February 21, 2007
Another Liberal/MSM Fallacy Addressed
Julia A. Seymour and Amy Menefee of the Business & Media Institute do a great job of dispelling the “income inequality as a menace” myth.
The argument that income inequality is bad is based on an underlying assumption: that if one person has more, another automatically has less. This “zero-sum” approach bases its logic on a pie chart that adds up to 100 percent. If one person has 30 percent of the pie, that leaves 70 percent for all the others to divide among themselves.
The problem is, that isn’t how a free-market economy works. And the media have left out economists who could explain it on the nightly news.
http://hardastarboard.mu.nu/wp-trackback.php?p=624
February 21st, 2007 at 6:15 pm
Economics leaves me in utter confusion, but pies
in my experience, remain at 100% pie. Unless its
one of those ‘trickle down’ pies’. My worry is the middle
class, which in reality, is the economic engine of the country.
If captitalistic darwinism values a bald, spaced-out Brittany
Spears more than a hard-working Seth, well so be it!
February 21st, 2007 at 9:08 pm
Amen to that. Everyone should have the opportunity to be successful, it’s what keeps the drive alive. Take that away, and society itself has no drive or ambition.
February 21st, 2007 at 11:24 pm
BB –
A pie chart is finite. The marketplace is not.
The gulf between incomes has no effect on the middle class as the MSM and their liberal fellow travellers would have us believe.
The concept of unlimited earning potential and being able to keep most of said income has a direct correlation to the fact that the United States is the wealthiest country on earth — it’s not the government that’s responsible for that, it’s the basic lack of government interference in the marketplace that is.
Re Brittney Spears, LOL, it seems that producers of the frivolous enjoy infinitely higher incomes than those who contribute the tangible.
AB –
Lack of incentive = lack of drive = stagnant economy.
February 22nd, 2007 at 7:10 am
The envy factor is a direct outgrowth of the French Revolution which spawned class envy. During the FR, people had their heads removed from the rest of their bodies for the crime of being rich. Here in America, our revolution was, in large part, fomented by rich folk. The difference is stark. Europe is largely socialist (following the french revolution’s class envy) while we in the US are largely capitalistic. Unfortunately, there is a large segment of our population (and growing?) that really likes the french revolution and they think that economics is indeed a zero sum game.
February 22nd, 2007 at 10:31 am
The French revolution included class envy, no doubt.
There were a number of other causes, including two estates
(Nobility & Clergy) who paid no taxes at all. The low and
middle classes, working people and merchants, bore the cost
of the state in the form of the gabelle, tithe, taille, vingtieme,
capitation. Peasants incurred the further cens, champari and
babiletes. The success of the Americans, a dire crop failure
and the ongoing enlightenment were additional factors. Given
an economy of mostly internal trade, the pie held at 100%.
de LaFayette, hardly a victim of class envy, was one of the
few noblility to join in the push for ‘liberty, equality and
fraternity’, the tricolor which replaced the fleur-de-lis of
the monarchy. Such were the times. Such were the French (spit).
February 22nd, 2007 at 11:03 am
Try convincing socialist libs and Dems of this truth! Remember thier true socialist/communits type agend is equality for all financially ny taking everything from the rich and distrubuting it to all. Remember Hillary tod somw fo her rich friends that when they got in power they would be taking from them to give to others. Their idea is that no one knows how to use their money unless it is under the supervision and control of Democrats !
February 22nd, 2007 at 3:20 pm
GM –
Great connection, it sort of makes a historic reference to the current socialist state of affairs in France (spit!), with the anti-rich/ anti-successful gene that seems to dominate over there.
The political climate over the last several decades has evidently enabled them to realize their centuries old craving for a socialist society.
If only we could send those like-minded souls living on this side of the pond over there, they could live among kindred spirits and we could get on with living the American way of life unhindered.
But that would be a “conservative Utopia”, LOL….
BB –
One thing that pervades in socialist societies, as you also point out rather eloquently as a bi-product of the French Revolution and similar to our own liberals’ beliefs, is the “do as I say, not as I do” feature: Those that make the rules don’t have to live by them, as they are “above” them and the bulk of socio-economic policies apply only to the unwashed masses, “for their own good”.
Ken –
Well put.
The Hillarys and Pelosis are all for “taking the profits”, as long as those profits taken are not theirs.
Liberalism/ socialism, double standards and hypocrisy all fit into the same category.
February 22nd, 2007 at 5:53 pm
The authors make a good point that one needs to look at whether the pie is expanding as a result of the forces creating income inequality, and not fixate only on the inequality, especially in a spirit of envy.
However, I think there are other factors that need to be considered to enable us to determine whether the trend is good or bad, including changes in cost of living, cronyism/distortions in market mechanisms (think Arab emirates), stability of incomes, percentage of population holding investments (versus debt), before coming to a conclusion.
Thanks for the visit.
February 22nd, 2007 at 9:31 pm
Civil Truth –
I would say that the major share of blame for inflation falls more, over time, on population density than on any disparity between individual incomes.
Remember the good old days when we could buy a nice home in a nice neighborhood or rent a spacious apartment in same for a small fraction of current prices/rents, or go grocery shopping for under $40.00 for a week to feed a family of four or clothing/ luxury shopping for hundreds of dollars less than we can today?
Since those days, our population has multiplied tremendously, multiplying with it demand for all the above. This is simply the marketplace at work, albeit with the dubious assistance of government opening the floodgates to an unprecedented amount of immigration over the last three or four decades.
As far as inflation inspired by any other, as in shorter term factors is concerned, the marketplace, in the true form of capitalism, has already shown that, when permitted to function as intended, will always find a way to make initially high-ticket items feasible to purchase by those with smaller incomes (witness generic drugs, which are name brands minus marketing expenses, retailers like Wal-Mart and its lesser known colleague chains, etc).
Ours is a system based on individual effort and merit, and haves & have-nots, largely based on the above, have always been part of the nature of mankind.
How often do we hear the left raise Cain when an 8 digit lottery winner, who hasn’t worked for the prize, is allowed to keep half his gross winnings?