It’s really no surprise that President Obama supports the redistribution of wealth theory (especially considering his upbringing among socialist icons). What’s fascinating is how much support he’s received from the left on this subject. Last night to liberals on Bill O’Reilly’s show tried to argue that places like France are a great example of how redistribution can work well…You know, the France that is now attempting to force their rich from leaving so that they can tax them at their “fair share” (75%). The democratic strategist argued that America’s tax system that was in place since the foundation of the nation is an example of great redistribution at work. Of course, Bill in his finite wisdom didn’t even hit her on this. Perhaps they both don’t know about the 16th Amendment.
America wasn’t founded on this principle of redistribution but on the notion that a free market and people know best how to grow money. When government controls money the money becomes relatively stagnant. There’s a misconception among redistributionists that also happens to be part of the sales pitch to the idea; that is that wealth is exchanged only monetarily. Off of this idea you can build a case for class warfare; he has all of the money and you have so little. But this isn’t true.
During the OWS movement there were outcries at big businesses because they “horde all of the money” and we remain deprived. These individuals spent weeks protesting and posting their actions from the I-phones without realizing the lesson at their finger tips. These individuals purchased these expensive phones (a phone that they would probably assert was too expensive or extortionist in nature from a big business like Apple). The fact is Apple charged what the consumer was willing to pay. Consumers set the price for products unless you live in a place where government does (something that OWS and many leftists support). When a consumer sets the price for production then something strange happens during the exchange of goods – both sides get wealthy. The business gets a monetary profit and you get something that makes your life better.
Let’s consider. Who is wealthier; the guy who has a mansion, a Land Rover, a pool, a giant 60” big screen, and a boat but only has $10k in the bank or a guy who lives in a hut with $500,000 in the bank? It’s all about perspective. The point is that products also grow your wealth because they are markers of wealth. America is one of the richest and poorest nations in the world. We have individuals who are literally worth nothing because they are so in debt, but most of those individuals who are deeply in debt have a car, air conditioning, a home with a kitchen, microwave, oven, etc. Who is wealthier then? The person who has all of these niceties but is in debt or the man in India who has money but access to none of these luxuries?
History has taught us well (and continues to teach us) that wealth redistribution doesn’t work. Not only does it not work, it is criminal in how bad the outcomes are. Soviet Russia attempted to redistribute its wealth and as many people died as did in concentration camps during WWII. Greece is the most recent victim. Thomas Sowell talked this week about the failure of Castro’s redistribution process and how his wealthy now live in Florida making us wealthier. We become wealthier due to their human capital. Sowell defines it this way:
“When successful people with much human capital leave the country, either voluntarily or because of hostile governments or hostile mobs whipped up by demagogues exploiting envy, lasting damage can be done to the economy they leave behind.”
The reality is that you cannot redistribute wealth on a large scale. Reason.tv already showed last year that if you took every penny from every millionaire in America you couldn’t even run the government half a year. What happens is as Margret Thatcher projected, “eventually you run out of other people’s money”. At that point you begin to redistribute poverty. Is this the America you want? Apparently it’s the one our President wants.
Filed under: Uncategorized