Filed under: Economy, Health Care, Freedom, Democrat Corruption, Taxes, Capitalism, Immigration, Regulation
Democrats have seized on “Inequality”as the cause of the day. They have reached back for terminology to terms like “the Gilded Age,” a time of opulence in the 1800s when the flowering of the Industrial Age brought great wealth to entrepreneurs who built great houses reminiscent of the great houses of England, and married off their daughters to impoverished British nobility. My dowry for your title. Downton Abbey revisited. And they are certainly trying to paint the Koch brothers as the” Robber Barons” of our day. Harry Reid leads the charge, he’s even claiming these great philanthropists are “un-American.”
The attempt is to portray a hereditary American gentry that becomes ever richer, while the bast majority of Americans toil away in poverty. Makes a good political narrative, if you have no idea who the Koch brothers are. It can be used to advance anything from raising taxes to increasing the minimum wage. Trouble is, it just isn’t so. Inequality isn’t even at the highest level in recent American history.
Consumption that is, spending, for both the highest quintile and the lowest has been essentially flat over the last decades, indicating that there has been no increase in inequality. But the “Gilded Age” theme doesn’t work either. About 80 percent of American millionaires are the first generation in their family to reach that status. Only 19 percent receive any significant income or wealth from a trust fund or estate, and fewer than 20 percent inherited 10 percent or more of their wealth. For the richest percent inheritance accounts for just 15 percent of their wealth, which may be a big chunk of money, but, clearly most of the rich earn their own wealth.
Income from wages is responsible for a majority of the net worth of wealthy Americans. Not much landed gentry here. The financial smarts needed to put together a fortune are not an inherited characteristic, and most fortunes wither away through a generation or two.
On the other hand, for all his talk about inequality, the poor have lost ground under Obama administration policies. Some did get free phones. About 50 million Americans live under the poverty line, which the federal government defined in 2012 as an annual income of $23,492 for a family of four. President Obama’s anti-poverty efforts have been “basically to give more people more free stuff.”
Fifty years after President Lyndon Johnson began a $20 trillion taxpayer-funded war on poverty, the overall percentage of impoverished people in the U.S. has declined only 2 percent. Mr. Obama doesn’t plan to commemorate the 50th anniversary of Johnson’s 1964 speech, which gave rise to Medicaid, Head Start and a broad range of federal anti-poverty programs. Johnson’s goal was to make people prosperous and self-sufficient.
A record 47 million Americans receive food stamps, about 13 million more than when Obama took office. The president is pushing for a higher minimum wage, ignoring the need for business to be willing to take on the expense of hiring beginners, who don’t know anything and must be trained. He is also ignoring the gradual mechanization of tasks that formerly went to beginners. His advocates believe that raising the minimum wage will make people less dependent on government programs, will not add to the deficit, and reward work— thus reducing poverty. To reward work, you first have to increase the number of jobs. Cutting jobs in half by forcing employers to pay for health insurance for anyone working 30 hours or more isn’t really helping, it’s just reducing everyone’s hours.
More American are completing high school, and more women are working outside the home, but the number of households led by single parents has tripled. When the War on Poverty began, about 6 percent of children were born outside of marriage. Today that is 42 percent and a catastrophe.
Perhaps we need to try encouraging business with fewer regulations, lower taxes, and fewer bright ideas from bureaucrats about how businesses should be run. They might start hiring and expanding. Getting rid of unnecessary SWAT teams might be a start. I haven’t read yet of a SWAT team that has been confronted by an armed office staff. A growing economy lifts all boats — Jack Kennedy said that, but Johnson didn’t heed the lesson.
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