The Wolves of State Street

President Obama has declared that he will devote the rest of his presidency to fighting the scourge of economic “inequality.”

Which is proof that after five years of claiming that they were going to “pivot to jobs” as a top priority any day now—through years of high, persistent, long-term unemployment—the Obama administration has given up. Because “inequality” is what the left talks about when they have given up being concerned about poverty or about a growing, vibrant economy.

Let’s dispense, first of all, with the left’s arguments about the actual justice of unequal incomes. The only argument they’ve offered that is remotely relevant, as far as I can tell, is Elizabeth Warren’s complaint that the minimum wage hasn’t risen at the same rate as worker productivity—the idea being that the wealth produced by all that extra productivity has been siphoned off by evil plutocrats. It’s a retread of the old Marxist idea that capitalists skim off the “surplus value” of the workers’ labor.

This is clearly the kind of idea that President Obama has in mind, since his only policy idea for dealing with inequality is to increase the minimum wage. I suppose he imagines that, instead of making thousands of marginal workers unemployable, this will pry a little extra money out of the grasp of the capitalist exploiters.

I’ve already taken apart Warren’s argument, pointing out how she proposes to give all of the benefits of increased productivity to the people who did the least to earn it. I just came across a good follow-up from William Jacobson at the Legal Insurrection blog confirming this. While Warren cites the increase in average productivity for all workers in general, most of that increase has come in jobs, and in industries, that do not use minimum-wage workers. The leader in productivity increases? No surprise: the technology industry, which produces a whole lot of those evil one-percenters.

More to the point, the whole issue of inequality actually sidesteps the question of what keeps unproductive workers unproductive—what keeps them poor and at the bottom of the pile. A good overview of the statistics on this indicates that the most important condition that allows people to raise themselves up out of poverty is—again, no surprise here—rapid economic growth, which offers more opportunities for advancement out of low-productivity jobs. But rapid growth is something we have yet to see during Barack Obama’s presidency. The other biggest factors—again, no surprises—are education and two-parent families.

More evidence that ending poverty is not the actual goal of the crusaders against inequality is a recently released study from a lefty relief group call Oxfam attacking the fortunes of the world’s wealthiest individuals. As James Pethokoukis points out, “does Oxfam’s simplistic narrative of crony capitalism tell the economic story of the past three decades better than the 80% decline in extreme poverty? And why exactly are there 250 million fewer extremely poor people in the world today? (Spoiler: It’s not because of Oxfam.)” The real reason, of course, is the spread of global capitalism, particularly greater economic freedom and connection to the global economy in places like China and India, the world’s two most populous countries.

Do check out the chart Pethokoukis refers to, which is really quite remarkable. You would think this would be the sort of thing that is the top concern for people who want to help the poor.

But as I said, “inequality” is what the left focuses on when they’ve given up being concerned about the poor.

Focusing on inequality achieves the political expedient of diverting attention from how to actually lift up the poor and directing it, instead, to resentment of the rich. A good example, as usual, is a recent Paul Krugman column devoted to attacking the idea that “America’s affluent are affluent because they made the right lifestyle choices. They got themselves good educations, they got and stayed married, and so on. Basically, affluence is a reward for adhering to the Victorian virtues.” Which is undoubtedly true: those who are educated and married are extremely likely to be employed and to be in the middle class, which is to say prosperous. But Krugman sniffs that they “are only doing OK.” Never mind that in the Obama economy, a lot of folks would really like to “doing OK.” Rather, his goal is to complain that “most of the gains of the top 1 percent have in fact gone to an even tinier elite, the top 0.1 percent.”

And who are these lucky few? Mainly they’re executives of some kind, especially, although not only, in finance. You can argue about whether these people deserve to be paid so well, but one thing is clear: They didn’t get where they are simply by being prudent, clean, and sober.

Well, of course not. Presumably, they also came up with some actual idea that had a lot of economic value. But Krugman never even addresses this question. Instead, he immediately moves on to compare these wealthy individuals to the protagonist of the new film The Wolf of Wall Street. “The DiCaprio movie of that name, by the way, is wildly popular with finance types, who cheer on the title character—another clue to the realities of our new Gilded Age.”

