Economic Equality – The Left’s Next Big “Progressive” Push and Why They Are Wrong

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(Punditcy.com) – President Obama says that the nation’s cities are key to the economic progress of the United States and states that he wants to work with the mayors to provide an environment that makes them essential job creation hubs.

To facilitate this agenda, President Obama held a meeting with more than a dozen hand-picked, newly-elected mayors of the country’s largest cities in mid-December under the guise of helping them to become “job creation hubs”.  However, comments from attendees following the meeting indicate that the topic may have had a slightly different spin then the White House indicated.   Among the mayors honored with a meeting at the White House was Mayor-elect Bill De Blasio, New York’s first Democrat mayor in 20 years, who has promised a major change of style and substance for America’s biggest city.

[image src=”http://punditcy.com/wp-content/uploads/2013/12/Bill_DeBlasio.jpg” width=”250″ title=”Mayor-elect Bill DeBlasio” lightbox=”no” frame=”light” align=”left” float=”left”]Mayor-elect De Blasio was excited following the meeting, obviously inspired by what had been discussed.  “There’s a progressive movement in this country that’s having a real effect,” De Blasio said.  “It’s clear that something is happening around this country and that the inequalities we’re facing are becoming just fundamentally unacceptable.”

It is obvious that the President has selected  income inequality as the issue of the day, along with immigration reform, in an attempt to kick-start his scandal ridden second term — I am certain that they will both be key themes for the President’s State of the Union address next month.

Unfortunately, President Obama and his cohorts of world elites are worried about something that, in and of itself, is not a problem.  And, just like many of the other Presidential initiatives, they will spend billions of dollars in an attempt to fix a problem that does not exist.

“In a landscape of 50 global risks facing the world over the next 10 years, respondents rated severe income inequality as the most likely global risk,” reported CNBC on a study by the World Economic Forum where the elite gather to debate perceived issues in the global economy.

Income inequality is, according to the study, a bigger problem than food or water shortages, communicable diseases, or “major systemic financial failure.”  Branko Milanovic, the lead economist at the World Bank’s research group, went so far as to assert that severe income inequality could fuel mass migration and popular uprisings.

Despite data to the contrary, the progressive movement has taken on this issue as their cause.  “The non-partisan Congressional Budget Office reported in 2011 that between 1979 and 2007 the top 1 percent of households saw their income grow by 275 percent, while for the bottom 20 percent, income grew by just 20 percent,” CNBC reports. “For the middle 60 percent of Americans, average incomes grew just under 40 percent.”

The fact that the percentage increase of the rich is disproportionately larger then the percentage increase of the poor was of great note in the report.  Some people are going to make more money than others; we already knew that.  So where’s the problem?  In every income bracket the arrows are going up.  People at the top are making more, people in the middle are making more and people at the bottom are making more — again, where is the problem?  Sure the rich are moving up at a faster rate, but that makes sense because they started with more.

The progressive ideology that income inequality is a threat to humanity is most certainly baseless and indeed is rooted on a premise that somehow the rich must get rich at the expense of the poor.  This just is not true.  The data is clear, economic freedom benefits the poorest of a country far greater than economies that are not free.   A much less free economy is the exact economy that the progressive ideology desires in order to correct this ill conceived threat.  A less free economy will not provide equality, but a lower standard for everyone.  The Heritage Foundation report Defending the Dream: Why Income Inequality Doesn’t Threaten Opportunity clearly shows that the successes realized in the United States are due primarily to the free-market enterprise system and how a growing economy benefits everyone.  It states:

If it were the case that the rich had grown richer at the expense of the poor, thereby making them poorer, then we would have reason to be concerned.   Something would have to be done not to equalize outcomes, but to address the unjust means that the rich had used to defraud the poor.   Contrary to what Marxist economists argue, however, that is not the way our economy works.  A free-market economy creates wealth.  For one person to make a dollar does not mean that another needs to lose one.  There is not just one dwindling pie to be divided up among the population, but rather a proven recipe to grow the pie to serve everyone.  All the talk about the rich “grabbing” too large a share of the national income therefore rests on a flawed understanding of this basic truth of free-market economics.

Those who focus on income inequality have embraced a very different American Dream from the one that is familiar to most Americans. They still use the traditional language of opportunity, but their new dream has very little in common with the real American Dream.

“For the Left’s new American Dream to deliver on its promise [of income equality], America would have to be completely overhauled and the character of its citizens altered,”  the Heritage Report stated.  “The spirited, entrepreneurial and determinedly self-reliant citizens envisioned by the Founders of our constitutional republic would give way to timid and envious clients who increasingly turn to an omnipotent state for their well-being.  It is therefore imperative that the American Dream be rescued from those who would so radically redefine it.”[image src=”http://punditcy.com/wp-content/uploads/2013/12/James_Madison_cropped.jpg” width=”250″ title=”James Madison” lightbox=”no” frame=”light” align=”left” float=”right”]

So what did the Founding Fathers have to say about income inequality?

