Tuesday, June 23, 2009

Class warfare

I am not wealthy, successful perhaps if one is very generous with their terminology, self sufficient for the most part would be more accurate. I am also not a booster for the wealthy, I am an economic Darwinist and have no interest in government mucking around in the private sector, and I surely don't feel bad for failed CEO's and such. However the idea that the rich are our enemy and that they need to be punished for their wealth is ridiculous. I just found a silly little propaganda piece, trying to paint everyone who believes in market economics as a shill for the rich. In this article the author talks about apologists for the wealthy. He tries to dismiss the idea that higher corporate and estate taxes slow economic growth. This only makes sense through a class warfare perspective. Try looking at it from a personal one. If you are working a job and you can either work a forty hour week and earn a modest income or put in a bit of overtime and make an excellent wage, what do you do? Many would take the overtime. However what if working the overtime put you in a higher tax bracket resulting in a net loss of income? I for one wouldn't work more to earn less money. The same is true for business owners and investors. If spending millions of dollars and creating hundreds of jobs will result in profits in excess of the investment, then that is what they will do. On the other hand if taxes and fees result in such investments being unprofitable they won't, or they will do business somewhere that is profitable. Pretty simple. A bunch of class warfare propaganda may make the self pity sector feel better but it doesn't change economics.

The author also complains that CEO salaries are increasing faster than worker wages. Again from a class warfare perspective this is a compelling point, however take a look from the other side. You own an auto shop. You have two employees, a skilled mechanic who brings in the bulk of your profit, and a guy who sweeps the floors. If you lose the mechanic you will have to hire a similarly high paid replacement, further you don't think you can find one who will make you as much money. On the other hand if you lose the guy who sweeps up, you can hire another one within a day. Do you pay the mechanic more than the shop sweeper? If another company tries to hire your ace mechanic, do you pay him more in order to keep him? Corporate CEO do not make money for nothing. They are paid millions and billions because they earn that much for their companies. Or at least the company that hires them believes they will. If the guy on the production line was making the company billions he would be paid millions also. A good manager, like a good worker is going to try to get as much pay and benefits as he can. Most of us wouldn't feel guilty about taking a higher paying job or demanding a raise, yet many of us resent corporate managers do the same.

The left serves up this class warefare bullshit to justify restrictionss, and taxes on industry. They do this for three reasons. The first is to put industry under government power. Regulations and government bailouts give the federal government power over private industry. The second is to decrease the income of the working class, by hurting the overall income of America they make people more dependant on government handouts and social survices. A populace dependant on handouts is going to vote for whoever offers the most handouts. Also a dependant population is not going to risk their means of support by speaking out against the government or making waves. Lastly corporate taxes supply the money to pay for all of these handouts.

Sure it feels good to resent the wealthy, especially in times like these. However the best thing for the economy is for the government to totally back off and let the rich make money. When the rich make money they hire people and buy stuff. That puts money in everyones pockets. Better yet money that is earned rather than begged leaves us free to oppose the governments attempts to deprive us of freedom and supress our freedoms. If you look at both the Democrats and Republicans all you will see are big government power grabbers, who are responsible for our current financial woes. Maybe we should start blaming them, instead of the corporations which used to provide us with an income.


  1. I have always hated the wealthy, because I have been surrounded by them. My family is very well off, and I spent my high school years around the children of people even better off then me (and I was the kind of kid who got a brand new car at 16, and never had to pay for my own gas either).

    Ignore the emotions of our current situation. They are irrelevant. Markets fluctuate, with or without regulation, and to believe there will never be hard times is a lie.

    CEOs do not perform work on the scale of 100 times the magnitude of other employees. Try putting the janitor at the CEO position. Just try it; the company will not change in the eyes of anyone but shareholders.

    CEOs are usually nothing more than public faces. They are PR. They enhance perception, like a nice suit. The choices they make are made for them by teams of advisors who are paid a fraction of their wage. It is a lie to say those at the top are doing anything more difficult or useful than those in the middle or at the bottom.

