Wednesday, June 15, 2011

Transfering Wealth

The lefties of our nation and the globe as well, insist that “fairness” can only be achieved by transferring wealth from the “haves” to the “have-nots.” As one can expect from most socialist reasoning (an oxymoron…emphasis on MORON), the holes in their policy are massive. Bernie Madoff sits in a jail cell as police, prosecutors, and plaintiff’s attorneys confiscate every remnant of his former ill-gained fortune. Now he appears to be broke. Should someone be required to share their wealth with the former prince of ponzi? I suspect that when we speak of transferring wealth from the “richer” to the “poorer,” we are in reality discussing transferring earned wealth from producers to socialist-voting looters. A person’s “right” to the wealth of others is determined by her or his likelihood of voting a certain way.

Transferring wealth is more complex than merely dropping a dollar into the bucket of a curbside beggar. The various governments, non-government agencies (NGA’s), non-profits, churches and other elements of the society employ a number of coercive devices to generate wealth-sharing. First, there is the direct tax, direct payment method. Welfare, Social security, Medicaid and Food Stamps are the most brazen examples. Some transfers are more indirect. They might include tax credits for munchkins (children), subsidies for behaviors (education) and massive industry and corporate subsidies or tax breaks. Straight forward foreign aid is direct. Sweet trade deals for preferred countries are an indirect form of the share the wealth mentality.

The transfer of wealth may also involve some subtlety (or sneakiness, if you prefer). Laws that include certain prohibitions may create a competitive advantage for one or another industry or company. For example, when I served in the legislature, there was a representative who introduced an absolutely devastating axle tax for the trucking industry. And….he introduced a similar bill every session…year after year. As I fielded the calls from truckers in my district and notes from lobbyists representing independent truckers, I sought to discover why he would introduce such a job-killing piece of   legislation. My older colleagues informed me that the offending representative was “in the pocket” of the railroads. No one took his legislation seriously, and it would not go anywhere, but just like biennial elections, he introduced it every session to earn his campaign check. When those pieces of legislation are taken seriously and passed, then a law-induced transfer of wealth is the result. Wait, there’s more.

Nearly every regulatory initiative passed by nearly every legislative body or agency impacts some industries more than others…a subtle transfer of wealth. Within given industries some companies may be more adversely affected than their competitors by new rules because of their size, location or any number of intervening factors….in essence a transfer of wealth because compliance costs are not fairly assessed. The great dream of the socialist agenda, ObamaCare, is the epitome of a wealth transfer mechanism at every level. The more than one thousand, one hundred (1,100) waivers granted so far to corporations and labor unions with the “correct” political leanings is the epitome of an indirect and sometimes subtle transfer of wealth. As you can detect, wealth transfers involve much more than simply “robbing Peter to pay Paul.” They also include subsidizing Paul and giving him tax breaks. They may involve regulating Peter at a much greater level than Paul so that Paul gains a competitive advantage. Think of coal, oil and natural gas rules and regulations versus the subsidy packages for wind power, solar systems, and bio-fuels. And yet…the “green” technologies are not competitive on the open energy market.

Licensing and registrations are another form of wealth transfer that operates outside the public view. In my early days as a broadcaster, there were no licensing fees for stations to operate once they had paid the initial start-up licensing amounts. Now stations must pay annual fees based upon their transmitter power, their markets and their gross revenues. In other words the more successful stations must pay a penalty for their efforts while the ones that are not so successful get by with lower fees. Stations that have made the effort to attract topnotch on-air talent and hire competent sales people must subsidize the regulatory administrative costs for less popular stations.

Transferring wealth by force is how the government functions. Government by its very nature is the definition of force. In a world where liberty reigns, wealth would be transferred unfettered by government coercion. A series of voluntary transactions wherein quality, productivity and service would thrive is the model for free commerce. While government stacks the deck and enforces its preferences, wealth is transferred….and we’re all much poorer and less free.

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