According to the professional hand wringers on the left, America has a crisis of inequality. It’s a big deal. Some people have more stuff than others. This drives the left crazy. Truly they are so close they need not be driven; they could walk from here. Never mind that some of us are taller, fatter, funnier, happier, more erudite, whimsical and talented than others. Apparently it is the stuff that matters. The left appears to be more OCD than Felix Unger when it comes to income inequality.
As difficult as it may be for the left to comprehend, not everyone wants all that stuff. More stuff is more to take care of, more to store, and maybe more trouble than it is worth. Not everyone wants to be rich. As they never tire of telling us, with great wealth comes great responsibility. From my observation, not everyone embraces responsibility, especially those on the left.
Typically, the left seeks to resolve the problem of income inequality by either taxing the wealth out of the rich or raising welfare benefits and minimum wage rates of the non-rich (“poor” now being politically incorrect); most often they prefer a combination of the two. There is ample history on each of these wealth redistribution schemes to make a reasonable person reject these unconstitutional options.
Some are suggesting more than doubling the current federal minimum wage to $15 per hour. No one ever explains the magic in the number $15. If $15 is good, would not $50 be better? Let them eat cake. If there are no repercussions to raising the minimum wage, as many on the left would have us believe, suggesting any limitation is just stingy.
The law of supply and demand is easily understood by most people. The wage increase given to these minimum wage workers must come from somewhere. The government issues the mandate but not the cash. Prices of goods and services will have to be increased to cover the cost of the increased wages. Because of the increased costs, consumers will purchase fewer of these goods and services. In economic terms this is referred to as a decrease in demand. Producers will respond to the decrease in demand by producing fewer goods and services. To produce fewer goods and services, fewer employees will be required. A direct consequence of minimum wage increases is an increase in unemployment. This is the all too predictable and historically documented result of brainless socialistic policies of the left.
It is an anathema to the left how progress is ever made. Someone, an entrepreneur, a worker or an outside inventor, develops a procedure, suggests lower cost materials, or makes a suggestion which improves the cost and/or improves the value of the product resulting in a lower unit cost for the amount of perceived benefit. This results in greater demand for the product which causes the employer to hire more workers. Unemployment goes down, economic activity increases and all segments of the economy benefit. All this happens with no input from the government. For the leftist, this is incomprehensible economic voodoo.
The left’s solution to the unemployment caused by their minimum wage policies is to create a welfare program to support their newly minted unemployed. The decrease in production caused by the increase in the minimum wage is now countered by increased money in the system from unemployment benefits which creates higher demand. Higher demand for a decreasing amount of goods and services results in higher prices or inflation. At some point the higher prices should incentivize producers to produce more, resulting in an improvement in employment.
But the inflated prices will remain, products will still be out of reach for some and the incentive to seek employment diminished by the fact that unemployment benefits now compete with the pay one might receive for working. The economy slows down and desire of people to be productive members of society is diminished. History is awash with examples of these same policies producing these same results. We are responsible for the results even when they do not coincide with our good intentions.
The President has cautioned that the greatest threat to America is income inequality. Yet historically, the time of greatest growth and greatest progress came when income inequality was the greatest. It is only in times when great wealth can be achieved that people are motivated to take great risks and achieve great things. Even in our current stifled economic situation examples of this can be found. A person living on welfare in a mobile home park will not trim his diet of store brand beer and chips when the lottery is at one or two million. But let it rise to 60, 80 or 100 million and he will give up a six pack and invest the money in a fist full of tickets. Never mind that it is this type of thinking which contributed to his living at Lofty Heights Mobil Home Park in the first place. It is the excess of income inequality which motivates him.
There is a strong case to be made in favor of inequality. To begin with, human nature rejects equality. Those who have parented more than one child have noticed the desire of each child to differentiate themselves from their sibling. If you have one child who is too good, brace yourself because the next child will make a point of being too bad. Even when children are raised in the same home by the same parents, the studious child will have an athletic sibling. Even in families which are musical, one child will master the piano while the other becomes a harpist.
Who among us aspire to Mao’s China where each person dressed alike and maintained the same demeanor? This desire on the part of leftists for absolute conformity goes against human nature. In these situations, the leadership always has better clothing, transportation, housing and food. Apparently, leftists are so bereft of imagination that unless everyone else is consigned to a life within the plain brown wrapper, they cannot differentiate themselves. It is hard not to conclude that they suffer some sort of mental deficiency.
