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Republicans Need to Get to Know Their Enemies on Income Inequality
Townhall.com ^ | April 28, 2014 | Cathy Reisenwitz

Posted on 04/28/2014 6:18:36 AM PDT by Kaslin

“Know thine enemy.” Uttered most famously a millennia and a half ago by famed warrior/philosopher Sun Tzu, the advice holds up well, even, and especially, when the battles are ideological. So what is the thinking behind the right’s utter refusal to actually engage with the left’s actual position on inequality?

The Federalist’s Ben Domenech wants us to know that in reality, inequality doesn’t matter. Of course what “matters” is entirely subjective. It would make more sense for Ben to try to persuade those who think it does why they shouldn’t. But that would require that Ben understood why inequality matters to people.

Here’s his summation of his opponent’s view:

The left continues to operate on an a priori assumption that income inequality/wealth concentration is a bad thing, because of those riches backstroking through their money. But that’s just a jealousy trope.

In fact, Googleing “income inequality” brings up a host of non-jealousy related reasons to care about it. One reason is that it hurts economic growth when the rich see their incomes rise but the poor don’t. The reason? The poor spend their extra wages, unlike the wealthy. Another reason is that income inequality hurts class mobility by making it more difficult for kids to go to college.

It may be that saving and investing are just as good, if not better, for economic growth than spending. And I tend to believe that college is generally extremely overrated as a tool for mobility.

But to dismiss concerns as simple class warfare is unhelpful.

According to Pew Research, “Americans in the upper fifth of the income distribution earn 16.7 times as much as those in the lowest fifth — by far the widest such gap among the 10 advanced countries in the Pew Research Center’s 2013 global attitudes survey.”

This matters to Democrats, but not Republicans. Pew again:

More than half (55%) of Republicans said the economic system is fair to most people, but majorities of Democrats (75%) and independents (63%) said it favors the wealthy. And 61% of Democrats and 50% of independents said the gap was a very big problem, versus only 28% of Republicans.

Here’s where the Republican messaging machine could go Sun Tzu on the Democrats and win converts. Forty-five percent of Republicans and the vast majority of Democrats and independents said the economic system “favors the wealthy.” This is true! From licensure requirements to tax breaks to onerous regulations to the incredibly regressive payroll tax, which takes a huge chunk out of your first dollar earned and actually has a cap, like it or not, government economic policies shape our economy and many of these policies absolutely favor the wealthy.

Republicans get trapped into thinking that because some level of inequality is a feature of capitalism, we shouldn’t care about it. And I sympathize with the view that a rising tide lifts all boats, so the focus should be on growing the pie, not making sure it’s divided evenly.

But it’s no disavowal of capitalism to admit that the current levels of inequality aren’t right, fair, or the result of the free-market at work. For example, if creative destruction weren’t thwarted by bailouts, we’d probably wouldn’t see CEOs paid many multiples of worker compensation to preside over failing firms.

It’s the defense the free market deserves to point this stuff out, instead of misrepresenting why people care about it in the first place. Maybe, in a truly free market, inequality wouldn’t matter to most people. We’re not in one. Admitting that fact is the first step to getting on the same page.


TOPICS: Culture/Society; Editorial
KEYWORDS: freemarkets; inequality; pewresearchcenter

1 posted on 04/28/2014 6:18:36 AM PDT by Kaslin
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To: Kaslin

Today from Pope Francis: “Inequality is the root of social evil.”

Oh my...if the Pope supposedly is infallible, how can he make such a demonstrably false declaration.


2 posted on 04/28/2014 6:24:43 AM PDT by twister881
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To: Kaslin

Evil is the root of social evil.


3 posted on 04/28/2014 6:25:54 AM PDT by twister881
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To: Kaslin

Personally I think the bail outs need to be paid back with interest.


4 posted on 04/28/2014 6:26:44 AM PDT by McGavin999
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To: McGavin999

I agree, but I doubt that’s going to happen. We’ll be lucky to get the bailouts paid back


5 posted on 04/28/2014 6:31:04 AM PDT by Kaslin (He needed the ignorant to reelect him, and he got them. Now we all have to pay the consequenses)
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To: Kaslin

Republicans should agree with Dems that things have become worse for us under Obama’s 5+ years (due to his bad policies), they don’t have to disagree on everything.

