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Analysis: Democrats’ redistributionist agenda will hurt the world

Analysis: Democrats’ redistributionist agenda will hurt the world

Radical Idea: Grow the pie rather than worrying about carving up the pie we have.

Well here’s something different.

As Netroots Nation cries out for income and wealth distribution and props up the class warrior Elizabeth Warren to cult status, some careful economic analysis finds that income inequality is decreasing globally and that redistribution in the U.S. would hurt the developing world.

In an Op-Ed in The NY Times, George Mason Univ. economist Tyler Cowan writes, Income Inequality Is Not Rising Globally. It’s Falling:

Income inequality has surged as a political and economic issue, but the numbers don’t show that inequality is rising from a global perspective. Yes, the problem has become more acute within most individual nations, yet income inequality for the world as a whole has been falling for most of the last 20 years. It’s a fact that hasn’t been noted often enough.

The finding comes from a recent investigation by Christoph Lakner, a consultant at the World Bank, and Branko Milanovic, senior scholar at the Luxembourg Income Study Center. And while such a framing may sound startling at first, it should be intuitive upon reflection. The economic surges of China, India and some other nations have been among the most egalitarian developments in history….

The message from groups like Occupy Wall Street has been that inequality is up and that capitalism is failing us. A more correct and nuanced message is this: Although significant economic problems remain, we have been living in equalizing times for the world — a change that has been largely for the good. That may not make for convincing sloganeering, but it’s the truth.

That has important implications for domestic policy, Cowen continues:

Many egalitarians push for policies to redistribute some income within nations, including the United States. That’s worth considering, but with a cautionary note. Such initiatives will prove more beneficial on the global level if there is more wealth to redistribute.

In the United States, greater wealth would maintain the nation’s ability to invest abroad, buy foreign products, absorb immigrants and generate innovation, with significant benefit for global income and equality.

In other words, the true egalitarian should follow the economist’s inclination to seek wealth-maximizing policies, and that means worrying less about inequality within the nation.

Trying to grow the pie rather than obsessing with dividing the pie we have.

What a radical idea. To your 2014 Democratic Party.


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So glad you did this post. Everywhere I look these days I am running into mentions of ‘distributed capitalism’ or economic democracy. Push Buffalo just put this report up of its Economic Democracy Summit at MIT.

All this language about creating “a new economic pie” or “democracy is the logical driver to revolutionize everything else” from people who have spent their adult lives sucking from the teat of taxpayer money or the nontaxed foundation’s endowments. They are literally breaking everything that has created prosperity in the past while insisting we can just redesign society.

Dangerous times. Bad ideas.

But unfortunately still quite influential.

As I’ve noted many times, individual INCOME per year is a false measure of much of anything. If you are in business for yourself, you may suffer many years of lean to see one fat year.

The only proper measure is STANDARD OF LIVING. Which, under the Obamic Decline as been…well…declining for most Americans. This is a violation of the norm.

But it is totally consistent with the Collectivist war on the middle-class, which, in turn, is totally consistent with fascist economic models. The ones that Baracula and Princess Running Bare love.

Does it matter to you that Bill Gates has kibbillions of dollars if you can eat pretty much what he does day-to-day? Or does it matter that food inflation is leaving you in a quandary about being able to afford some bacon?

    Chem_Geek in reply to Ragspierre. | July 21, 2014 at 12:30 pm

    Wrong. The BSD 1%er MBA CEO Managers are the ones trying to eliminate the middle class.

    Warren Buffett — ‘There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.’

Warren and the Dems ate the pie They now have Celiac Disease. is what led me to what I linked above. Note this economic model is only viable as long as taxpayer monies flow from elsewhere.

Rags is right. Few understand that state capitalism or mercantilism are not what brought silk stockings within reach of the masses.

Read economic historian Deirdre McCloskey’s great work on what she calls the Great Fact of what capitalism in its noncronyistic forms did for the poorest of us.

    Midwest Rhino in reply to Robin. | July 19, 2014 at 7:53 pm

    thanks … I looked a little and found this article on that. And she has a few books.

    That something else is what McCloskey calls “the Bourgeois Revaluation.” Only when merchants, tinkerers and practical seekers of profit in markets came to be respected — and to be widely spoken of with respect, even with admiration — did the social status of the bourgeoisie increase enough to make membership in that group desirable to large numbers of people. And when this Bourgeois Revaluation happened, innovation skyrocketed.

    It’s this innovation — mad, fevered, historically off-the-charts amounts of innovation — that really is what we today call “capitalism.”

    Obama’s preferred revaluation is based on race and political correctness. Warren’s is on “you did not build that”, or “I am Cherokee woman, hear me roar”.

    “We will defeat Hobby Lobby’s right to hold belief not condoned by government. We MUST force them to fund ALL forms of birth control.” That is the new age of entitlement to control others, certainly not any enlightenment.

Of course the “inequality” of outcomes is a bogus boogeyman, as clearly evidenced by the fact that the average “poor” person in the US would be considered rich in most of the world. The average family under the poverty line has more than one television, cable service, internet access, more than 70% have air conditioning and half own more than one auto.

But the idea of “growing the pie” has ALWAYS been flatly rejected by the redistributionists/Marxists. Their concern is never how much one gets, but instead one’s relative share of the pie. We could give all the poor Obama voters Cadillacs and mansions, but the Left would still be unhappy if Bill Gates has a private jet.

