6 Two 3 Nine

Expert Unexpert Advice

Class warfare is the last bastion of the intellectual invalid

leave a comment »

Until we all starve together

Today Frank Rich wrote a column in the New York Times that focused primarily on the horrors of wealth disparity, in which he lamented the same old class warfare bs, that the top 1% of wage earners took in 28.5% of all of the pre-tax income, that there are billionaires paying less in taxes than their secretaries, yadda yadda yadda.  His “broader” (I use the term loosely) argument is that wealth disparity is damaging not just in terms of socioeconomic mobility but also damaging to the American culture of self-determination itself.

That burden is inflicted not just on the debt but on the very idea of America — our Horatio Alger faith in social mobility over plutocracy, our belief that our brand of can-do capitalism brings about innovation and growth, and our fundamental sense of fairness. Incredibly, the top 1 percent of Americans now have tax rates a third lower than the same top percentile had in 1970.

There are several things in this that are misled, and more that are downright silly.  The issue with the billionaire hedge fund manager paying less in taxes than his secretary, for example, has absolutely 0% nothing to do with whether the income tax rate on the rich needs to be raised.  We have a progressive tax system, we’ve had one for a very long time.  The reason the billionaire can avoid paying taxes is because federal and state governments have repeatedly attempted to use tax policy to manipulate behavior, leaving ample ground for high-priced accountants (that his secretary presumably can’t afford) to get people out of owing what we’d consider their fair share.  Conservatives have been screaming at the top of their lungs for generations that we need to drastically simplify the tax code, and the left-wing has been the sole road block to achieving those goals.  It’s hard to not suspect that at a certain level the left blocks reform so they can retain their favorite talking point.

Ultimately the much more pervasive and dangerous argument Rich makes is that it’s not only OK, but necessary, for the government to use tax policy to play Robin Hood

The first problem with this argument is it promotes socioeconomic relativism over socioeconomic absolutism.  In simpler terms, it promotes the idea that we’re better off starving together than we are if I’m eating well and you’re having a feast.  When we judge our success based on our relative placement to each other we inherently have to accept a socially cannibalistic philosophy that it is impossible for us all to be moving forward based on our ability.  Realistically, if everything is working as well as it possibly could, wealth disparity would have to be increasing because those creating the most wealth would continue to create more wealth than those creating less wealth (and presumably a large percentage of the top wealth creators would at any point in time also be among the top income earners).

The second problem with this argument, which is closely tied to the first, is that by identifying governmental interference in the market as the solution, he identifies the market as being the problem.  Considering that the root concern in this argument is the well-being of relatively lower income Americans, attacking the market is about as counterproductive as he could possibly be.  The reality is that the market has been the best friend and best defender of the poor from both the elements and the disaster 2-bit intellectual hucksters consistently attempt to impose on them.  When the market created affordable housing, the government stepped in and caused housing shortages.  When the market created jobs for everyone, the government came in and outlawed the ones where the least skilled actually had a shot.  When the market created jets, trains, automobiles, industrialization, GMOs, global food and product distribution that fed the world, governments responded with tariffs, subsidies for dying companies over new innovative competitors, and created what remains of Detroit and Cleveland.

This dichotomy is even more stark when you look at the American example.  Back in 2007 the Heritage Foundation looked into the conditions the “poor” in America live in, and this is what they found:

The following are facts about persons defined as “poor” by the Census Bureau, taken from various government reports:

  • Forty-three percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.
  • Eighty percent of poor households have air conditioning. By contrast, in 1970, only 36 percent of the entire U.S. population enjoyed air conditioning.
  • Only 6 percent of poor households are overcrowded. More than two-thirds have more than two rooms per person.
  • The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)
  • Nearly three-quarters of poor households own a car; 31 percent own two or more cars.
  • Ninety-seven percent of poor households have a color television; over half own two or more color televisions.
  • Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.
  • Eighty-nine percent own microwave ovens, more than half have a stereo, and more than a third have an automatic dishwasher.

As a group, America’s poor are far from being chronically undernourished. The average consumption of protein, vitamins, and minerals is virtually the same for poor and middle-class children and, in most cases, is well above recommended norms. Poor children actually consume more meat than do higher-income children and have average protein intakes 100 percent above recommended levels. Most poor children today are, in fact, supernourished and grow up to be, on average, one inch taller and 10 pounds heavier than the GIs who stormed the beaches of Normandy in World War II.

Read the whole thing if you have time.  This is not arguing that the poor in America have it good, because they don’t.  It’s saying that the market is not what has failed the poor.  If you look at the problems facing lower-income Americans, more than anything else the issue is crime – crime caused by a black market created by, you guessed it, the government.

I’m sure you’ve noticed at this point I haven’t addressed whether or not any or all of the Bush tax cuts should be extended, although I’m sure it can’t be too difficult to guess where I come down on the issue.  I wish we were in the middle of a national debate on marginal tax brackets, I really do, but that’s nowhere close to an accurate description of the national debate.  We’re not talking about the serious implications of a tax increase on business or investment, or about the merits and flaws of the logic and underlying assumptions of different revenue models.  What we’re seeing is class warfare, pure and simple.  A sampling of quotes from Democrat leaders:

“These folks can afford it. They were rich back in the ’90s…It’s not like suddenly they’re going to have to go to the poorhouse.” – President Barack Obama

“It is unconscionable for Senate Republicans to hold middle-class tax cuts hostage in order to secure more tax giveaways for millionaires and CEOs who ship American jobs overseas,” – Senate Majority Leader Harry Reid

“The notion that we borrow $700 billion for the next ten years from China or some other country in order to pay for tax cuts for millionaires and billionaires doesn’t make sense.” – White House Senior Adviser David Axlerod

Hell, the article I’m responding to is dead seriously called “Who Will Stand Up to the Superrich”.  It’s too bad.

Advertisements

Written by updowndownup

November 15, 2010 at 5:54 am

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: