By Joseph Horton
Thursday, February 20, 2014
I was excited when I learned that the parents of a
student I knew produced a product my family used and enjoyed. His response to
me was “Yea, they’re getting rich off you.” He was quite confused when I
replied “They should be. They make a very good product. If they are not getting
rich, they are not good business people.” The student expected me to be envious
of his parents’ success rather than thankful for the product that met my
family’s needs better than anything else.
In a free society, people get rich by providing goods and
services people want at prices they are willing to pay. Yes, there are people
like the founders of Solyndra who game the system and get rich from government
favors. Still, most people who become rich do so by serving others, whether it be
designing new computers or running a carpet installation business.
President Obama has made the reduction of income
inequality a key focus of his second term. Our president is promoting the
politics of envy. We are told that some people have more than their fair share,
and that only the government can make things more fair by taxing and regulating
the successful. The losses of the rich are supposed to make the rest of us
happier and better off.
Since the president was inaugurated, middle-class incomes
have fallen when adjusted for inflation. Five years of the Obama presidency
with tens of thousands of new regulations and hundreds of billions of dollars
of stimulus spending and tax increases on the wealthy have not helped
middle-income families.
This is not surprising. Remember President Clinton’s
luxury tax? It was supposed to affect only the rich who bought things like
yachts. The people who built yachts lost their jobs when the rich stopped
buying luxuries. President Clinton was humble enough to allow the luxury tax to
be repealed. Our current president is doubling down on more of what has failed
and is prepared to use constitutionally dubious methods, circumventing the
legislative branch, to do so.
We do not need new savings accounts created by executive
fiat so middle-income people can loan more money to the government. Savings
Bonds already exist. We need more wealth creation. Contrary to what many
pundits claim, wealth is good. Wealth is fresh fruits and vegetables in
January, indoor plumbing, and MRI machines.
Neither will raising the minimum wage improve the lot of
those who earn it. People can only be paid what their labor is worth for a
particular job in the current economy. Raising the minimum wage will increase
automation, eliminating low-level jobs. Claiming otherwise for political
support simply takes advantage of people while pretending to help.
It is not by chance that the United States is a wealthy
country. Yes, the government was involved in such things as building roads
which have helped business. However, government does not have any resources of
its own. Roads were built because productive people paid taxes to pay for them.
We have become a wealthy country because for most of our history we have had
relatively low taxes (when rates were high there were huge loopholes), limited
regulation, the rule of law, and relatively little corruption.
No one is arguing that there should be no government, or
that no tax revenue should be collected. Limited government, however, provides
the freedom for entrepreneurs to provide solutions to people’s problems and
improve their lives. If our elected officials would in humility stop trying to
engineer fairness, step back and let Americans create wealth, the middle class
could thrive again.
President Obama is encouraging us to compare ourselves to
those who have more. Rather than using these people as examples of how to
achieve success, he is telling us it is unfair and that he can bring fairness
and prosperity. Political points may be scored, but it will not improve our
standard of living. If Americans succumb to the politics of envy we will be
less happy and poorer for it.
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