Skip to comments.Everything You Ever Needed to Know about the Left’s View of Income Inequality,
Posted on 01/27/2014 9:47:15 AM PST by Kaslin
If you want to know why the left is wrong about income inequality, you need to watch this Margaret Thatcher video. In just a few minutes, the Iron Lady explains how some perhaps most statists would be willing to reduce income for the poor if they could impose even greater damage on the rich.
This picture is another way of getting across the same point. It was sent to me by Richard Rahn (famous for the Rahn Curve), and it uses two pizzas to show how leftist policies would solve inequality.
I like this analogy, and not just because I also used the pizza analogy to make the same argument in this TV interview.
The growing or shrinking pizza is useful because it helps to focus people on the importance of growth.
Nations that follow the right policy recipe can enjoy the kind of strong and sustained growth that enables huge increases in prosperity for all income classes. In other words, everyone can have a bigger slice if the pie is growing.
I even tried to educate a PBS audience that growth is better than redistribution if you really want to help the poor. Talk about Daniel in the Lions Den!
I dont know if I persuaded anyone, but at least the facts are on my side. Consider, for instance, how the worlds two most laissez-faire jurisdictions Hong Kong and Singapore have overtaken the United States over the past 50-plus years.
Thats been great news for low-income and middle-income people, not just the rich.
So ask yourself whether youd rather be a poor person in one of those jurisdiction or in France. The government in France has all sorts of programs to make your life easier, but you have very little hope of escaping a life of dependency.
And now ask yourself whether its good that Obama is doing his best to push America in that direction.
P.S. If you want another example of how long-run growth makes a big difference, check out this chart comparing Chile, Argentina, and Venezuela. Not only has Chile overtaken the other nation thanks to pro-market reforms, but the poverty rate has fallen dramatically.
P.P.S. Since this post shares a very good image about income inequality, lets include a bonus picture on taxation.
Its a helpful suggestion on how to make kids aware of the cost of big government.
Though lets be sure to acknowledge that Obama is doing what he can to make kids more skeptical of class warfare.
P.P.P.S. On a separate topic, Ive explained that the so-called austerity vs growth argument is grossly misguided because Keynesian spending isnt pro-growth and also because its important to distinguish between good austerity and bad austerity.
Too many governments are choosing the wrong type of austerity, imposing destructive tax hikes on the private sector. Whats really needed in genuine spending restraint so that austerity is imposed on the public sector.
But some folks on the left say theres been too much spending restraint in recent years.
So whos right? Well, UBS has produced a report containing some very useful data.
Viewing the global economy as a single unit, we see a very different picture to the post-crisis world of austerity at least if austerity is taken to mean government spending cuts. The two largest components of global GDP, namely private consumption and fixed investment, both hit multi-year peaks in the first quarter of 2008. Since the start of 2008, government consumption at the global level has risen by 20% in real terms, whereas private consumption and fixed investment have risen just 8% and 5%, respectively. In other words, despite talk of austerity, government spending continues to run ahead of private-sector spending.
Hmmm the burden of government has been growing faster than the private sector. Thats the opposite of what the Golden Rule calls for.
And not only has government been growing too fast in the past, its likely that fiscal policy will get even worse in the future.
Structurally, government debt, government spending, and the share of government within the economy must be sustainable. Government consumptions share of global GDP has risen from 11% to 14% over the past 15 years. In 2013, it reached its highest level since 1980. At the same time, government debt-to-GDP ratios have hit record highs in many countries. In the long run, such elevated levels of expenditure (and corresponding levels of debt and deficit) are probably not sustainable, in particular, given other structural changes underway. For instance, demographic trends in many advanced economies pose challenges.
The moral of the story is that America and other nations should be restraining budgets, ideally by enacting the right kind of entitlement reform.
Though Im worried that Obama is learning the wrong lesson from whats happening in Europe.
Indeed, this Henry Payne cartoon shows what he has in mind. And if he succeeds, this satirical 2012 campaign slogan may become reality.
P.P.P.P.S. Heres a final image that captures the essence of Washington.
THEY DON’T GET IT!!!!!
I showed this picture to a lib friend of mine and this was her response.
“WHY DID THEY PLACE THE AFTER PICTURE SO FAR AWAY? “
Maybe change it from pizza to a steak and a plate of dog food.
Shrinking pizza: tell her it’s due to government waste, fraud, giveaways to enemy countries, and servicing the ever-increasing debt interest. The shrinking pizza is a picture of the shrinking dollar in terms of value.
That advice may be found here. Essays on other subjects, such as government-controlled minimum wage levels, also are available at the site.
Williams introduces the "income inequality" matter in this paragraph:
"Democrats plan to demagogue income inequality and the wealth gap for political gain in this year's elections. Most of whats said about income inequality is stupid or, at best, ill-informed. Much to their disgrace, economists focusing on measures of income inequality bring little light to the issue. Lets look at it." - Walter E. Williams
In the paragraphs which follow, he does just that! Too bad we didn't have honest and articulate politicians in both Parties in Washington who would be as straight with American citizens as is Dr. Williams.
I have found that those indignant about INCOME INEQUALITY are most likely to be those who condemn the business owner who has created 20 jobs but are evil because he/she makes $100,000 a year, while cheering the ballplayer who signs a $1,000,000 a year 5 year contract.
I did that to my kids' in-vehicle sodas and snacks while traveling on vacation and to their Halloween hauls. They got used to it.
Even though they understood at an early age, a couple of them still voted for 0bama.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.