Wednesday, October 29, 2008

Redistributor cap

By Carl

Much has been said in the past week or so regarding Barack Obama's "
spread the wealth" comments. Suddenly, he's been called a "redistributionist in chief".

Well, Senators, time to analyze just what "
spread the wealth" is all about.

First, let's define some terms. Since the occasional right wing conservative scans this blog (I know, because I've read bits of my writing taken word for word in other places that I'd be ashamed to link to), I think its important they get some edumacation.

Capitalism, loosely defined, is the redistribution of wealth! Think about it: I have a little bit of wealth, and I have a need. You have a product or service that satisfies that need. I give you a little bit of my wealth in exchange for the satisfaction of my need.

What gets exchanged?" Wealth. Where does it go? From me, who had some you didn't have, to you, who now has accumulated more. It has been redistributed!

Nothing wrong with that. I don't know of many rational people who don't get that the free market in theory works pretty well.

In this example, wealth is nothing more than a pile of rocks accumulated from other people. Eventually, the rocks aggregate and make a pile so high, it's hard to toss more on top, and some end up trickling down.

What supply side economics does, in theory, is say, "Look, we'll pour more rocks on top of the highest piles, and some will tumble to the ground where the poor and middle class can scavenge for the pebbles and stone dust.

It's like the old joke about the priest who takes the money from the collection plate and tosses it in the air: whatever God can catch, he can keep.

What Obama proposes to do is simple: take the highest rocks off the highest piles, and give them to the people still with piles closer to the ground.

Not in the direct sense of actually giving money to the poor and middle class, but in allowing those classes (sadly, or maybe not so much, I'm not part of the classes who would benefit from Obama's tax cuts, but I'll get to that in a moment) to keep more of their stones.

So what happens then? Well, the core cost of living is the same no matter how much money you have: you need food, you need clothing (sadly), you need shelter. You need transportation. People with fewer rocks will spend a higher proportion of their rocks on these necessities. Whatever is left, one hopes, they will put in a bank but given our consumerist society, they will end up spending those rocks on comforts.

In other words, they'll get their rocks off.

But remember the first example I spoke about? I have a little bit of wealth and a need (or want) and I share my wealth with you in order to have you satisfy that hole in my life?

Look what happens now: those same rocks that the capitalists would have gotten directly from the government thru lower tax rates, rocks they likely would have off-shored in some Cayman Islands investment corporation, are now repurposed to have benefitted millions of Americans first, before getting back essentially to the same place they were going to end up in the first place! In the pockets of the rich like me!

In effect, the wealthy have lent out their wealth AND gotten a higher return from the American economy AND seen the American economy get stronger as a result, than they would have seen squirreling their rocks away on some island offshore.

Lest you think that this concept has been lost on Republicans, take a look at some of John McCain's proposals:

- Increased defense spending, including ramping up troop levels.

- a $5,000 tax credit for buying zero emission cars.

- $2 billion to "clean" coal technology.

- a $5,000 tax credit for health insurance to every American family.

None of these are anything except governmental solutions to free market problems. In other words, a redistribution of wealth.

To periphrase
Animal Farm, "All rocks are equal, but some rocks are more equal than others".

(crossposted to
Simply Left Behind)

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