Yesterday, economist Robert Shiller — co-creator of the Case-Shiller housing price index and a professor at Yale — appeared on CNN to discuss Wall Street’s bonus bonanza and its implications for economic policy. Shiller is of the opinion that the bonuses are indicative of America’s greater problems with income inequality, which he feels will be become “bigger than this whole financial crisis” if left unaddressed:

To me, I would hope that this would spur public discussion about the structural problem that inequality, economic inequality, has been worsening in the United States and in other countries for 30 years. And it’s gotten really — especially at the high end — it’s gotten really off…This, I think, is potentially the big problem which is bigger than this whole financial crisis. If these trends that we’ve seen for 30 years now in inequality continue for another 30 years, we’re going to look like — it’s going to create resentment and hostility. It’s not a country that — we could turn into a country that even the rich would rather not be in. [...]

And I think we ought to think about — I have a proposal. I’ve talked about this in my other, some of my books. I have proposed that the government should index the tax system to inequality.

Watch it:

The income gap in America is at an all-time high, with the wealthiest 10 percent of Americans earning 11.4 times the amount made by those living near or below the poverty line in 2008. And most of that wealth is concentrated at the very top, as between 1979 and 2006, the inflation-adjusted after-tax income of the richest 1 percent of households increased by 256 percent (compared to 21 percent for families in the middle income quintile and 11 percent for the bottom). In 2007, the last year for which data is available, executives and other highly compensated employees received more than one-third of all pay in the U.S.

As The New York Times’ David Leonhardt pointed out, in recent years “the wealthy have received both the largest pretax raises and the largest tax cuts.” Under Shiller’s “Rising Tide Tax System,” tax rates would “automatically adjust along with levels of income inequality.” If the incomes of the middle class and the poor were growing faster than those of the rich, tax rates on the rich would fall. If the incomes of the rich were growing faster, their tax rates would rise.

I don’t see much of a chance of anything resembling Shiller’s plan making an appearance in Congress anytime soon. However, the surtax in the House’s health reform bill — which is still causing all manner of consternation — would help to address some of the inequality, by increasing taxes on the very wealthiest to pay, in part, for a bill that would rein in health care costs for everybody.

Back in January, the Republicans staked out their opposition to the administration’s economic stimulus package by claiming that it would cost $275,000 for every job created. “All told, the plan would spend a whopping $275,000 in taxpayer dollars for every new job it aims to create, saddling each and every household with $6,700 in additional debt,” said Rep. John Boehner (R-OH).

This number was derived by taking the entire cost of the stimulus package and dividing it by the number of jobs created in just one year, obviously inflating the per job cost a few times over. At the time, Paul Krugman called the Republicans’ number a “bogus talking point,” while Joe Klein dubbed it “phony-baloney propaganda.”

With the White House’s announcement last week that the stimulus package has thus far created 640,000 to 1 million jobs, the GOP is at it again. Don Stewart, spokesman for Sen. Mitch McConnell (R-KY), told reporters on Friday to “get out your calculators” and divide the spending by the jobs, ending with a figure of $230,769 per job. In addition to Republican lawmakers, Fox News, CNN, and CNBC have all repeated some variation of the number (using slightly different estimates) in the last few days. Watch a compilation:

The Associated Press’ Calvin Woodward, however, was not fooled, and today released a piece telling readers to “beware the math” coming from the Republicans:

Some Republican lawmakers critical of President Barack Obama’s stimulus package are using grade-school arithmetic to size up costs and consequences of all that spending. The math is satisfyingly simple but highly misleading…First, the naysayers’ calculations ignore the value of the work produced. Any cost-per-job figure pays not just for the worker, but for material, supplies and that worker’s output — a portion of a road paved, patients treated in a health clinic, goods shipped from a factory floor, railroad tracks laid. Second, critics are counting the total cost of contracts that will fuel work for months or years and dividing that by the number of jobs produced only to date.

As Woodward wrote, “dividing apples by oranges won’t settle” whether or not the stimulus package has been a success. But it seems to be good enough for the Republicans and all of the cable news hosts that they can get to listen.