Posts tagged with: redistribution of wealth

income-inequalityIn his recent State of the Union address, President Obama has signaled that income inequality will be his domestic focus during the remainder of his term in office. The fact that the president considers income inequality, rather than employment or economic growth, to be the most important economic issue is peculiar, though not really surprising. For the past few years the political and cultural elites have become obsessed with the issue.

But what should Christians think, and how should we approach the issue? Should we also be concerned? And if so, what should we do about it?

Here are ten points about income inequality that every Christian should understand:
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Blog author: bwalker
posted by on Tuesday, January 28, 2014

Pete Seeger performing the Woodie Guthrie song “This Land is Your Land” at President Obama’s “We Are One” Inaugural Concert, January 19, 2009.

Environmentalist, agent provocateur, leftist activist, recovering Communist and ardent redistributionist – all apply to the folksinger who died Monday in New York at the age of 94. Pete Seeger, for better or worse, answered to all of the above adjectives but it’s his legacy as a songwriter and performer for which this writer prefers to remember him.

Certainly there’s much with which to disagree with Seeger from an ideological standpoint over the decades of a nearly 70-year career, but taken as a whole his body of work stands out for its calls for equality and societal change for the better. Take for example Seeger’s “Turn, Turn, Turn,” a wonderful song that “sampled” a bit of Ecclesiastes to become a gentle yet powerful anthem akin to Curtis Mayfield’s “People Get Ready” and Sam Cooke’s “A Change Is Gonna Come.” With “Turn, Turn, Turn,” the songwriter assisted in the bridge between folk and rock when the song was appropriated by the Byrds’ signature jangle-and-harmony pop. (more…)

the_abyss_of_inequality_3075151Earlier this week I claimed you rarely hear progressives argue that income inequality is a problem since for them it just is an injustice. But there’s another reason you rarely hear them make arguments about why income inequality is morally wrong: their actual arguments are terrible.

CNN columnist John D. Sutter recently asked four people — Nigel Warburton, a freelance philosopher and writer; Arthur Brooks, president of the American Enterprise Institute; Thomas Pogge, director of the Global Justice Program at Yale; and Kentaro Toyama, researcher at the University of California at Berkeley — to answer the question, “Is income inequality ‘morally wrong’?”

Sutter only summarizes their arguments, but it’s doubtful they would become more coherent or persuasive if they were in book-length form. So let’s examine each of the summaries:

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Margaret Thatcher once told an interviewer, “Of course, I am obstinate in defending our liberties and our law. That is why I carry a big handbag.” During her time as Prime Minister, Thatcher’s handbag became an iconic symbol of her ability to handle opponents. The term “handbagging” even entered the Oxford English Dictionary (the verb “to handbag” is defined as: (of a woman politician), treat (a person, idea etc) ruthlessly or insensitively) to describe her rhetorical style.

Thatcher’s handbagging usually occurred during Question Time, the hour every day when members of the parliament ask questions of government ministers—including the prime minister—which they are obliged to answer. A prime example is in her last appearance as Prime Minister in the House of Commons, on November 22, 1990. Liberal Democrat MP Simon Hughes taunts her on the subject of income inequality.
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“You can be for markets without being against redistribution,” says Erik Angner, a philosophy professor at George Mason University. Angner argues that the Nobel-winning economist Friedrich Hayek offers an alternative to contemporary liberals and leftists on the one hand and conservatives and libertarians on the other. As Amanda Winkler notes,

In a controversial Politco op-ed published in 2012, Angner wrote that while Britain’s National Health System and the price-rigging elements of Obamacare violate Hayekian principles, creating an individual mandate and giving poor Americans some amount of money to spend on health care as they see fit does not. To Angner, vouchers for health care would function similarly to vouchers for education, helping to create stronger market forces and spurring the sort of competition that would lead to a more efficient and robust system.

Economist Tyler Cowan is skeptical that Hayek’s approach would work since, he says, “it is hard to have major government involvement in health care without price controls, or should I write ‘price controls,’ in some manner or another.”

Perhaps more interesting than whether a Hayekian could support Obamacare is the question of whether a Christian who favors free markets should be in favor of income redistribution. Personally, for numerous reasons I’m in favor of encouraging individual redistribution and leery of state-mandated redistribution. One reason, as Arthur Brooks explains, is that “[It] just culturally makes it harder for people who believe in income redistribution to give intuitively, to take personal ownership of a problem.” Believing that aiding the poor is the role of the government provides a disincentive for personal engagement with those in need.

What would most Christians consider a strong, compelling argument (assuming any exist) for free markets and government-mandated redistribution?

On National Review Online, Acton Research Director Samuel Gregg offers an analysis of last night’s debate between President Barack Obama and Gov. Mitt Romney. Gregg begins with the assertion by Melinda Henneberger of the Washington Post that the candidates are ignoring poor and working-class Americans. Gregg responds:

… what’s generally missing from the discussion of poverty in the context of this presidential election — though Romney did obliquely reference it in the second debate — is acknowledgment that: (1) the economic causes of impoverishment are more subtle and less amenable to wealth redistribution than the Left is willing to concede; and (2), with a few exceptions, liberals are generally reluctant to acknowledge some of poverty’s non-economic causes, not least because it throws into relief some of the more destructive effects of their cultural agenda.

If poverty was simply a question of wealth redistribution, the sheer amount of dollars spent since the not-so-Great Society programs of the 1960s should have resolved the problem. In 2011, Peter Ferrara calculated that “total welfare spending [in 2008] . . . amounted to $16,800 per person in poverty, 4 times as much as the Census Bureau estimated was necessary to bring all of the poor up to the poverty level, eliminating all poverty in America. That would be $50,400 per poor family of three.”

