Wealth Creation & Distribution – A Progressive’s View

Ben Emery

[Editor:  This piece by Mr Ben Emery evolved from a thread in the comment stream to ‘Progressive Radio – the Dangerfield of the airwaves’.  There Mr Emery posted and extended response to my 909pm comment which appears below.

BenE 807pm - It reappears that you and yours believe that the amount of wealth on earth is fixed, and humans live to just redistribute that wealth in a grim zero sum contest with the winners being those who can unjustly take it from the losers. You don't see 'jobs' which can add enormously to man's aggregate wealth, in the process increasing the QoL for millions (billions?), and then taking a small fraction of that for themselves. That small fraction will still cause great inequality, and that to you is the injustice that we cannot countenance while some in the world are still suffering. It is better that no such new wealth is created, it is better that we all stay at some previous lower but more equal QoL level. That is probably what you all call 'social justice'.
Under this (to me horrible) ideology one person here, who creates nothing, should be empowered to define what is the proper level of risk and reward for another person there, one who wants to create wealth and a better life on earth for all in reach of that new creation. And if all cannot share equally in the new creation, then none should share in it.
Does this understanding provide you with an inkling of why we are so polarized, and why the likelihood of a Great Divide increases by the day?
Posted by: George Rebane | 11 February 2013 at 09:09 PM

Since wealth and its distribution was a thread somewhat afield from the topic of progressive radio, and worthy of discussion on its own merits, I invited Mr Emery to draft his comments into a response that could be published as a single piece, and serve as a dedicated forum for its discussion and debate.  With minor edits to promote clarity, that piece appears in the following.  Nothing has been removed from the original comment stream where the preamble to this post remains intact.  gjr]

George,

Now to address your 909pm comment.

No I don’t see wealth as fixed, I see wealth as created by the labor of one’s intellect or physical time and energy.  I, like most people in my camp, don’t see a problem with those who take financial risk to take a bigger chunk of the pie.  As many studies have shown, an income ratio of 5:1 creates a functional economy and society.  That is $5 for every $1 between the top quintile and the bottom quintile. In the US that ratio is around 14:1, we are just behind the Ivory Coast in this category.  Now this ratio paints a picture that isn’t even close to what the real story is in the US. The top quintile is the top 20% of income either earned or unearned. In the US the top quintile controls 93% of the wealth. Within the top quintile the top 1% controls 40% of the total wealth. From 1980 to 2009 83% of economic gains in the US were taken in by the top 1% and even that is misleading because it is the top 0.5% that a vast majority of those gains. In 2010 alone over 90% of economic gains went to the top 1% with the same reality as the other statistic.

Now here are the two big lies corporatists like yourself like to tell. 1) Job creators are the wealthy. 2) Those who have accumulated great wealth are the productive members of our nation while those who created that wealth are the takers. Both of these are false and I will start with the latter because it is debunked with a single sentence.  Wealth is created by the labor of a person’s intellect or physical body.

Accumulating huge sums of wealth based on other people's labor is theft if those laborers aren't justly compensated with a living wage for full time work in humane working conditions.  If those laborers are compensated with a living wage for full time work with humane work conditions, then that accumulation is justified, but should have the incentive to reinvest back into the economy after a very high threshold is surpassed, e.g. $2-3 million annually.

The way jobs are created is not by wealthy people, but (through) an increase in demand.  Demand is created by average workers’ wages. The more workers have to spend in the economy the more demand that is created, since they spend 99% of their incomes.  Spending by consumers equates to 70% of all economic activity in the US.

I did a little calculation on median personal income, note it is not household income.  Adjusted for inflation $1 in 1980 is equal to in spending power or adjusted for inflation to $2.80 in 2012. The median personal income of 1980 was $19,600, which should equal to inflation adjusted dollars to $54,600.  Remember in 1980 it was personal income as in a single individual in the workforce and today it is calculated at household incomes, which includes many if not most households with two or more incomes.  In 2011 the median personal income was somewhere around $27,000, and median household income was around $49,000.  The $5,000 difference from the inflation adjusted income of $54,000 is probably the $0.75 on the $1.00 women make to men for equal work.

I can go into tons of statistics and studies but I know that doesn’t matter because we can pull that stuff from any angle to prove our points. The numbers I used above are just straight forward.

Now for the last point of Bill Gates, a single individual, (who) through his unethical business of Microsoft has accumulated $65,000,000,000 over a 30-year period.  First Bill Gates bought the rights to a system that created MS-DOS system.  Second no inventor or innovator came up with their idea alone; they built on the thousands of ideas that came before them,  so the patent laws are written for those wealthy enough to purchase competition/ new technology or inventions to reap all the benefits for long term gains or to keep them off the market.  So many of these inventions came from public research and investment, which makes the tax dodging behavior even more egregious.

If Bill Gates kept manufacturing in the US paying $20 plus benefits, his total worth might by only $20-$30 billion, but the US would have blue collar workers spending earned money into the economy instead of borrowed money with interest, thus giving banks more and more power. But Gates and Microsoft decided to go into the modern day slave business instead.  It is not only Microsoft, but they are a microcosm of what large transnational corporations have become. There are thousands of stories like this going on around the world about worker exploitation, unsafe working conditions, anti-trust violations, and environmental nightmares. Three different continents, same type of behavior.
 
China - ‘Hundreds Threaten Suicide At Microsoft Supplier Plant In China.’
http://seattle.cbslocal.com/2012/01/10/hundreds-threaten-suicide-at-microsoft-supplier-plant-in-china/

Europe - ‘EU fines Microsoft record $1.4B’
http://news.bbc.co.uk/2/hi/business/7266629.stm

US - ‘Judges Conclusion: MS Guilty’
http://www.wired.com/politics/law/news/2000/04/35378

Comments

[George Rebane]

So much to respond to Ben, but thank your for putting it all together. To kick things off, here are a couple of points.

You attribute to me the two "corporatist lies", I have maintained neither of them. But I do maintain that a poor person creates no job, but instead a need that someone else (perhaps a job creator) can and/or should fulfill.

"Accumulating huge sums of wealth based on other people's labor is theft if those laborers aren't justly compensated with a living wage for full time work in humane working conditions." This appears as something you would charge is fundamentalist theology, were it to originate from another quarter. Who deigns to define the thresholds of 'just compensation' and 'living wage' and 'humane working conditions'?

"The way jobs are created is not by wealthy people, but (through) an increase in demand. Demand is created by average workers’ wages. ..." Who created the demand for the telegraph, Coca-Cola, the hula hoop, Kentucky Fried Chicken, big box stores, the personal computer, the Kleenex, the Black-Sholes option pricing model, ...?

