Obama’s Income Inequality Gambit (2014 Jan)

by Barry A. Liebling

When the ObamaCare rollout was recognized as a disaster – by both its critics and its supporters – President Obama knew he had to change the topic to regain (or gain) credibility. He needed to induce Americans who are interested in politics to focus on an issue that is likely to be a winner for Democrats, welfare state enthusiasts, and (most important) the President himself.

And President Obama may have found an effective gambit. He unveiled a theme that is a reliable standby for hard-left partisans, a theme that is designed to perk up his base and disarm his antagonists – the “problem” of income inequality. In a speech sponsored by the Center for American Progress he asserted that income inequality is on the rise, that it thwarts economic mobility, and that the government has to act to make things right. Note that the call for expanded government intervention is the core message and that citizens’ incomes and mobility are convenient pretenses.

Of course, this narrative resonates very well with the progressive base. Income inequality is measured by the average difference between how much the most successful people make compared to the least successful. That there is any spread at all is a perennial irritant to committed leftists and is one of their favorite complaints they use to indict the country for lacking “economic justice.” In their view if the world were “perfect” everyone would have the same share of the wealth. And leftists generally agree that the world will never be “perfect,” so this permanent flaw is their justification to take actions – more government programs, increased funding of existing government programs, higher taxes, additional burdensome laws – that purport to reduce income inequality.

The progressives’ manifest goal of “fixing” income inequality is a mask that conceals their deeper motive – the desire to confiscate wealth from those they despise and funnel favors to people they support. In the leftist playbook it is appropriate to tax and penalize “the rich” because they have so much more than their “fair share.” But some rich people are allies and are not to be scorned or molested. Wealthy celebrities, sports stars, crony industrialists, union bosses, and highly paid government officials who are enthusiastic supporters of the progressive agenda are given a pass and can be exempted from punitive takings. Notice that federal employees often rake in considerably more in salary and benefits than their private sector counterparts. The Washington DC metropolitan area is famous for having a lavish level of affluence and its inhabitants – largely dependent on federal government largess – have been doing very well in the last five years. But there is almost no chance that President Obama will point this out, target the federal elite, and suggest that they pay “a little more in taxes” to help reduce inequality.

Consider the flawed premises of the income inequality “problem.” It is diametric to the philosophy underlying free markets which recognizes that everyone has the same natural rights and that individuals create wealth and are the legitimate owners of their property. Notice that when a left-leaning pundit moans about inequality there is inevitably some reference that the top earners are getting an increasingly larger proportion of “the country’s” income or of “society’s” wealth. Implicit in this pronouncement is the false notion that the country or society is an entity that somehow owns all of the wealth. When the leftist “intellectual” convinces a gullible listener that all income really belongs to the collective, it is a small step to suggest that everyone should (ideally) get an equal share and that opposition to this is “unfair.”

How do conservatives and Republicans respond to the charge that there is too much income inequality? Frequently they take the bait and foolishly surrender the moral high ground to their adversaries. And as long as progressives convince themselves – as well as their opponents – that the leftist vision is ethically sound they will retain the advantage. Many conservatives will meekly agree that income inequality is a bad thing but argue that the degree of inequality in America is far less than the progressives claim it is. Alternatively, some conservative commentators sanction the leftist ethical judgement but assert that income inequality – although not ideal – is the price society has to pay to motivate entrepreneurs to start businesses and generate wealth.

A few Republicans have answered the President’s speech on income inequality in a manner that is inadvertently self-defeating. They have pointed out that in the last five years, when President Obama’s policies have been in effect, income inequality has actually increased. These oh-so-clever Republicans imagine that their rebuttal has merit. But, in fact, it only fuels the progressive cause. It is an invitation for the Democrats to correct their “error” by doubling down on their meddling. Furthermore, the criticism suggests that when Republicans are in power they will focus on the income inequality “problem” and be even more zealous in fighting it.

What is the true relationship between “income inequality” and justice? The short answer is that there is no necessary connection at all. How much wealth you have in comparison to your neighbors is not a valid concern. It is the business of the government to protect everyone’s individual rights, and it is out-of-bounds for the government to micro-manage and fiddle with anyone’s income. What is important is how individual citizens come to posses wealth.

You either acquire your wealth justly or unjustly. Ethical wealth acquisition occurs when you create valuable goods and services, trade your valuables – honestly and by mutual consent – for other valuables, or receive gifts from others. Conversely, it is immoral to get wealth by violating anyone’s natural rights – that is by physical coercion, by threats of coercion, by theft, or by fraud.

A man or woman who acquires wealth ethically, is entitled to it – regardless of how much or how little other people may have. A scoundrel (whether a private citizen or a government official) who enriches himself by violating the rights of others does not deserve any of it – even if the scoundrel has taken from those who are “richer” than he is. People who understand this are immune to the income inequality gambit.

*** See other entries at AlertMindPublishing.com in “Monthly Columns.” ***

Comments are closed.