The Founding Fathers fully understood that the premises they were using to design a country that was free, would result in some citizens doing better than others, as determined by merit.  The principles they held dear should remind us why economic inequality is not necessarily an injustice, but rather a necessary component of any prosperous society.

The Founders believed that the notion of merely owning physical property did not encompass the entirety of their understandings, the founders rightly recognized that property rights to also include “natural rights.”  In an essay on property rights in 1792, James Madison wrote:

He has a property very dear to him in the safety and liberty of his person. He has an equal property in the free use of his faculties and free choice of the objects on which to employ them…Conscience is the most sacred of all property…the exercise of that, being a natural and unalienable right.

Property rights, therefore, also must include the means for utilizing our skills to acquire that property, which precedes the ownership of physical property.  And thus, are also inherent and must be protected.

The founders were very aware that protecting the talents of individuals would lead to inequality.  In Federalist 10, Madison said that, “From the protection of different and unequal faculties of acquiring property, the possession of different degrees and kinds of property immediately results.”

But is this just?  Were the founders just flat out wrong and the enlightened intellectuals at the World Economic Forum right?

I believe that the reason the founders understood this to be just is that property rights benefit all classes equally because they protect every individual from exploitation or enslavement by others.

Madison in a speech to the Congress, April 9, 1789 articulated that industrial citizens left to their own ingenuity will be directed to “those objects which are most productive, and this in a more certain and direct manner than the wisdom of the most enlightened legislature could point out.”

Likewise, Alexander Hamilton noted in his Report on Manufactures, December 5, 1791 that individual faculties organically create a division of labor, which “has the effect of augmenting the productive powers of labor, and with them, the total mass of the produce or revenue of a country.”

I think it is quite clear that the founders understood and believed that a free economy would not promote equality of wealth and that they, as I do, believed that equality of opportunity is the foundation of greatness.

When someone can explain to me how a man like Bill Gates, who built a billion dollar company from nothing, somehow took money from the poor to amass his enormous wealth, then I might start to listen to the fairy tale of income inequality.

Progressive income inequality and income redistribution is not about  fairness, it is about power.  Centralizing it and maintaining it in an all powerful and all controlling government.

If the Left does achieve their goal, then the American Dream will most assuredly fade away

 

  • TomTito

    This Heritage report could use more specific data. Their theory of economic growth has not been matched by our recent experience of economic stagnation. And growth areas of eviction and foreclosure provide jobs but don’t grow our economy.

    State and local government continue to increase taxes on low wage families, increasing inequality without growing the economic pie.

    Pinellas County Florida is asking voters for a 14% increase in the sales tax. Tea Party leaders have cited the regressive nature of the sales tax as a reason to vote no.

    • The data shows that there is no correlation between economic inequality and economic growth. Obama says that we need to fix the inequality “problem” to revive the economy, that just isn’t true. The only sustainable way to fix the failed recovery is to free up the market. Take the chains off of the job creators (small businesses). See my post on why economic freedom is the only sustainable solution. http://www.punditcy.com/2013/economic-freedom/economic-freedom-is-the-only-sustainable-solution/

      Growing the economy by freeing up business will aid in all areas. More jobs available, more people working, more people spending money and more tax revenues so local and state tax rates would not continue to go up. The reason the local and state taxes are going up is because tax revenues reflect the state of the economy.

  • While I agree that equality of opportunity is far more correct and essential right than equality of income or means, I think it is completely erroneous to suggest that disparity of income or wealth is not at all a problem. Tell that to the single mother who is working 2 or 3 jobs in attempt just to survive, while loosing a battle to stop her son from drug addiction lacking her presence and guidance. It is elitist to shut ones eyes to the effects of income disparity.

    It is not possible to maintain a healthy democratic society beyond some threshold of inequity, not even going into the moral or ethical aspect of some people enjoying unmeasurable power and wealth while others are not even able to live a meaningful or reasonable life on the baseline.

    • Much of the income inequality is made worse by poor government policy and crony capitalism. The laws passed favor those special interest who provide the most money to keep elected officials in office. Economic Freedom (see Economic Freedom is The Only Solution)

      If you read this article you will see that the more free an economy is, the better off everyone is… including the single mothers working multiple jobs to survive. It is not the inequality that is the problem, it is the government intrusion and government choosing who wins and who looses through policy. Get the government out of the way and we will ALL be better off.

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