In a 4/27/21 editorial, Chris Christie’s lunacy about socialism, the New Jersey Star-Ledger Editorial Board (SLEB) wrote:
Gov. Chris Christie is telling friends that he may run for president in 2024, which explains why he’s now calling President Joe Biden a socialist for proposing a tax increase on the rich. “It’s nothing more than income redistribution,” Christie said during his regular appearance on ABC’s “This Week.” “It’s socialism!”
It’s a perfectly logical statement if his intention is to raise money from wealthy donors, or to tickle the fancy of the folks over at Fox News. And you can’t win the Republican presidential primary without doing this feather dance for them.
But to most Americans, that old dog won’t bark anymore. They can see with their own eyes that, that the top 1 percent now has 15 times the wealth of the bottom 50 percent combined, that the pandemic cut incomes for working people while creating 500 fresh new billionaires.
I want to focus on the last paragraph.
“. . . the rich are capturing almost all the gains of economic growth these days.”
This is classic socialist rhetoric. The idea is that “society” creates economic growth, and that the wealth from that growth is a social (or tribal) product, not a result of individual productiveness, and that whatever wealth someone has is simply “captured” from that pile of tribal wealth. But “societies” don’t create wealth. Society is just a number of individuals, and only individuals create wealth through their own productive efforts (with the aid of free trade). The sentiment that informs that quote is the savage’s (or socialist’s) view of wealth as a fixed given, in which the “distribution” of wealth is a zero-sum game. Of course, no one has ever explained how society’s wealth comes about if no individual member actually produces wealth. A society in which its members go around capturing wealth is a primitive hunter-gatherer society, not a modern industrial one. But that rhetoric serves to disconnect producers from recognition, for political purposes.
“. . . the top 1 percent now has 15 times the wealth of the bottom 50 percent combined.”
This is a classic bate-and-switch. What the SLEB doesn’t want you to see with your own eyes is that wealth is not money, or that money is not net worth. Money is a means of the exchange of wealth, not actual wealth. Net worth is measured in dollars, but is not actual money. So, yes, the richest people have a high net worth, which is held in the form of stock in productive companies. As to actual wealth -- that is, stuff -- the wealth of the top 1% is an inconsequential pittance compared to what others hold.
For example, the bottom 50% of households in America encompasses all of those earning less than about $75,000 per year. That group owns roughly half of all autos in America. Even if the top 1% owned all of the other autos, its a 1 -1 ratio, not 15 - 1 in favor of the top %. But hold on. What about the people in the 51 - 99%? Over $500,000, that’s how much. If you add in people earning up to $150,000, the auto ownership ration jumps to 91.6%. That leaves the income group earning over $150,000 with ownership of 8.4% of all autos. If you subtract people earning between $150,000 and $500,000, the percentage of auto ownership of the top 1% shrivels to an almost irrelevant percentage.
You can play this game with cell phones, homes, food, central heating, running water, air conditioning, and any other mass-market category of wealth ad infinitum, and come up with the same observation. The vast bulk of the wealth created by “the economy” is in the hands of the ordinary people.
As to that net worth of the top 1%, most of it is held in stock, as I said. So the vast majority of the net worth of the richest people represents productive power, both as a measure of wealth created for “the masses” and of investors’ estimate of future production of wealth for “the masses,” including the bottom 50%.
That “. . . the top 1 percent now has 15 times the wealth of the bottom 50 percent combined” is plain for “most Americans . . . [to] see with their own eyes” is a fantasy or deliberate lie perpetrated by socialists like the SLEB. You can see why Leftists would want to obfuscate the concepts of wealth, money, and net worth. It feeds their desperation to paint the American economy, and Capitalism (to the shriveling extent we still have it) as fundamentally unfair. But the act is, the wealth-filled lives we 99% dwellers enjoy is a direct corollary of the freedom of the most successful entrepreneurs -- the 1% --to build fortunes building companies that supply all of the mass-market wealth we hold, not to mention the jobs they provide.
Finally, “. . . that the pandemic cut incomes for working people while creating 500 fresh new billionaires.”
The pandemic was not the main culprit that “cut incomes for working people.” That honor goes to the politicians’ draconian lock-down orders. That said, it was only those “working people” who lost jobs who had the incomes cut. By a 2-1 margin, Americans said they were either better off or the same financially. And as for those 500 “new billionaires,” keep in mind that many were the result of businesses that flourished as the pandemic economy shifted, saving us from a much worse economic catastrophe. Who benefitted? Working people. And remember that retirement accounts of tens of millions of ordinary savers also rose as the stock market soared. All of that aside, my answer is, So what?
The upshot is that you need to take Leftists with a huge grain of salt. Truth is not their strength.
Related Reading:
Inequality Has Surged Since 1989, but the Lifestyle Gap Has Shrunk by John Tamny for FEE
QUORA: 'How is becoming a billionaire even possible, chronologically?'
From ‘You Didn’t Build That’ to ‘The Nation's Wealth’
All Earned Wealth, No Matter How Big the Fortune, is Deserved Whether ‘Needed’ or Not
Oxfam Attacks Prosperity, Part 1
Oxfam Attacks Prosperity, Part 2
How is it Possible that ‘1% control over 95% of the wealth?’ It’s Not, and They Don’t.
Related Viewing:
"The Unrelenting Beauty of Wealth Inequality" by John Tamny
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