Saturday, January 25, 2014

The Politics of “Income Inequality.”

We hear a lot, these days, about income inequality. That is the mantra of the liberal who seeks equal outcome for everyone. But…I wonder how sincere this wish really is.

Let’s look at the different types of governments and different models of society throughout history. There can be little doubt that the more leftward a society leans, the more the poor suffer. Is there any doubt that even if you are poor, it is far better to be poor in a free market democracy like the US instead of the old Soviet Union, Cuba, or Vietnam? Isn’t it interesting to see how, in more modern times, places like China experience tremendous economic growth through the embrace of capitalistic policies (the same that made America a superpower)? At the same time, we are seeing liberal Democrats in America embrace some of the same policies that led to hundreds of millions of Chinese, Cubans, and Vietnamese living in huts on less than a dollar a day!

I wonder, would today’s liberals claim that those with special skills should not be paid more than those without those skills. Take for an example, would liberals like President Obama or Al Gore or Bill Clinton give their millions of dollars to the poor or would they refuse to work for a low salary or income level in order to equalize their money resources with a day laborer. This is a nonsense question. Nobody thinks that income equalization at that level would be a good idea. It is necessary for those with special skills and abilities to be paid more than others.

But, a not-so-nonsensical question is this. If these wealthy liberals do not wish to give away their wealth, why should Joe Middleclass be asked to give his income away in a governmental redistribution scheme?

In order to assess the needs of the poor in America, we need to look at their economic situation straight in the eye. Being a “poor” American is not nearly as bad as you might think. More than 80 percent of poor Americans have cell phones, televisions, and refrigerators. Most also own a motor vehicle and have more living space than the average European. On top of all this, immigrants from all over the world still want to come here for a chance at a better life. This would not be happening if “poor” Americans were living in squalor.

One wonders if liberals and their obsessions about income inequality are really only making themselves feel good. Or…are they appealing to low information voters who think that these policies will have some real effects. I suspect that the liberal cry for income equality is an appeal for votes to those on government welfare who may not be particularly interested in bettering themselves.

I think a much better way to address the problem of income inequality is to stimulate business by eliminating today’s onerous regulations and tax burdens. Let business go—it has been an efficient engine for job creation in the past; and it can produce the jobs needed to equalize income better than government redistribution programs.

(This blog post was redacted from 1/5/14.)

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