes that takes those things into account. So…
Bruce Bartlett: You have to look really hard to find it.
[Talking at same time]
Peter Robinson: Now--now we--now we go back to our first point which is that even after you make the corrections--even if the census bureau were to publish a different set of statistics that conform with your view of what is relevant, you'd still see the trend.
Bruce Bartlett: That's true. That's true.
Peter Orszag: Over the last twenty years, yeah.
Peter Robinson: Okay, so now let me ask you this. What would you do that President Clinton didn't do?
Peter Orszag: I would have more--more aggressively expanded early Head Start and Head Start. I would have, even more aggressively expanded Pell Grants and simplified the Pell Grant process. Uh, I…
Bruce Bartlett: Did you agree with welfare reform?
Peter Orszag: I did agree with welfare reform. I think it--I think that there are co--concerns about…
Peter Robinson: Why don't you just soak the rich? If you're concerned that these rich are getting richer too quickly…
Peter Orszag: There is a tradeoff that one has to find a balance between…
Peter Robinson: Ahh, okay, all right.
Peter Orszag: …in--in, uh, equality versus incentives. And at some point, one--one leans too hard and the disincentive effects are too large. The question is finding a balance between the--the incentives provided to produce, supply labor, take risks, and fairness.
Peter Robinson: So this would be difficult statistically, but the rule of thumb would be, we engage in redistribution, we cream off the top quintile and put it one the bottom qui--quintile, to the extent that we can without killing the economic engine--without smothering growth. Would that be about the rule of thumb that'd you go for?
Peter Orszag: I think that's about the rule of thumb, yes.
Peter Robinson: So…
Peter Orszag: It's all a matter of degree. How much reduction in--in economic activity are you willing to…
Peter Robinson: Right, and it could be difficult to find that balance…
Peter Orszag: Right.
Peter Robinson: …but that would be the aim.
Peter Orszag: That should be the aim, yes.
Peter Robinson: So the--the key instrument then for addressing the problem is redistribution.
Peter Orszag: No it's--well, it's not just redistribution, it's also ensuring equality of opportunity. Remember, things like Head Start are not--we--we don't get low-income ki--the poverty rate for kids is still seventeen, eighteen percent. We don't get low-income kids high--ready for school well enough, and we could be doing more. I wouldn't call that redistribution.
Peter Robinson: So you'd support President Bush's move to--or his efforts to improve education?
Peter Orszag: Uh, I would support moves to improve education. I think there are questions about--precisely how President Bush is doing that.
Bruce Bartlett: A lot of this discussion about the--the--the evils of inequality and the improvements that would come from more equal distribution of income implicitly assume that whatever you--whatever income is taken away from the wealthy, is in fact given to the poor. And now, as we know, there's a huge transactions cost, and--and I--and one of the questions…
[Talking at the same time]
Peter Robinson: You got to run it through the federal bureaucracy, state bureaucracy…
Bruce Bartlett: Suppose you put on a tax that was, uh, that sim--say--say we increased the capital gains tax…
Peter Robinson: Right.
Bruce Bartlett: …and only the capital gain because the rich are the only ones who get capital gains…
Peter Robinson: Right.
Bruce Bartlett: …and as a consequence, uh, the rich simply stopped realizing capital gains. So on paper, their incomes have gone down, but--but not--but there has been no revenue derived from this. Uh, so--so the rich have gotten or--or on paper poorer, but there's been no revenue that's been to--to give to those at the bottom. All that has happened is that the rich have come down, they have less wealth as they--as they do over the last, uh, year. I think that this is a very important point.
Peter Robinson: So you've harmed the position of those at the top without helping those at the bottom.
[Talking at same time]
Bruce Bartlett: The society has not gotten better…
[Talking at the same time]
Peter Robinson: And the poor are not better off.
Bruce Bartlett: Society is--that's right, they're not any better off. Nobody is better off.
Peter Robinson: Last topic, why has income inequality increased over the last several decades?
Title: Study Skills
Peter Robinson: It sounds to me as though the causes of this income inequality are not well understood. Is that right?
Peter Orszag: I think that's a--a bit of an exaggeration. There--there are major, uh, hypothesis that have been proposed and we know something about the causes of income inequality. Basically the income inequality has--has a lot to do with skill bias--with--with--returns to skill, with--it returns to being a skilled worker. Um, for example, if you look at college-educated workers, they're now earning seventy-six percent more than high school educated workers. Twenty years ago, they were only earning thirty-eight percent more. And economists think that has a lot to do with the increase in income as well.
Peter Robinson: So would you favor doing things to improve education in the country?
Bruce Bartlett: Of course. I don' t know any economist who doesn't. Uh, the question is, what--what--then--then you have to have an education debate about what actually works in that area, but per se, I don't know any economist who doesn't feel that education is important. Another factor that might be worth mentioning is the--the age distribution of the--of the population, uh, we're a relatively aging society as we all know, we're all baby boomers at this table I think. Uh, we're--we're into…
Peter Orszag: Not quite, but…
Bruce Bartlett: Well, I mean, we're--we're well into our peak earning…
Peter Robinson: Bruce and I have boomed long ago.
Peter Orszag: Okay.
Bruce Bartlett: And--and--and of course, the--the elderly are an important of--of all this debate. We've been talking mainly about people on welfare, but a very goodly portion of people in the bottom quintile are--are the elderly. But I think that we--in--in this discussion about income, we sometimes lose track of wealth, which is also an important consideration.
Peter Robinson: Right.
Bruce Bartlett: Uh, my mother was a good example of this. Uh, she lived--her income was very, very low because she had only essentially social security as cash income, but she owned her house free and clear. She had no mortgage on it whatsoever. She had a substantial number of stocks that she was--she could have sold at any time, any time she needed some extra money. She actually didn't need anymore than she got out of social security to--to live a--a very nice, uh, life.
Peter Robinson: And so she actually was quite comfortable but it didn't show up in the statistics.
Bruce Bartlett: That's right, if you're looking at income--if you're looking at income.
Peter Robinson: …statistics. So Bruce would your view be simply this; look, income distribution just--it just isn't relevant. It's a very good question, if the poor are getting poorer, we should do what we can to attack, uh, poverty in the country. We should certainly do what we can to improve education because that's investing in the future. It makes everybody more--all that is fine, but this notion of publishing statistics and worrying about how quickly the rich are--worrying about this gap between the folks in the bottom and the folks on the top, it's--it's confusing, it's elusory, it's irrelevant, forget about it. Would that be a summary of your position?
Bruce Bartlett: I think--yes--I think that if…
Peter Robinson: Don't worry about if folks, it just isn't a serious problem. Poverty is a serious problem, but the gap is not.
Bruce Bartlett: We should try to increase the standard of living of all Americans to the best that we can, and--and I think generally we have. Uh, clearly the--the--the wealthiest people in our society today are living, uh, better than--and--and so are the poor.
Peter Robinson: It's television men, final question; The Economist Magazine, I quote, "In America between 1979 and 1997,"--restatement of some statistics here--"the average income of the richest fifth of the population jumped from nine times the income of the poorest fifth o to around fifteen times." When will we see the gap begin to narrow? We've already established that you think it doesn't matter and you think it does, but can you predict when the gap will narrow?
Bruce Bartlett: Next time we have a really serious recession, it will narrow. Uh, the greatest increase in equality, uh, occurred during the Great Depression. I think…
Peter Robinson: Because everybody was poorer, got poorer.
Bruce Bartlett: Yeah, but--but the rich lose more because the stock market collapses, wealth collapses, property values collapse…
Peter Robinson: Peter, when will we see the gap narrow?
Peter Orszag: We'll see the gap narrow when we finally do provide sufficient equality of opportunity, especially with regard to education, that, uh, in terms of lifetime opportunities, people at the bottom would have a much better chance at reaching the top than they do now.
Peter Robinson: Peter and Bruce, thank you very much.
Peter Orszag: Thank you.
Peter Robinson: Peter Orszag believes there's something not quite right about a society in which some people can afford hotels on Boardwalk while others can't even afford houses on Baltic Avenue. Bruce Bartlett says, don't even look at the people on Boardwalk; just ask whether the lot of the poor, those people on Baltic Avenue, is improving over time. I'm Peter Robinson, thanks for joining us.