Income and Wealth Inequality: The Good, The Bad, and The Ugly – Part One The Good – by Peter Burrows 4/27/16 email@example.com – silvercityburro.com
Exit polls show Democratic voters in the presidential primaries put “income inequality” near the top of the list of things to be concerned about. This is typical of politics in America today: The Democrats find some statistical disparity and make a political issue out of it, regardless of the underlying facts, and the Republicans let them get away with it. The evil party and the stupid party.
Since statistical disparities abound, the Democrats get lots of political mileage out of portraying things as unjust when they are just the opposite. For example, blacks are incarcerated more than whites, which Democrats claim is proof of racism, not that blacks commit more crimes, which they do. Women earn less than men, which for decades Democrat have claimed proves gender discrimination, in spite of numerous studies showing other perfectly reasonable factors at work. Which brings to mind the festering problem of there being no women playing quarterback in the NFL or center in the NBA.
OK, I made that last one up, but it wouldn‘t surprise me if somebody were to sue the NFL or NBA someday on that statistical discrepancy. Women are being shoe-horned into all sorts of jobs where they are physically at a disadvantage, so why not NFL quarterbacks, NBA centers or for that matter, hockey goalies, etc. etc. ad absurdum. It seems that common sense has disappeared these days.
To be worried about income and wealth disparity in America is a silly concern, at least it is as the Democrats frame it. Bernie Sanders rails against the top one-tenth of one percent of income earners as though those people are guilty of something. Just what are they guilty of, Bernie? Being successful? Being lucky? Being hard working? Being creative?
How about just being old? Thomas Sowell in one of his books, I forget which, had an interesting thought experiment in which a perfectly run society has everybody being paid the same, saving the same amount and retiring after 50 years. In this society, everybody starts work at 18 and retires after 50 years at 68. Population is ridgidly controlled so for each retiree there is a new 18-year-old workforce entrant.
Everybody is paid ten dollars a year and saves one dollar. What this means is that the 68-year-old retiree has saved $50 and the 19-year-old has saved $1.00. Along comes Bernie who rails at the “system” that has the top two percent with fifty times the wealth of the bottom two percent.
It gets even more unequal if the dollar saved each year is invested at 5%. The retiree’s savings will be not be $50 but over $200 dollars. WOW! Bernie will be in demagogue heaven! Furthermore, in the year before retirement, the older worker will not only have two hundred times as much wealth as the 19-year-old, his income of one dollar will be supplemented by over $10 of interest income, so his income will be eleven times as much as the 19-year-old. Go get ‘em, Bernie! (1)
In the real world, of course, workers are not paid the same starting wage their entire careers. They get raises, they get promotions. The typical person about to retire therefore has much more wealth and income than a person just entering the work force, and huge discrepancies in wealth and income are to be expected. That’s only fair. But you’d never know it by just looking at the statistics.
To add to this inherent, “natural” inequality, we have what I call Cosmic inequalities. Some people are gifted with intelligence and talent far above average and if–IF– they have the ambition and work ethic to develop those talents their earthly rewards will be way beyond what most will experience. Examples are easy to cite. Oprah Winfrey’s income was $175 million one year. She earned it. Robert Downey Jr. made $80 million last year. He earned it. (I don’t know what movie –movies?– he starred in and I don’t give a damn.) (2)
In the business world, which Bernie sees as inherently evil, the two richest billionaires are both liberals, as are many lesser billionaires, e.g. the Google Boys, the Facebook kid, the Amazon founder, and many others. They earned it. Nobody is forced to do business with them. People repeatedly reward these entrepreneurs with their business because they offer a valuable, competitive product. That’s as it should be. In a meritocracy, people should be rewarded for their achievements. Ignorant, stupid people whose only achievements are in the world of politics should butt out.
In the Bible, Jesus calls attention to the fact that how a society treats its less fortunate is something He takes personally. “Truly, I say to you, as you did it to one of the least of these my brothers, you did it to me.” (Matthew 25:40 ESV) Why shouldn’t the same apply to unfair treatment of best of our brothers?
(1) The embellishments of interest on savings are mine, not Dr. Sowell’s. Any mistakes are ergo mine, not his.
P.S. The top .1% of income tax filers represents only about 115,000 taxpayers. They averaged $9.4 million in earnings in 2015 and paid 20% –that’s twenty percent from one tenth of one percent!!–of all the income taxes paid.(2) Hillary Clinton is in the group. Also in the group are the two quarterbacks in the recent Super Bowl. What harm did they do to society that Bernie is so pissed about? Lots of sports figures and entertainers are in the .1%, most only temporarily. Not so Oprah Winfrey, Bill O’Reilly, Joe Scarborough, and many others getting $10 million or more year after year. The common crime of almost all these big earners is that they excel, and in so doing risk making others feel inferior. Can’t have that can we, Bernie? http://www.marketwatch.com/story/45-of-americans-pay-no-federal-income-tax-2016-02-24