    They are paid that much BECAUSE THEY CAN SET THEIR OWN SALARIES. That is the only reason. They look at how much they can bleed from the company without crippling it, then take it as salary.

    There needs to be NO class warfare. In fact, I would love to avoid any kind of violent reaction by simply preventing those who would amass multi-generational fortunes.

    The reason the "left" opposes these actions is because it's wrong. People become "reliant" on systems like healthcare in nations that provide it, and they are treated better on the whole. And don't worry, even the rich get better care under socialized medicine (private clinics), so relax: they still get more. Inequality will persist, just not on a deadly scale.

    Quit carrying a cross for the wealthy. It was the intention of men like Jefferson for the wealthy to carry the load:

    "The rich alone use imported articles, and on these alone the
    whole taxes of the General Government are levied... Our revenues
    liberated by the discharge of the public debt, and its surplus
    applied to canals, roads, schools, etc., the farmer will see
    his government supported, his children educated, and the face of
    his country made a paradise by the contributions of the rich
    alone, without his being called on to spend a cent from his
    earnings." --Thomas Jefferson to Thaddeus Kosciusko, 1811.

    (This quote discusses the state of taxation during his era, when there was no income tax, only taxes on imported goods. I'm sure Libertarians would LOVE no income tax... but that's another debate.)

  2. Ginx, thanks for the comment. Comments really make a blog a blog IMO, especially when they disagree with the blog author/authors.

    Ryk, great debut post! Thanks for contributing. I hope Skeptical Eye readers will hear more from you in the future.

    For those of you who are not familiar with Ryk, please check out his excellent blog Dead Ryks Underground.

  3. Excellent point Ginx. I am by no means wealthy but because of my career positions I have spent a lot of time around community leaders and the wealthy and my take is exactly like yours... Those at the top all have the same things in common, they a personable, well-groomed, bull shit artists who are always looking out for themselves. Executive leadership is by and large the ultimate good ole boy network that welcomes those who look and act like them and shun those who don't.

    The idea that the rich getting rich will raise the tides for all boats has been emphatically proven false by the financial meltdown we are now experiencing. It's the end result of Reddy Ronnie's "Trickle Down" theory. It couldn't be more wrong. Wealth does not trickle down, it accumulates at the top. It flows from the bottom up.

    There must be controls to make certain those generating the wealth aren't robbed of it. Since the market has proved incapable of regulating itself, government must do it.

    Our charge as citizens is to be certain those in elected offices do what's right for the majority. Obviously, we the people have been abject failures at doing so.

    Great blog Mr. Eye, and as a self-employed person myself, I can see and understand your argument, but it does not account for the basic greed of mankind.

  4. Class warfare started in the US after After Ronald Reagan was elected, he cut taxes for the top two income groups using the Supply side economics trojan horse. He left the nation in the red because of the Reagan cut taxes and the massive spending on the Armed Forces. George HW bush could never shake the recession that Reagan created and that is why he wasn't reelected.

    Bush also cut taxes for the wealthy and started na expensive $800 billion + war. He, too, left the US in the red.If you can cut taxes and balance the bidget, that is OK. But the GOP has been unable to do that.

    Taxes are related to income and income tax is one of the few progressive taxes in the US. Social Security it one of the worst regressive taxes in the US because of the $98,500 cap. Sales tax is also regressive.

    According to Wikipedia the Gini coefficient data, income inequality in the U.S., already among the highest in the post-industrial world,has risen considerably between 1967 and 2005 among households and individuals. In 2003, the upper 20% household earned 49.7% of all of the income. Wealth distribution is far worse. Income distro is even worse today

    Reagan fractured the Middle Class and about 1/3 became wealthy and the other 2/3 trade water or declined. He also heralded an era in which the US stopped spending money on roads, bridges and leveess.

    I don't underestimate wealthy people but anyone who thinks they need help form a political party is naive. The rich can take care of themselves without much help.The GOP is a master of class warfare. American politics is based upon class warfare.

