The Poverty of Income Inequality

dfThe left lives from social crisis to social crisis. Now it is leaping nimbly away from its last mess, the great crisis of the uninsured (who have decided to stay uninsured despite Obamacare’s fines) over to the great crisis of income inequality.

If you believe the left, the leading economic problem that Americans face today is not a lack of jobs or the cost of living, but a crisis of CEO salaries.

The crisis of income inequality, in which some people make a lot more money than everyone else, is irrelevant in an economy where the problem is not that incomes aren’t high enough, but that they don’t buy enough, and that there still aren’t enough jobs at minimum wage or any other wage.

The left’s answer to the high price of medical care wasn’t to discuss why prices were so high, but to wrap the whole thing in a planned medical economy of price controls and resource limitations administered by death panels whose existence they deny.

Its solution to cost of living issues is to raise the minimum wage. That’s a slogan that sounds good, because everyone knows more money means more money. At least until you remember that the dollar, like an Obama promise, has no absolute buying power value. And the availability of jobs isn’t a fixed value either. Raising the minimum wage eliminates jobs and raises the cost of living so that those who keep their jobs now have more money that buys the same amount.

The left’s agenda isn’t to make life better for the people at the bottom of the economic ladder. It’s to build up their planned economy with failed solutions that aren’t meant to solve anything. The left’s solutions don’t work, because the problem they’re solving isn’t economic inequity, but their own lack of absolute power. And they solve that with economic solutions that fail, necessitating more power grabs until they have complete control.

The progressive solution to income inequality is government intervention. But when has centralization ever produced income equality?

The USSR was the ultimate experiment in central planning. The Soviet Constitution declared, “The principle applied in the U.S.S.R. is that of socialism: From each according to his ability, to each according to his work.”

The Soviet Union was supposed to be a classless society. Western leftists assumed that was true. They were wrong. Not only did the Soviet Union have a rigid hierarchy of classes, but it also had the same income inequality as any other economy in its class.

After WW2, the wealthiest ten percent of Russians took home more than seven times as much as the poorest Russians did.

Factory bosses took home 100 times the salary of factory workers. Managers made five times what their employees did. A small percentage of the country wallowed in luxury while a sizable underclass struggled to put food on the table. And these figures are hopelessly inadequate to describe real income inequality in the USSR because most of the real income at the top went unreported because it was derived from corruption and bribery which were and are widespread.

But it wasn’t income inequality in the USSR that led to poverty and misery. It was the planned economy whose control of the means of production created product shortages by not producing what people wanted, rather what it thought they should have, and whose control over the means of distribution made the black market into the only real source of needed products.

The gap between the rich and the poor matters less than what the poor can buy for their money. That is why the left would rather talk about income inequality than the standard of living. It wants to play around with wealth redistribution, instead of dismantling their programs that make life so expensive. The same hypocrites jabbering about income inequality dream of imposing a Green carbon tax on everyone that will further raise the prices of all goods and services.

The left inflicts poverty and then campaigns against it. It raises the prices of products and the cost of services, it devalues incomes, destroys jobs and raises energy prices… and demands even more regulatory powers so that it can finally solve the poverty mess it creates once and for all.

Even if we assume that income inequality, rather than the standard of living, is the issue to focus on, the worst possible way to achieve it is through more centralization. Free enterprise top 1 and 10 percent incomes are vulnerable to market fluctuations. That’s not the case in the Socialist sphere where incomes remain high regardless of economic performance.

A CEO who runs a company as badly as Obama runs the country risks his job. Obama risks nothing.

Washington D.C. is a great place to talk about income inequality because it has one of the highest levels of income inequality in the country. Obama declared that income inequality is the defining challenge of our time. It’s a challenge localized in the very cities that voted for him.

Progressives might try to argue that Obama won those cities based on the support of the poor,  but he also won 8 of the 10 wealthiest counties in the nation. Not only did he win them, but he won them by margins greater than the national vote. And that shouldn’t be surprising, since of the wealthiest men in America, numbers one and two were both strong supporters of his campaign.

But the left doesn’t actually hate the rich. To do that it would have to hate itself.

