POPULAR NONSENSE

"Young people are exploited!" "Income
mobility is down!" "Poor people are locked
into poverty!"
Those are samples of popular nonsense
peddled today.
Leftist economist Thomas Piketty's book
"Capital in the Twenty-First Century" has
been No. 1 on best-seller lists for weeks (with
400 pages of statistics, I assume "Capital" is
bought more often than it is read). Piketty
argues that investments grow faster than
wages and so the rich get richer far faster
than everyone else. He says we should impose
a wealth tax and 80 percent taxes on rich
people's incomes.
But Piketty's numbers mislead. It's true that
today the rich are richer than ever. And the
wealth gap between rich and poor has grown.
Now the top 1 percent own more assets than
the bottom 90 percent!
But focusing on this disparity ignores the fact
that over time, the rich and poor are not the
same people. Oprah Winfrey once was on
welfare. Wal-Mart founder Sam Walton was a
farmhand. When markets are free, poor
people can move out of their income group.
In America, income mobility, which matters
more than income inequality, has not really
diminished.
Economists at Harvard and Berkeley
crunched the numbers on 40 million tax
returns from 1971-2012 and discovered that
mobility is pretty much what The Pew
Charitable Trusts reported it was 30 years
ago.
Today, 64 percent of the people born to the
poorest fifth of society rise out of that quintile
-- 11 percent rise all the way into the top
quintile. Meanwhile, 8 percent born to the
richest fifth fall all the way to the bottom
fifth. Sometimes great wealth makes kids lazy
and self-indulgent, and wrecks their lives
Also, the rich don't get rich at the expense of
the poor (unless they steal or collude with
government). The poor got richer, too. Yes,
over the last 30 years, incomes of rich people
grew by more than 200 percent, but
according to the Congressional Budget Office,
poor people gained 50 percent. That growth
should matter more than the disparity.
Piketty's data reveal times in our history
when income inequality decreased: during
world wars and depression. Do we want
more of that ?
It's right to worry about the plight of the
poor, but not everything done in their name
really helps them -- minimum wage laws, for
example.
I've had hundreds of employees whom I paid
nothing: student interns. Unpaid internships
were allowed for years, because it was
understood that interns learn by working. My
interns learned a lot. Many went on to
successful careers in journalism. One won a
Pulitzer Prize. Many said they learned more
working for me than at college (despite
$50,000 tuition). They benefited and I
benefited. Win-win.
So for years government ignored Labor
Department rules that decreed unpaid
internships legal only if an employer gets "no
immediate advantage" from the intern.
Geez, who wants that? Of course I got an
advantage from my interns. That's why I
employed them!
Recently, President Barack Obama's Labor
Department announced it would enforce the
internship rules, and some interns sued their
former employers, claiming internships were
"unfair." Charlie Rose forked over a quarter
of a million dollars. Word spread, so now
unpaid internships are vanishing.
Some people say it's good that unpaid
internships are gone, because they are unfair
to poor people, who can't afford volunteer
work. But getting rid of opportunities does
nothing to help anyone. Employers lose and
students lose.
Difficult as it can seem to make your own
way in this world without a phony
government promise that you'll be taken care
of, or that every job will pay at least $15 an
hour, success happens when markets are
relatively free. Individual initiative creates
new things, companies, job opportunities --
whole new ways of life -- that make the world
better for all of us.
Government "help" ends up doing harm.
Leave people free -- both as workers and
employers -- to pursue opportunities they find
worthwhile, and we will prosper in ways
government planners could never imagine.