Posts Tagged ‘income inequality’

CNBC Article on Income Inequality

I mentioned income inequality in yesterday’s piece. Seeing as the president is apparently going to address this issue in his state of the union address tonight, I thought it appropriate to mention it again and share this short article I read on cnbc today. The author makes a few great points but the most telling point to me is the fact that from 1979 to 2010 real income for the the bottom 20% increased by 49%. He also points out that the gap has not widened but narrowed since 2007. So when Obama tells you tonight that the gap is widening he’s lying. It is apparent that this is just the issue du jour for the Obama administration. It is an obvious attempt to distract from the disaster that is Obamacare or the NSA before midterm elections. It’s an attempt to pander to his dependent constituency.

One point I didn’t make yesterday is that a by-product of the fed printing money (and giving it to the rich) is to cause consumer prices to rise. So while the wealthy get all the cheap money, the poor, and middle class, and those on fixed incomes get punished with higher prices on things like milk, gas and rent. You think the rich care if the price of milk is $4 or $40? Check out http://www.shadowstats.com for some legit reporting on inflation, as opposed to the BS the BLS puts out. I’ll get into inflation another time but for now suffice it to say money printing benefits the rich and punishes the poor. To the extent income inequality is actually a problem, government creates and exacerbates it.

Advertisements

What is the free market? By definition it is simply a system of voluntary exchanges, nothing more really. If you have a hat and I have ten dollars and we agree to exchange them, absent coercion we have both obtained something we prefer. I prefer the hat to the ten bucks and you prefer the cash. This simple system of voluntary exchanges has been vilified throughout our country’s history and has been blamed for everything from recessions and depressions to the business cycle, to low wages, to income inequality. We are told it is inherently flawed and predatory and a breeding ground for corruption, greed, fraud, scandal, etc. The pope recently told us the free market is evil basically… awesome! We hear this in the media. It is taught in the schools. The result of this perpetuation of the evil free market has been massive regulation, and controls placed on free exchange in an attempt to fix these perceived flaws. In a democracy, if most people believe the free market is to blame for a weak or volatile economy, they will elect those who will place more controls on the economy. Mysteriously these controls never fix the business cycle so we pass more rules, and round and round we go… at some point to gotta ask, “Is this really a free market?” (more…)