This should get us started, I'll stop for now.

[Videodrone]

while I'm not in the rarefied economic ivory tower and can't throw about grand economic theories (besides as a practical sort - to me, towers are where you stick the antenna!) I can only offer plan speak

'just compensation' + 'living wage' gives us public service unions that provide little for a lot of $'s - if you are assured some acceptable minimum and there is no other incentive - it also assumes that there is some magic pot of cash that can cover any short fall, nice gig if you can get it and can stomach it.

let's see, do I want to be a drone doing the minimum to get by and getting what someone else decides is 'just and Living' or if I finish this project to the satisfaction of the customer I can move on to the next ones - which one is going to lead to wealth creation?

besides what no one else seems to want to say; "WHO THE HELL ARE YOU to tell me how much of what I earn is yours?"

[Steve Enos]

"The way jobs are created is not by wealthy people, but (through) an increase in demand. Demand is created by average workers’ wages..."

Remember that Henry Ford and the start of Ford Auto did both of the above at the same time. Ford held the position that increased wages and even shorter working days/hours would allow his workers to buy one of the cars they were making, which is how it worked out. Ford thought it good for his workers to spend more time with their families and keeping their homes and personal lives in order.

So in the case of Ford we had a wealthy person (a very hard working, very smart, self made man) that raised his workers wages and shortened their hours over the objections of other business folks.

But Henry Ford had this as part of his larger and very robust social engineering plan he carried out. Henry Ford did a LOT of social engineering and he was VERY invasive into the lives and lifestyles of Ford workers for their "own good". Ford had hard line standards of conduct for his workers and their families. He did things like regular inspections of their homes and home life, which were mostly built and owned by Ford.

The full picture of what Ford did is interesting. It was social engineering combined with business, undertaken by a wealthy guy that created jobs and opportunity for many.

[George Rebane]

I bear a sad message. A mutual friend called me tonight to say that long time RR reader and commenter Mr Dave King passed away three days ago. I did not know Dave outside these pages. From his comments it was apparent that he had a technical background which turned out to be true. Dave King was a software engineer whose career included having operational charge of the aircraft software systems for the U-2 squadron based at Beale AFB. We will miss his insights and anecdotes. RIP.

[Ben Emery]

" Who created the demand for the telegraph, Coca-Cola, the hula hoop, Kentucky Fried Chicken, big box stores, the personal computer, the Kleenex, the Black-Sholes option pricing model, ...?

The average working class person who purchased the products in great numbers created the demand. That is why we so those items are in just about every household in America while only a small few people comparatively have yachts.

[Ben Emery]

How I can mess up a two sentence comment is beyond me but I got other things on my mind.
Should read "That is why so many of those items are found in every household"

[George Rebane]

BenE 904pm - what you don't seem to realize is the entrepreneurial process which requires that the entrepreneur has to lead by taking time out of his life and investing up front monies before the product or service even comes into being. That is all real risk because it also often involves his health, his relationship with his family, friends, secure job, etc, etc.

Your average working class person doesn't have a clue about either the product or his desire for it that must be built into a sustainable market demand. All that has to be developed up front, and then appropriately sold to him so that he can understand the benefits of something that never before existed. The progressive is totally blind to this part of economics, and the risk and hardship it entails. And this blindness is what makes liberals like Obama and Warren utter such butt stupid remarks as "You didn't build that."

When I as an entrepreneur don't build that, you as a liberal wind up with a USSR, Cuba, or North Korea.

[Ben Emery]

George,
My wife and I owned and operated a deli/ ice cream shop so I understand the difference between the time invested between an owner and employee. But at the same time we also understood treating our employees with respect and just compensation was the best policy for the business s well. When we sold the business our employees didn't receive a dime of the money so the original monetary investment was paid back. What you don't seem accept, without labor their is no wealth being created. Our business was open from 10am - midnight seven days a week. We hired people to maximize our ability to serve people our product because it would allow us to create more wealth. Two people working those hours by themselves wouldn't have been good for business and would have limited the amount of goods and services we could have put out. When we would get 10,000 people in town for a weekend festival the two owners working by themselves could have only handled a very small fraction of what the potential volume could have been. We would have up to 15 - 20 employees during the summer months, the number depended on how many were full time vs part time. This is where you don't get it, without the employees making us more money than we paid out they wouldn't have been hired. The only reason we hired more people in the summers was because we had more volume. Here is the ironic part of the story. We lived in a destination ski town where the wealthy came to play in the winters, our volume dropped dramatically with the wealthy people in town and we boomed during the summers when average working class camping, hiking, and festival crowds came to town. Why? Because the more people having money to spend in an economy the entire economy does better. Businesses did better when more people came to town with less money to spend than a smaller number with virtually unlimited amounts of money to spend. Economics 101

Trickle Down, Reaganomics, Chicago School, Austrian Economics have all failed miserably while Demand Side Economics has proven itself the most stable and equitable macro economic system.

[Gregory]

"This is where you don't get it, without the employees making us more money than we paid out they wouldn't have been hired."

Ben, why you think anyone outside of Congress, including George, doesn't 'get that'?

[Gerry Fedor]

I'm just trying to understand this basis for the redistribution concept.

If you look at the poorest states, and the ones that receive the most food stamps, the most welfare, the most unemployment and the most federal support they are predominantly Republican based states. So just how does the Republican's multi-billion dollar senior management "team" represent this group in a fair and accurate way?

So maybe I'm unaware, but if the Democratic party and their constituents (who pay more in Federal and State income takes, and take less from the pool) were looking to redistribute the wealth, how exactly does this work?

It really sounds like the Republican party needs to continually re-evaluate their position as I really want to understand this (I have a Masters Degree, so I'm hoping I could fathom these concepts), but these ideas (when you look at them with a critical eye) don't seem have much if any validity. If you want to say that the Republican's management group want to make arguments that they will be losing their income then I tend to agree, but otherwise......?

[George Rebane]

GerryF 834am - to properly respond to you, could you please point us to your source(s)? Thanks.

[TheMikeyMcD]

I hold that economics has laws just like science (think Newton's Laws). Within the terms supply and demand, elasticity, economies of scale, Laffer Curve, etc are not opinions, they are foundational 'laws' of economics.

Very few products come as a result of demand (the risking entrepreneur must 'think' that their could be demand at a certain price). Stating "Demand is created by average workers’ wages" as fact is irresponsible. If Henry Ford gave people what they demanded he would have made a better buggy. Instead he risked all to create (at the right price) a NEW product which he had to market (i.e. create demand) and fend off competition. It is through wages that a market exists. But, wages do not guarantee demand for all products.

