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In Defense of Inequality
Townhall.com ^ | January 18, 2014 | John C. Goodman

Posted on 01/18/2014 6:27:26 AM PST by Kaslin

During the 2008 presidential election, Barack Obama was asked if he would favor a higher capital gains tax rate, even if the government received less revenue as a result. His answer: Yes.

When you stop to think about it, that's a remarkable answer. By hypothesis, everyone is worse off. The owners of capital are worse off. The government is worse off. Poor people who depend on government are worse off.

Yet Obama's answer wasn't remarked upon. It was generally ignored. The reason: I think most people in the mainstream media took it as aberration. Maybe even a misstatement. And that is because the mainstream media doesn't take the president seriously when he says he is against inequality — an understandable attitude, given that the first family just finished a 17 day, $4 million vacation in Hawaii.

But I have it on good authority that the president repeated that answer to the very same question in private fund raisers. So I'm willing to entertain the idea that he really means it. That implies that for Barrack Obama equality is a serious value — one that should be pursued even if it requires the destruction of wealth, less revenue for government, less welfare for the poor and compromising on other things that are also of value. Not only am I willing to take Barack Obama seriously, I'm willing to give the benefit of the doubt to Paul Krugman, Joe Stiglitz, Robert Reich and others.

Let's admit it folks. Maybe these guys aren't the hypocrites many of you think they are. Maybe they are really serious.

OK. So what does that imply?

Let's take expatriation. After John Templeton renounced his citizenship and moved to Nassau (where there is no income tax), the federal government imposed penalties — to discourage other wealthy people from doing the same thing. That was because the government wants to tax them. But when a wealthy person expatriates, the distribution of income and wealth becomes more equal. Should we reverse course and encourage the John Templetons of this world to get out of town. If equality is a serious goal, we should at least relax the penalties.

At the other end of the income ladder, consider poor immigrants. Every time one comes to our shore, the distribution of income becomes more unequal. But the same could be said if the immigrant is rich. Any immigrant who isn't earning close to the average income is going to make the distribution less equal as a result of his immigration. If equality is a serious goal, we definitely need a different immigration policy.

Then there is federal aid to the students at Harvard. Granted, many of them may be poor right now. But if they were smart enough to get into Harvard, their lifetime expected earnings are way above average. And what's true of Harvard is true of Yale, Princeton, etc. In fact, an argument can be made that all aid to college students everywhere contributes to inequality. If equality is a goal, at least there should be a lot less of it.

Then there is he welfare state. To the degree that it encourages people to be poor or have children who will grow up to be poor, it is certainly not performing an egalitarian function. Instead of paying welfare mothers more money when they have another child, perhaps there should be financial penalties.

More generally, all means tested entitlement benefits contribute to inequality of income and wealth. The reason: they discourage work and income earning. Unemployment insurance benefits, Food Stamps, Medicaid — all these programs and more contribute to inequality. They encourage people to have less income and fewer assets than they otherwise would.

And as we have previously mentioned at this site, it's hard to think of an institution that causes more inequality than the lottery, even though lotteries are a favorite source of funds for Democratic legislatures and Democratic governors.

But before we rush out and change all these laws let's stop and reconsider. If inequality is a bad thing, there must be victims. Yet if penniless immigrants come to our shore, knowing that their arrival makes the distribution of income more unequal than it was and knowing that they will be at the bottom of the income ladder initially, then it's hard to argue they are being victimized.

I know I would much rather live around billionaires than people who earn what I do. People with a lot of money create business opportunities, employment opportunities and even social opportunities that I would otherwise miss out on. If there were no rich people around, I would never have been able to sit in a box at Cowboy Stadium, or sail in a yacht, or drive as Aston Martin. In fact, if there were no rich people, there wouldn't be any sports boxes or yachts or Aston Martins.

For almost any skill or attribute, think of a bell curve distribution. Most people are near the middle of the distribution, while the most accomplished 2% are way out on the right tail. Now think about how your life is richer and more fulfilling and enjoyable because of the 2%. If you could take a magic wand and remove the 2% who are the best football payers, how enjoyable would Sunday's TV football games be? Would you watch at all if the players on the field were all of "average" ability?

The same principle can be applied to other sports (baseball, basketball, hockey, etc.), to music (what if there were no Beethoven, Mozart or Rachmaninoff?), to film (what if there were no Betty Davis or Humphrey Bogart?) and to singing (no Beyoncé or Bob Dylan or the Beatles?)

The most important inequality however is intelligence. What we loosely call "genius" is a person with an IQ in the top 2% of the IQ distribution. Have you ever thought what would have happened if some freak accident of nature prevented the top 2% from ever being born. If nature's distribution of IQ were only slightly narrow than the one we experience, we never would have had a Euclid, a Galileo, a Newton or an Einstein. In the business world, we never would have had a Thomas Edison, a Steve Jobs or a Bill Gates.

