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Thursday, April 3, 2014

The Income-Inequality Love Train -- The Obama Democrats and IMF want the U.S. to slow down and divide up the pie -- By Daniel Henninger, The Wall Street Journal

(Ikon Images/Corbis)

Suddenly the subject of income inequality has turned into a global love train. Politicians and public-policy shops all over the world are hopping onboard. 

Naturally the engineer is Barack Obama, who gives speeches on income inequality and won a presidential election by rolling over 1% of the population. Democrats in this year's midterm elections are running on income inequality, and this is rational. Their alternatives don't look attractive, despite ObamaCare's seven million recruits. 

Less obvious is the linkage being made now between global warming and—what else?—income inequality. Or that the International Monetary Fund is moving income inequality to the top of its agenda for global economic adjustment, even as it begs congressional Republicans to authorize more billions for its general fund.

On Monday, the United Nations released the fifth report by its Intergovernmental Panel on Climate Change. In addition to its familiar warnings of species extinction, irreversible eco-destruction, and the disappearance of ski resorts, the report introduced what it called "a novelty in the IPCC." That would be income inequality. 

"Climate-resilient development pathways," the IPCC's authors announce, "will have only marginal effects on poverty reduction, unless structural inequalities are addressed and needs for equity among the poor and non-poor people are met." Until now, saving the planet's ecology alone was thought to be a heavy lift. No more. Among the new challenges: "Existing gender inequalities are increased or heightened by climate-related hazards." 

Less novel is the conclusion from the U.N.'s college of climate cardinals that the interlocking catastrophes of global warming and income inequality have a "funding gap." The IPCC says current estimates for "adaptation costs" range from $70 billion to $100 billion annually, but the real needs are "orders of magnitude greater." Who could doubt it?

Next in line to get its income-inequality ticket punched is the International Monetary Fund. A few weeks ago, 20 authors with the IMF's fiscal affairs department published a report called "Fiscal Policy and Income Inequality." 

According to the report, "Rising income inequality in advanced and developing countries has coincided with growing public support for income redistribution." The Fund staff then goes about explaining how the world's nations can get moving toward income redistribution. 

What's noteworthy about the IMF's dive into income inequality is that it comes just as its legions of white-hat supporters are trying to shame Senate Republicans into voting to let the organization double its general fund to $733 billion, plus give emerging-market nations more voting power to authorize payouts from the Fund's resources. "Dereliction of duty," cries the Economist's editorialists about the Republicans' doubts. In a speech Wednesday, IMF Managing Director Christine Lagarde noted that the U.S. alone is withholding support.
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