So there you have the “anti-inequality” mindset in a nutshell: no statistics, no facts, no examples, no arguments. Just some anecdotal gossip about a Martin Scorcese film—a Hollywoodized version of a not-very-truthful memoir—about a guy who does a lot of drugs and throws a lot of wild parties after he gets rich quick running a pump-and-dump scam.

This is the left’s caricature of the super-rich. Needless to say, there is no room in this mindset for, say, guys who got rich by founding big technology companies like Microsoft, Google, Oracle, Facebook, and Apple (Bill Gates, Larry Ellison, Larry Page, Sergey Brin, Mark Zuckerberg, Steve Jobs), or folks who made their money by creating innovative retailers like Wal-Mart, Amazon, and eBay (the Walton family, Jeff Bezos, Pierre Omidyar), or folks who made their money providing energy resources (the Koch brothers, and Harold Hamm, the godfather of the shale oil and gas revolution), a lot of big names in investing (Warren Buffett, Carl Icahn, and Abigail Johnson, the heir and current president of Fidelity), and some of the folks who created big media companies (Michael Bloomberg and of course Rupert Murdoch).

Where did I get these examples? Oh, I just scanned the top couple of dozen names on the Forbes 400 List. You would think that if Paul Krugman wanted to vilify the super-rich, he might try picking a non-fictionalized example. But you can see why he doesn’t: he would have to start by denigrating the economic achievements of Bill Gates and Warren Buffett. The point is that the richest people in America are generally those who started and ran enormously productive, ground-breaking enterprises—yet they get dismissed, reflexively, as the “undeserving rich.”

It’s easy and great sport to poke fun at Krugman, the self-important Nobel Prize winner who offers us super-sophisticated arguments about how the Google guys don’t really deserve their fortunes because—hey, look, Leonardo DiCaprio!

But Krugman is important because he is revered by a whole swathe of the “progressive” left, and if you check out the comments section of his column, you will see that his readers take it as an opportunity to vent their hatred at anybody who earns more than they do. So his column is an indication of what is really behind the “inequality” push: not anguish at the fact that some people are still poor, but venomous hatred of those who are really rich.

If this hatred of the rich resulted only in more economic controls, higher taxes, and minimum wage laws that shut more people out of the labor market, that would be bad enough. But the same hate-the-rich mentality is also being used to justify political controls.

That’s the point of a new leftist proposal stated in perfectly blunt terms: “Let’s Nationalize Fox News.” To be fair, it’s not just Fox. It’s every media company.

Imagine a world without the New York Times, Fox News, CNN, the Wall Street Journal, and countless other tools used by the 1 percent to rule and fool.

In a socialist society run by and for the working people it represents, the mega-monopolies like Walmart, Halliburton, Exxon-Mobil, and the corporations that run the tightly controlled “mainstream media” will be a thing of the past.

So there you have the “progressive” left, pining for the intellectual purity of state-owned media.

The point of this, as with the campaign about economic inequality, isn’t to create something new and better. The alternative media they propose—which is basically union-run newspapers on a somewhat bigger scale—already exist and are hardly thriving. (The proposal itself is published on a money-losing website funded by “ongoing cash injections” from two of the super-rich—an investment banker and a technology mogul.) So the point is not to build up leftist media, but to tear down successful right-leaning media companies, which is why they can’t help themselves from billing it as a proposal to shut down Fox.

It’s worthwhile to remember the original meaning of the old phrase about “cutting down the tall poppies,” a classic expression of the psychology of envy. It started as an ancient Greek ruler’s advice about how to consolidate dictatorship by executing a city’s most prominent men, so that no one could be a threat to the ruler.

This is the motive that always accompanies the left’s envious hatred of the rich: the idea that they, or their gang, should rule instead, that they should hold the real power, so they cannot permit anyone else to rise to prominence and stick up his head as a dissenting voice or a potential challenger to their rule.

Krugman’s ugly caricature of rich guys as drug-addled louts, or that piece about nationalizing Fox News—these are evidence that an unreconstructed left is trying to pull itself back together after the disaster of the 20th century and bring back its power-mad agenda in all its malicious, destructive glee. Smearing those who are honestly successful in the free market as “wolves of Wall Street” is the first step toward unleashing the wolves of State Street.

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