Have you been hearing the new catch phrases Income Inequality and Wealth Inequality lately? I have, entirely too much, and to be honest it really pisses me off when I hear it. There, I said it. Y’all know how much I loathe to write about political subjects but I just had to get this one off my chest because my poor wife just can’t take much more of all my long-winded soliloquies about socialism when I hear these idiotic phrases being repeated on radio and television. This national election on the radar with an admitted socialist party member among its candidates has ignited all sorts of latent communist credo’s that the extreme left normally suppress. But don’t kid yourself, those ideologies are always present.
Political speech really gets me fired up and I guess it has that same effect on most everyone else too which is why I typically avoid that/this kind of blog. Blog’s like this one are always going to have supporters and detractors and you end up making people mad instead of entertaining them. I like people to like and enjoy the things I write, it’s a sick kind of flattery I guess, and political speech brings out all the wacko’s (people who disagree with me) who like to trash your site with unintelligible hate speech. But in the end, I guess I need to decide who it is that I think I’m entertaining; you or me? I pick me, not because I like myself any more than you do; but, because I need the entertainment and you’re probably not going to be all that entertained anyway.
First, the very term “income inequality” is an obnoxiously expressed phrase that presupposes that we are all supposed to be earning the same amounts of income and that something is wrong in the cosmos if we aren’t. It is a hint that we’re supposed to be living in a socialistic sphere and that such a system has actual merit as an alternative to modern capitalism. Sadly, nobody reading this blog gives me any credibility whatsoever anymore in this capitalism versus socialism argument because I’m now a farmer so I apply for and receive a few farm subsidies.
It’s like I’m on welfare except instead of investing in Meth with my welfare check I’m growing beef that people can eat and I’m using eco-responsible grazing and watering methods to improve the eco-systems downstream from us. I’m sounding kinda like Trump explaining all his bankruptcies, “I’m just working within a system that I didn’t design, just like everyone else.”
To address this first issue, we need to agree right now to do ourselves a favor and stop calling it income inequality. Income is not the culprit and there’s nothing “quality” about my income. As Americans, we should have no negative associations with the word wealth or income in the context of people having it. Poverty and social dysfunction are what really plague us; those things cannot be fixed by taking from the haves to give to the have-nots. To really improve the situation, the have-nots must eventually recognize the value of doing something. OMG; I just lost half my readers.
Not only that, it also assumes that American’s are not already giving significant portions of their income to the bottom earners. In recent decades Congress has chosen to funnel significant amounts of our taxpayer contributions as benefits for lower-income and non-earners through the income tax rather than just writing them a check. Some of these benefits, such as the Earned Income Tax Credit and the American Opportunity Credit for education, actually do make direct cash payments to people who don’t owe income tax. That’s why the lowest earners on pretty much every pie chart show a negative contribution to taxes rather than a zero. They don’t just get a free pass on income tax, we actually pay them to not earn much.
For people who don’t have ambition, the system encourages people to stay right where they are rather than just be there for tough times. I’ve had them myself. When the building bubble burst, I was laid off and didn’t work for nearly a year. Instead of getting drunk every day or contemplating cutting my wrists, I simply went back to school during that idle time and incubated a developing business model which had some early success then failed but evolved into a fairly decent side business for me.
But most studies show that those bottom earners who pay zero taxes actually receive as much as fifty thousand ($50,000.00) a year in cash and benefits for things such as housing, food, and health insurance. If this particular demographic had to actually report those non-taxable earnings on their tax returns then no one would qualify to be on the poverty tables anymore because it would reveal that our American poor receive more income as benefits than most of the so-called non-poverty low-income earners in the United States – specifically our working young who are graduating high school and college. How many of your kids just graduating college are making $50k a year?
The second big problem I have with so-called income inequality alarmists can be summed up as them having a general contempt for capitalism and an ignorant fascination with socialism. Let’s get something straight once and for all. Socialism is not only to be feared, it is to be summarily avoided at all opportunities. Socialism is economic absurdity. There is no more sufficient way to describe it. Even if we were to tolerate the idiocy of wealth redistribution, for instance through taxation and welfare transfer payments, this is merely the least offensive socialist idea and one that we’ve as a country have moderately embraced now for 83 years.
True socialism necessitates nationalization, the government management of all means of production and resources. The state is the main employer and therefore the main benefactor. People are reliant on the whims of leaders and technocrats to determine a fair compensation for their labor and creativity. Because the state sets prices arbitrarily, rationing inevitably follows. Black markets become a necessity. Socialism is an economic system that requires a shadow economy to operate. It is at every level inefficient and global history has more than proven this by now. You don’t just have to accept this blog as empirical evidence, read about world history and look at this great big world around you and study those who once felt that same “Bern” you may be feeling.
