June 27, 2011

You can't spread the wealth like butter on toast

Friday I asked if it was a problem if the rich are getting richer? No one had an issue with the wealthiest among us getting more wealthy.

"The rich are getting richer and the poor are getting poorer" has long been the mantra of the Progressive Left. Like it or not, this is the central theme of Marxism. What modern liberals fail to establish is a correlation between the two sets of facts.

For one, the rich are getting richer. The poor of today, at least in the US, are rich by their grandfather's standards. We are all far better off than a few generations ago.

Economists and deep thinkers far smarter than I have studied the economics of the world. They do not have the answers and you certainly will not find them here. I limped through a couple of economic courses in college. The detailed discussions of monetary policy on interest rates, derivatives, the Theory of Value, Says Law and balanced payments makes my eyes glaze in boredom.

Here is what I believe. A rising tide floats all boats. Even the most cursory study of history and economics shows that taking from the most productive among us and giving it to others never improves the lot of society as a whole. At some point the producers just quit producing. The takers just keep taking. The Pilgrims tried it.  Their first year they operated on economic principles that would have made Karl Marx weep with joy. The problem was it took no time at all for most to understand they did not have to break their back in the fields and could still eat. John Smith quickly instituted the 'no workee -- no eatee' policy and New England got off to a rousing start. Too bad the descendants of those same idealists want to infest the region with the failed socialist policies of their ancestors today. I guess some of us are doomed to repeat our history.

The bottom line is this: Robin Hood was a thief. Good intentions do not change facts. Taking from the rich and giving to the poor, or "spreading the wealth" as the President likes to say, is a losing policy. The current administration continues to harp that the "rich" are not paying their fair share. I read a speech by Al Franken at the Netroots Convention last week that echoed that sentiment.

Here is the giant 8,000 pound gorilla in the room -- nearly half of Americans pay NO income taxes. What is fair about that? The richest 10% in this country pay most of the collected taxes. That is fact. I find it hard to believe they are not paying their fair share. Those of you who believe we have a revenue problem (need to collect more taxes) as opposed to a spending problem in Government today should be advocating a tax for all, not asking more from those already paying a progressive tax. Sadly, politicians of both parties have realized the best way to buy votes and power is to give away as much as possible to as many as possible and hope the rest of us can foot the bill. The 'bread and circus plan' did not work for the Romans and it will not create a prosperous America either.

Let me pose a scenario. It is true that the poor buy the majority of lottery tickets. Let us say your neighbor Sam picked the winning Lotto numbers and won a windfall of $10,000,000.  Would you think it all right if the Government kept 90%?  Instead of 10 million bucks, good neighbor Sam took home a mere one mill? Granted, we would all take a million bucks, but would you think it fair Uncle Sugar grabbed the balance? Liberal icon FDR imposed a 90% tax upon the rich. In fact, he pondered a 100% tax on income above $100,000.

Envy is not good economic policy.

I am not rich. I have lived paycheck to paycheck. My house is small and my subdivision is not the finest in town. I would like to be rich.  Living in a society where I do not have the opportunity to make money, earn my way, is not for me. I like the idea that I could become wealthy through hard work, risk, and opportunity. I love that America offers me the chance to own a business, develop the next new technology, to cash in on that better mousetrap. The choice is mine. The idea of a faceless bureaucrat taking the sweat from my brow, the fruits of my labors, and giving it to my neighbor makes me sick.

Sometimes bad things happen to good people.  Sickness, unemployment and other factors can make us poor and dependant upon society for a helping hand. It happens. Many of of us have been there.  Many of the truly poor -- not those who have had temporary setbacks in life -- are poor for a reason.  They have made bad choices in life. Lack of education, having kids you cannot afford, turning to drugs and crime all contribute to one's economic station. There is no one in this country who is denied the opportunity for education. The poorest among us have a decided advantage in scholarships and financial aid. I suppose anyone can slip up and get pregnant once. But recorded history shows only one woman ever got with child without having sex. . My neighbor should not be forced to subsidize my poor life choices.

Again, there is a big difference in a hand up and a hand out.

Each to his ability, each to his needs leads to us all lowering our expectations. "Tax the rich, feed the poor 'till they ain't rich no more" does not float the fleet on a rising tide.  It leaves all of our ships sunk in the mud and mire of poverty and low expectations.

Edit. I actually wrote this Friday night and Saturday morning. As usual, why read my ponderous writing when you could get a better, clearer mesage from a guy way, way smarter than I?  Read This. You will be smarter when you are done.

10 comments:

Erin O'Brien said...

"We are all far better off than a few generations ago."

Perhaps, but we may not be better off than just one generation ago. That is if you consider independence to be an indication of economic well being.

From 2000 to 2007, the number of older parents living with adult children rose from 2.2 million to 3.6 million, a 67 percent increase, according to the U.S. Census.

source

With guaranteed pensions a thing of the past, that trend is only going to go one way. Add the squeeze on SS and Medicare and y'all can start fixin' up the spare room for Gramps.

Why, it'll be just like The Waltons!

Anonymous said...

in the United States, the number of centenarians grew from 32,194 in 1980 to 71,944 in November 2010 (232 centenarians per million inhabitants).

That might explain a lot of what Erin is trying to prove.

JOG

Joe said...

And an increasing number of young adults are also moving back home.

That you may increase your wealth does not equate that I must get poorer.

CnC said...

I like Hanson, he is on the radio every Wed. for a segment with Greg Garrison. Too much common sense going on around here, time to go to work.

Joe said...

I listen to Garrison almost every day

Erin O'Brien said...

As for spreading the wealth around like butter, sure you can. Reagan called it "trickle down economics" and it spread tons of butter over to the rich side.

In 1980, CEOs at the largest companies received 42 times the pay of the average worker. In 2000 the gap hit a high, with CEOs making 525 times the average worker.

source

Anonymous said...

But did those CEOs take money from you and I or did everyone prosper through the late '80s and'90s

Just because a person gets richer itdoes not mean someone else got poorer.

Joe

Anonymous said...

From Erin's source
"In an effort to shine a light on CEO pay, the AFL-CIO examined chief executive salaries at 299 firms traded on the S&P 500. Their compensation was up 23% in 2010, compared to 2009. AFL-CIO used Bureau of Labor Statistics wage data to define typical worker pay, which was $33,190 for all occupations in 2009, the most recent year for which data is available."
So 299 CEO's, I have my doubts about the typical worker pay, how about the typical union worker pay, say at GM?

JOG

Anonymous said...

http://wsjclassroomedition.com/archive/06may/auto2_jobsbank.htm

Well this is interesting,although data is from 2006, wonder if it still goes on. Oh yeah Unions are good for America




JOG

Tam said...

There is a reason that it is an "income tax" and not a "wealth tax".

The Kennedy family, for instance, is very wealthy, but irrevocable trusts don't really generate much in the way of taxable income...


Erin,

Good to see that the politics of envy are still so reliable, you little bolshie, you. :)

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