Inequality leads to the diversity they claim to cherish. Yet in states hermetically sealed by the left like East Germany, if you owned a car it was a Trabant. East Germans never experienced the wealth of choices experienced by their relatives on the other side of the wall. Although Germans are known for their engineering prowess, the “Traby” was known as “the car which gave communism a bad name,” click here . One person may value a Bristol body Cobra as the ultimate in transportation where another may see his Ford F-150 as the perfect vehicle. I do not know where to start, but between these two, there is ample inequality for comment. Yet neither person would trade with the other. Just between you and me, the guy with the F-150 is crazy, but that is his prerogative. He may just enjoy riding around with his pit-bull, Florence, and would worry about the effect the dog’s strange proclivities would have on a Bristol body Cobra’s interior.
There are also some hard economic advantages to inequality. If one sees the lives of others as more rewarding than one’s own, the logical question to ask is, “How can I make my life more rewarding?” In a leftist society the only way to improve your lot is to kiss some leftist’s butt. As gratifying as this may be to the leftist, there is little societal value in it. In a capitalistic society, one creates a more rewarding life for himself by producing more of what others value and for which they are willing to reward you. In the capitalistic society, when one person chooses to be more productive, others benefit as well. In the world of the left, only the leftist benefits.
In the world of the leftist, the person who finds his life less rewarding than his neighbor’s is compensated for suffering the disparity through welfare grants. Unemployment benefits are an oxymoron because unemployment benefits no-one. The neighbor, seeing that this person is receiving compensation for much less effort, of course, wants to know what he has to do to be compensated for less effort. As more people, pursuing their own self interest, become less productive in pursuit of easy money, goods and services become scarce. This scarcity is a common element in all socialistic societies.
The leftist remedy for these leftist created scarcities is big government controls and rationing. Nothing in controls or rationing does anything to alleviate the scarcities; it only spreads these fewer goods thinner. Only individuals, pursuing their own self interest by being more productive, provide a remedy to scarcity. This is how wealth is created. Government controls, mandates and rationing will never achieve what free acting individuals achieve naturally when left to their own devices. Capitalism honors human nature and harnesses it for the good of all. Leftism destroys human nature and appeals to its baser aspects.
The driving force leftists cite for their desire for equality is freedom from want. To have so much that you want for nothing sounds wonderful, utopian actually, but if you want for nothing what motivates you? What animates your life and gives it purpose? To want for nothing is to be put to sleep like a dog who has outlived his purpose.
This may sound hyperbolic to some, but many on the left have not only come to the conclusion that there are too many of us and that we have outlived our purpose; they have plans as how to depopulate the planet. This is not the first time the left has proposed such measures. The early part of the last century saw eugenics as a consistent refrain of the left. Evidence suggests that Obama Care may be the child of such desires. What better way to decimate the ranks of your political enemies than to give them health care and then deny them care when it is needed? We have seen many examples of the current administration punishing their political enemies while giving handouts to their friends: legitimate Chrysler bond holders denied in favor of un-invested unions, businesses which were campaign donors favored with grants from the treasury, political friends fast-tracked through bureaucratic regulation while political enemies halted by it. With this history of fascistic abuses why would we think this administration will not go down the path of other fascistic regimes?
Socialist policies decrease production, causing scarcity and unemployment which requires welfare for the newly unemployed, creating more money chasing fewer goods resulting in inflation and increased misery for all. Contrast this to free market solutions which improve conditions of all participants in the economy. Yes, free markets produce inequality, but they produce everything else as well: all the goods and services we enjoy. Socialism produces an equality of misery for all but those at the top. Your choice, but really, it is so obvious, do I even need to write this article?
POSTSCRIPT: The left is now touting the fact that many people can opt out of the work force, because of an unadvertised side benefit of Obama Care, as a good thing. They are no longer “locked in to a job,” as if employment is the modern day equivalent of slavery. It is further proof that the left is incapable of understanding basic economics.
Leftist legislators assume that most people are like themselves in that they are employed in unproductive work; that is, work which adds nothing to the gross domestic product (GDP) of the nation. However this is not true. Employers, free of government requirements to the contrary, do not employ people who are unproductive. For every hour a citizen chooses not to work, fewer goods and services are produced. The GDP becomes smaller. For every subsidy given to an unemployed worker, demand for goods and services increases. Greater demand for fewer goods and services is a time proven recipe for inflation which devalues peoples’ savings and shrinks the middle class. Yet it is the left who decry the shrinking of the middle class and use this phenomenon as a platform on which to run.
If we are not smarter than this, if we are incapable of explaining this to the victims of public education, we will surely lose this republic. It is not enough to be personally conservative. We must become evangelically conservative.