Perhaps a better way is to look at a satellite image of the Korean peninsula at night. North Korea is pitch black. The rest of the world glows while they dwell in darkness. Who could wish that on anyone? We shouldn’t be quick to praise seemingly less totalitarian socialist nations either. As many noted after the death of Hugo Chavez, Venezuela may have lifted up its poor through oil subsidies, but it is one of the most violent countries in Latin America and has one of the highest inflation rates in the world. As for the socialism-lite of Europe, that’s not to be admired either. They are facing a very serious crisis. Spain and Greece have unemployment rates above 25%. In Greece, poverty and the lack of opportunity are giving rise to neo-Nazis all over again. Just try to see a doctor in any European country for any illness without waiting for 4 weeks. How sick are you four weeks later…uh – dead?
This is not surprising. Socialism is not a democratic system. There’s a reason it has always been accompanied by autocracy—it cannot work any other way. In order for the state to be able to set prices, wages, and benefits, in order for it to manage all of these resources that the market otherwise would, it has to be centralized. It may seem to raise up the impoverished, but socialism most certainly does not give these disadvantaged classes a voice. Instead, socialism silences everyone. It strips them of the liberty to buy, sell, work, and live how they would see fit. Anyone who promotes socialism as a way to empower the masses in America should be shamed out of the public sphere completely. The Bern should go down in flames.
In order for an economy to work, someone has to create; someone must invest. In order for a society to advance, someone must invent; someone must produce. HEY YOU GUYS – step back into the Dark Ages. What happened to create a Renaissance period? Oh, I don’t know, maybe it was art and architecture and production and the cessation of the church and state killing smart and artistic peoples in order to control the flow of knowledge. If you and your fellow citizens lose the motivation to create and better themselves then nothing happens. Socialism, in every instance of its existence in society, has never done anything but to rob every individual inside it of all motivation to do anything except fight their way out of it.
Fine, you’re a millennial and you’re proud of being flexible. Don’t screw it up for yourself and undermine the one thing that makes it possible for you to continue longer in the undetermined stages of life. Stable societies that empower people to be free and productive offer people the ability to prosper. No other known form of government does that. It was never a guarantee that every single person would prosper because not everyone has the same abilities and not everyone has the same motivations. Capitalism is simply the conduit for wealth-building that can be used by people who give a rat’s ass. Redistribution of a static supply of resources accomplishes nothing and makes no one richer.
People often talk about income as if it’s this fixed thing. “Those people over there are the 1 percent.” “These over here live in poverty.” “That other group is the people in the top 20 percent.” That’s not the way it is folks. Lots of people move up and down the income ladder over the course of their lives which denotes that there are other important catch phrases that never get near as much attention – one such phrase might be something I would call Economic Mobility.
Why is there so much movement in income? There are no real surprises here. Raises, promotions, experience, new careers, hair-brained ideas, inheritance, retirement, and a spouse entering or leaving the workforce can all create large fluctuations in household income. That top 1% you see on the charts evolves and changes fluidly. Similarly, many people in that bottom 90% and even in the bottom 10% will quickly climb into higher and higher income brackets over their lives. That happened to me when the economy tanked in ’08. I will probably never earn as much money as I was making just prior to the recession and never any lower than I was during it. That’s life though. That in no way means I will stop trying; no, I keep finding more and more things to aggravate my wife over.
The percentiles you see in income charts are living, breathing and evolving. That’s not wealth in the hands of a titled and inaccessible aristocracy as some foolishly intimate. It belongs to a free class of people that continuously shifts and grows. If America had this much-illusioned situation of an elite oligarchy that controls all the money and opportunity then Forbes would no longer produce its annual list of the top 400 richest people in America. It publishes that magazine annually because the list changes every year. And because reality television keeps exposing us to these crazy-talented unknowns: #OmarosaActuallyWroteABook.
Income and wealth inequality is only a problem if the goal is for everyone to be equal. What we have in this country is opportunity. The entirety of our globe is in a far better place today with medicines, technology, innovations and science because of this crazy American experience. Technology and the advancement of science grew at a snail’s pace in the scheme of things historically before the existence of capitalism and the drafting of the Constitution of the United States of America. We did this! Capitalism did this! Be excited about it, don’t be suckered into feeling guilty because you’ve benefited by it more than some other person. We all get what we give in life.
Those in our bottom 80% and our elderly wouldn’t have anywhere near the quality of life they now have it weren’t for that top 20%. The top 20% of wage earners pay 82% of income taxes, but the vast majority of government spending goes to the bottom 80%. Federal and state governments spend a trillion dollars a year just on welfare programs, which does not include Social Security and Medicare. That is more than we spend on national defense. It adds up to roughly $17,000 per person in poverty, over $50,000 for a poor family of three. If you’ve ever had a job, you helped do that. I’m sorry if those people don’t feel thankful for what the rest of us are doing for them just because they can’t have all the same things you or I have. If they want those things, they can have them too without having the government wrestle more of it out of my pockets or by stealing them from someone else. They can actually work and create and invent and save for it just like the rest of us have to do.
