Friday, October 10, 2008
The left gets what it wants: The narrowing distribution of wealth
The combined value of American stock markets has fallen by literally trillions of dollars in the last two weeks. Since the affluent -- the "rich" in the argot of the presidential campaign -- own most equities, they are disproportionately taking it in the shorts. Executive compensation, which mostly turns on share gains, will be sharply lower. Layoffs in the financial services industry will unceremoniously deport thousands of millionaires to the middle class. The percentage of our national wealth owned by the top 1% has almost certainly declined significantly in the last six weeks, and especially in the last two, and this may be only the beginning.
Narrowing the gap between the "rich" and everybody else has been a loud aspiration of the left for years, the only difference being they intended to achieve it through confiscatory taxation which they would convert into election-winning wealth transfers. Well, the left will win the next election by a wide margin (even if John McCain wins the presidency) and taxes will go up dramatically no matter who becomes president. So rather than raising taxes which would destroy wealth particularly at the top, fate -- and the madness of crowds -- has intervened to destroy the wealth first, after which we will raise taxes anyway. Is this not, more or less, what the left has been clamboring for, and is it not happening far faster than it ever could have been accomplished legislatively? Looked at this way, Barack Obama has won already.
5 Comments:
By 
Escort81, at
Fri Oct 10, 03:40:00 PM:
I don't know, is it as much fun for people who want to narrow or eliminate income and wealth gaps when the second part of the Robin Hood equation does not happen?
Isn't there a difference between:
1) Take from the rich and give to the poor
and
2) Take from the rich and give to a hole in the ground?
The effect may be the same in terms of the rich being closer to the poor and their balance sheet, but wealth has been destroyed, not redistributed. Does that actually produce the same kind of high for aggressive redistributionists?
(I should note that in a broad sense I don't have too much of a problem with a moderately progressive income tax structure, not too different than the one we have now, although less complexity would be good; very high confiscatory levels of taxation on wealth or income are another matter).
By TigerHawk, at
Fri Oct 10, 05:45:00 PM:
You are, of course, correct, but the left will not make that argument because it leads inexorably to the place they do not want to be: That it is the absolute condition of the poorest that matters, not their condition relative to the richest. Because if we get into an argument about the acceptable minimum wealth of poor people, we will then argument about whether the ownership of Nike shoes or a new television is "proof" of material sufficiency. The left does not want to go there, so it sticks to arguing the disparity point, not the absolute condition point. Well, it is quickly getting what it wants, insofar as the disparity between rich and middle class, at least, is closing rapidly.
By 
, at
Sat Oct 11, 01:50:00 AM:
That's still a ridiculous thing to say. Hard to know where to start with that. I read this site pretty regularly for good challenge to my beliefs, this is not one of them!
but thanks for the blog anyway :)
By , at
Sat Oct 11, 12:27:00 PM:
Anonymous (Sat Oct 11, 01:50:00 AM) said...
"That's still a ridiculous thing to say."
Is the ridiculous thing to say tigerhawk's statement:
"That it is the absolute condition of the poorest that matters, not their condition relative to the richest."
If so, I'd like to hear your thoughts even if it may be "Hard to know where to start with that".
By Andrew Hofer, at
Sun Oct 12, 11:00:00 AM:
"That's still a ridiculous thing to say...[no supporting argument given]"
I suppose there is no other possible reaction when the cognitive dissonance of one's own beliefs is exposed. Throw up your hands and run away.
Stock market and home equity wealth is almost exclusively in the top half of the income distribution. It just got wacked by trillions. Tada - gini coefficient is much better. Everybody feel good? Guess you forget those are the folks who provide jobs.