Tell me this, Progressives: What happens in a society that steals from the producers to reward the non-producers?

    Chem_Geek in reply to Redneck Law. | July 21, 2014 at 12:32 pm

    You get this society, where the workers are teated worse than dogs and the BSD 1%er MBA CEO Managers steal 300 times what they deign to let the workers, the people who actually create value, keep.

    Defend that, thief.

At Nutroots Convention, Warren announced the recipe for the pie will be in Pow Wow Chow II.

Midwest Rhino | July 19, 2014 at 7:00 pm

And why go back just 20 years … why not start in 1776, or maybe the start of the industrial revolution. Life had been brutal for the common man. Harsh factory conditions still offered a step up from cold and starvation faced by most.

Henry’s Ford and the internal combustion engine, a capitalist venture that made some filthy rich, still served that vaunted “greater good”. Ford decided to mass produce, to give the forty hour work week (as it was more productive). Ford wanted average Joe to be his customer, and soon ordinary farmers were all driving cars to town. Mass production and the marginal unit economics, floated all boats, and we didn’t have to steal resources from anyone to do it.

But our socialist government bureaucrats are instead incentivized by shredding veterans appointment requests, defrauding us with junk mortgage bonds sold as AAA, creating job security through tenure rather than productivity and excellence, or with IRS agents attacking conservatives to maintain the fascist stranglehold on the productive.

The contrast is so obvious. Production versus “you didn’t build that”. But it’s good some academics are making the argument, thinking globally, I suppose. 🙂

    Chem_Geek in reply to Midwest Rhino. | July 21, 2014 at 12:28 pm

    I’m glad you brought up Ford. He is the antithesis to today’s BSD 1%er MBA CEO Managers. Ford raised wages; today’s capitalists cut wages. Ford cut working hours; today’s capitalists increase working hours. Ford insourced; today’s capitalists outsource.

    In other words, Henry Ford would not fit in today. He realized that he didn’t build it; his workers did.

    Chem_Geek in reply to Midwest Rhino. | July 21, 2014 at 12:33 pm

    You claim that it was the GOVERNMENT that “defrauded us with junk mortgage bonds sold as AAA”? You’re really out of touch. It was BSD 1%er MBA CEO Bankster Managers who did THAT.

Redistributive change (aka recycled change) is limited by finitely available and accessible resources and constrained by its propensity to sponsor corruption. It does, however, offer comfort to people who dream of instant or immediate gratification, and can create an illusion of success. It’s mandatory in areas with overpopulation which suffer from structural inequality. It is, not coincidentally, accompanied by other efforts to reduce the problem set, including abortion/murder or the euphemistic family “planning”. The actual issue is cost of living and a uniform morality (i.e. religion).

Progressivist agenda meet major vehicle.

Unfortunately it’s all built on governmental transfers. Not exactly a sustainable model.

Income inequality is a false flag waved by socialist-redistributionists.

Just as with the global warming hoax, income inequality as a universal‘social justice’ mantra makes everyone in the world a victim.

Politicians, ‘social agenda’ oligarchs and the international ‘do-gooders’ pay others to create fear mongering – much like the paid/tenured/grant-awarded global warming scientists who ‘cooked the books’ to create global warming.

The above socialist’s cabal needs willing low information victims to join their crusade. With lemmings in tow it is then an easy power grab. Those in power can then coerce money from wallets everywhere. Yet, in doing so, THEY create income inequality.

That is the main purpose of a union these days: gather ‘victims’ into the fold so as to “fight the ‘man’.” “Hand us your money and we will do battle against the‘injustice’ of the ‘rigged’ system.” The deceit is compunded with the likes of Elizabeth Warren the poster child of a Grapes-of-Wrath-animus-driven-low-information class warfare.

In a growing and dynamic world economy income inequality can and should be expected. It means among other things that good things are happening. People are thriving, moving forward.

In stagnant low information Krugman type economies Stagnation and its bedfellows Socialism, Egalitarianism and Going-Nowhere-Nihilism dusts off Keynesian policies to try and stir up ‘things’. But again, these policies lead to disproportionate income inequality, e.g, our current U.S. economy and the gap between the very poor and the very rich; the middleclass suffers the most.

Income inequality is also very dependent on where you live, whether-in a resource rich area or a desert and also on how you live. For example: squandering money on Solyndra money laundering projects, on bailouts, on $44 BN POTUS trips, etc. and also on what you do with what knowledge you have – buy lottery tickets, dope and malt liquor or invest in your future. (Don’t forget! Charity can only happen if you haven’t squandered your money.)

More important than capital transfers is the transfer of knowledge.

Another example: Warren Buffet and other successful investors know the companies they invest in before diving in with their capital. Being knowledgeable and using that knowledge to grow your pie also allows one to be charitable.

Obama, on the other hand, doesn’t want you to have knowledge transferred to you. He, without you knowing, will dive in with taxpayer money to gain political leverage for himself. ‘But then you already knew this.

Humphrey's Executor | July 20, 2014 at 8:26 am

One example of the counter-productive effect of Warren’s vision: Local banks are disappearing. With more and more regulation, they lack the economies of scale to compete. Its a great way to funneling wealth into fewer hands.

PersonFromPorlock | July 20, 2014 at 8:28 am

It isn’t patriotism that’s the last refuge of scoundrels, it’s principles. Politics has become purely and simply about who controls the gravy train, and the more politicians talk about principles, the faster we should count our spoons.