The Census Bureau estimates that our current welfare spending totals four times what would be necessary just to give all of the poor the cash to bring them up to the poverty line, eliminating all poverty in America. One of the biggest problems with social programs is the enormous bureaucracies we have to create that are necessary in order to give free money away. It costs governments more money to give money away than the money that they are giving away. America has the means to do way more than it is doing without taking more from its doers. Money that we could use to create more; more opportunity for others to earn, more technology to make life easier for everyone, and more ideas that flourish exponentially into even more of everything because I have it to use or invest instead of the government having it to sustain. If we can find ways to lean up bureaucracies then it would be like instantly finding another Fort Knox that we didn’t even know we had.
Another issue that is important to note is that the term household income pretty much means nothing. First of all, why is it always measured based on household? It makes it really difficult to compare one’s income to others in their industry or area or even to the U.S. overall. It also skews the overall perception of wealth– for example, looking at the charts you’re like, “wow that many people make over $100K per year?” But no, that’s mostly *two* people making $55K/year. Secondly income isn’t a very good indicator of wealth. Sure, it’s a major factor. But taken alone it doesn’t tell you much of anything.
If I made $100K per year but say I went to law school to be able to earn that and have $800 per month student loan payments for 20 years, that $100K doesn’t exactly say much about how much money I actually have. Also, you could work in an industry that includes a lot of highly skilled blue-collar jobs where it’s not uncommon to earn that kind of wage but those people have NO college loan debt, so that level of income means a lot more.
This modern socialistic style of health care is also making it difficult for physicians to earn high wages too. These guys have student loan debt that may require them to make monthly payments as high as $2,500.00 a month. The reason people choose the medical field is so that they can earn big money knowing that they will be relatively poor until their debt is paid. Poor people don’t understand all that because paying debt off is a complete oxymoron. If you pay it, it’s not debt anymore…right? If we cannot figure out a way for doctors to continue to be rich, guess what? Fewer people will be willing to make that investment with so little return – that means fewer doctors.
Another problem is that someone could live in Boston, San Francisco or NYC and make $80,000 a year and be a virtual pauper but if they lived in Tulsa Oklahoma, Billings Montana, or Shelbyville, Tennessee that same salary/income would afford them a more than adequate lifestyle. The landscape of incomes/lifestyles is very different depending on where one lives.
Unfortunately, I’m concerned with the futures for our younger generation. They don’t necessarily mind work but they definitely lack ambition. I think that our bottom numbers are growing because this generation of young men and women have been given too much to the extent that they can’t imagine themselves without a safety net. They don’t dream and they don’t stress over their futures like the generation before it did. The good news, fewer heart attacks. The bad news, a lesser ability to eat wonderful things that increase the risk of heart attacks.
When my parents were young, they had empty pockets, cabbage sandwiches and Friday night delousing with kerosene and broken combs. Kids back then didn’t have a whole lot. Their parents were still recovering from the depression and even if they’d found a way out of poverty, they were too paranoid to spend money out of fear that the economy would collapse again. Annual de-wormings were not just for livestock. These days, the new school year means y’all kids get a new Xbox game; my parents got their one annual pair of school shoes along with an enema cocktail that killed ringworm and cured tuberculosis.
But this group of youngsters today seem to be the most unambitious group of people to ever walk the face of this earth. They don’t strive for anything at all; because, they’ve been given everything. Ambition to them means they might have to work extra hours to pay for their own car, iPad, or anyexcuseforapalooza tickets. Kids today graduate high school then take a year off to vacation in Europe. Take a year off from what? Kids graduating high school in the 40’s went to Europe to die fighting Nazi’s – not to sample the hashish menu at the mellow yellow coffee shop in Amsterdam.
The problem with poverty is not only that stereotypical demographic that we are used to seeing: people living with perpetual public assistance, people selling drugs and committing crime to get by. The problem is also being exacerbated by a generation of unambitious non-producers. You cannot grow your own skills or achieve anything by sitting on your ass waiting for an opportunity to come toward you or by spending valuable time complaining about the lack thereof. When one closely examines this every increasing gap between the non-earners and the rich, the bottom number doesn’t necessarily expand at all. The middle earners are growing and the rich are growing too.
You cannot assume that there is only a certain amount of money on the table to be made and the rich are getting more than their fair share while the poor are getting less. That’s the kind of idiocy that is being talked about. No, the amount of income that Americans can figure out how to make can actually grow, just like our debt can grow. How can the poor get poorer if they already had nothing to begin with? It’s not like that. The middle class is growing and the rich are growing and that is a great thing. In 1920 our Gross National Product (GNP) was $78 Billion dollars. In 2016 it’s expected to be One Trillion Six Thousand Six Hundred Thirty One Billion dollars. The stack gets bigger and bigger people.