Occupy Wall Street wasn’t a bunch of unemployed workers looking for a more compassionate economy. A third of the Occupiers had household incomes of six figures. The majority were college grads and 39 percent of the latter had graduate degrees.

The left does hate people who work for a living. The poster child for its childish screeds is Elizabeth Warren, a populist voice of the people who spent three-quarters of a million on a condo as soon as she got to Washington D.C. and who once scored $90,000 from the government for serving as an expert witness.

Elizabeth Warren was right and wrong when she said that no one gets rich on their own. There are people who do get rich on their own. And there are people like her who get rich through their political connections. The left hates people who work for their money and get rich on their own. It loves “public servants” like her who get rich off their political connections.

The left argues that the income inequality in this country shows that we have an oligarchy. They’re right. And they’re the oligarchy.

In Washington D.C. there is an oligarchy that monopolizes wealth and loots the working people. It’s a government oligarchy just as it was in the Soviet Union. America doesn’t have an income inequality problem. It has a government problem.

The growth of government has lowered the standard of living. The standard of living peaked before Obama took office and fell in the sharpest such drop in recorded American history.

The left can shriek about raising the minimum wage all it likes, but the American worker today makes 57% less an hour than he did in 1970. The left can play its class warfare games, but they cannot and will not restore the standard of living that Americans had in 1970.

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  • Texas Patriot

    Great article. It sounds as if you have been reading The Black Book of the Left. Unfortunately, what you have written has the ring of truth.

  • Judahlevi

    Democratic policies by definition will lower the standard of living for everyone – the poor included. The US will become a third world country by following economic policies such as wealth redistribution and income equality. History has proven this over and over again.

    Democrats have never understood economics and Obama doesn’t have a clue. You don’t learn it in law school or by being a community organizer.

    • Sara

      when was the US ever a 3rd world country?

      • gray_man

        He said it will become one. Not that it had been.

  • DogmaelJones1

    This is one of the best critiques of progressivism and the “planned” economy extant. It should be read by anyone who is now wondering what happened to his standard of living. And leftists should be compelled to read it under penalty of having their ears boxed until they grasp its truths and confess that, no, they weren’t really concerned about helping the poor, but helping themselves to other’s money and wealth, and that they really hated the independent American.

    • lyndaaquarius

      why can’t we have public debates? Televised.With stars. Hollywood stars. A smart,gutsy Conservative and an outspoken Lib.The topic: Daniel Greenfield’s “the poverty of income inequality”.Let them deconstruct the article,the conservative star defending Greenfield’s points and the Lib star trying to prove how wrong Greenfield is.An evenhanded moderator required.I’m thinking James Woods vs Alec Baldwin.An audience would vote.America needs to start examining Progressive policies in this year of the 2014 elections. Gotta raise the Lo-info voters.So much to debate.Gotta expose the emptiness of the Left.

  • truebearing

    Well and succinctly said.

    Obama told the truth, for once, when he said he would “fundamentally transform America.” The biggest transformation was changing our economy from one where the currency is dollars to one where the currency is political power. Money is still a reward, but the Left sees no value in anything that isn’t politically advantageous. All value is now politically based.

  • lessthantolerant

    Would it not be great to do an analysis of the top 100 politicians both Republican and Democrats, analyze their net worth before they entered government service and after 10 years in public service. I venture to guess we would see that all increased their net worth substantially since entering public service and off of insider trading and cronyism.
    We The People really don’t realize how most politicians are robbing us blind and doling out peanuts to keep us quiet.
    We let the Triad of Propaganda (Education, Media and Entertainment) feed us propaganda and divide us so we can not put a stop to the corruption.
    Now with the growth of Parasite Nation we actually have little chance of turning this system around.
    America is doomed.

    • Drakken

      As much as I hate to say this I will anyway, time to crash the whole bloody rotten house of cards and hold all progressives/commi’s accountable and held as an example of what happens when you get a taste of communism. Maybe this time we can make the Republic stronger and more resilient from the decadence and weakness we have done to ourselves. If we have to depend on the youth today who can’t get their lazy azzes off the couch while playing their xbox, we deserve it.

      • lessthantolerant

        A financial collapse could be the best thing that could happen to America.

        At least in this way we could rid ourselves of these wh*res we have in the House and Senate.