House marked slowing, record #s of Americans not working, gas, food prices rising.

And yes a few are doing extremely well, under Obama.


6 posted on 04/28/2014 6:32:07 AM PDT by sickoflibs (Obama : 'You can keep your doctor if you want. I never tell a lie ')
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To: Kaslin

Neo-patrimonialism “form of organisation in which relationships of a broadly patrimonial type pervade a political and administrative system which is formally constructed on rational-legal lines.” It is a system in which an office of power is used for personal uses and gains, as opposed to a strict division of the private and public spheres.
Explains the failure of third world countries. It’s here and very proficient.


7 posted on 04/28/2014 6:32:26 AM PDT by griswold3
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To: sickoflibs

Agree. Regressives don’t mind being rich; they just don’t want anyone else becoming rich.


8 posted on 04/28/2014 6:36:15 AM PDT by twister881
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To: griswold3

Obama admin is the prime example of a patrimonial kakocracy. Rule by the worst of society who endlessly promote and enrich each other. The type of corruption found in many African and Latin nations, and also in America’s ‘RAT-run cities.


9 posted on 04/28/2014 6:43:10 AM PDT by twister881
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To: Kaslin
Government redistribution of wealth is one way to deal with the issue -- but it's imposing one person's view on another, which is distasteful. How about using the rule "If you want more of something, subsidize it; if you want less of something, tax it"? The solution I keep suggesting is for the Democrats (and Republicans) to tackle income inequality in the Tax Code in a manner that encourages choice and discourages mandates.

My idea is a simple one: provide a tax break for companies and corporations, over and above the existing exemption, who distribute profit sharing to all full-time (and perhaps part-time) employees. An additional tax write-off of, say 33 percent of the bonus pay-out, would encourage employers to put more money into the hands of their employees, and not just in the hands of managers and directors.

I'm sure the Congressional Budget Office would need to run the numbers, but my gut feel is that the increase in cash flow through the lower echelons will spur an increase in spending that will be a positive for the economy -- how much of an increase would be a question for the analysts. If the profit-sharing were based on a combination of compensation and merit, the bonuses would reward good work that adds to the bottom line of the company.

Stock options for employees could provide further incentives to front-line employees to work smarter and more efficiently. And, it would give the employees equity in the company.

Those companies who don't want to participate, don't have to. Unlike Obamacare, you don't need to coerce everyone into doing this. We already know, from past experience with other incentive programs, that companies will willingly go the extra mile to take advantage of these incentives.

The loss on corporate taxes will be made up by the increase in individual taxes, especially when spending goes up. There is a multiplier in action here: instead of the money going into storage, it gets out in the retail economy.

10 posted on 04/28/2014 6:46:05 AM PDT by asinclair (Political hot air is a renewable energy resource)
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To: twister881
Oh my...if the Pope supposedly is infallible, how can he make such a demonstrably false declaration.

When it comes to church doctrine, the Pope is infallible. Saying that "inequality is the root of social evil," may not necessarily be false. Many in the lower socio-economic classes turn to drugs, theft, prostitution, and a number of other "social evils" because of unequal situations.

You present the Pope's comment out of context, so I don't know what his proposed solution to "inequality" is. I also know that coveting what isn't yours, and that making the most of one's talents are also covered somewhere under church doctrine, so I would hope that he's at least consistent with his proposal.

11 posted on 04/28/2014 6:50:58 AM PDT by Lou L (Health "insurance" is NOT the same as health "care")
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To: Kaslin
It’s the defense the free market deserves to point this stuff out, instead of misrepresenting why people care about it in the first place.

In keeping with the author's main theme on Sun Tzu's admonition to know your enemy, Ms. Reisenwitz should better know that the lieberals don't care about "this stuff". She's very naive. They only care about class warfare helping form their campaign themes to use human envy to win votes. It is NOT a misrepresentation to point out that the democRATS don't care about the people currently in the lower rungs of the economic spectrum. In fact, they want to KEEP THEM THERE. Poor, dependent, dissatisfied and envious ... only for the purpose of their votes.