The effects in terms of reducing poverty have, however, been underwhelming. As Ferrara observes: “Poverty fell sharply after the Depression, before the War on Poverty, declining from 32% in 1950 to 22.4% in 1959 to 12.1% in 1969, soon after the War on Poverty programs became effective. Progress against poverty as measured by the poverty rate then abruptly stopped.” In short, America’s welfare state, which now easily accounts for the biggest outlays in the federal government’s annual budget, has proved inadequate at realizing one of its central goals.

Read “Who’s Really Forgotten the Poor” by Samuel Gregg on NRO.

Does the Circle of Protection  actually help the poor? What may be surprising to many of those who are advocating for the protection of just about any welfare program is that these may not alleviate poverty but only redistribute wealth. Rev. Sirico explained in an interview  with the National Catholic Register how the discussion should be about wealth creation, not wealth redistribution:

Father Robert Sirico, president of the Acton Institute, a conservative think tank based in Grand Rapids, Mich., suggested the Christian activists may not be aware “of the root causes of poverty and wealth.”

“Their statements are all about redistribution of wealth with almost nothing about wealth creation through production and labor,” he said.

Rev. Sirico later articulates that the issue isn’t simply about whether we should care for the poor and vulnerable, but more to point how we should care for the poor and vulnerable. What may surprise the Circle of Protection activists is the programs they seek to protect trap the poor in poverty instead of lifting them out:

“Any Christian would agree that we should put the poor and vulnerable first. The question is how,” noted Father Sirico.

He argued that taxes on the middle class destroyed its ability to grow the economy and to generate surpluses that can be used to assist the poor or to create new jobs.

“Redistributing wealth is the way to keep the poor in poverty. The way to lift them out of poverty is with jobs,” said Father Sirico, who added that he did not mean government jobs, but rather jobs generated through wealth creation in the private sector.

Click here to read the entire article.

Blog author: jcouretas
posted by on Thursday, March 31, 2011

Bill Whittle at Declaration Entertainment uses a recent Iowahawk post, Feed Your Family on $10 Billion a Day, to figure out how an “Eat the Rich” economics program would work as a solution to our fiscal ills.

A very good piece on taxation, income inequality and fairness in today’s Wall Street Journal by Arthur C. Brooks, president of the American Enterprise Institute. Brooks, a frequent guest speaker at Acton events, is also author of “The Battle: How the Fight Between Free Enterprise and Big Government Will Shape America’s Future”, forthcoming from Basic Books in June. Watch for the review on the PowerBlog soon.

Simple facts about our tax system do not support the contention that it is “unfair” in favor of the rich. According to the most recent IRS data, the top 5% of earners bring in 37% of the income but pay 60% of the federal individual income taxes. The bottom half of earners bring home 12% of the income but pay 3% of the taxes. Today, according to the Tax Foundation, 60% of Americans consume more in government services than they pay in taxes.

In sum: A large majority disagrees with the current administration’s redistributionist philosophy; believes the rich already face a tax rate that is too high; and disapproves of the fact that more and more Americans pay nothing in federal income taxes. So why do arguments like the president’s persist?

The answer is that nobody wants to sound anti-poor, so we too easily concede the notion of fairness to those who define it as redistribution and criticize redistribution only because it leads to economic inefficiency.

This is an error. There is nothing inherently fair about equalizing incomes. If the government penalizes you for working harder than somebody else, that is unfair. If you save your money but retire with the same pension as a free-spending neighbor, that is also unfair.

Read “‘Spreading the Wealth’ Isn’t Fair” on the Wall Street Journal Web site.

A 2001 radio interview of Barack Obama surfaced yesterday in which he said that “one of the tragedies of the Civil Rights movement,” and one of the limitations of the Warren Supreme Court, was that although they won such formal rights as the right to vote and “sit at the lunch counter and order,” they “never ventured into the issues of redistribution of wealth.”

A caller to the station, WBEZ Chicago 91.5 FM, then asks if the courts are “the appropriate place for reparative economic work to take place.” Obama responds that “you can craft theoretical justifications for it legally,” but a more effective approach is “the political and community organizing and activities on the ground that are able to put together the actual coalitions of power through which you bring about redistributed change.”

Does the radio interview demonstrate that Obama harbors radical views? Does it suggest that the black liberation theology of his former pastor, Jeremiah Wright, plays a bigger role in Obama’s thinking than he claims? Should black Americans get substantial monetary payments from other Americans as repayment for slavery and racism? If these are the primary questions swirling around this radio interview in the coming days, an important question may go begging: Would reparations specifically, and wealth redistribution generally, actually help poor black Americans?

In a new Acton video short, “How not to Help the Poor,” experts on poverty fighting argue that government wealth redistribution has devastated poor communities.

One of the experts interviewed is Robert Woodson, a former Civil Rights activist and president of the Center for Neighborhood Enterprise. “We in Washington today lead the nation in 21 separate categories of poverty expenditures,” he notes. “Explain to me why a child born in Washington D.C. has a life expectancy that’s lower than a child born anywhere in the western hemisphere second only to Haiti. We have the highest per capita expenditure on education and we’re 48th in outcomes for kids.”

Woodson does not find the answer in the history of blacks under slavery but in U.S. social policy after 1960. “The black marriage rate in 1930 to 1940 was higher than in the white community. Eighty-two percent of all black families had a man and a woman raising children. But what happened in 1960 when government intervened with the poverty programs, a major paradigm shift occurred and contributed to the decimation of the family.”

Why do such well-intended programs have such devastating consequences? And what has proven to help lift up the poor? The video short also explores these questions.

An early transcript of the Obama radio interview is available here.