Monday, July 30, 2012

A Brief Comment on "Income Inequality"

The NJ Star-Ledger ran an article entitled "Study: N.J. wealthy flourishing, gap between rich and poor is largest since Great Depression."

You could imagine the kinds of correspondence such as article would generate. I was reluctant to jump in. But alas, I couldn't help myself. You never know when you might reach a rational mind that's "on the fence."

So, I left these quickly cobbled-together comments:

Posted by

July 29, 2012 at 5:00PM

The bigotry against the productive and successful is a symptom of pure envy. The real problem is not income inequality as such which—in the context of a free society—is a natural and morally virtuous result of human nature; i.e., individual differences in ability, intelligence, interests, ambition, values, goals, etc.

The real issue is the growing burden on upward economic mobility. The question we should be asking is: Why is the number of economically successful people falling (or at least stagnating)? A good clue; look at the past decade that is the focus of the study.

Since 2001, we have seen a massive expansion of entitlements (e.g. Bush’s prescription drug benefit), a massive expansion of economic regulation (e.g., Bush’s Sarbanes-Oxley and the EPA’s regulation of CO2; Obama’s  ObamaCare and Dodd-Frank), a colossal drain on private wealth ($10 trillion in federal deficit spending), the collapse of the politically engineered “affordable housing crusade” (housing boom and bust, and related recession), massive inflation (the fed’s easy money policies), and so on.

It takes a massive act of mental evasion to avoid the fact that the economic troubles of the past decade coincides perfectly with the massive growth of the regulatory welfare state to unprecedented proportions. If government coercion and intervention is the answer, we should have economic nirvana. Instead, we have perpetual economic struggles. This is no coincidence.

The Marxist obsession with “income inequality” and the cowardly scapegoating of “the rich” will not hide this fact. Nor will it hide the fact that the answer is to reverse course; regain our reverence for economic success, and institute massive cuts in taxes, spending, redistributive theft, and regulations. Otherwise, the course we are on will lead to continuing shrinkage in individual productiveness—the only source of economic vitality—and the growing entrenchment of the entitlement mentality—the source of economic sloth. 

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