We also must accept that there are among us people, brothers, sisters, and parents who do not have, and in some cases never had, the capacity to create. Age is a fact of life; physical handicaps, injuries, mental disorders, and mental simplicity all present challenges that cannot be overcome by simple solutions or at all. That is where the rest of us step up and step in. By the way, laziness, and the lack of ambition are not YET listed in the Diagnostic and Statistical Manual of Mental Disorders. But, our system of caring for those who cannot do for themselves could and should be improved.
We can do that by adding simplicity to the way we provide assistance. The reason why there are so many rules and so much bureaucracy with providing public assistance is because of the historical abuses and fraud in that system. The government has been forced to react to the problems of fraud instead of being able to thoughtfully come up with rational and sensible solutions. The advancement of technology should offer us ever increasing capabilities of providing higher amounts of government benefits without breaking the bank.
While it is disturbing to contemplate the living situations of people stuck in the bottom income percentiles in the United States, the possibility of such wealth at the top should be thrilling to all of us. It should not depress us; it should inspire us. It should not incite jealousy; it should kindle ambition. People should look at that astronomical green bar and think: How do I get there? What can I make? How can I create something of worth?
We know that it takes lots of work and sometimes many tries and failed attempts before an idea takes off. So please try. Who knows, maybe your efforts to be the next big porn star will fail but in the process you discover a cure for premature ejaculation. #HellaBank! – am I right?
That’s what wealth is. Capitalism is not the enemy. Not for a free people who have prospered because of it. Capitalism has done more to save and enrich lives in Western civilization than we can possibly enumerate. Perhaps that’s the problem – most Americans don’t know any other way of life. They don’t understand how miserable, sick, and poor we’d be without the creative power of a free market. More accurately, they fail to recognize what it cost the rest of us to provide them with shitty free housing and all the cheese and baby formula they can eat. Yes, it’s shitty…but it’s free dumbass and it allows you the free time you need to pursue your dream of becoming the next reality television star.
People simply do not grasp how disturbing socialism has been in actual practice. In the 1930s, in the larger cities of the Soviet Union, abortions outnumbered births. People had no incentive even to carry life on into the next generation. People need incentives. They need to believe that their children will thrive and prosper. The only system to successfully and consistently instill that kind of confidence is capitalism. So, yes, socialism is justly to be dreaded and the returns of capitalism are not to be viewed with contempt.
The real issue that should ignite anger, fear, and sadness is poverty. We need to concentrate on that and finally forget our misguided and pessimistic inclinations to pillage the wealthiest among us. Why should we hate them, they’re paying our way – paying more than 80% of this country’s income tax burden? We should want to be them. To achieve that, we must unleash our creative forces. We should be concentrating on teaching everyone who enters our public school system the value of capitalism instead of padding our public schools with leftist, pinko-commie, bed wetting teachers who indoctrinate our kids with ignorance and utter intolerance of anyone with a conservative ideology.
We all have to recognize that God put and maintains equal numbers of men and women on this planet and he also put and maintains equal numbers of liberals and conservatives on this planet. Not to fight each other over who’s ideologies are right or wrong, but to influence, balance, and temper the other’s views with empath and observance of the other’s needs. Without that, nothing exists but chaos and extremist somethings – extremist right wing, extremist left wing, or extremist no wings.
An example of this would be ISIS. As a matter of ideology, they neither accept the views of women who are viewed as inferior nor will they accept any other idea which challenges their strict interpretation of the Quran. Any attempt at compromise or an offer of alternative interpretation is summarily followed by a beheading.
It’s a little like our Congress except instead of beheading people we just distort their words and ideas then unleash our “incredibly unbiased” media on them, making smart people everywhere regret ever thinking about serving the rest of us. Who’s left to serve? You got it; dumb people who idolize North Korea, dishonest and pompously fake bureaucrats wearing pant-suits, and self-important narcissists who don’t care that you think they’re stupid because, “look at how hot my wife is!”
The opposite of income inequality is income equality. Income equality, as Churchill said, is the “equal sharing of misery”. He said this because of his experience in observing all other socialist countries where all the wealth is centered in government and all the people are equally poor, equally hungry, equally denied of rights and opportunities, equally frightened of the government, equally distrustful of their friends and neighbors because they may tell the government about your radical ideas, equally cultivated into becoming machines for the benefit of government, equally denied of ideas and information and culture and art or anything that would allow you an opportunity to know. Income equality is death. We shouldn’t even recognize it as a legitimate phrase much less a cause. It is a term created by a hungry but dying mass-media, embraced by the jealous, and propagated by an exploitative political machine for its own growth.