Is there a pulse? Is the economy dead?
What happens when a pulse is no longer found on your wrist? That is an indication that your heart stopped pumping blood.
What would happen if income inequality stopped pulsating throughout the economy? That would be an indication that the beating heart of business is no longer pumping.
Income inequality is to be expected whenever growth occurs. To not grow is to be moribund.
The collapse of an economy is brought about by throttling the pulse of income inequality in order to create flat line “equality.” Immobility, as opposed to upward mobility, happens when wages become stagnant or “equalized” to a zero Gini Coefficient. Socialist economies, past and present, have been choked to death or near to death by those who promote the end of “income inequality!”
And while I see income inequality as a good healthy thing, opportunity inequality is not. But keep in mind that equal opportunity does not equate to or guarantee income. An individual response to opportunity is what matters. And, that is why leftists want to force the equal income issue – they know that people are by nature lazy and will respond to handouts of other people’s income.
Only effort tied to skills that increase in value over time will likely result in greater income. And here it should be noted that Progressives hate competition. The dynamics of supply and demand in the job market are anathema to them. They want to invoke their own economic “Nudge.” That is why they will push “Participant” trophy mindsets over competition.
Progressives consider most things to be of equal value (except their opinion). Progressives do not want you to even compete against yourself, to better yourself – “You are worth what we tell you are worth.”
But competition and pressure are necessary to proper functioning. As with your body, there would be no blood pressure if there wasn’t some resistance imposed by blood vessels. The vessels provide constriction necessary to maintain pressure. Proper blood flow feeds all veins and capillaries with life-sustaining oxygen.
So it is with competition. It constricts and channels the pressure in the form of your effort to those parts of your life that require sustainability, which is every part.
What are the causes of “income inequality!”? Is “income inequality!” the “fault” of Wall St. “fat cats”? Is shaking down Wall St. and the 1% the answer? Here is an excerpt from a recent book about the origins of inequality, a diagnosis that is spot-on:
“The distribution of income cannot be boiled down to one mechanism such as supply and demand in the labor market, nor can it be measured by a single measure of inequality like the Gini Coefficient. It is the result of many different processes working together. History matters, as do the market, politics, and demography.”…
“Over most of the past century, Americans have been acquiring more education, so that the supply of skill to the labor market has increased. If nothing else happened, this chain of events would have reduced the value of education and driven down the gap in wages between those with and without a college degree. Yet the gap has risen, not fallen, and it has done so particularly rapidly since the late 1970’s. When price rises even though supply has risen, we know that demand must be rising even more rapidly. Economists attribute this rise to the relentless increase in the skills required to work with new, information-based technologies. They believe that the acceleration in the skill biased technical progress over the past thirty years is the main engine driving increased inequality in earnings.” (emphasis added)- Angus Deaton, “The Great escape: health, wealth and the origins of inequality.” (Angus Deaton, in 2015, “was awarded the Nobel Memorial Prize in Economic Sciences for his analysis of consumption, poverty, and welfare.”
The demonizing of Wall St. and the rich is the Marxist ranting of the Left. “Income inequality!” is created by a multiplicity of factors just as your good health is dependent a multiplicity of factors – the environment, your intake of nourishment, your exercise, etc. Blaming Wall St. for “income inequality!” is like blaming the existence of restaurants, those who trade in food, for those “fat cats” who eat more than others.
Do you blame restaurants for your poor physical health and not the choices you’ve made? If you do you must be a Blamocrat.
Blaming Wall St. is “Wrong, Wrong, Wrong, Wrong!”
What other factors cause “income equality!”?
-Fiscal and monetary polices limit the flow of wealth and create hyper-“income inequality!”
The fiscal policies of Barack Obama’s administration, like those of a Marxist economy, have sown seeds of uncertainty. Investors, the economy’s job creators and the demonized ones of Wall St., are wary of investing due to the unknowns of government regulations and of taxes, specifically. The risk of investing any money is made considerably greater by government’s visible hand in the till.
The effect: we have had sub par 3% GDP for the last several years under Barack Obama. And, even though today’s job numbers are better than usual they are sub par also. The labor participation rate is still terrible. I know of four people who are currently struggling. Two of them have been out of work and/or underemployed for years. The other two have recently lost their long time jobs. There are men between the ages of 25 and 54 sitting on the couch at home eating Twinkies and watching ESPN. Obama’s fiscal policies have created “income inequality!” for millions of black and white lives, as if they didn’t matter.
The Keystone Pipeline project would provide significant jobs but the Obama administration has kept it from happening. The cult of climate change creates extensive “income inequality!”
