Getting Poor on the Backs of the Rich

Our current administration and swarms of socialists for decades before it have repeated the dogma that the rich get rich on the backs of the poor. This fallacy deserves no place in genuine political discourse. In fact, the opposite will be true given the policies that come from such a premise – all of society will get poor on the backs of the ‘rich’ chained by government.

First off, if a rich person can only get rich by bilking the poor person, this implies that there is a finite amount of wealth in an economy. This defies all logic. There is an infinite amount of wealth because there are an infinite amount of ideas that can be converted into goods and services, the competition of which increases quality, decreases cost and spreads the wealth to all of society. The imagination of the entrepreneur is boundless, and the transformation of ideas to tangible wealth can only be constrained by taxes, regulations and the economic uncertainty generated by a political class responding to constituents who seek to use the law to benefit themselves at the cost of others.

Taking a step back, when those like Barack Obama speak about the “rich,” they never define who these heartless souls are. The term ‘rich’ as regards tax policy is a misnomer. It is the highest earners that are the rich; it is the highest earners in society that provide the disproportionate amount of wealth that the government forcibly takes and redistributes. This is not a static class. People can move from high income brackets to low income brackets at any time in a free economy. Only in a socialist economy do the rich stay rich and the poor stay poor at the whim of the political class, whereas in the free economy it is determined by how much society values one’s services.

Which brings us to the fact that when Obama and his comrades speak of the ‘rich’ in derisive terms, there is never any discussion of how the high earner becomes the high earner.

In a free economy, profitability is the reward for providing a good or service that people demand at a price that they deem fair. The market economy provides a testing ground where failure means bankruptcy. The political economy on the other hand effectively rewards bankruptcy as a populace reliant on gaining advantages by government decree pits all citizens against each other in plundering wealth creators. Politicians grant favors to a populace that demands it, and never pay the price unless they are voted out of office or the government defaults, which the government is implicitly admitting in its infinite money printing (i.e. “quantitative easing”) – it can’t service its debt so it can only reduce its value artificially by inflating it away. This of course at the cost of the savers and investors who finance real economic growth.

A society that functions under the faulty premise that wealth is a zero-sum game, that a market economy leads to static socioeconomic classes and that think wealth is created magically will naturally demand policies that preclude the producers in society from producing. The end result is that with less production comes less wealth, and increased poverty for all. The poor especially suffer when the wealth-generators lack the incentive to produce.

To briefly debunk another Marxist trope that the rich have gotten richer while the poor people have gotten poorer, a dubious statement to begin with given how many people’s fortunes have been eviscerated during the recent economic downturn, those hurt need only look at the government to blame. For it is government policy that breeds dependence, subsidizes incompetence and a lack of productiveness, distorts the market economy and decreases the wealth pie that would be distributed to everyone on the basis of merit in the marketplace, not political cunning. But the voters need look no further than themselves for this government, as people get the government they vote for. Additionally, one must remember that those entering the highest income bracket have increasingly done so as a direct result of government largess — these are the rich that are unfairly becoming rich due to our socialist transformation.

Underlying all discussions of wealth and its redistribution however have at their base the notion that we are our brother’s keeper — that it is morally right that someone else have a claim on our wealth before we earn it. We believe that government can provide services such as healthcare in a more equitable way than a free market economy, and that it is the proper role of government to determine how we plan our lives with respect to things like education and retirement. We are sowing the seeds of our own destruction by adhering to such a morally bankrupt and bankrupting philosophy.