That said, perceptions are important and Conservatives would do well to articulate that we actually do care and that as Milton Friedman has put so well ... the record of history is absolutely crystal clear ... that there is no alternative way, so far discovered, of improving the lot of the ordinary people, that can hold a candle to the productive activities that are unleashed by a free enterprise system.

12 posted on 04/28/2014 6:54:27 AM PDT by Servant of the Cross (the Truth will set you free)
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To: Lou L

The pope must invoke his charism of infallibility, and be speaking with respect to faith and morals, for his teaching to be regarded as infallible. The occasions are few and far between.

Otherwise, his statements should be taken with the seriousness due his office.


13 posted on 04/28/2014 6:55:20 AM PDT by St_Thomas_Aquinas ( Isaiah 22:22, Matthew 16:19, Revelation 3:7)
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To: Lou L

He posted it as a Tweet, with no context. The danger and error of making sweeping, 140-character pronouncements. Poverty can predispose people to immoral or illegal behavior, but it is not the root cause. My parents grew up as poor as church mice, but taught and led by example to be honest and honorable. All cultures are not equal, and never will be.


14 posted on 04/28/2014 7:03:21 AM PDT by twister881
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To: Kaslin

The bottom line is that the Democrats cannot tax the wealthy into poverty, though they bitterly want to hurt them.

But if at the same time, the biggest potential gains for the wealthy amount to rigged gambling games that “manufacture” money out of nothing, this represents a threat to the economy.

Therefore the solution is to structure taxation and investment away from gambling markets, like derivatives, and into investments that *benefit* the economy, the less wealthy, and even the poor.

The taxation is not direct, but is used to prevent corporations seeking cheap materials and workers overseas, yet profiting from selling these goods in the US markets at high prices.

The bottom line is that, “If you want to sell it here, you make it here. If you want to make it there, your goods will have a tariff slapped on them so that you will make no more money than if you made it here.”

While many people shy away from the idea of tariffs, in fact, this is just the opposite: it is trying to prevent “dumping”, that hurts our domestic production market. It is not protectionism, it is anti-unfair trade practices.

The “free trade internationalist” philosophy that free trade would benefit everyone, has failed even worse than Keynesian economics. In practice, while it has benefited the overseas poor, in most cases it has done so only marginally; and at devastating cost to the American economy.

So now that their painful experiment has run its course, it is time for it to end, despite frantic resistance from the multinational corporations in the US Chamber of Commerce.

Sorry boys, it’s time for this to become an honest casino, not just one where you skim off all the wealth while screwing everyone else.

This is real redistribution of wealth: pumping their investment money back into the US economy, and making a healthy profit while doing so, yet also benefiting Americans with jobs and wealth for them as well.

It’s past time that the wealthy again brag about how many Americans work for them, and how it is making America stronger.


15 posted on 04/28/2014 7:03:47 AM PDT by yefragetuwrabrumuy (WoT News: Rantburg.com)
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To: Kaslin

Why don’t the Republicans reply - YES, wage inequality is pretty bad. Sadly, its found in industries which survive off government regulation, rules and subsidy

Therefore, as a first step we are proposing immediately - the closure of the Federal Reserve, and the break-up of Wall Street banks


16 posted on 04/28/2014 7:10:41 AM PDT by PGR88
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To: Kaslin

The author is missing the forest because of a couple of trees.

“Income Inequality” is a complaint against the OUTCOME of people’s attempts to better their own positions. That is the exact opposite of the basis for our nation - which is the availability of OPPORTUNITY to better oneself.

“Income Inequality” is a complaint that the socialist/communist goals of relegating all but the ruling elite to an equally dismal outcome of their efforts to succeed has not yet been realized.


17 posted on 04/28/2014 7:15:57 AM PDT by MortMan (With friends like these, who is needing enemas?)
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To: Kaslin

The cited links are from CNBC, NPR, and Pew (twice).

I thought she was trying to appeal to conservative thinkers. Using partisan leftist propaganda to do so marks her as a rube (at best) or a shill.


18 posted on 04/28/2014 7:20:02 AM PDT by MortMan (With friends like these, who is needing enemas?)
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To: Kaslin
The biggest problem we have with our tax policy is we have an income tax, rather than a wealth tax. We need to replace the income tax completely, or in such a way it does not penalize those who work harder and make more income.

What is income, anyway? Monetary reward for labor. Whether that labor is manual, physical, mental or all of the above, people use their labor to get rewarded money. But why tax labor?

Why not tax wealth? With a homestead exemption, of course, so they can't steal Grandma's farm.

The super-rich avoid income taxes by not having any income. All the money goes into Trust Funds (TF) that “pay” for all their living, no matter how extravagant. So, why do you need any money when the TF buys the food, pays the chef, provides the 100,000 kitchen, etc, etc? Or perhaps you'd like a Lamborghini? Nice ride. The TF will buy one, and you can drive it. The TF will even pay for a private mechanic, garage and fuel.

Meanwhile, we have American Small Business (SB). SBs are the backbone of the American economy. Yet their owners get an income, often up to $1,000,000. But SB owners must also pay for things from that same income, from buying new machines to hiring workers. Yet it is these folks who bear the brunt of the income tax the most.

People like Warren Buffet and Bill Gates—who people like to think of as super-rich, and want them to pay more income tax, and then support democrats in those efforts—actually pay no or very little “income” tax, and these same super rich individuals are always advocating raising income taxes because, hey, it doesn't really effect them. And those political efforts to raise taxes almost always hurt the SB owners the hardest, and this dampens the economy, which in itself affects all those working and middle class people who can't get work--that is, monetary rewards for their labor. The super-rich continue to get richer, as we don't touch THEIR wealth. So wealth (not income!) inequality grows.

So, we need to find a way to tax their so-called tax loopholes, their trust funds, and their wealth rather than the hard work of SB owners.

19 posted on 04/28/2014 7:23:54 AM PDT by Alas Babylon!
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To: St_Thomas_Aquinas
Otherwise, his statements should be taken with the seriousness due his office.

Addressing "income inequality" is not something that can be answered in a 30-second soundbite. I don't know the full context of the Pope's speech (as originally quoted), nor do I know of what the Pope is suggesting as far as a solution. Claiming that "inequality is a root of social evil" may be somewhat true, but it's a root with many feeders: personal responsibility, moral and spiritual equality, and so forth.

Saying that income inequality leads to social evil is not necessarily untrue. The Pope doesn't have to explain himself every time he speaks, in order to maintain his moral standing.

20 posted on 04/28/2014 7:28:54 AM PDT by Lou L (Health "insurance" is NOT the same as health "care")
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To: twister881

“Inequality is the root of social evil.”

OK. Do away with the church hierarchy.


21 posted on 04/28/2014 7:38:04 AM PDT by pieceofthepuzzle
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To: Kaslin

I contend that I was as successful as I was during most of my working life because:

I DID the homework in grade school & high school.

I TOOK the tests and got good grades.

I ATTENDED school, with very few absences.

I worked HARD at whatever job I had, even those which were boring, or not my first choice.

I DID EXTRA ASSIGNMENTS when my employer asked.

I went back to college AT NIGHT, after working more than 40 hours a week and took accounting classes.

I put my SOCIAL LIFE ON HOLD for over 4 years to take all the accounting classes the college offered.

I got a 4.0 grade average—all 4 years.

All of this enabled me to be self-employed before I was 40 and to choose my clients.

I often worked MORE THAN 60 HOURS a week to keep clients happy. None of this was “Overtime”.

I bought my first house when I was 26. I owned 4 houses in the years, and own this one free & clear.

Attendance—effort—doing extra....all these things are what it takes to be successful.

Those who don’t ant to do any of the above will never be a decent employee.


22 posted on 04/28/2014 8:14:11 AM PDT by ridesthemiles
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To: Kaslin
Oligarchy in the Twenty-First Century Column: Think rich conservatives rule the world? Think again.

The world of unequal incomes that liberals self-righteously lament, the world of concentrated, inherited wealth, of politics dominated by the concerns of a few, is a world constructed by liberal methods according to liberal ideals. “The ruling ideas of each age have ever been the ideas of its ruling class,” Marx and Engels wrote in 1848. And there can be no denying that the ruling ideas of our age—diversity, multiculturalism, cosmopolitanism, gun control, free trade, unrestricted migration, sexual autonomy, feminism, environmentalism—are liberal ones.