The foundation of the progressive worldview is that wealth is fixed (Ben's use of "Pie" confirms this), the average man is not smart enough to function without the help of elitists, entrepreneurial risks pale in comparison to the rewards (losers are ignored and the few successful are villified) and a godlike (selfless, honorable, fair) central planning beauracracy is required for equality and justice.

Job creators are the risk takers. The really good risk takers are rewarded substancially. The small fraction of really good risk takers encourages other risk takers. This is how we get coca cola, air conditioning, medical treatments, etc. Take away the possibility of success and you take away the pie for everyone.

[Ryan Mount]

This chart says it all George. Please sort by all Federal spending *per capita* per State to reveal the top "States" are:

- District of Columbia
- Virgina
- Alaska
- Maryland
- New Mexico
- Hawaii
- North Dakota

http://en.wikipedia.org/wiki/Federal_taxation_and_spending_by_state#Table_of_Federal_Taxation_and_Spending_by_State

It's not as simple as Red State vs. Blue State as some would like to believe.

[George Rebane]

RyanM 1004am - thanks for the chart Ryan. My problem with it is how the 'spending' category is defined to include 'procurements', 'retirement', etc. For example, government procurements are not transfer payments, nor are SS payments since they are earned retirement distributions according to our government (remember the famous 'SS trust fund' that the libs claim makes worrying about the solvency of SS a conservative red herring?).

[Ryan Mount]

> how the 'spending' category is defined to include 'procurements', 'retirement', etc.

Those are legitimate criticisms, which underscore how difficult it is to generalize on such things in non-partisan ways. But I find notable exception in the Federal government "States" of Maryland and Washing DC auspicious.

[Ben Emery]

Greg,
""This is where you don't get it, without the employees making us more money than we paid out they wouldn't have been hired."

"Ben, why you think anyone outside of Congress, including George, doesn't 'get that'?"

Many reasons give me that impression.

The lack of respect for workers, their rights, and their ability to have a say in their work conditions makes me think it. George has told me straight up he wants American workers to compete with third world labor.

The other is the false mantra of "Job Creators" and then Mickey claiming "Job creators are the risk takers." Without consumers of a product or service there is no demand that would sustain a business. I could risk everything on a service or product nobody has a use for and it would result it failure.

[Brad Croul]

"The wealthy create jobs, so, if we tax them, they will not create more jobs."

This might be true if you consider the wealthy as a very greedy bunch of business owners. If you increase the taxes on the greedy CEOs, and they don't want their incomes to go down, they might lay off people and cut back in other areas to make up the difference.

I think most businesses are started by entrepreneurs with an idea, often in a garage, on a shoestring, maybe with a loan.

[Walt]

By Ben's logic, the homeless camp should have people waiting in line
for a high paying job, since "rich people" don't create those jobs.
Government workers really don't contribute to the "tax pool". they take FROM it.
Real tax money only comes from the private world. Right now, public workers make more than the private workers. Can you say, Bass Ackwards? But they still want MORE.
Like the wicked witch of the West claimed. " We don't have a spending problem. just a paying problem". She sounds like a crack addict. This time is Jones'n for money, power, and control.
Now we have LIBS out there saying "we are not broke." ( Really?)
Now the LIBS are looking at any way possible to relive us of what money we have left. The rumors of Gov. going after 401K money, because "it's just sitting there" have bubbled to the top once again.

[Gregory]

Ben, you're stuck in a common loop... 'these guys must think A, because they're not thinking B'.

"The lack of respect for workers, their rights, and their ability to have a say in their work conditions makes me think it. George has told me straight up he wants American workers to compete with third world labor."

Ben, we have competed with third world labor over the last 150 years, but our competitive advantages, including infrastructure, a domestic market, a skilled workforce and ready access to capital markets meant that we were competitive except for the most labor intensive manufacturing and farming jobs.

You seem to think "supply side" and "demand side" are two different schools of economic thought. They aren't. They're political foci.

"Trickle Down, Reaganomics, Chicago School, Austrian Economics have all failed miserably while Demand Side Economics has proven itself the most stable and equitable macro economic system."

Nonsense. "Trickle down" is merely a leftist caricature of free markets that never existed. If anything, the rich get rich by trickle up. Hearst got rich making pennies per newspaper, selling a lot of newspapers to a lot of people. Heintz made a bundle making pennies on bottles of catsup. Apple made a bundle by getting multitudes of the stylish and silly to overspend on cool. "Reaganomics" was just a name for a political program that, say what you want, worked. And the Austrian and Chicago schools of economics are alive and living.

A focus on "Demand side" has been tried. Read up on Cargo Cults. Doesn't work.

[Walt]

Speaking of "demand" There will be a few states "demanding" we turn over our "black guns", so THEY can use them. Several gun makers have just returned fire against those states. If the citizen can't own it, they will not sell it to any agency within said state. They are canceling those gun orders from those states. ( starting with N.Y. and expanding to any state that passes anti black gun laws.) No parts, no repairs. The count is up to three major makers, and growing. There is no law stating they MUST sell to state governments.

How will that sit with Ben? Business picking and choosing who they sell to, and why? ( This should be good....)

[Walt]

Princess Nan said it one way, Now Harkin says it a little differently.
Still with the idea that all money is government property.

"Well look at it this way, we’re the richest nation in the history of the world. We are now the richest nation in the world.

We have the highest per capita income of any major nation. That kind of begs the question, doesn’t it? If we’re so rich, why are we so broke? Is it a spending problem?

No, it’s because we have a misallocation of capital, a misallocation of wealth."

Libs like Ben love to attack Conservatives for their "love of wealth"
and think we should just willingly hand it over.
How come we never hear Ben and friends attacking Soros and Immelt of GE fame and fortune, for their huge wallets and tax evatio....breaks.
Then of course there is Gore selling out to that dirty oil. ( again,,, not a peep)

[George Rebane]

Tack this on your wall - when American workers no longer have to compete with the global labor market, misery and war will rule the land.

[Dixon Cruickshank]

But when Ford came out with his new cars what happened to the buggy makers that couldn't compete with the car?

Here is an example = the Detroit Fire Dept still has on staff a Blacks Smith, how long do you suppose they haven't used horses? I forget the exact dates but the guy seemed like he knew it was stupid

[Gerry Fedor]

George R 6:28 - When American workers no longer have to compete.....?

Sorry George, but your American worker mantra seems to be be based upon the wrong idea when it's been shown that the cheapest labor market will dictate much of what happens with the American labor workers paycheck.

