Wednesday, August 11, 2010

A Take On Wealth Distribution, From An Independant Congressional Candidate.

Last week, I published a post that dealt with wealth distribution. In it, I referenced an op-ed by Senator Bernie Sanders. His piece was published over at Politico, and included this stunning revelation:

"Today, the top 1 percent of wage earners earn more income than the bottom 50 percent; and the top 1 percent has more wealth than the bottom 90 percent. "

Those figures disturbed me. I didn't know quite what to make of them, so I decided to solicit responses from a collection of political activists. Of the 8 organizations I approached for perspectives, 4 of them have graciously took the time to respond. The first three responses are compiled in this post.

The most recent response to my question comes from Bob Clark, an Independent Candidate for Congress. He is running for the U.S. House of Representatives in Massachusetts. You can check out his campaign website here.

The Snare General: "Do you have an official position on wealth distribution (or the income gap)?"

Bob Clark: "I wouldn't consider myself an expert on "wealth distribution", but I usually have an opinion about things. I'll assume you're referring to distribution of wealth by government, and so I'll base my response on that.

The taking of wealth from one group of people, and distributing it to others, is a characteristic of a socialist form of government. Liberalism is a euphemism for "socialism, but to a lesser degree". The opposite ideology would probably be capitalism, where people who earn money keep it, and the less fortunate fend for themselves. The way Bernie Sanders states it, and perhaps the way I described capitalism, just "doesn't seem fair". The questions are: can governments effectively impose fairness, and will people, in general, benefit from it?

Examples of systems that are capitalist - although I would argue that "crony capitalist" is much more prevalent - would be USA, England, and Japan. Good examples of socialism would be Cuba, North Korea, and Libya. You can choose your own examples, but in general, capitalist countries enjoy a higher standard of living. I'll explain why that is in a bit, but first..

Let's look at why governments choose to be socialist, as opposed to being capitalist. This can occur even if the country is not democratic. IE: dictatorships, monarchies, etc. Do they choose to be socialist because they are a bunch of really nice guys, and they want to be fair to the less fortunate? Of course not. When more of the nation's money must be turned over to the government, even if the stated cause is "social programs", two things happen: 1) government officials gain more power and influence by deciding where the money gets spent, and 2) some of the money always gets "lost" as it passes through government hands. Government officials - or their cronies - are usually the beneficiaries of that money.

Back in this country, the Democrats have a knee-jerk mantra: Tax the rich! This is often to fund those "social programs". But what happens when you tax the rich? Basically you're lessening the incentive to become rich. And when you use that money to subsidize the poor, let's face it(!), you discourage the poor from working to become richer. So the Robin Hood ideology produces a double dis-incentive!

Let's talk about the rich. How about Warren Buffett and Bill Gates. Rich enough? Does their net worth consist of cash under their mattress? Not hardly. The vast majority of it is stock in the companies they started and/or grew. And when they do receive income, does it get spent on "rich person" parties? Some, perhaps. But most of it goes into savings and investments, which becomes capital that can be loaned out to other enterprises. Are rich people "bad" people? These two people have announced how they will give away most of their net worth to charities. Certainly, when compared to liberal government officials, I don't think the rich hold a candle to "badness".

Finally, a personal note. I've worked alongside a person who later became a billionaire. Do I believe we should have a system where the incentive to do that should be reduced? Definitely not. Along his journey, he created thousands of quality jobs. Mine was one of them. I am proud to live in a country of opportunity!"

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