Not everyone with a high IQ is a high flyer. In fact the vast majority are not. But all the great scientific discoveries and all the great innovations came from people out there on the right tail. Without them, life for you and me today would be little different than it was in medieval times.

So the next time you say a prayer of thanks be sure to thank whatever Gods may be for the fact that we are not all the same.


TOPICS: Culture/Society; Editorial; Government
KEYWORDS: 0bamavacation; barack0bama; inequality

1 posted on 01/18/2014 6:27:26 AM PST by Kaslin
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To: Kaslin

So a guy who sits around picking his ass playing on his x-box in his granma’s basement should have the same income as his brother who works two jobs, driving a cab in the evening. And his brother who works two jobs but dropped out of school in the 10th grade should have the same income as his brother who stayed in schooled, scrimped and saved and borrowed to go through medical school?


2 posted on 01/18/2014 6:34:18 AM PST by Lonesome in Massachussets (In the long run, we are all dead.)
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To: Lonesome in Massachussets

Because if you equalize their income, when the brother living in the basement needs to see a doctor about his diabetes, there won’t be a cab to take him there, or a doctor to see him.


3 posted on 01/18/2014 6:36:15 AM PST by Lonesome in Massachussets (In the long run, we are all dead.)
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To: Kaslin
It's really pathetic that anyone would even feel a need to "defend" inequality in this day and age.

Defending inequality is like defending the sunrise. It just happens, and there isn't anything that anyone can do about it -- no matter how hard these stunted misfits like Barack Obama, Paul Krugman and Tom Friedman try.

4 posted on 01/18/2014 7:23:08 AM PST by Alberta's Child ("I've never seen such a conclave of minstrels in my life.")
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To: All

See the tagline.


5 posted on 01/18/2014 7:25:44 AM PST by Thom Pain (Income Inequality is caused by Effort/Discipline Inequality!!)
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To: Kaslin
All you liberals now jumping on the income inequality bandwagon... You know this is pure political theater right? They just want to distract from the scandals such as IRS, EPA, Benghazi, etc. and the flaming pile of excrement that is obamacare.

So here's a little test for you liberal lurkers now carrying the "income inequality" water for the socialsts/fascists...

From what I've been able to tell with a little online research mean family income in the US is about $52,000 a year. So, if you're so fired up about "income inequality" you are in luck! You, yes you sitting there reading this can do something about it right now, today. You do not have to wait for the government, you do not have to be frustrated by all those "obstructionist Republicans" etc.

Figure out your family income. Most of us have a fairly good idea, within a few percent, of what our income will be. Now, take every dollar you and your family members earn that is over $52,000 and donate it to charity. Some of them are very good, only a couple of percent overhead. (far better than the federal government) So you can address income inequality immediately, right now.

Not willing to do it? Why not!? I thought this was important to you? I thought you were beating the drum about how we must take action? Well, there's an action, what are you waiting for? Not going to do it? Then STFU. Waiting for the government to take action - what with other people's money? You want equality, you've got to get down to $52,000 a year, so get on it.

Oh, maybe you think only "the rich" should have to pay "their fair share" ... Well guess what, the numbers are in. If you're making over $52,000 a year you are "the rich" compared to many, and your "fair share" is everything you make over $52,000.

Oh, what's that, you're willing but only if everyone else does too? Well gee, that's a problem. You see, some people obviously are not going to want to play along. I know, selfish ba*tards right? {snort} But hey, this is America, life, liberty, and the pursuit of happiness. So if they want to be that way, well, that's their choice, their freedom. Oh, I see, you want the government to force them to do "their share" - via taxation, confiscation, etc. Wow, problem is, that's communism, and not only does that not work in theory, in practice it has failed miserably everywhere it has been tried. So I guess in a free society income inequality is a fact of life. You're not willing to give up freedom and liberty, are you? Because then the government will have to regulate virtually everything in the economy. You'll end up with some government hack telling you where to work, what to drive, what to eat (I know, that's NYC now but work with me).

Gee, if only there was some way we could help that large percentage of the population making less than $52,000 a year to make more... Like, I don't know, grow the economy, create jobs... Hmm, what could we do to cause that... Well, what has been demonstrated to do that in our past and in other places is to cut government size/spending, reduce red tape and regulation... Gasp! I know, sorry, probably 3 liberals just passed out and fell out of their chairs after reading that - he wants to cut the federal government!

6 posted on 01/18/2014 7:48:24 AM PST by ThunderSleeps (Stop obarma now! Stop the hussein - insane agenda!)
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