I find it rather interesting now that people in China are demanding (and getting) a larger paycheck as well as those obsolete things like health-care, and that many manufacturers are starting to realize that having a better educated workforce is a better thing than just a body with two arms.

Now there are exceptions to that rule (as you don't been a Masters or Doctorate to install wheels on a wheelbarrow) but there has been a small but increasing return back to the US (shipping costs also play into this game too) for many of those who went off-shore are seeing that their dollars are better spent at home.

[George Rebane]

GerryF 726am - Am confused about the reason for your sorrow. What hill are defending re the American worker, most certainly not the proposition I made in my 628pm?

[TheMikeyMcD]

Ben, the more I read/study your post and the comment stream the more assured I am of the need for a great divide.
Your emotion-based opinion of how economics works and the desire to have a deity-like central planning agency to manipulate, control, regulate, confiscate to meet an incalculable ‘justice or equality’ index cannot jive with the realities of real world economics and the desire of many for individual liberty.
The value structure of our society has deteriorated past a tipping point. Given the pathetic state of our educational system, our welfare system, our justice system, socialized financial system, agricultural system, etc our values have no chance of returning to the Puritan work ethic, self-reliant, faith based value system that made America great. Review the progressive tax system, excessive government debt and the failures of the Federal Reserve to see how vile our (progressive) value system is today. Our tax system allows for a mob to vote to steal from a minority. Our federal government has accumulated over $16.5 Trillion in debt which will be passed on to future generations. And since the Federal Reserve Act the value of $1 has fallen to 5 cents (fiat). In each case it is the intention/actions of central planners that provide for such evils against everyone except the elitists.
And today we split people up into classes, ignore economic principals, vilify employers, turn our backs to envy-based discrimination (progressive tax system), continue to rack up debt, continue to empower the Federal Reserve, trust a too-big-to-succeed government with our children’s education, health and debt laden future. We ignore our knowledge of 1836-1907 when freedom from central planners (coupled with a noble individualist value system) gave an increase in standard of living greater than any other time in history.
Looking to central planners for equality and justice has created the crisis we live in today. To put on a Guy Fawke’s mask and beg for more is irrational, irresponsible and idiotic.

[Gerry Fedor]

Sorry George, no sorrow here only accuracy as many American Companies are now coming back to the US as they are not seeing the "return" on their overseas labor.

I was not trying to disrespect what you were saying. Sorry if you took it that way.

The American workforce will always be destine to be a slave to lower labor costs overseas, but now manufactures are seeing what their "ideas of true costs" are getting them in the end (and pocket-book).

[George Rebane]

GerryF 1215am - Am still confused about your seeming disagreement with my 628pm.

Some manufacturers with energy dominant cost structures are coming back because US energy costs are dropping in spite of Obama's policies. We have so much of it that in their cost budgets energy costs are trumping labor costs. And true to form, overseas labor costs are increasing as workers in countries like China, Vietnam, Indonesia, ... are climbing the economic ladder. And that is as it should be when free trade is practiced.

[Russ Steele]

Gerry@12:15AM

Lower energy costs are due to lowering natural gas prices. Which are due the the wide spread use of "tracking" technology on state and private owned lands. The other factor is the spreading use if robotic technology, lowering labor costs significantly in US manufacturing. Combine the two, lower energy costs and increased use of robots and doing business in US is now economically attractive. On the other hand it is not creating the jobs need for economic recovery. The lack of job is going to be a real challenge as we seek to recover our economy, which is highly dependent on consumer spending, which is dependent on a robust labor force. A labor force that is absent in the current market place.

What is your solution to create the need jobs, given that most college and high school graduates do not have the required skill sets to work in our technology driven economic resurgence?

[Brad Croul]

Perhaps the 1% are heeding the lamentations of the 99%. Instead of working the 99% to death in low paying jobs consisting of repetitive, back-breaking drudgery;
the wealth creators have moved to robotics as a way to say, "sorry, we understand you do not like the jobs we offered you, so now we have robots to make our luxury cars for us."

http://www.youtube.com/embed/libw1rV2McY?feature=player_detailpage

[George Rebane]

BradC 1125am - Thank you Brad. That excellent video (one of a series) on the current state of automated manufacturing underlines a prominent theme of these pages. From the video it is hard to keep track of all the human jobs that the robots have taken over forever. And the punch line is that, contrary to previous times, the economy is not creating new jobs to replace the ones robotized. In short, creative destruction is going through a sea change that neither progressives nor politicians (of all stripes) understand.

One worthy in these comment streams continues to represent the collectivist mirage that it is demand arising from the great unwashed that gives entrepreneurs the ideas to invent new things and start new businesses. Such mindsets are clearly beyond the redemption that reason provides as this and other such videos demonstrate.

[Wayne Hullett]

Ben,

I am homeless and broke. What is your net worth, and how much of it do I have a right to?
Please respond with your address so that I may come pick it up.

Thanks,

Wayne

[Wayne Hullett]

Ben,

I forgot to ask: What days of the month do you get paid, so I can come pick up my share of your salary?

Thanks again,

Wayne

[Michael Anderson]

George,

As a libertarian progressive who has addressed this issue numerous times on these pages, I have to disagree with what you write here: "In short, creative destruction is going through a sea change that [x] progressives [x] [do not] understand."

Automation is nothing new and the accelerated pace of creative destruction is something most politicians under the age of 50 are keenly aware of...how they explicate that awareness is the political sauce of the day, and as you rightly suggest, is not something either party does very well. But I think they get it, I really do.

They just don't know what to do about it, so they work on details in their districts instead of trying to grasp the big picture.

Michael A.

[George Rebane]

MichaelA 952pm - I was referring to more than the politician class. For example, none of BenE's piece here gives evidence that he understands that there is an epochal change going on in job markets worldwide. His words could have and were uttered back before WW2 and even in Bolshevik Russia during their civil war as the USSR was being formed. The message has been a constant of the far left for at least a century.

[Bill Tozer]

Happy President's Day everyone.

http://www.foxnews.com/opinion/2013/02/17/america-first-entrepreneur-george-washington/?intcmp=features

[Ben Emery]

Well guys I was at the DC rally against the hoax and haven't been able to follow the thread. I am in IAD at the moment and will try to address any remarks. I did see one childish response about being homeless and wanting to come over to my house. I do lots of volunteer work with Hospitality House and if you go to the Welcome Center on Church street at 12:30pm any day of the week maybe they can help you out. It really isn't that funny to use the downtrodden as the butt of a joke but you are free to say what you want.
http://hhshelter.org/about/mission-vision/

But since you are posting comments on RR my guess you are somewhere warm with access to the internet and a computer. I find it very funny the childish mentalities that are shared by those who are trying to make the opposite point.

