Among the issues most commonly discussed are individuality, the rights of the individual, the limits of legitimate government, morality, history, economics, government policy, science, business, education, health care, energy, and man-made global warming evaluations. My posts are aimed at intelligent and rational individuals, whose comments are very welcome.

"No matter how vast your knowledge or how modest, it is your own mind that has to acquire it." Ayn Rand

"Observe that the 'haves' are those who have freedom, and that it is freedom that the 'have-nots' have not." Ayn Rand

"The virtue involved in helping those one loves is not 'selflessness' or 'sacrifice', but integrity." Ayn Rand

14 December 2014

Obama's Wealth Redistribution Takes It From Blacks and Hispanics

Never, ever assume that the proclaimed purpose of a Progressive Elitist is what he says it is.  Progressive elitists are thorough-going unprincipled pragmatists and they do whatever leads them to their desired results.  If it takes a lie to defraud others into giving them the power they want, they will not hesitate to lie.  A now classic example is the set of massive lies used to enact ObamaCare:
  • If you like your health insurance plan you can keep it.
  • If you like your doctor you can keep him.
  • The cost of health insurance premiums for the average family will be reduced by $2500 a year.
  • Most of the 47 million Americans said not to have health insurance will get it under ObamaCare.
  • ObamaCare is not a tax.
  • ObamaCare will cause few Americans to lose their jobs.
So, why would anyone believe that when Obama said his purpose was to redistribute wealth from the rich to the poor, that would be the result of his policies?  Well, some people are just that naive and that blind to the evidence of history.  Let us examine the evidence of the recent past.

Every three years the Federal Reserve publishes the Survey of Consumer Finances.  The Pew Research Center has produced a very useful summary of the results addressing the differences in household net worth for non-Hispanic blacks, Hispanics, and non-Hispanic white Americans.  Despite years of claims of "economic recovery" under Obama, the median net worth of all households was lower in 2013 than in 2010 and much lower than in 2007.  The median household wealth of 2007 was $135,700 in 2013 dollars.  In 2010, it had fallen to a mere $82,300, before falling further in 2013 to $81,400.  Median household wealth in the USA in 2013 had "recovered" to 60.0% of the median wealth of 2007!

But from 2010 to 2013, non-Hispanic white household income improved a minuscule 2.4%.  This is essentially stagnation in terms of normal wealth growth, let alone the growth characteristic of most economic recoveries.  This is a horror story by itself.

The worst horror story is that of American non-Hispanic blacks.  In 2010, black median household wealth was only 86.5% of what it had been in 2007.  So in 2010, blacks had lost 13.5% of their median household wealth compared to the 28.0% lost by whites.  But then instead of stagnation from 2010 to 2013, black median household wealth dropped precipitously to 57.3% of their 2007 wealth!  So under those much bally-hoed years of the Obama "recovery", non-Hispanic black median household wealth fell a further 33.7%, after the earlier three-year fall of 13.5%.  Black Americans lost more under Obama's "recovery" than they did in the early stages of the Great Socialist Recession!

By 2010, Hispanic American median household wealth fell to 67.8% of their 2007 wealth in 2013 dollars.  This loss of 32.2% was even worse than the 28.0% loss of non-Hispanic white households.  Once again, Hispanic Americans had further losses of household wealth during the Obama "recovery".  In 2013, median Hispanic household wealth was 58.1% of that of 2007 for a total loss of 41.9%, and an additional loss between 2010 and 2013 of 14.4%.

The period of time from 2007 to 2013 was a disaster for most American households.  White median household wealth fell from $192,500 to $141,900.  Hispanic wealth fell from $23,600 to $13,700, making their reserves razor thin.  Black household wealth fell from a median of $19,200 to $11,000.  Both the median black and Hispanic households now have almost negligible wealth. This means they have almost no protection against further economic shocks and almost no reserves for retirement.  Even before the Great Socialist Recession they were ill-prepared for either.

Obama's anti-business and anti-growth policies of higher business taxes, much increased and expensive regulations, ObamaCare, and an alarmist carbon-based fuel vendetta, have hurt the black and Hispanic Americans the most.  Their households were the least well-provisioned to survive these economic shocks to the private sector that madman Obama so much relishes delivering.  When Big Government takes resources away from the private sector where they are put to productive use and redistributes them to political uses, it is the poor and the least skilled and educated who are hurt the most.  Those who benefit are the politically connected and the poor are not usually well-connected.  They do not have the money to entice politicians and they are the least likely to devote the time or even to have the time for the study of the Byzantine workings of Big Government.

The miracle of wealth generation is well-known.  It is Capitalism with its emphasis on mutual cooperation and competition in the private sector that generates wealth.  Big Government is a very efficient consumer of wealth.  It takes wealth by force and destroys it in huge gulps.  Obama has proven that he is a particularly Big, Greedy Gulper of Wealth.  Where does that wealth come from?  It comes from American households.  The more government uses for political purposes, the less wealth American households have to pursue their own dreams and happiness.

Such are the consequences of allowing a Great Socialist Leader the power to redistribute wealth.  The story is always the same.  The socialist redistribution of wealth always reduces the total wealth of the society and it reduces that of most of the people of such a society.  A few politically well-connected people prosper, as we have seen with Obama's crony mercantilist friends.

Curious it is that mercantilism is usually described as the nature of the politically connected economies under monarchies and the accumulation of aristocrats hundreds of years ago.  It was the economic system before Capitalism.  It was the economic system of Medieval times.  Mercantilism, with its effective aristocracy of the politically well-connected is the economic system that Obama and the Progressive Elitists have turned America toward in their Transformation of America.  Theirs is a profoundly retrograde viewpoint that takes us back to the Divine Right of Kings, now the Divine Right of the Politically-Connected Progressive Elitist Aristocracy.  As in the feudal system, most of the people are not politically-connected.  Most of the people are made poorer and dependent on those who are politically connected.  Most of the people know almost nothing about what is going on in the government and have no effective control over its actions.

A vigorous and little-controlled private sector creates great wealth.  It may not produce it equally for everyone, but it does produce wealth for almost everyone.  Feudalism in its socialist or Progressive garb, destroys wealth for almost everyone.  When only partially implemented, it may only reduce the rate at which the people can acquire wealth.  When implemented as far as Obama and his Progressive Elitist allies have implemented it, it actually destroys wealth.  We see that in the reduced median household wealth figures above.

Yet, only a fraction of the implementation of wealth redistribution and socialist policies of the Progressive Elitists has been put in place.  There is much, much more wealth destruction that their policies are capable of doing.  Those who understand this should understand that a principled reduction of government powers and their scope of implementation is necessary.  We ought to return government to its legitimate purpose of protecting the equal, sovereign rights of the individual to life, liberty, property, the ownership of their own minds, bodies, and labor, and to the pursuit of their own happiness.

No comments: