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    “Take” and “grow” are two different things

    “Take” and “grow” are two different things

    Kathleen


    Vanity Fair, to which I begrudgingly subscribe (anything that keeps Hitchens on a payroll can’t be that bad, right?), brought my blood to a boil this morning when I read their latest article on ‘inequality.’

    Here’s the gist:
    “Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few. Yet in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income – an inequality even the wealthy will come to regret.”

    Hmmm. Okay Mr. Stiglitz, let’s think about this one:
    • Even if the top one percent made/earned (“take”? take from who, exactly?) 25% of the nation’s “income,” in 2008 the top 1 percent of tax returns paid 38.0 percent of all federal individual income taxes.
    • Since when has economics been a zero sum game?
    • Stiglitz makes a thinly-veiled comparison between the wealthiest Americans to oligarchs in Russia. I would compare the US government to a dilapidated playground that puts it in their favor, but I see no reason to condemn people playing by the faulty institutions that have been developed. Corporatism, rent-seeking, and other elements pervert the income of the top, but it is also hard to say if people in the bottom 1% deserve so much wealth when everyone earns it in a context of a far from perfect free market.
    • Lowering tax rates on capital gains promotes investment. When people know they will yield more from an investment, they will be inclined to make more.
    • Wait, I think someone covered this already…

    Clearly there is much more to say. Everyone is welcome to contribute their observations…

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    Comments


    There has never been a nation with equality of income, nor will there ever be.

    I am considered wealthy by most, and no doubt resented for it by many who are less wealthy. Most of them are strangers to me, I guess. I didn't see them nearby when I went to work full time at age 16. I guess they continued on in school. Nor did I see them around when I went on to work at least 55-60 hours per week for the next decade, building seed money for a planned business adventure. Perhaps they went home the instant they could. My resenters were likewise no where to be found once I began my business, probably because I found few willing to work 12 hour days, 7 days a week, for months on end. Could be I missed these folks because they were off on vacation while I went 10 years without a vacation, working, building, and growing my business. Well, now I'm 55 and retired, very comfortably, thank you, and I'm remaining still long enough to finally meet some of my detractors, those who fully believe the wealth I have came to me only at their expense, and that I ought to hand a chunk of it over as soon as possible. I struggle to understand this, and so far, not one lefty I've asked has been able to explain it either. This inability failed to impel them to drop the belief. Odd that.

    I am amazed so many otherwise intelligent lefties do not have the barest grasp of the fact that wealth is created, not 'taken' from some finite community general fund. Their anger is prompted by the wrongheaded belief that one becomes wealthy only by stealing it from another. Surely the progressive leadership understands this, so it must be that this stupid idea is promoted as pure propaganda, a way to keep the less than affluent leftist based angry and ready for 'change', aka wealth redistribution. If one believes one is *owed* the money currently belonging to a hated Wealthy Person, it becomes very easy to justify just about any action employed to take it.

    Everyone needs to remember that government, any government, is a net consumer of productivity…someone, somewhere has to produce something of value in order for the government to receive anything.

    1. For about an hour, I've been walking around my house, doing routine tasks and trying to think of a coherent comment on Stiglitz's piece. It finally dawned on me that a coherent comment on something utterly incoherent is not possible.

    2. Afaic America has developed serious systemic flaws in which counterproductive incentives play a major role. Beyond that, I haven't seen a convincing diagnosis let alone a plausible prescription.


     
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    directorblue | April 10, 2011 at 9:46 pm

    I'd like to think I addressed Mr. Stiglitz in my whimsically titled "Schmuck With a Pen.

    The unstated implication of the wealth disparity trope is that the rich spend all their money on booze and broads. The glitzy Hollywood liberals are the poster boys. I've been hearing the same theme for more than 60 years. You'd think that with all their intellectual firepower they could revise the 1932 playbook.


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