[Ben Emery]

George,
Here is where you are blind and missed the entire point. " none of BenE's piece here gives evidence that he understands that there is an epochal change going on in job markets worldwide."

First my piece is a short summary that I put together in a couple of minutes I didn't realize it was supposed to address the entire scope of the issue of wealth creation.

The change is in policy not labor. I didn't address trade policy at all. For 200 years we protected industries/ jobs in America and in the 1980's we shifted away from it and it has only profited transnational corporations.

[George Rebane]

BenE 731am - Sorry for pushing you past limits, but since the topic is wealth and its distribution, and the elephant in the room is the epochal changes that technology and meritocracy has brought into the labor markets, I thought that you might want to touch on that in your short summary instead of repeating old collectivist shibboleths.

But if you do care to cover the elephant, I'd be glad to append it to your piece as an update and/or addendum.

[George Rebane]

re WayneH 151pm and BenE 727am - Some readers may not know that the 151pm is a take-off on the story attributed to Andrew Carnegie who was accosted in his own office by very progressive and agitated gentleman demanding that Carnegie distribute his wealth among the world's poor. After a moment's thought Carnegie pulled a dime out of his pocket, gave it to the gentleman as his calculated distribution, and asked him to take his leave.

WayneH was just poking a little churchillian fun at a progressive who is always very anxious to tell others what to do with their money. The only thing "childish" about this response is that it is difficult for children to understand.

[Steve Frisch]

Well I am comforted by the fact that Mr. Hullett's comments were not inspired by Alexander Berkman's attack on Henry Frick after the Homestead strike!

[Wayne Hullett]

re George 1147am: Aw, George, you let the cat out of the bag. And I was planning on following up with "my buds here at the shelter also wanting to come along to collect their fair share of Ben's wealth", and follow that with the 70% of the world that is worse off than even the poorest Americans. "We're comin' for you, Ben!" But I liked your last sentence.

Sorry Ben, I didn't mean to scare you. I won't be coming to your house. It was merely an attempt to get a progressive to carry his thinking through to its logical conclusions. Alas.

[Ben Emery]

Oh I understand what the poking fun is about but don't find it very funny because I know first hand many people in Nevada County who are homeless and who are struggling.

[Ben Emery]

George,
Wasn't the point of the post is to solidify where wealth comes from? I did that and it didn't seem to garnish any objections. Wealth is created by labor. The follow up question should be:

If wealth is created by labor why is the distribution of wealth so lopsided to those who don't actual earn or labor it? I gave the statistics of the redistribution of wealth over the last 32 years, what has changed?

[TheMikeyMcD]

Ben, for the record I read your missive and yell "I object!" I spent my 'labor' on an "I Object!" response
Posted ]by: TheMikeyMcD | 16 February 2013 at 09:00 AM

[TheMikeyMcD]

and fascisms roots in socialism...

http://blogs.telegraph.co.uk/news/danielhannan/100203076/so-total-is-the-lefts-cultural-ascendancy-that-we-dare-not-mention-the-socialist-roots-of-fascism/

[George Rebane]

BenE 303pm - In these pages, and I'm afraid elsewhere, you and yours are blind to the overwhelming objection that wealth, and here we talk only of discretionary wealth, comes from labor. It no more comes from there than it comes from any of the other cost components (e.g. raw materials, capital, machinery, processes, ...) of production that are employed by enterprises. Discretionary wealth is the only kind that can go into growth, into building things new and better. And that comes only from profit. I've lost count of times that I and other readers on RR have tried, in vain, to explain the meaning and role of profits. It is both a thankless and a hopeless undertaking.

Your leftwing views of an economy have laid waste to nations and peoples. Your methods don't generate profits, and for attempting to achieve growth you have always dunned the worker even more until they too are paupers - albeit equally paid paupers - not able to afford the things which the state then dares not allow in the stores.

[Steve Frisch]

One thing that Adam Smith had 2/3 correct (and there were many more): wealth comes from ""the annual produce of the land and labour of the society". The other third I would add: human intellectual capital.

[George Rebane]

MikeyM 457pm - another good piece on the provenance of fascism and its place in the collectivist pantheon. Yet the progressives' revision of history is almost complete in today's American mind - 'fascism is far rightwing' has now been drummed into the common consciousness. What utter intellectual trash that is shoveled up regularly by the lamestream and echoed by liberal choruses across the land. And they have to do it, for it is the only bogeyman they can attach to those who oppose them by promoting liberty, constrained government, individual enterprise, and free markets. All these they pompously pronounce as fascist or proto-fascist, and then retreat into silence when they are shown history.

[Michael Anderson]

George wrote: "And they have to do it, for it is the only bogeyman they can attach to those who oppose them by promoting liberty, constrained government, individual enterprise, and free markets."

George, as far as I can tell, you are more than happy to carry the flag for the United States Military Industrial Complex. In fact, much of your individual and business success derives from that construct. So, I ask you:

1. How has the United States Military Industrial Complex promoted liberty since WWII, except in the very few cases where extreme dictators were deposed, as opposed to supported and nurtured?

2. How has the United States Military Industrial Complex utilized constrained government? Isn't unconstrained government the very definition of a military industrial complex?

3. How does the United States Military Industrial Complex contract with individual enterprise? Aren't most of these contracts on a cost-plus basis? Aren't most of these contracts just sweetheart deals with known revolving-door government-blessed extremely large corporations with very little oversight or accountability?

4. How does the United States Military Industrial Complex deal in free markets? I have yet to see an RFP from the Pentagon show up in The Union classifieds.

The Tea Party is perfectly willing to cut everything but the military. I smell and detect self-dealing, which makes me want to lock my wallet in the safe in my basement, and count my Wal-Mart rounds.

[Gerry Fedor]

George / Russ, lower gas prices from your fracking have done almost nothing for energy rates and pricing as PG&E have not reduced their energy costs to residential or major industrial users, so that argument has very little basis in meaning anything for anyone other than the power generators who are seeing their profits increase, and their actual generation cost drop (natural gas is much easier on equipment and pollution control equipment).

http://www.eia.gov/electricity/data.cfm#sales

Look at the retail prices to customers on the right hand side as they show that we have had a consistent price rise, so this nonsense of how fracking is lowering prices is just that, NONSENSE!

