Observations on life

The inequality of inequality 

If my wealth is ten times yours or one hundred times or a thousand times, what does it matter?

It may matter if I stole it from you or intentionally created situations that prevented you from accumulating your own wealth, but absent that, why does it matter?

Why are the targets of wealth criticism invariably business people? Why are we not so critical of the wealth of sports figures, movie stars and other celebrities? Does their wealth somehow have less impact on the non-wealthy than the CEO of Exxon? Why hasn’t Oprah come up in these discussions (or wealthy politicians for that matter)?

I submit that entertainers have more of a negative impact on average Americans than any CEO whose wealth is mainly in the shares of his or her employer. Entertainers, rock stars, etc. earn their money by taking it directly from the average consumer’s pocket, generally younger people, for a non-essential service. State-run lotteries hurt low-income Americans more than inequality.

Nobody is forced to attend a concert for a few hundred dollars, but neither are they forced to shop at Walmart.

What matters is an economic environment that does not allow the low and middle classes to increase their incomes and their wealth. The problem is not the growth of the top ten percent, it is the limited growth of the ninety percent.

man_with_empty_pockets_hg_clrIt is much easier to create envy, to stimulate distrust and to create a scapegoat than it is to face the failure of any number of economic and social policies or to explain how the global economy has changed and how that impacts the American standard of living. The housing crisis is a good example. Government policy encouraged reckless borrowing, stimulated the home ownership mentality which was taken advantage of while individuals exercised little responsibility claiming they were talked into reckless behavior.

Think how appealing it is to tell Americans their salvation is found is higher taxes on the wealthy? The political left has done a great job diverting attention from the economy and from individual responsibility with their inequality rhetoric.

They also chant “fair share” as if the wealthy don’t pay their fair share. Fair share of what? What is a fair share? How much of ones income is fair to give to federal and state government?

Every law involving money, every government program involving money contains provisions that restrict the value to higher-income Americans. Social Security, Obamacare, Medicare, income tax deductions, the AMT, all qualified retirement vehicles and more limit benefits or add taxes for wealthier Americans. The average American could if they choose to, invest their savings in municipal bonds and have an income entirely tax-free.

How great it sounds that “free” college is on the way. In fact, college of any kind is no guarantee of success. The middle-class is made up of college graduates who forever will remain average Americans and there are some millionaires and billionaires who never graduated college. Politicians should read Shakespeare, “The fault, dear Brutus (Bernie), is not in our stars, But in ourselves, that we are underlings.”

Consider where all the rhetoric and noise is coming from. It comes from politicians who never held a real job, who never created anything. It comes from academics who live within theories and data bases and not the real world.

Are Americans equal in income, no. Are there great gaps between the very rich and everyone else, yes. Is the answer to bring down the wealthy, no. The answer is to raise-up everyone else. The responsibility for that rests primarily with the individual as it always has.

uncle_sam_shaking_money_out_of_man_md_clrHow many people do you know of similar backgrounds and education but with very different levels of accomplishment in their lives. If one follows their dream and becomes a teacher and the other an entrepreneur, has the one who is a millionaire taken anything from the teacher? And could a cleaver, industrious teacher also be a millionaire; certainly.

Americans are being conned into complacency and the belief that government can make everything alright if it can just take more from some people. That’s not how it works.

But the real question is, is that how you want America to work?

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Categories: Observations on life

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2 replies »

  1. Capitalism is based on the idea of enlightened self-interest, which has lead to the creation of great wealth and the high standard of living first-world countries enjoy. Inequality of wealth is guaranteed, which has been broadly acceptable, as the society as a whole benefits.

    Currently some of the most successful are able to rig the system (legally and illegally) to their benefit. Last week’s C-SPAN coverage of the Wells Fargo CEO’s congressional testimony being the latest example. (And Trump supporters, read this morning headlines.)

    Jimmy Carter, in his acceptance speech as the candidate for President in 1976, declared that the U.S. tax system is a “disgrace to the human race.” (A good line I thought). After forty years, which included three Democratic Administrations and three Republican Administrations, the tax code is worse.

    Little wonder that many in the general populace, largely ignorant of what their politicians do, are now demanding unrealistic solutions.

    Capitalism, the best economic system so far, can not endure unless the people have honesty, integrity, and respect for others. These are the diminishing moral capital.

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    • I don’t agree the example of Wells Fargo is an example of a rigged system. It is however an example of poor management, poor board oversight and a poorly designed incentive system within an organization. I also agree the tax code is a joke and could be made much, much simpler. But don’t forget that average Americans actually pay a small portion of all income taxes.

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