Tuesday, February 16, 2016

The Unequal Arguments on Income Inequality

There has been, for a few years now, a lot of hue and cry about income inequality. The obvious solution of those who think this is a drastic problem is to reallocate the funds of those with the most money to those who have the least. After all, they say, in the richest country in the world, why should anyone go without?

But wait – why stop there? Why can those in the richest country in the world not afford to provide for all? And by all, let us be truly inclusive. The ‘income inequality’ crowd like to crow about the 1%, but fail to acknowledge that the overwhelming majority of Americans fall within the 1% themselves. An American with a household income of $37,000 is better off than 99% of people in the world. In fact, according to a World Bank economist, the bottom 5% of Americans are still better off than 68% of the world. Yet we don’t see that same hue and cry to address this global issue from the folks on the streets wanting $15 per hour as a minimum wage. Why is that?

Two sides of the same coin.
In fact, the same folks who are advocating against income inequality here at home are making efforts to erect even taller barriers to addressing the issue on a global scale. Sen. Bernie Sanders, candidate for the Democratic nomination, has it as part of his platform to dissolve NAFTA, which he believes has flooded our markets with cheap goods that have escaped stringent regulation. GOP front-runner Donald Trump , who could care less about income inequality, would erect even stronger barriers by imposing tariffs on Asian goods. Never mind the economic good that has been created for Central American and Asian economies and the labor forces there that can now more easily transfer goods to willing partners with customers that have money to spend in the U.S.

But why would they want to harm these developing economies? Why, it is to create better paying jobs at home, of course! So in this context, the argument is we should allow people in the U.S. to thrive financially even if it does economic harm to those in other countries. But if we believe in ‘income equality’, shouldn’t the thought process be that anything that increases the economic benefit for the most people possible be a good thing, even if it harms people in our community? Isn't that the whole point? But there are caveats, they say.

These aren’t American people. This is the first and foremost argument: we must look out for our own before providing economic benefit to others. But this does not hold water, when the very people who say this then want to provide the benefits of American productivity to those who are here illegally through efforts like the DREAM Act and similarly styled programs that amass taxpayer funds, and assign them to people who are, in effect, not American. So one cannot say without being disingenuous that they are in favor of taking taxes from every American to give an education to some who are not American, while at the same time saying they want to take good jobs from a few people over the border to provide them to Americans.

What one is also saying by the ‘not American’ argument is that because they are not part of our community, they are not deserving of the benefits of it. But that argument can be taken down to any level of government. I should be able to say as a resident of Stillwater County in Montana that I do not want to pay for the expenses of those in Yellowstone County, via the state income tax. Or for that matter, pay for the expenses of Essex County in Massachusetts. I did not have a vote in how they determine policy, therefore I should not have to forfeit my productive income to contribute towards said policies. And though most would argue the gravy train runs the other way, there are far more people and colleges in that county than in all of Montana, and every year we pay taxes that go to fund grants and programs at institutions and with governments across the nation in which individual citizens have never had any say.

So why don’t the folks in the 99% movement stress the necessity of everyone in the richest country in the world contributing to the economic betterment of the world? They would likely argue that someone making $37,000 per year can’t afford to. Perhaps they are right. But who gets to make the decision as to at what income level we cannot afford to help? The Sally Struthers commercials used to tell us that for pennies a day we could feed starving children in other countries. Surely someone at that income could afford those pennies? Again, how do we determine who can tell people what they can’t and cannot afford?

Some people want the government to decide, to take that money and put it to good use. Wait, I say, what if I don’t trust the government to put it to good use? Too bad, they say: you have a moral obligation and we all voted for it. So much for protecting the rights of the minority. The majority of Americans voting for something doesn’t make it ‘right’, and even more so the majority of voting Americans voting for something doesn’t make it right. After every election, no matter what the outcome, there is still a majority of Americans that did not vote affirmatively for the winner. That includes those who voted for the opposition, and those who did not vote. There is no such thing as a mandate when most people did not vote for you. So taking my money under the auspices of any such mandate is not legitimate.

If I took money from a rich person’s wallet because ten people in a room of fifteen told me to, and put it in a Salvation Army bell ringer’s canister, I still wouldn’t be right for having taken it to begin with. Hundreds, if not millions of people not in that room would call this theft. Voting a government into power that will take my money for the same ends doesn’t make it any more right. And many that would nonetheless celebrate my taking the money from an affluent person’s wallet would then criticize me for depositing the funds with an organization that so openly violates several left-wing beliefs. So even when you take someone’s money, it isn’t right to use it if how you do so it contradicts the beliefs of a subset of individuals.

So how do we ensure that money goes to something we believe in? Not by giving it to government. Many would say the government spends too much on war, defense, spying, and nation-building and too little on social issues and the betterment of society. But here’s the thing: you gave them the power to take your money to begin with. You could have held on to that money and given it to whatever social cause you desire, including ones right there in your community. Instead, we are subject to a tithe on average of 25% and have no say in where that money goes. And because of that, it goes wherever a group of 530 or so people say it should go, and not where a hundred million people think it would best be put to work.

So when people complain about income inequality, and then say voting a different person into power will fix everything, they’re ignoring how the problem got started to begin with. It started when people gave up the right to do with their own money what they wanted, and allow that it be legislated for a portion of it go to an entity of a paltry few people, miles and miles away, who talk more with special interests than they do with their constituents.

Soldiers of the 'revolution'.
But part of being in the richest country in the world also means that we have options that others don’t. People complaining about income inequality while typing on a Macbook Pro ignore that they could have purchased a comparably capable PC laptop for $1,000 less. Every economic choice has a consequence, and what we’re seeing today is not simply the result of people making poor ones, but the fact that after making these poor choices they have less money left over to help themselves and others as they see fit.

In reality, each of these arguably bad decisions does help someone, it just isn’t someone we can readily see, and may not be the person we want to help. Buy a Macbook and a designer in the Bay Area can go on vacation to Bali instead of Belize. A marketing guru can buy a Mercedes instead of a BMW. But the guts of that laptop? They all come from the same factories in Asia regardless of which brand you buy. And those purchases fund huge amounts of individually-driven economic development no matter which brand you buy. They just don’t fund development here. And truth be told, despite what Bernie or Trump would have you believe, we are still better off for that.

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