Monday, October 27, 2008

Spreading the wealth only makes us all poorer (2)

In case you've missed it, the blogosphere is buzzing over the discovery of a 2001 interview on Chicago NPR that revealed yet more of Obama's socialist/marxist core instincts. You can check it out here, and here is the transcript of the relevant portion:
... the Supreme Court never ventured into the issues of redistribution of wealth, and of more basic issues such as political and economic justice in society. To that extent, as radical as I think people try to characterize the Warren Court, it wasn’t that radical. It didn’t break free from the essential constraints that were placed by the founding fathers in the Constitution, at least as its been interpreted and Warren Court interpreted in the same way, that generally the Constitution is a charter of negative liberties. Says what the states can’t do to you. Says what the Federal government can’t do to you, but doesn’t say what the Federal government or State government must do on your behalf, and that hasn’t shifted and one of the, I think, tragedies of the civil rights movement was, um, because the civil rights movement became so court focused I think there was a tendancy to lose track of the political and community organizing and activities on the ground that are able to put together the actual coalition of powers through which you bring about redistributive change. In some ways we still suffer from that.
Obama apparently favors an extremely activist court that would rewrite the Constitution, granting unheard of new powers to government to "spread the wealth."


Allan said...

I see nothing wrong with putting the issue of redistribution of wealth in front of the Supreme Court, for better or for worse. That seems to be all Obama is saying in the quote and as much as I disagree with a constitutional right to redistribution, putting the issue on the SC agenda could put an end to the concept once and for all. Obama has given the Republicans one heck of a target, yet McCain doesn't seem up to the fight, relying instead on fear mongering. Despite my disagreement with his policies, I'm voting for Obama, the more honorable of the two.

Scott Grannis said...

I don't believe that spreading the wealth is an honorable thing to do. It's the beginnings of a slippery slope that eventually attacks property rights and the foundations of a free society.

Martin said...

What is an activist court? I hear people say that as a criticism of the left, but then go on to say that they would only nominate someone who would overturn Roe V. Wade. Isn't that the same thing?

And let me tell you why the government's role is and should be the redistribution of wealth. Every excise tax in the world is a redistribution of wealth and a government intervention into the rights of the individual. Why don't you complain about the egregious taxes on smokers? Because you don't like them. No one does, so they get taxed. That is just one example of who they redistribute wealth.

The reason they should redistribute wealth is an analogy that I came up with. Look at the way any company functions in a self-serving culture (Japan, for example, wouldn't count). Place every employee on a vertical spectrum from the most highly paid to the lowest paid. Somewhere on that spectrum there is a line. The ones above that line will be paid as much as possible. The ones below will get paid as little as possible. It is the government's role to exert pressure on those at the top to constrict salaries at the top and support those at the bottom. The reason why this is important and valid is because there are just fewer positions at the top and massive numbers at the bottom. This is just simple distribution. The leaders at the top are rarely the most qualified, nor do they consistently provide great outcomes for their companies. There is just a role that needs to be filled. I would argue that there are at least 10000 people who could run HD better than Bob Nardelli has. How about you start by putting up a F#%#!n' sign at the end of each aisle so I can find a damn extension cord without having to traverse a labyrinth to find yet another apathetic employee who just points, if you are lucky.

Those who would refute that argument would have to try to convince me that Steve Jobs should be paid 10% of the companies profits because he is SOOOO important to their success. I think there are 21,600 other people who have helped AAPL achieve its greatness. The same is true in almost every company. As much as the C-level people like to pretend that no one else could do their job, that is a load of garbage.

The role of government is to ensure that money and power do not concentrate in the hands of the few, because that is what happens by nature. That is not good for the people. That is not good for the country. We have spent far too long with the government encouraging that behavior rather than being a check against that natural tendency. The truly brilliant and hard-working will continue to succeed in spite of increased challenges, while the undeserving will merely rise as high as their talent or connections will allow. The great men and women I have encountered in my life are not motivated by money, but by passion. Now, if you would like to argue that the government is somehow retarding passion at the top, I might change my view.

Scott, I am very much enjoying your blogs, and the opportunity to debate and vent. Thanks for your efforts and the valuable information that you present. But, I will keep challenging you on ideas that I think are not challenged frequently enough.

egp said...

Last night I had a discussion with friends and I remembered the following: (I could not find the original piece)

"The real secret to happiness: higher taxes

Consider this experiment where students at Harvard were asked to choose between living in two imaginary worlds. In World One, you get $50,000 a year while other people average $25,000. In World Two, you get $100,000 a year, while others average $250,000.
The majority of respondents preferred the first world. They were happy to be poorer in absolute terms, provided their RELATIVE position improved.

All this suggests that a major motivation for people in working so hard is to gain higher status directly from their position in their organisation or from the amount of money they earn and the homes, cars and other status symbols they are able to buy with that money."

Is the world like it is? Do people prefer to be the 1rst in Gallia to be the 2nd in Rome?

Allan H. : Please don't vote for Obama.

Scott Grannis said...

egp: Maybe those are just the results you would get from asking Harvard students that question...

Scott Grannis said...

Martin: I am strongly against the government interfering with business in any way. The Freddie and Fannie disaster is the latest and best example of the consequences of government meddling.

What is Steve Jobs worth? Try a mind experiment: how much would AAPL fall if he died tomorrow?

Money concentrates in the hands of those who know how to earn it. Power concentrates in the hands of those who know how to wield it. You can't just give money and power to any person at random.

Martin said...

I believe government should set the rules and get out of the way. However, government is far too entwined already so we are a LONG WAY from that utopia. My point is that until there is a massive rewrite of how we tax our citizens, there is already a wealth redistribution going on, but in the wrong direction.

AAPL has already priced in Steve Jobs death. It will not break 85 now and should be north of 250 in a year.

Money begets money. There are always higher yields available to those with more money. I tried to get a $200M loan from Japan at 0% interest, but they said my credit score was too low.

Power begets power. Those with power in our country only lose it through loss of wealth or loss of position through election or dismissal.

But, it is the meeting of the two that creates the stark advantages for those who have either or both. They have greater access to information that will allow them to increase both.

And finally, don't confuse the realignment of incentives with some Robin Hood notion. No one in this country is just given power, except maybe through the media. Money is given to be sure, but never in the amounts to the poor that it is given to the rich. I have never heard of a controversy or scandal where a low-income family received $10M through some questionable government expenditure. It is only the rich individuals and companies who can steal from the country in significant amounts, and who do regularly. Are you aware that the telco companies received $200B in incentives and tax breaks to roll out 10MB/2MB up internet service to America back in the 90's by the Republican Congress. What did we receive instead? 786 down/128 up. And at a cost of $1000 per individual in America. I think private enterprise could have done much better, don't you?

I believe that era is also drawing to a close and that this is the turning point where our country actually uses the information technology that we invented to make it harder for government to "misplace" our money.