The popular rhetoric of income inequality, the attacks on Charles and David Koch, the assertion that the system is rigged against the common man, the accusations that a vast right-wing conspiracy has despoiled the American landscape and society and polity—these are the means by which the ruling class masks its true position and justifies its continued agglomeration of power and of wealth.

The campaign against inequality and the call for higher taxes and the regulatory burdens placed on extractive industries further the self-interest of the liberals who rule our world partly because those liberals are already established in society and have already made their money, partly because like David Cohen or Tom Steyer or George Soros or Elon Musk or Warren Buffett they stand to benefit financially from their preferred outcomes, but also because there are fortunes to be made, there is status to be gained, in justifying the continued expansion of the welfare state, in designing plans for the redistribution of tax dollars, in demonizing those sections of the elite, and that minority of Americans, which dissent from the ruling ideas.

Seven of the 10 richest counties in the country voted for Barack Obama in 2012, many of them by huge margins. Six of the 10 are in the Washington, D.C., metro area, which has benefited from government employment and payment regulations, from government contracting, and from consulting, lobbying, and lawyering for clients petitioning the government. The median income of Falls Church City, Va., is $121,250 dollars. In 2012, Falls Church City voted for Obama 70 percent to 30 percent.

Democrats represent eight of the ten richest congressional districts in the country. Democrat Carolyn Maloney represents the district with the highest per capita income of $75,479. Outgoing congressman Henry Waxman represents the district with the second-highest per capita income of $61,273. The only two Republicans on the list are Rep. Leonard Lance, whose New Jersey district ranks seventh, and outgoing Rep. Frank Wolf, whose Virginia district ranks tenth. The average per capita income of Democratic House districts is $1,000 more than Republican ones.

Indeed, the partisan makeup of the super-rich is less interesting, and less important, than their ideological unity. The issues that the richest Americans care most passionately about, from gay marriage to comprehensive immigration reform to gun control to drug legalization to foreign aid, are liberal issues. Only the Kochs and Adelson are famous for making defiant and public stands against the spirit of the age.

The campaign of Barack Obama outraised the campaign of Mitt Romney. Overall, in 2012, the “red team” slightly outspent the “blue team” by a little more than $100 million. It made no difference. Not a single one of the top “all-time” institutional donors between 1989 and 2014 tilted Republican, according to a list compiled by the Center for Responsive Politics. Senate Democrats are winning the 2014 money race. Even as they denounce Supreme Court rulings that loosen restrictions on political speech, liberal billionaires pledge gifts of $100 million and $50 million to Democrats in the 2014 election, and meet anonymously and in secret to coordinate giving to the multitude of organizations that make up the professional left. So effective has been the fundraising of hedge-fund billionaire Tom Steyer that President Obama, having delayed the Keystone pipeline yet again, is likely to kill it.

“It’s very difficult to make a democratic system work when you have such extreme inequality,” Piketty told the Times last Sunday, “and such extreme inequality in terms of political influence and the production of knowledge and information.” In fact the mechanisms of democracy seem to be working precisely as the capitalist and petty-bourgeois liberals would like them to work: the question among Democrats these days is just how permanent their majority is likely to be.

What we are in danger of losing because of the “extreme inequality in terms of political influence and the production of knowledge and information” are the classical liberal values of negative freedom, of religious liberty, of equality before the law, of free markets. The inequality of income our bipartisan ruling class sanctimoniously condemns is the very tool it uses to shore up the inequalities of power and communication from which it benefits. Affluent, self-righteous, self-seeking, self-possessed, triumphalist, out of touch, hostile to dissent—this is what oligarchy looks like in the twenty-first century. And it is all in front of one’s nose.

23 posted on 04/28/2014 8:32:18 AM PDT by kabar
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To: All

She was only off by a millenium so I’m sure everything else is accurate.


24 posted on 04/28/2014 1:44:58 PM PDT by pluvmantelo (Sure would be nice if the same articles weren't posted multiple times)
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