On Greed

Are Conservatives Greedy?

No, greed is not the same thing as rational self interest. Conservatives believe that “God helps those who help themselves” and we are big on self reliance, personal freedoms and private property. As conservatives, we believe that Adam Smith understood this simple truth as early as 1776.

“It is not from the benevolence of thebutcher, the brewer, or the baker, that we expect our dinner, but from thei rregard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.” — Adam Smith (1776)

Liberals, Marxists, socialists, progressives, communists and yes even most Democrats argue that the “current distribution of wealth” is “unfair” in the USA. Hence, Obama, has been quoted as saying he wants to “spread the wealth” around.

Liberals use a rather crude notion of wealth, i.e. that its is a “zero sum” game; i.e. it can be modelled mathematically as the “Ultimatum Game. Conservatives believe that wealth creation, i.e. capitalism; is more realistically modeled as a non-zero-sum game. Voluntary capatilistic “wealth transfer” transactions create wealth because they benefit both parties in the transaction, i.e. a “win / win”. If you take (rob) from one group (Peter) to give to another (Paul) you have a “win / lose” where no wealth is created its just “spread around”. This “spreading” has to be done by a central government of course! This is the oldest trick in the book and its what Obama’s “change” is all about. This “change” he has spoken of is nothing new at all and has been tried (and failed) over and over again throughout history.

“A rising tide lifts all boats.”– John F.Kennedy

So I guess JFK was the real originator of voodoo economics / Reaganomics”?

By way of contrast, wealth transfer conducted by the Federal government (with the aid of the IRS Keynesian confiscation force) is truly unfair to the person being “taken from”. The big dividing line in this country is not between Democrats and Republicans, or Women and Men, or Blacks and Whites, or Straights and Gays, or haves and have nots, but between Takers and the Makers also as written about by Thomas Sowell.

Although win / lose games are immediately gratifying for the winning participant (or the whining liberal), they ultimately hurt the macro-economic system since less wealth ends up being created by the economy as a whole (hence there is a smaller amount of wealth to tax). With a bit deeper thought, one can see that somebody that is succesful will create more capital (wealth) and that capital will end up benefiting society as a whole, since it will be spread around in the form of investments in the market (risk), job creation / sustanence (risk), purchasing of goods (consumption), etc.

This is not that difficult to understand, but these simple princples elude a vast majority of liberal politicians and the voting electorate. One can also think of it in terms of the old Chinese proverb:

“Give a man a fish; you have fed him for today. Teach a man to fish; and you have fed him for a lifetime”.

Its much easier for voters to understand platitudes like:

“A chicken in every pot and a car in every garage” – Herbert Hoover

or

“95% will get a tax cut” – Obama.

Certainly there are people in the USA that need help from the government, and we certainly need taxes and charities and a safety net (and there plenty of them already in place in the USA — over half the Federal budget is spent on these). Why do these programs need to be Federal and not State programs? Centralizing them in the Federal government goes against what our founders wanted and the constitution’s republican intent.

What we certainly don’t need is a Federal hammock for people to lay in and be nurtured by a “Nanny State”, seriously, if you want that type of country, which encroaches upon your personal liberty, your private property and freedom, please move to Venezuala, France, Canada or some other already Socialist state. What gives you the “audacity of hope” to try and create your anti-capitalist Marxist Utopia here in the USA? Really?

The non-zero sum nature of Capitalism was the basis for Reagan’s insight into what has come to be called “trickle down” economics by the left. What the leftists always refuse to admit, is that they are for the very opposite and short sighted notion of trickle up poverty. Wealth transfer systems, like socialism, communism, progressivism, and Marxism have a very long track record of disasterous failure – almost always ignored (and even hidden) by their proponents on the left.

We conservatives believe in the rule of law and a small but self-correcting government. Monopoplies can be very bad for the economy and there must be oversight to prevent them. The U.S.A. has historically out-paced every other economy of the world by being the most capitalist country ever with the most GDP and wealth creation in the history of the World. The U.S.A. has also donated the most generously of all countries, to the UN, and developing countries. Clearly capitalism works very well and has the track record to prove it – yet the deniers abound – on the left.

No matter how disastrously some policy has turned out (take for example Barney Frank’s Fannie/Freddie policies), anyone who criticizes it can expect to hear: “But what would you replace it with?” Well, “When you put out a fire, what do you replace it with?” -Thomas Sowell.

Liberals believe they have to “spread the wealth around” because there is only so much to go around (zero sum thought patterns). This is simply wrong. Wealth is being created by capitalism continuosly. Wealth is by no means a zero sum game. People that are highly compensated, like CEOs for example, have more than likely created much more wealth in their life than they have ever earned (by definition), and that wealth is transferred to the employees of the corporations with job creation. In the USA almost anyone can be a CEO, a high ranking politician, a business leader if one works hard and takes responsibility for ones own life.

There is some luck involved in all aspects of life. Gross injustices, like slavery, rabid racism, sexism, have caused economic injustices in the past, but have been “corrected” by the USA’s self correcting form of government (the ammendment system) – and we credit those that fought for these corrections. A certain amount of injustice will always remain in every society since people are not perfect, nor are their governments.

We are all (already) Socialists now!

The bailouts (sigh), what a disaster, but that is a topic for another day. Lets look at the U.S. corporate income tax versus what the rest of the world does.

Clearly USA (and Japanese and German) corporations are paying their fair share! So why are we losing jobs to overseas?

Wow! That’s gotta be efficient! But wait, lets look at individual tax returns.

The above chart is from the Tax schedule of the IRS in 2004 (check your new one this spring), shows that the top 1% of earners pay 37% of the federal income tax bill. The top 5% pay over 50% of the Federal taxes in this country already! Do we really need to “spread more wealth around”? Isn’t this progressive tax system really hurting our economy?

Where does it all go?

Social Security (21%) + Medicare / Medicaid / SCHIP (21%) + Safety Net Programs (9%) = 51% of the $3T national budget and this is currently paid for by top 5% of wage earners (yes that’s today).

Fedzilla is already “spreading the wealth” around. Don’t you think that this might bepart of our problem in the USA, i.e. the solution is not more of the same stuff we have been doing (i.e. the “Change” Obama promises is a more intense form of this type of progressive taxation).

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