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Anorak | Little Nicky Clegg misunderstands the Wealth Gap

Little Nicky Clegg misunderstands the Wealth Gap

by | 20th, December 2011

I CAN’T say I’m all that surprised that Nick Clegg does misunderstand the Wealth Gap, this is true, for the various writings and reports about it all make the same blitheringly obvious mistake.

Or if you’d prefer, everyone who writes about it lies about it in the same way .

“Wealth inequality is very much greater than income inequality, and widening,” Clegg said. “The bottom third of households hold just 3% of the nation’s wealth. The top third hold three-quarters of it. This inequality of wealth then cascades down the generations, potentially widening the opportunity gap.”

Now it’s true that wealth is unequally distributed and it’s also true that wealth inequality is greater than income inequality. However, that 3% to 75% ratio is entire cock and bull, invented shite.

When we measure income inequality we do it in two different ways. We measure market incomes, what people get from their work alone. Then we also measure it after all of the things that we do to make incomes more equal. After council tax rebates, income tax, tax credits, unemployment pay and so on. For the obvious reason that we know that we already do some things to make incomes more equal and what we’d really like to know is how much more should we be doing?

Unfortunately, when we look at wealth we only do it the first way. We only look at what people have from the market, we don’t then go on to include the effects of all the things we do to redistribute wealth. And even then there are some very odd lies in

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Posted: 20th, December 2011 | In: Money Comment | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink