Income Inequality Rationale: Cover for a NIMBY Nation?

Inequalities which result from unnecessary limitations in knowledge use, start to have cumulative repercussions with the passage of time. Knowledge use limitations also include NIMBY reactions to economic access which takes a myriad of forms. Often the intent behind access limitations can be deceptive, thus not amenable to easy solutions. After reading an article about no compete clauses, I thought about that article in relation to Janet Yellen's recent speech on inequality. Just like the neighborhood variety, the rationale basically comes down to...growth? Perhaps, so long as it doesn't disturb my own back yard.

When NIMBYs multiply, growth - and the monetary policies associated with it - don't inspire as much support as before. Of course when the growth stops, everyone looks around the room to see what they want to grab - hence today's renewed income inequality debate. Silicon Valley has been one of the nation's last remaining bastions for equality of opportunity, in knowledge use. Even though knowledge use had long since been limited for individuals - particularly in services - at least business wealth formation had not suffered that fate to the same degree.

Increasingly, that has changed. Many now turn to governments, to form knowledge enclosures for their own personal gain and survival strategies. Few other strategies create such a stranglehold on economic growth. When people cannot even utilize or share the knowledge they need most, does anyone wonder why more suffering is the result? How does anyone help others, if they have lost the means to help themselves? Here's Janet Yellen, in a speech to the Federal Reserve Bank of Boston:

The extent and continuing increase in inequality in the United States greatly concern me...I think it is appropriate to ask whether this trend is compatible with values rooted in our nation's history, among them the high value Americans have traditionally placed on equality of opportunity.

Again, as I indicated in my last post, there needs to be organized action on this front so that monetary authorities can return to the job they are actually assigned to do. For instance the Fed's option to maintain economic stability through aggregate spending capacity, sometimes seems as though a distant hope. They don't need to be blindsided by misleading arguments on income inequality as well, particularly when the public is already expecting them to take a more active role in financial concerns.

Presently, I want to give Janet Yellen the benefit of the doubt, for she comes across as someone who is concerned about inequality for the right reasons. Hence my problem is not so much with the fact she decided to speak about it, but that her words will be subjected to interpretations that can mangle logical thought processes in a hurry. Piketty's recent book has already been mentioned in at least one article which covered her speech, and doubtless there will be other mentions.

Just like Piketty, too many elite want to generate yet more redistribution in the name of inequality - all the while pretending they didn't benefit from the most recent round of tax hikes and knowledge use exclusions. Too many ladders have already been pulled up, too many doors to economic access have been closed...let alone the zoning restrictions in place all around. Does collective guilt account for a rising chorus to raise wages? Extra dollars in the paycheck is not much of a consolation prize, for the egregious theft of knowledge use which has already taken place.

One only hopes that Washington will not take seriously the solution that Piketty thought was appropriate for income inequalities. But governments may well try to do so, if others do not step up first to offer specific courses of action. When alternatives are not forthcoming, many special interests will ultimately go along with government, in order not to have their own sense of order disturbed. Alternatives need not be perfect, and they can develop slowly. But they need to be established, so that Washington will not keep returning to non solutions.