  5. SE, I think your piece is awfully simplistic, as are most "don't hate the wealthy" boilerplates.

    If you had a conversation with me, you might leave it with the impression that I hate all wealthy people, but this is false. I don't subscribe to the Marxist theory of class conflict and I understand perfectly well that the free market is not a zero-sum game, but we're not in a free market. There's a lot of state intervention in the economy and the purpose of state intervention is generally to tip the scales in favor of certain individuals/organizations.

    When you take a particular example of a wealthy person, you have to consider *where* their wealth came from. A lot of people will say that you shouldn't rag on Bill Gates because he earned his fortune, but when you consider how much of his money came from state-enforced intellectual "property" laws, it should be obvious that trying to defend his wealth with "free market principles" is a load of BS.

  6. Andrew, I pretty much agree with everything you said. I for one do not believe what we have is a real free market either. I DO NOT defend the system as it currently exists in this country.

    There is a ruling class that consists of the governing elites, the banking system, military-industrial complex, many large corporations and so on.

    Not every wealthy person, however, owes their success to government favors (e.g., intellectual "property") and many would be far wealthier if not for government regulations, taxes, etc.

    Also, for the record, this post was written by fellow Skeptical Eye contributor Ryk, not by myself.

  7. Whoops, you're right. Guess I didn't read very closely. :-(

  8. Ryk,

    This is an outstanding post. Glad to have you on board as a contributor. None of the luddite/loser/"progressive" policies do a thing to help "the workers."

    Fuck egalitarianism. Individualism is where it's at!

  9. Who needs freedom when you can EAT THE RICH!!! :D

    While I understand the sentiment, I don't believe enforced redistribution as some suggest above is the solution, nor do I believe that the market naturally consolidates wealth - it is our monetary systems and governments that cause that.

    The typical propaganda to support socialist policy and progressive taxation is that 'if you don't support this, you are defending the rich'. I don't think that's at all true - the really rich actually like socialism and regulation so they will have no-one to compete with in the market. Thus the little guy gets screwed.

    BTW this current economic collapse isn't the market at work, it's fraud and ponzi scheming on a massive scale. $1.4 Quadrillion in derivatives worldwide? That isn't trade, but fraud. Fraud isn't capitalism, it's supposed to be slightly illegal, but we allow it when it's the bankers doing it.

    Our money is inherently worthless, fraudulent paper, lended to us by the central bank, on which we pay the interest to the debt, which comes in the form of higher taxes. And the National Debt just keeps on growing.

    Watch 'Fiat Empire' on google video, explains all this stuff.

    And Jefferson was right, the key is that we tax IMPORTS, not INCOMES!

    Don't eat the rich, ARREST THE BANKERS!!!

  10. Mr. Charleston is right about corporate leaders. Most of them come out of the fraternity system and are big on social contacts and parties.

    Carl Icahn, the corporate raider, pointed this out. Most of the CEOs he took out were empty suits.

    Microsoft got a big break with IBM because the company that had an OS called CPM wouldn't deal with IBM.

    Gates bough a clone OS for $50k and sold copies to IBM. One third of the Microsoft workforce are temps and salaries in Redmond MS facility are low. Now Gates spends all of his time trying to give his money away.

    Linux is eating up the MS desktop market. The glory days of MS are over.

  11. I will agree with Andrew, we do not have afree market and until we do(if ever) market economics will be unpredictable. Capitalism isn't something that responds well to half measures.

    In America we have a bloated civil government and a bloated millitary. I don't advocate specific tax cuts for the wealthy. I advocate slashing the government to the bone so that we don't need high taxes for anyone.

    Failing that we might as well embrace socialism, for all of it's flaws, European socialism is better than the system we have in the US where the government facilitates wealth for a handful regardless of their success or failure and drives the income of everyone else down.

    I see the ultimate end of the current trend in the US as a few multi billionaires ruling over a nation equally split between the working poor and benefit recipients.


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