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Mankiw's evolution on income inequality

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Republican presidential candidate Mitt Romney doesn’t seem troubled by income inequality, but his economic advisor, Harvard professor Gregory Mankiw, says he is worried.

“Widening income inequality is a real and troubling phenomenon, albeit one without an obvious explanation or easy solution,” Mankiw wrote in the New York Times earlier this week. The comment was part of a longer column on a walkout by some of the students in his introductory economics course last month. They claimed Mankiw’s course was biased, and “symbolizes the increasing income inequality in America.”

I tried to interview Mankiw about income inequality earlier this year for our special issue on the American Dream, but the former chairman of George Bush’s Council of Economic Advisers begged off, saying he would be busy for the next couple months. I suspect he didn’t want to talk because his position has been evolving.

The Occupy protesters have pushed income inequality to the political front burner. President Obama has jumped on the bandwagon, calling for higher taxes on the very wealthy and saying in a Kansas speech this week that “this kind of gaping inequality gives lie to the promise at the very heart of America: that this is the place where you can make it if you try.”

Romney, the wealthiest candidate in the race for president, doesn’t favor imposing more taxes on the rich and has argued for a merit-based society where those who invest and take risks should are rewarded. “The rewards they earn don’t make the rest of us poorer – they make us all better off,” he said in a speech this week.

Mankiw has acknowledged rising income inequality in the past and given an explanation for it. In one post on his popular blog, he said, “most economists attribute the trend primarily to changes in technology that reward skilled workers relative to unskilled workers. Education and other skills are more valuable now than they were in the past.”

That theory has been espoused by two of Mankiw’s Harvard colleagues, Claudia Goldin and Larry Katz, whom he credited in an interesting 2010 paper in which he argued against imposing greater taxes on the rich. Foreshadowing Romney’s political stance, Mankiw wrote: “A person who contributes more to society deserves a higher income that reflects those greater contributions.”

There is just one problem with Mankiw’s analysis. Goldin and Katz make a convincing case that a technology-education gap is responsible for a significant  portion of income inequality, but even they don’t suggest that the top 1 percent of earners got there simply because of a better education. As Katz told my colleague Michael Jonas: “Our explanation is pretty good for the bottom 99.5 percent. The top half percent has obviously much more to do with the massive growth of finance, with the politics of corporate governance, and changes in the norms up there.”

                                                                                                                                                                    --BRUCE MOHL



BEACON HILL

Belmont state Rep. Will Brownsberger hit the daily (newspaper) double, picking up the Globe and Herald endorsements today in his race for the state Senate seat recently vacated by Steve Tolman.  

Senate President Therese Murray, on her weekly appearance on local station WATD, predicted 10 years down the road that most people will see casinos as “no big deal.” Via State House News Service.

A Los Angeles movie director was arrested last night on charges that he defrauded the state out of $4.7 million by submitted bogus expense claims to collect on the state’s generous film tax credit program.

The Lowell Sun reports that three audits of the Chelsea Housing Authority during the tenure of former executive director Michael McLaughlin uncovered none of the financial abuses that led to his resignation.

Lawmakers are moving to change the last vestige of the Blue Laws that are preventing liquor stores from opening on December 26.

Joseph Lally, the key prosecution witness in the trial of former House speaker Sal DiMasi, will get to serve his 18-month sentence at the nearby minimum security facility in Devens, not at the high-security federal prison in Brooklyn to which he was originally assigned.

A Sentinel & Enterprise editorial calls the demotion of Rep. Charley Murphy counterproductive, saying the mid-session move exposes “DeLeo’s commanding rule.”

Howie Carr compares the House Democratic caucus to the People’s Mic at Occupy Boston: “DeLeo: ‘I vote yes.’ All the sheeple: ‘I vote yes.’ DeLeo: ‘Murphy must go.’ The sheeple: ‘Murphy must go.’”

OCCUPY

Although many who had been camped out at Boston’s Dewey Square packed up their tents in advance of yesterday’s midnight deadline from the city to vacate the Occupy Boston site, a contingent of protesters remained in place -- and police have not yet made any moves to evict them.  

MUNICIPAL MATTERS

A Worcester firefighter died and his partner was seriously injured when the back wall collapsed of a burning house where they were searching for a tenant thought to possibly still be in the building. The death of 43-year-old Jon Davies rekindles memories of the “Worcester 6,” six firefighters who died in a warehouse fire 12 years ago, WBUR reports. NECN has a video report.