I find it very interesting that we want a highly educated workforce that can handle complex tasks, but how many kids who are graduating from High School could weld, or dis-assemble a piece of equipment, repair it, and put it back together correctly? Very few as this has changed greatly from the time that we both went to High School. I find this very interesting as not every kid that goes thru High School is going to be a engineer, or computer scientist, but we want a technical workforce that can handle manufacturing robots....

Many of these kids can't even operate a screw driver, and it becomes a very hard sale (unless you are manufacturing huge quanities of goods) to support the ROI on a expensive piece of equipment.

[George Rebane]

MichaelA 953pm - these will be hard for you to digest, I suspect.

1. It has been the industrial strength of the US and its ability to project power that brought post-war communism to a soft landing without starting WW3.
2. A strong and reliably national security structure is one of the seminal functions of government that our Constitution prescribes. The fulfilling of that function has not grown government per se, and most certainly not anywhere near as much as have the entitlement administrations and regulatory agencies. Do not confuse military spending with government growth or in-country reach.
3. You have a totally wrong picture of government contracting. Government contract come in the usual flavors of firm fixed price, cost plus, and time & materials. And they definitely are not sweetheart deals because they are bid for by private companies that range from 2-3 'man' outfits to giant corporations. The government, for obvious reasons, has an interest in keeping certain engineering teams having specialized skills/knowledge together, and therefore does split contract awards between such companies. And that is one place where the 'revolving door' between the military and private sector benefits the country when operational officers (and even non-coms) join corporations upon retirement.
4. The Union or even the NYT does not receive government ads for procurement. These are handled very formally and placed into the Commerce Business Daily. Everyone with even a passing knowledge of doing business with the government knows where to find such announcements. Start here - http://www.cbd-net.com/

Re the Tea Party and the military, I would suggest that your olfactory system needs a major overhaul.

[George Rebane]

GerryF 1028pm - you address two topics, the second observation about our younger generation is on the mark.

But you seem not to know that 1) PG&E is part of a government supported oligopoly and has literally no competition nor impetus to lower prices. 2)the actual price paid to the energy producers reflects the supply and demand of available energy products and has benefited enormously from fracking and the new supplies that has made available. Had not this technology and attendant exploration made these reserves available, the cost to the consumer now would be much higher. Corporate margins on energy production are low and publicly available. It is government's heavy hand in piling on taxes and fees that keep the fuel prices up. And keeping the Keystone pipeline from being constructed is beyond insanity.

[Michael Anderson]

George wrote:

"MichaelA 953pm - these will be hard for you to digest, I suspect."

Nope, not all. Been having these conversations since the Vietnam War, when I was just a sapling.

"1. It has been the industrial strength of the US and its ability to project power that brought post-war communism to a soft landing without starting WW3."

A nice spin, but certainly debatable. That "soft landing" came with terms, and the rest of the world has been chafing at the bit ever since. Clinton did a crappy job of deterring those results, which manifested in various international and domestic terrorist acts, and GWB was even worse.

"2. A strong and reliably national security structure is one of the seminal functions of government that our Constitution prescribes. The fulfilling of that function has not grown government per se, and most certainly not anywhere near as much as have the entitlement administrations and regulatory agencies. Do not confuse military spending with government growth or in-country reach."

As I've said before, it's not fair to blame the Boomers for the uptick in entitlement costs. We're the skunk at the party--the huge rat trying to be digested by the snake. And I'll let Eisenhower's exit speech be the answer to that last sentence.

"3. You have a totally wrong picture of government contracting. Government contract come in the usual flavors of firm fixed price, cost plus, and time & materials. And they definitely are not sweetheart deals because they are bid for by private companies that range from 2-3 'man' outfits to giant corporations. The government, for obvious reasons, has an interest in keeping certain engineering teams having specialized skills/knowledge together, and therefore does split contract awards between such companies. And that is one place where the 'revolving door' between the military and private sector benefits the country when operational officers (and even non-coms) join corporations upon retirement."

I know it's one big happy family because I saw it in person. My dad took me to the Pentagon when I was 11 years old, he worked for GTE Sylvania and traveled to D.C. regularly. I am still living with the benefits. And I am still calling them into question.

"4. The Union or even the NYT does not receive government ads for procurement. These are handled very formally and placed into the Commerce Business Daily. Everyone with even a passing knowledge of doing business with the government knows where to find such announcements. Start here - http://www.cbd-net.com/"

Sorry, I was just funnin' you on this one. I know perfectly well how this stuff is let out to bid. Subcontractors in Nevada County who receive revenue that has trickled down from federal gov't military contracts are usually working for companies who negotiated the original contracts. But you know that.

"Re the Tea Party and the military, I would suggest that your olfactory system needs a major overhaul."

I know how the money flows. I can smell it running downhill. The Tea Party is indeed a revolutionary movement, but it's a revolution against the revolution. I'm sure all of this will be worked out in short order (-;

Michael A.

[Bill Tozer]

Dr. Rebane, you have just inspired a new phrase for me: "To Insanity and Beyond" Perhaps patiently trying to explain the facts of life to your friends of the liberal persuasion is beyond insanity. I hope you keep pounding your head against the wall with facts, although I see it as a futile exercise. You are a better man than me for your efforts and tenacity.

[Ben Emery]

George,

The entire point has gone over your head. I don't care what product an innovator or entrepreneur has developed with the use of labor to further that product remains just a good idea. How many cars do you think Henry Ford could have assembled by himself in a day?

What you are failing to except is the true value of labor to any enterprise. When a laborer isn't justly compensated for their time and energy we get a dysfunctional society where we have huge amounts of poverty while at the other end huge amounts of dynastic wealth concentration. Remember the whole foundation of wealth in the US is based on theft. Is it any surprise that "whites" on average have around 20x the accumulated wealth than a person of color. With this wealth opportunities and doors exist where they don't for people of color. It doesn't mean "whites" don't work hard it means if you are a person of color you have to work twice as hard if not harder for the same opportunities. Oh I know your story of being an immigrant and all that stuff but it is the color of your skin that entitles you to 400 year of privilege not your birthplace.

[Ben Emery]

Should read " I don't care what product an innovator or entrepreneur has developed without the use of labor to further that product it will just be a good idea."

[Steve Frisch]

George, I think Ben has an entirely valid critique above. Wealth is created through the application of labor and ingenuity to resources. So says Adam Smith.

Wealth is created in an economy through manufacturing, of goods and services and that manufacturing of goods and services is how value is added to raw materials, making a finished product more valuable than the sum of its parts. This contributes to increasing the size of the overall economic pie, rather than continuing to divvy up and distribute one constant-sized pie. So value added through manufacturing and services potentially makes everyone in the society richer.

It is our social structure that controls or allows access to labor, ingenuity and resources; and by doing so controls the individuals ability to generate wealth. A social structure that allows for equitable access to labor, ingenuity and resources, and manages access to create fair and equal access is what many of us are striving for. That is a fundamentally capitalist goal. The only question left begging here is what is the role of government in managing that access. I think Ben and I would likely contend that government has a legitimate role. I believe you would contend that that role is restricted to overseeing contracts
and providing for the common defense; we would say they have a more active role.

[George Rebane]

SteveF 705am - No one here contends that labor does not serve a function in the creation of wealth by an enterprise. I've recounted it as a necessary constituent. But the causal sequence is where our disagreement (misunderstanding?) arises. It is the entrepreneur who must FIRST invent/assemble the idea along with its various forms of capital and expose himself and his other partners/owners liable to loss (risk) without any guarantee of return, let alone profit. The 'Help Wanted' sign goes up AFTER that, and cash flows out for some time before there is any sign of success.

Some here appear to argue that labor assembles itself, gets and idea, makes the business plan, convinces investors, after which it communicates all this to the entrepreneur who then just manages to the plan.

Things start going awry when notions like third parties deciding what is "equitable access to labor" enter the mix. An entrepreneur has no obligation in our social contract to 1) create any jobs, and 2) pay any third party determined wage for the jobs he creates. Among free people, that should be a bargain struck between employer and employee(s).

If the employees want to group themselves, and proceed to an employment contract that way, that is fine. But it is fine only when the employer has the freedom to reject that arrangement, and, without prejudice, turn to another more agreeable employee or group to satisfy his needs for labor.

Government's role here should be to enforce contract law, as is its role in enforcing contract law in the rest of our civil arena. But it should not be government's role to dictate the freely agreed on terms of contract between the principals, here employer and employee(s).

[TheMikeyMcD]

Wealth comes from a man's mind when he is given enough freedom to pursue his thoughts.

In Russia around1888 a member of my wife's family (Frank Sr.) had a design for a better plow for the fields. Metal, even for a blacksmith, was scarce. Throw in the Bolshevik (collectivist/communism) revolution an exile to Siberia and the new plow design never left Frank's head. After an escape from Siberia (in the 1930's) to the USA Frank found the freedom that would allow him to use his mind to build, design, thrive.

http://www.amazon.com/Under-This-Sun-Frank-Neufeld/dp/1425149367/ref=sr_1_6?ie=UTF8&qid=1361291598&sr=8-6&keywords=under+this+sun

[TheMikeyMcD]

An entrepeneur has the odds against him/her. EmployEEs have the position of power, the government has a position of power (taxes, regulations, etc), competition, etc. To take away the possible size of the reward IF the entrepeneur is successful would result in even fewer entrepeneurs (a dying breed thanks to the headwinds above).

Then, as George and I keep bringing up (to the sound of crickets) someone in the progressive equality/justice-over-liberty system must determine winners/losers and how big to keep the pie. Who could be trusted with this power?

Democracy has already proven to birth immoral/discriminating laws.... 2 wolves and a sheep voting on what to have for dinner....

[Bill Tozer]

I must be losing my faculties. For the life of me I just cannot remember the day someone put a gun to my head and told me I had to work at Walmart. I do recall Lizzy Warren saying the game is rigged and "they" are screwing me.

Oh, what a sad lot to think there is no hope, no improving one's lot in life (to paraphrase Honest Abe). Might as well just pull the covers over my head and wait for death.

I do recall someone telling me the sky is the limit and if I fall on my face to try try try again. I do recall that and I choose to believe the sky is the limit. An ancient wrote "Without hope, the people perish." I ain't talking about entrepreneurs or the filthy rich. I am talking about millions upon millions of working folk across the fruited plain that are living breathing examples of seeking and obtaining a middle class living wage. Guess nobody told them the game is rigged and if I am being screwed, I haven't felt a thing.

[Gregory]

"Then, as George and I keep bringing up (to the sound of crickets) someone in the progressive equality/justice-over-liberty system must determine winners/losers and how big to keep the pie. Who could be trusted with this power?"

What? You don't trust Frisch's favorites to be equitable?

Fairness of process, or fairness of results. Rule of law, or majority rule determining what results are fair. Take your pick. Personally, I think we're in for rough sledding downhill if the rule of law isn't upheld in the end.

[Ben Emery]

Why does everybody insert other issues into the discussion. The post is about wealth creation.

If we can agree that wealth is created by labor then why is the distribution of wealth so lopsided to those who don't earn or labor for it?

I think you guys are mixing up those who are well off with those who are obscenely wealthy. If you are making $500k a year by using your intellect or physical labor you are well off. What I am talking about are those who make $10 million or a $100 million a year. There is no job on the planet that can justify that type of compensation.

I will go back to my favorite punching bag, The Waltons. Not goodnight John Boy Waltons but the heirs to the Walmart fortune.

http://www.motherjones.com/mojo/2012/09/sam-waltons-fortune-walmart-employees-7-million-years

The average Walmart worker earns just $8.81 an hour. At that wage, the union-backed Making Change at Walmart campaign calculates that a Walmart worker would need:

-1 year to earn as much money as the Walton family earns in Walmart dividends every three minutes.

These are heirs who inherited the wealth not earned the wealth along with accumulated wealth of $115,000,000,000 billion dollars. It would take an average WalMart income earner 170,000 years to earn the same amount of income that they receive from dividends. They could take zero in dividends/ capital gains and pay average employees $18 an hour and they wouldn't even make a dent in their inherited fortune. I consider this theft. They force employees on public assistance, built factories in human/ natural rights nightmare nations, and buy off our political parties to secure their wealth and power. It is disgusting.

[Gregory]

"There is no job on the planet that can justify that type of compensation"

Sure there is. If someone is willing to pay it, there's a justification, and they don't need Ben Emery to approve it.

[TheMikeyMcD]

Ben, did you catch Rebane's 19 February 2013 at 08:31 AM post? My previous posts?
In a nutshell, your opinion on economics actually makes the reader misinformed. Life is complex.

Amen to
: Bill Tozer | 18 February 2013 at 11:13 PM

[TheMikeyMcD]

ALL Walmart workers CHOOSE to work for the pay they receive!

I shop Walmart (1-2 times year) because they are non-union.

You can claim to fight for the little guy, but, all you are doing is fighting against everyone.

