Skip to comments.The Terrible Truth about Income Inequality
Posted on 05/14/2014 10:22:07 AM PDT by Kaslin
Economic inequality has emerged as the central political challenge of the 21st Century. Left wing academics and politicians are quick with quack remedies -- higher taxes on the wealthy that will only send more investment abroad and smother growth.
For most Americans, good-paying jobs are scarce, and many feel powerless to improve their lot. Yet, for those at the very top of business and in a few charmed professions things have never been better.
Vermont Senator Bernie Sanders (I) recently asked Federal Reserve Chairwoman Janet Yellen are we still a capitalist democracy or have we gone over into an oligarchic form of society in which incredible economic and political power now rests with the billionaire class?
Yellen deflected, saying she preferred not to assign labels, but Sanders struck a nerve.
Russias oligarchy has two salient characteristics. The government uses its power to regulate markets to concentrate wealth in the hands of an influential few, while most of its citizens stay poor by western standards.
In recent decades, the federal government has enabled monopolization in many industriesfor example, in cable TV and high speed Internet, banking and health careby failing to use its antitrust and regulatory powers to curb abusive practices.
Comcast enjoys monopoly access to most homes it services. Each year, it raises rates for cable TV bundled with high-speed Internet faster than the rate of inflation, because federal policies prohibit local governments from regulating cable prices as those do for electric and water utilities.
Its fee structure discourages subscribers from purchasing only high-speed Internet and independently obtaining entertainment content over the Net. Now Comcast proposes to acquire Time Warner Cable and establish a virtual national monopoly, giving it huge bargaining leverage with content providers, such as ESPN, Turner and Fox , even though it already owns NBC.
Comcast is transforming a public utility into an international media giant on the backs of overtaxed subscribers. Yet federal regulators will likely approve its acquisition of Comcast, because it has close ties with the Obama White House.
Similarly, Dodd-Frank financial reforms impose regulatory costs so onerous that small banks are selling out to bigger ones. In the bargain, small business loans and mortgages are tougher to obtain, and grandma cant get a decent rate on CDs. Bank executives pull down huge bonuses but also make generous contributions to political candidates.
ObamaCare has effectively monopolized many local markets for health insurance and hospital care, and reinforces pharmaceutical companies ability to charge higher drug prices than prevail in other wealthy countries like Germany and Holland.
To salve the masses, Washington politicians exempt nearly 50 percent of voters from income taxes, and offer subsidized health care, food stamps and the earned income tax credit for lower income Americans.
All are great vote buying schemes financed by heavy taxes on most upper income Americans.
But those politicians skillfully exclude from those high taxes the very top of the one percentthe oligarchs in communications, finance and other industries are often paid in stock options, which are subject to much lower capital-gains tax rates.
A recent Wall Street Journal poll found the majority of Americans view the economic and political system stacked against them, and most are dissatisfied with Obamas handling of the economy.
Meanwhile, the economics professioncomposed mostly of left leaning academicsis enamored with French economist and author Thomas Pikettys thesis, in the new bestseller, "Capital in the Twenty-First Century," that growing inequality is the natural outcome of capitalism and confiscatory taxes are the answer.
Both notions are wrong.
Washington corruption -- in the pattern of Vladimir Putin -- is driving inequality and sinking family incomes. Higher taxes may catch your family doctor in the near future but politicians will still find a way to exempt their supporters among the very wealthy.
Politicians offering ordinary voters a free ride on taxes, subsidized health care and other enticements are really picking their pockets by giving the country away to the oligarchs.
Income Inequality is caused by the lack of jobs and hard work.
In my opinion, the writer's analysis overlooks important aspects of the social & political context in both the United States & Russia. Part of that context is a failure to realize the absurdity of even making equality of achievement a goal is any society advanced enough to have developed an economy based upon a division of labor.
The central problem of the past 100 years has not been the greed of some; rather the mass incitation of many by demagogues, bent upon exploiting the baser elements of the human personality.
And Ambition Inequality.
While political gamesmanship in a modern bureaucracy may certainly influence the extent of the differences; the primary cause is simply the vast difference in individual aptitudes--always in the context of the demand for those aptitudes at any given moment in social history--and personality traits which affect the extent to which one develops one's individual aptitudes.
Nothing is more ridiculous than the collectivist/egalitarian mantra, that tries to demagogue this reality.
Difference in individual aptitudes is where the hard work comes into play it does pay off in the end.
Right. The demagogues, AKA Fabian Progressive Socialists, say the "right" things and use the "right" titles in their proposals to deceive the naivety of well-meaning do-gooders. They don't care about what they say or propose except that it furthers the Collectivist State power they lust for.
The very hand-wringing over inequality is itself a bit of an aberration. In other forms of sentient & social life forms, there is general acceptance of a pecking order--in some instances it may be challenged at mating time, but that is a special instance. So too, throughout most of human history, there is that same acceptance.
The frenetic embrace of egalitarian projects generally flows not from those supposedly disadvantaged by traditional society, but those in the most affluent classes, who have too much leisure time. Thus the French Revolution embraced demagoguery that flowed from the salons of the debauched party set in Louis XV's France; thus Aristocrats in costume helped to lead the march on the Bastille.
The manufacturing of supposed "grievances," by which the many are corrupted, is as old as the version in Genesis, which led astray but two. It is an endlessly repeated call upon the baser human instincts; but it is not a rational argument for change. (See Variations On A Demonic Theme.)
My boss makes more than I do. I should sue him.
Increased prosperity of the economic system as a whole requires economic progress, which requires the existence of capital accumulation. Capital accumulation requires the existence of the institutions of capitalism. One of these institutions is economic inequality. The combination of inequality with the institution of private property,provides both the means and motive to accumulate capital.
Increased taxes on "the rich" and other forms of libtard government intervention into the economy are an assault on saving, investment, and productive expenditure.The effect of these is to slow down the accumulation of capital or to cause the decumulation of capital, which leads to economic decline and decay.
Once again, you have summarized the article into one sentence. Many thanks.
The idea of an oppressive central bureaucracy providing the answer to social problems--whether real or imagined--may appeal to those either too foolish or too lazy to look closely at how a healthy society functions; it cannot be maintained in a serious debate over policy.
Always good to hear from you, and find you still on the side of truth & reason.
But no amount of hard work can overcome all inherent weaknesses.
Better not tell AA members that as well as people who over came all odds.
I thought that one of the basic pillars of the AA program was to accept those things they cannot change?
No one is saying that people cannot greatly improve their lot by hard effort; but that does not mean an ability to morph into someone else.
Neither you nor I, nor anyone reading this, ever sat in a class-room with their equal on either side (unless their identical twin or triplet). You may be better than another at one subject, or one physical activity, while poorer than another at some other subject or activity. But in your complex of aptitudes--as well as personality traits--you are unique.
Egalitarianism is the vehicle of demagogues, who are not engaged in uplift--however they may protest that they are. (See: The Greatest Mischief Ever Wrought.)
Equal can mean different things to many people but the basic line must start some place.