  • Tommy

    “Greed is good” – Leftist idea of capitalist philosophy
    “Envy is good” – Leftist idea of how to relate to a capitalist
    “Anger is good” – Leftist idea of how to relate to anyone who disagrees
    “Lust is good” – Leftist idea of how to relate to a leftist
    “Pride is good” – Leftist idea of how to relate to an academic
    “Sloth is good” – Leftist idea of how to relate to oneself
    “Gluttony is good” – Leftist idea of tax and spend philosophy

  • Michael Pierce

    The run away healthcare cost is directly related to the push of the left to remove restrictive laws limiting the amount a nn profit could pay to management. It was restricted to a max of 60 thousand a year. When these restrictions were removed a non profit could pay an unlimited amount to management and employes. Hospital prices ren up fast as everyone wanted high pay. Humanitarian companies sprang up for high pay checks with little going to their causes. It was the one change that devistated our nation and the cost of healthcare.

  • lyndaaquarius

    Daniel Greenfield’s writings need to be included in every American high school’s curriculum. They would have to be balanced with some Leftists thoughts, for the sake of “fairness”,of course. Robert Reich or Thomas Friedman. The contrast would be stunning. Conservatives have got to penetrate local school boards.

  • Sara

    Economists agree income equality is bad for the economy. Let’s stop pointing fingers and think of solutions to actually fix it. http://www.sltrib.com/sltrib/world/57277720-68/economists-percent-fed-income.html.csp

    • sara

      typo, inequality

    • Daniel Greenfield

      The solution would involve shareholders holding CEOs accountable. I’m not sure how much money they have to lose before that starts happening.

      • Judahlevi

        I am all for holding CEOs accountable for being profitable. We still need a long-term focus and not get caught up in the quarter to quarter earnings rat race.

        We also need to get rid of any crony capitalists who make money by being friendly to politicians, not by having profitable business plans.

    • Drakken

      Let me guess? Your a progressive liberal right?

    • Judahlevi

      No, this is not another moral equivalency argument. We do need to point fingers at people and politicians who advocate for such terrible policies.

      And those people are Democrats, not Republicans.

      Detroit is the perfect example of Democratic policies.

  • WW4

    Mr. Greenfield is on a roll. There are a lot of fair strikes in this article. Too many shibboleths on the Left that require dismantling (or at least redefining). I don’t get the attraction of Elizabeth Warren. Government need not be demonized–but the Left needs to accept that you can’t shouldn’t rely on the federal government for anything besides what it is constituted to do–establish justice and defend the nation. Those may seem broad categories but they are not boundless.

    However there appear to be some deflections, here, too: a discussion of the post-war Soviet economy as an example of a planned economy; instead of the post-war U.S. economy, which is what a lot of people on the left point as a positive example of economic policy. And to say “they” (the Left) “are the oligarchy”…come on. Big Government and Big Business are one and the same. The players hop from the one to the other, regulating and deregulating as benefits them–and they’ve had their way to the point of economic catastrophe. It’d be naive in the extreme to believe all these players hew Left.

    When discussing minimum wage, the Left might also counter that Australia upped their minimum wage to $16/hr yet somehow managed to weather the economic downturn better than most.

    It is a pipedream these days to think either side will give up their sacred cows. It is too bad they can’t sit down like neighbors and discuss concrete answers to some fundamental questions: What do we mean by “quality of life?” What does it mean–minus identity politics–to be “needy” in a country full of food and shelter? How do we care for the least among us, while incenting the able to achieve? What should be the responsibilities of the citizen in civic life? What do they require for an education? etc.

    • philbest

      An academic who wishes to remain anonymous said the following to me in a recent email:

      “…….Our universities are churning out social scientists not as informed citizens who might then look for a career, but as people who have the expectation that they can turn their degree into a career. Many of them head into public sector employment and policy jobs because there is nowhere else for them to go. And any time they are asked to look at an issue they generate policy recommendations that lead to regulations. Because their knowledge is bestowed on them often by weak (or doctrinaire) teachers they do not have the critical capacity necessary for the job. Nevertheless, they can become part of a club which exerts considerable power, and persists (often becoming stronger) through changes in government. This applies to local and central government.