[George Rebane]

BenE 648pm - "If we can agree that wealth is created by labor then why is the distribution of wealth so lopsided to those who don't earn or labor for it?" That is an IF-THEN statement the IF of which has not been agreed to hereabouts. All that I and others have agreed to is that labor is a component in the wealth creation process. And to the degree that in a certain enterprise (say, Walmart) labor is a fungible component and readily available, then it properly commands commodity pricing and no more. However, non-fungible labor in an enterprise commands a high price commensurate to its importance to that enterprise's success in creating wealth.

So not to worry, all labor is compensated at a proper price by the owners of the enterprise. It seems to me that the only worry you will find hard to relinquish is that no one will let you intervene and dictate what wages and profits are 'fair' between other people doing business.

[Russ Steele]

Hey BenE, check this out:

The CEO of a U.S. tire maker has delivered a crushing summary of how some outsiders view France's work ethic in a letter saying he would have to be stupid to take over a factory whose staff only put in three hours work a day.

Titan International's Maurice Taylor, nicknamed "The Grizz" for his negotiating style, told the left-wing French industry minister in a letter published by media on Wednesday that he had no interest in rescuing a plant set for closure.

"The French workforce gets paid high wages but works only three hours. They get one hour for breaks and lunch, talk for three and work for three," Taylor wrote on February 8 in the letter in English to the minister, Arnaud Montebourg.

"I told this to the French union workers to their faces. They told me that's the French way!" Taylor added in the letter, which was posted by business daily Les Echos on its website and which the ministry confirmed was genuine.

"Titan is going to buy a Chinese tire company or an Indian one, pay less than one Euro per hour wage and ship all the tires France needs," he said. "You can keep the so-called workers."

As I recall in an earlier post you were promoting the French way!

[Ben Emery]

Russ,
You recall wrong. I have been trying to keep the dialogue to wealth creation and distribution.

[Wayne Hullett]

Ben,

You keep coming back to your (mis)conception that labor (alone) creates wealth. I recently read a delightful little book that I thought gives an easy-to-read explanation of how a capitalist economy works: "How an Economy Grows and Why It Crashes" by Peter D. Schiff and Andrew J. Schiff (John Wiley & Sons) - 2010. I would encourage you to get a copy and read it, to give you a model against which to test your ideas. Then you will at least have a greater chance of getting traction for your ideas by couching your arguments in terms that others around here understand. Otherwise we are just talking past one another.

FWIW, I do see your point about the immense difference in incomes between the average person and the inheritors of great fortunes, and I agree that unfettered laissez faire capitalism is not without problems. However, while I do not think that a monied aristocracy is a stable situation, I also do not think that government confiscation of "excess" wealth for redistribution by corrupt and incompetent politicians is the best solution to that disparity. Perhaps a discussion about whether that disparity IS in fact a problem, and if so, what are some alternatives in the context of what is best for humanity (by some measure also to be discussed), would be fruitful in these pages. It turns out that that is an extremely complex subject, and requires a good understanding of how things work now to avoid being hung by the Law of Unintended Consequences.

[Gerry Fedor]

Russ, sorry if I used the "PG&E" word, but the survey and info I showed was for all power companies across the entire USA, so with all of this fracking gas that's available, why do prices continue to go upward?

It doesn't make sense when you try to tie fracking to the cost of electrical power.

[George Rebane]

GerryF 1052pm - your question was answered in my 1046pm. Asking the same question of Russ without even acknowledging my reply makes future replies from me less likely.

[Russ Steele]

Gerry@10:52PM

I am not sure where your get your gas pricing information, but if you go to the Energy Information Agency, HERE your will see that the price of natual gas has fallen since 2008 when it peaked at $12 per MMBtu to the Jan 2013 price of about $3 per MMBtu. You will also note the sudden drop in rigs drilling after the 2008 election and Obama implemented his energy polices in 2009. Even with that political obstical horizontal drilling and fracking have reduce the price of natural gas. Now what the utilites are charging customers, that is a different story. In PG&E's case were are paying green energy surcharges mandated by CARB. See George's1046PM for more insight.

[Steve Frisch]

The "Green Energy" surcharge is 2% of your utility bill.

[Bill Tozer]

2% is way too much. That's millions of customers paying in millions each month. And what do we have to show for this pot of mula? Well, we get people sitting around trying to figure out how to force people to buy solar panels they cannot afford and how to get folks who drive electric go carts and hybrids to pay more highway taxes. Maybe planning a lot more bird shredding wind mills or outlawing black cars and maybe some generators powered by ocean waves or algae. The possibilities are endless for that much mula. Should prop up a bunch of start ups that can't make it on their own. Maybe even fund a great, great, great big worm farm. Or even an electric rail to Colfax. Hydro is bad. Natural gas is bad. More money is good.

[Ben Emery]

I have to many other important things going on in my life at the moment to try and talk about this stuff but I did hear a very good interview while taking my parents down to Sacramento for a emergency medical appointment. It is not on wealth creation but the whole discussion on the economic system and the role it plays in society.

http://billmoyers.com/episode/full-show-taming-capitalism-run-wild/

[Ben Emery]

Check this out on Wealth Distribution or Inequality.
http://www.upworthy.com/9-out-of-10-americans-are-completely-wrong-about-this-mind-blowing-fact-2

[George Rebane]

BenE 946am - Thanks for the link Ben. Taking their numbers at face value, the begging question is how did the wealth concentrate in such a manner, and what will happen to the overall quality of life in the country when you seek to intervene with laws to prevent such concentration. (BTW, this theme has been covered for years on RR, and continues to be covered since I claim that we are building systemic unemployment contributed to by our broken education system, global competition, and accelerating technology.)

If you wish to offer answers to those questions in a longer piece, I'll gladly post and link it to your present contribution.

[Gregory]

George, if I may chime in for Ben, it's obvious the increase of income disparity during this period of unprecedented growth of government power and spending can only be because the government didn't grow fast or large enough.

[Gregory]

You've got to love propaganda pieces like that one linked by Ben.

Anyone know how they valued the stocks and bonds that the lower and middle classes (by income) with union or public sector jobs defacto own in the pension funds that were invested for them?

Then there is that little problem that taxes are paid on incomes, and assets like those stacks of pixelated cash can't be taxed directly. Ben's schemes hit those who are accumulating wealth, not the ones sitting on it.

It's income tax, not wealth tax. The former is constitutional (barely), the latter is not.

[George Rebane]

Gregory 131pm - Sounds about right. But I'd be interested in Ben's dissertation to continue the compare and contrast exercise between capitalist and collectivist thought.

[TheMikeyMcD]

Income/wealth inequality is not a bad thing. Income/wealth equaliy is not a right.

Income/wealth equality can only be gained via slavery (shared misery).