Foxborough’s planning board tabled a proposed zoning change that would have helped pave the way for a casino on property of Patriots owner Robert Kraft. Foxborough officials tentatively set a December 17 date for Kraft and Steve Wynn to pitch their development plans to town residents. Mansfield has its own issues with the proposed Route 1 complex.

Show them the money: Some Palmer town councilors, meanwhile, are frustrated that  Mohegan Sun to has yet to divulge its financial plans for a casino in the community.

Most of the 25-member Lawrence Police Superior Officer’s Association backs the effort to recall Mayor William Lantigua, the Eagle-Tribune reports.

Lynn Mayor Judith Flanagan is concerned the city’s sex offender ordinance won’t hold up in court, the Item reports. The ordinance bars sex offenders from living within 1,000 feet of a school or park, and the mayor wonders whether that restriction covers most of the city.

A Fairhaven homeowner, frustrated by road work outside his home, painted obscenities on his fence directed at a local bus company and his state representative but was ordered to remove the anatomically impossible directive after complaints from passersby.

A Carver selectman, who is also a police sergeant in town, has been fined $2,000 for violating the state’s conflict of interest law by participating in talks about the town administrator’s contract while the administrator was negotiating the police union’s contract.

Quincy Mayor Thomas Koch is proposing a 2 percent property tax increase for next year, an average of $98 per homeowner. He had promised to keep the tax hike under $100 and, by gum, he did it.

Springfield approved a home rule petition to install cameras at certain intersections to catch drivers running red lights. The bill now moves to the State House.

NATIONAL POLITICS/WASHINGTON

President Obama gets ticked off at Senate Republicans, who block the approval of Robert Cordray, his nominee to head the Consumer Financial Protection Bureau.

In a Wall Street Journal op-ed column, Jim DeMint argues that the best way to save Europe is by cutting the American deficit. And not bailing them out, obviously.

Republicans will bend in their opposition to a payroll tax cut, but only if it’s tied to a new oil pipeline.

Elizabeth Warren’s exit from Washington hasn’t made it any easier to get her consumer protection bureau up and running.

ELECTION 2012

Conservative pundits finally notice Jon Huntsman.

Would you watch a debate between Rick Santorum and Newt Gingrich? Those are the last men standing for Donald Trump’s debate after Michele Bachmann bows out.  

Some leaders of the Republican establishment are taking aim at Gingrich. Former Wyoming senator Alan Simpson says Gingrich “lied to the president of the United States” during budget negotiations with George H.W Bush. Gingrich backers say criticism from GOP insiders will only serve to help the former House speaker win over Tea Party activists and other outsiders.

Rick Perry’s new anti-gay gambit, in the middle of a campaign that’s clearly about the economy, has heads scratching. Curious onlookers include those within his campaign, and inside the GOP establishment.

Paul Krugman ponders the GOP’s Gordon Gekko problem.

Elizabeth Warren is not happy with Karl Rove.

CHARITY

Christopher Stone, a criminal justice expert and professor at Harvard’s Kennedy School has been tapped to run George Soros’s multi-bililon dollar, worldwide charity network.

EDUCATION

The Fall River Herald News profiles a University of Massachusetts Dartmouth program that holds classes at Bristol House of Correction where regular college students from outside learn in makeshift classrooms alongside inmates.

Massachusetts College of Liberal Arts students and faculty vote against arming campus police. The issue now goes to the college’s board of trustees and Mary Grant, the college president.

The Massachusetts Charter Public School Association files a complaint against Somerville, accusing city officials of using public funds to launch an anti-charter campaign.

A television station in Maine, which just approved a law allowing charter schools, pays a visit to a Massachusetts charter school.

ENERGY/ENVIRONMENT

The US Environmental Protection Agency detects chemicals linked to natural gas fracking in Wyoming aquifer, Bloomberg reports.

MEDIA

Tom Stites, writing for the Nieman Jounalism Lab, examines the new world of news deserts, and what to do about them. He says Haverhill is one. Holyoke, as CommonWealth reported in its recent anniversary issue, is another.

Dan Kennedy, writing in the Huffington Post, weighs in on the ruling by an Oregon judge ordering a blogger to pay $2.5 million in a libel suit in part because the judge determined the blogger was not protected by the state’s “shield law” because she is not considered a professional journalist.

Entertainment Weekly has a new survey that links political leanings with television viewing preferences, and Keller@Large thinks it’s too bad that politics can ruin a good reality show viewing.

SPORTS

The Patriot Ledger takes a different tack on the unsportsmanlike penalty that negated the potentially winning high school Super Bowl touchdown for Boston’s Cathedral High School, saying the ref made the call according to the rule and Blue Hills Regional Technical School is the rightful champion.

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