And, with a zero percent interest policy the FED is pushing asset valuations up in the stock market. This is due to the fact that investors sensibly want to earn a return on their money. And since the FED has created no incentive to save with its zero percent interest rate investors must look to other financial vehicles for a return.
As investors buy into the market asset valuation climbs by pushing prices up. Hence investor wealth grows, at least on paper. Investors seek such havens to grow their wealth. This makes utter sense to me as an investor as opposed to accepting stagnation and even loss of income to due to today’s unspoken real inflation.
Again, the FED’s monetary policy of zero percent interest does nothing for middle class savings accounts. Here, again, disparity of incomes between Wall St. and Joe Schmo is created by those in power.
The economics of the Keynesians, the Progressive’s go-to policy makers, is to have government and people spend all their money (consume) in order to make the economy grow. This nonsense, the AGW scientism of economics, is exactly opposite of what is needed to grow the economy and stunts savings and investment.
Both fiscal and monetary policies are political animals chained to the powers that be. And, that is not you, Joe Schmo.
The very people who rail against “income inequality!” during a campaign (Clinton, Sanders, Warren, etc.) are the ones who create the malignant disparity of unequal opportunity when they get into office.
As I write this Hillary Clinton is proposing a $12 minimum wage for federal employees. Yet, no quick fix-it “remedy” happens in isolation.
Do you want to guess who pays for this proposed redistribution? In effect, Clinton is asking taxpayers, those moms and dads who both work, to vote for her (and to reduce what’s left of their disposable income) so she can raise the minimum wage of federal workers, those folks who will vote for her. The bleeding heart liberal’s cure for “income inequality!” is pulse-robbing bloodletting of voters.
The money that comes out of your paycheck to pay for this minimum wage increase is money that you cannot spend in the economy yourself. It is redirected to others and becomes the gateway drug for more redistribution.
To redistribute your wealth as Hillary proposes is like putting a pacemaker in the heart of the flagging economy with a battery that will last only a fraction of an election cycle.
You don’t need to be a Nobel Prize winning economist to understand that your income changes (creating income inequality over time) by a change in age, from young to old, from inexperience and a wet behind the ears status to well-oiled maturity and grey-haired sagacity. And also by where you live (a tech corridor, for example, and not the Sahara) and by your enhanced skill set. There is no devious little secret behind “income inequality.”
In fact, “income inequality!” drives return on investment. Who would invest if you knew that you would never gain appreciated value in the form of dividends or capital gains (income) over time from your investment? Even non-Wall St. Folk will buy homes believing that a home will appreciate (simple income inequality) over time.
It’s a Hip Hop world kid! Get with the program!
The following parable provides a Kingdom of God finding on “income inequality!”
What I hope you will note is that “income inequality!” as approved by Jesus (and as recorded by Dr. Luke, Chapter 19) means that those who do not increase what they are given are relieved of what little they may have. Their portion is given to the one who has made a significant (ten-fold) return on investment. As is usual in the Kingdom of God, Jesus’ POV is completely opposite of the world’s POV.
The world under the rubric of “income inequality!” will take from those who have succeeded and give to those who have not made any significant effort. And, the world will do this using Caesar as Divine Redistributor. There is not one mention of Caesar in Jesus’ words.
The Parable of the Ten Talents
“There once a nobleman, “ he said, “who went into a country far away to be given royal authority and then return. He summoned ten of his slaves and gave them ten silver coins. ‘Do business with these,’ he said, ‘until I come back.’ His subjects, though, hated him, and sent a delegation after him to say, ‘we don’t want this man to be our king.’
So it happened that when he received the kingship and came back again, he gave order to summon these slaves who had received the money, so that he could find out how they had got on with their business efforts. The first came forward and said, ‘Master, your money has made ten times it value!’
‘Well done, you splendid servant!!’ he said. ‘You’ve been trustworthy with something small; now you can command ten cities.’
The second came and said, ‘Master, your money has made five times its value!’
‘You too – you can take charge of five cities.’
The other came and said, ‘Master, here is your money. I kept it wrapped in this handkerchief. You see, I was afraid, because you are a hard man: you profit where you made no investment, and you harvest what you didn’t sow.’
‘I’ll condemn you out of your own mouth, you wicked scoundrel of a servant!’ he replied. ‘So, you knew that I was a hard man, profiting where I didn’t invest and harvesting where I didn’t sow? So why didn’t you put my money with the bankers? Then I’d have had the interest when I got back!’
‘Take the money from him,’ he said to the bystanders, ‘and give it to the man who’s got it ten times over!’ (“Master,” they said to him, “he’s got ten times that already!”)
“Let me tell you: everyone who has will be given more; but if someone has nothing, even what he has will be taken from him…”
Stay healthy and profitable my friends!
The 10X Dance