By John Stossel
Wednesday, January 08, 2014
President Barack Obama says income inequality is
"dangerous ... the defining challenge of our time." The pope is upset
that capitalism causes inequality. Progressives, facing the failures of
Obamacare, are eager to change the subject to America's "wealth gap."
It's true that today, the richest 1 percent of Americans
own a third of America's wealth. One percent owns 35 percent!
But I say, so what? Progressives in the media claim that
the rich get richer at the expense of the poor.
But that's a lie.
Hollywood sells the
greedy-evil-capitalists-cheat-the-poor message with movies like Martin
Scorsese's new film, "The Wolf of Wall Street," which portrays stock
sellers as sex-crazed criminals. Years before, Oliver Stone's "Wall
Street" created a creepy financier, Gordon Gekko, played by Michael
Douglas, who smugly gloated, "It's a zero-sum game. Somebody wins;
somebody loses."
This is how the left sees the market: a zero-sum game. If
someone makes money, he took it from everyone else. The more the rich have, the
less others have. It's as if the economy is a pie that's already on the table,
waiting to be carved. The bigger the piece the rich take, the less that's left
for everyone else. The economy is just a fight over who gets how much.
But this is absurd. Bill Gates took a huge slice of pie,
but he didn't take it from me. By starting Microsoft, he baked millions of new
pies. He made the rest of the world richer, too. Entrepreneurs create things.
Over the past few decades, the difference in wealth
between the rich and poor has grown. This makes people uncomfortable. But why
is it a problem if the poor didn't get poorer?
Progressives claim they did. Some cite government data
that show middle class incomes remaining relatively stagnant. But this data is
misleading, too. It leaves out all government handouts, like rent subsidies and
food stamps. It leaves out benefits like company-funded health insurance and
pensions, which make up increasing portions of people's pay.
And it leaves out the innovation that makes life better
for both the rich and poor. Even poor people today have access to cars, food,
health care, entertainment and technology that rich people lusted for a few
decades ago. Ninety percent of Americans living "below the poverty
line" have smart phones, cable TV and cars. Seventy percent own two cars.
But hold on, says the left. Even if the poor reap some
benefits from capitalism, it's just not "fair" that rich people have
so much more. I suppose this is true. But what exactly is "fair"?
Is it fair that models are so good-looking? Why is it
fair that some men are so much bigger than I, so no one will pay me to play pro
sports? It's hardly fair that I was born in America, a country that offers me
far greater opportunities than most other countries would. We Americans should
be thankful that life is not fair!
Freedom isn't fair, if fair means equal. When people are
free, some will be more successful than others. Some people are smarter or just
luckier. Globalization and free-market capitalism multiply the effect of smarts
and luck, allowing some people to get much richer than others. So what?
Inequality may seem unfair, but the alternative -- government-forced equality
-- is worse. It leaves everyone poor.
Opportunity is much more important than equality, and
there is still income mobility in America. People born poor don't necessarily
stay poor.
Pew research shows 58 percent of the kids born to the
poorest fifth of families rose to a higher income group. Six percent rose all
the way from the bottom fifth to the top fifth.
Sixty-one percent of kids born to the richest fifth of
families fell from that group, and 9 percent fell all the way to the bottom.
Opportunity requires allowing people to take risks and
make changes. We won't always like the outcomes. But over the long haul, we're
still better off if people are free to strive and fail, or maybe -- reap big
rewards.
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