Friday, March 7, 2014

A Modern American Myth -- The Inequality "Problem"

Inequality has risen in Russia.  Why?  Because, once upon a time, virtually all Russians lived at what Americans would define as the poverty level.  Now a large part of the Russian population lives well above the poverty level.  The average Russian is far, far better off today than 25 years ago, but inequality has risen.  One way to get back to the old "equality" is to reduce everyone back to poverty levels.  Then all can be equal in their poverty.

If you have a society of two people with no income and of them discovers a coconut tree and gathers coconuts, you have created great inequality.  So, destroy the coconut tree.  Then you can have true equality restored.  That seems to be the Obama Plan for the US economy.

The myth that the middle class is losing ground is artfully dispelled by today's Wall Street Journal piece by Professor Donald Boudreaux of George Mason University and his graduate student Liya Palagashvili. Check it out.  It turns out that the middle class in America has shrunk mainly because a huge number of middle class Americans have moved to a higher income level.  One way to return to the old level of "equality" is to hammer those folks back into the middle class by reducing their income.  Kill the coconut tree.

How do you kill the coconut tree?  Enact Dodd-Frank and Obamacare.  That should do the trick.  So far, so good for the Obama team.  If they reduce us all to poverty, then we will have true inequality.  Except, of course, for Obama and Lois Lerner and their friends.  They will live high while everyone else lives low.

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