      The result is not just over-regulation, but poor regulation. Policy is based on imitation, workshops, and group think……”

      • WW4

        Many of these people really do God’s work, though, under thankless circumstances. They are the day-to-day difference in some people’s lives.

        But your academic is right: the only students who get a sense of how things work are the volunteer-types. Most students, even good students, do not get a view beyond the internecine politics of their field. From that persepctive, everything looks adversarial: people who get the money for you are the “good guys.” People who want those funds used elsewhere (or not appropriated at all) are the “bad guys.”

        Regulation, itself, is a reality and needn’t be a problem. It becomes a problem when members of a community aren’t in communication. You need to be able to have business, non-profits, and gov come together to say “Here’s why this is or isn’t a good idea.” But when you have political social climber demagoguing the public, it results in pronouncements from “on high:” that one-size-fits-all crap that no one likes but sounds great from a podium.

        The other problem with regs (especially in the education sector) is consistency. Give me the regulations, I can figure out how to implement them. Just don’t change the dmn things every one or two years!

  • mtnhikerdude

    The B. O. is taking a 4 million dollar vacation to Hawaii for Christmas on the tax payers dime. Anyone smell the stench of hypocrisy ?
    Trust your health care to a doctor making ten dollars an hour ?

  • glpage

    Have you ever noticed how many of the richest people in this country support socialist policies? I would suggest they are hypocrites, but they do so because in every socialist society the rich have always gotten richer. Socialism aids the increase in wealth disparity.

  • Aizeta

    In Spain they call it, the revolving door: inside government, outside board, outside government inside board. US is now officially a culturally ‘enriched’ latinolike country. I wonder if it has something to do with changing demographics.

  • Boots

    Liberals are for redistributing wealth as long as you don’t touch theirs. They have no problem with accumulation of wealth as long as they’re the ones accumulating the wealth and “evil” capitalists aren’t. There’s a reason social corporatism is so popular on the left… they get to choose the beneficiaries of redistribution.

    • lyndaaquarius

      in the final analysis isn’t it all just about getting and holding and wielding pure ole raw power? There is no altruism it’s only their trojan horse.Talk about the heart of darkness.Our founding fathers understood this and set about to protect human dignity by codifying it and enshrining it in our Constitution.I feel that “this last great hope on earth” will endure. I trust the yearning for freedom in the hearts of millions. An invisible power.

      • Boots

        This is just opinion but I think both left and right covet power. How it plays out is different. There are altruistic people on both sides but, to me, it appears the left wants equality through mediocrity for most while the donor and political class get wealthy. I haven’t figured Republicans out because they’re a different type of corporatist. I don’t believe Republicans hate or even want there to be poor because poor people don’t buy as much stuff as people with money so there’s no incentive to keep people poor. I think Republican power desire manifests in control of government money to reward cronies and influence regulation. I wish I understood the hearts of men. I’d be rich instead of just comfortable.

  • antioli

    Obama’s theory was to never wast a crisis. Well he wasted the big one when he went for Obama care instead of fixing unemployment. Instead he went for his party’s political security by fostering illegal immigration which would result in chain babies who would eventually vote for Democrats. The “Moderate” Republicans
    are great allies with the Democrats with respect to “Illegal Immigration.
    The US Chamber of Commerce finances La Raza.

    • WW4

      To paraphrase Field of Dreams:

      “If you hire them, they will come.”

  • tagalog

    How does a person making more money than the next guy translate into a crisis of inequality?

    Only in a world view that sees economies as zero gain entities, in which the only way for one person to make more money is to take money away from somebody else.

    On the Soviet economy, don’t forget that the Soviet economy was propped up by tens of millions in labor camps for decades, producing wealth (including Kolyma gold) at almost no cost.

    • Daniel Greenfield

      The entire Soviet workforce was arguably in a labor camp. Or 90 percent of it at any rate.

  • tkondaks

    The problem with so-called income inequality is the way it is measured.
    Who cares whether some have 10,000 times more income than others? What is important is the access of every person in a society to the basic necessities of life. This the U.S. does through a plethora of social programs, including welfare, food stamps, and Medicaid.
    Forget the Income Gap; let’s measure true poverty…and we’ll see that poverty has been virtually wiped out in the U.S.