To “celebrate” Dow 16000 and S&P 1800, both of which the stock market just hit intra-day, I’ve gathered a few links on rising economic inequality in the U.S. A few remarks first, to set context.
As a capitalist, I have no problem with inequality – when it comes about for the right reasons, that is, when sovereign consumers have awarded it by their actions in free markets. The problem is that, under President Obama, we have inequality for the wrong reasons.
Obama puts government in control of more and more of the economy, and he has the Federal Reserve bailing out the biggest players on Wall Street (as well as the government) and goosing the financial markets ever higher. That doesn’t come for free.
Whenever someone is bailed out, somebody else was “bailed in”; somebody else lost wealth (or purchasing power). Obama’s policies stealth-transfer it from the wages, pensions, savings and balance sheets of productive people to those who happen either to (1) receive government spending, or/and (2) own financial assets (stocks, bonds, etc.).
Many of those are productive people; but many are not and, in any event, everyone should have to earn wealth the real way, by pleasing their employer or their customers in the market. None merit bailouts. No one deserves government-orchestrated wealth transfers (stealthy or otherwise). No one.
I want small government, natural rights under Rule of Law, sound money and free markets because they are both moral and populist. They form the only moral social system (the only system that lets people be free and doesn’t steal from them, or enslave them). And, as a consequence of being moral, they form the only practical system where masses of deserving poor and middle-class people can and will get ahead.
The Big Lie of Leftism is that leftism somehow stands for the People, or the little guy. It doesn’t. As we see today with President Obama’s policies, producing a result of record inequality – for all the wrong reasons.
You can see that, in the last six years, the share of wealth held by the bottom 75% has plunged from 12.7% to barely 10%.
That’s part of why so many people feel like they’re struggling, and are planning to cut back their holiday spending. And possibly part of why America is struggling under an epidemic of thievery.
Also via ZH, here is a chart of the income distribution:
You can see that, under Obama, U.S. income distribution has reached new heights of inequality; heights not even reached in the Roaring 20s that led into the Great Depression. Another way to look at it is that a record number of Americans have an income over $50 million per year:
Again: This is a result of Obama policies, including (but not limited to) Federal Reserve policies, which artificially boost the wealth and incomes of the top 1% at the silent expense of the lower 99%.
The Left proposes to deal with it by taxing the wealthy more. That won’t help; as in the past, the wealthiest will merely have Congress increase the complexity (loopholes) in the tax code.
What changes the distribution in favor of the poor and middle class is an economy that is growing for real. Growing because the financial deadwood was burned out (the government/Fed is not artificially propping up the financial markets). And growing because government itself has backed off, deciding to spend less and run the economy less, just as the U.S. federal government did in the long boom after World War 2.
To get an economy which grows for real, an economy in which the poor and middle class can do well, we need the opposite of the “Big Government / Big Banking” poison offered by Obama and the Left. We need free-market populism. As Tim Carney puts it:
Instead of trying to convince successful people that Democrats will take away their wealth, why not explain to the middle class that big government is keeping them down?