Friday, July 31, 2015

Liberalism creates poverty, not wealth (or, what is quantitative easing)

One of the things progressives talk a lot about is the income gap between the rich and the poor.  They say they do not like it, and they say that the cause of it is unfettered capitalism.

So here we have Obama well into his 6th year in office, and he has added more progressive programs than any president since Lyndon Johnson and Franklin Roosevelt.

Progressives believe that the only way to narrow the income gap is by "fundamentally transforming" America from capitalism to progressivism.  In other words, they believe it is necessary to "re-distribute" wealth from the rich to the poor.  They believe this is needed because greedy rich people do not spend their wealth wisely, and so the government must force them to support their agenda through high taxes and so forth.

Obama and progressives believe that capitalism makes the rich richer and that the middle class just stagnates, and the poor get poorer.

Anyway, the progressive tax and spend (redistribution) agenda has advanced more during Obama's first six years than at any time since the Johnson and Roosevelt administrations, and today we learn via the New York Times, "Middle Class Shrinks Further as More Fall Out Instead of Climbing Up," that the income gap has (drum roll please) under Obama risen four times faster than under George W. Bush. reported that "Inequality has been even more pronounced under Obama than it was under George W. Bush."

There is a good reason for this income gap increase, and it has nothing to do with capitalism.  Consider the following facts as reported by the Huffington Post:
  • Many Americans lost their jobs in the 2009-2010 recession and were unable to find another job that paid as well (meaning they make less now than then)
  • Today we have a record number of people (46 million) living in poverty.
You might also wish to consider the following statistics:
  • Today we have a record 92,898,000 working age people not working
  • Today the U6 unemployment number, the one that includes those 92,898,000 working age unemployed workers, is a whopping 13.6%
Progressives believe that the income gap is created because the market isn't fair. So they make it fair by making laws that create regulations and programs by taxing the rich.  In other words, they force the rich to support their progressive programs that are basically a redistribution of wealth.  

Then, when they realize that they can't make enough money from taxes to support their spending, so they start to print more money in a process called quantitative easing.  This is a process where the government prints more money and pumps it into the equities market (i.e. the stock market). It goes into the stock market because the people with the power to print it come from the stock market.

And so where has all this newly printed money been going: to the stock market. Who makes money off the stock market? The rich people. So they get richer.

This is why the stock market has grown by leaps and bounds under Obamanomics. It's because the same people who print the money just give it to themselves. This explains why the income gap has grown.  It's because the stock market, in an ever growing recession where the poor get poorer and the middle class is stagnant, has grown by leaps and bounds because of quantitative easing to pay for all the progressive programs created by the Obama Administration.  It's full fledged liberalism at work here.

If you have money in the stock market, if you can afford to do so, you are probably sitting pretty about now. If you are an average American with a 401K you are probably sitting pretty.

Obama will tell you that the stock market is growing completely independent of anything he is doing.  But that's not the case at all.  The Federal Reserve is pumping money into the stock market left and right in order to make it look like progressivism is working.  Yet once we evaluate the underlying data and see that the income gap is increasing as a result of it, we see what is really going on here.

The rich people who can afford to invest in the stock market are getting wealthier and wealthier and wealthier.  But it's not because people are smart and know what stocks to invest in, or not because of any genius business move.  It's because money has been artificially pumped (some $3.5 trillion) into the stock market under the name of quantitative easing.

The stock market has not grown because millions more Americans have decided to invest their money there. It has not grown because of unfettered capitalism. It has grown artificially due to some idealistic progressive attempt to create money to pay for progressive programs that do not work.

This is the only way to explain how the middle class can be stagnant at the same time the stock market grows. It explains why so many people in this country are making sacrifices, yet the rich continue to get richer.

Some of the rich will always get richer because they have the money to take risks in the stock market or other places. Sometimes they lose, although sometimes they win and make even more money. With more money in the stock market due to quantitative easing, the rich just get richer. This also explains why there are always just a few filthy rich people in communist nations.  

Anyway, progressives programs (bailouts, regulations, subsidies, Obamacare, Social Security, TARP, and you name it), coupled with the fact that progressive programs do not cause people to rise up from poverty and into the middle class, results in a rise in the income gap.

High taxes, coupled with regulations that make it so entrepreneurs cannot afford to start their businesses, make it so people do not rise up above the middle class.  So this makes the middle class stagnant.

All Obama did was create programs to help the poor.  He made it so those who do not have jobs can get unemployment for a longer period of time.  So that means all those people are not working and therefore not making money.  The middle class are not creating new jobs, and they are not investing more in the stock market.  So capitalism is not working here.  So to pay for their bailouts and such, progressives had to print more money and put in into the stock market.

This helps the rich get richer.  The middle class is ignored.  The poor get poorer. People from the middle class who lose jobs get new jobs that pay less, and some of them move down into poverty.

Progressives will blame this on capitalism, so they will propose creating more laws and regulations to make things more fair, by their definition of fair that is. But it's not capitalism that is at fault here, it's progressivism; it's Obamanomics. It's the growing number of people on welfare. It's all the progressive regulations made to create fairness and equality and a perfect world.  

That's what happens when you have six full years of full fledged liberalism.  This is yet another example that proves why liberalism/ progressivism has never worked.  It has been tried over and over and over again since the ancient world.  It is what caused the collapse of the mighty Roman Empire and many other empires. It has been called many things, but it always results in the same thing: failure.

Progressives complain that things aren't fair, and so they have to have their own progressive experts define what is fair and what is not.  So they create laws and regulations to force people to comply. They make the market fair, something capitalism, they say, will never do.  Yet fairness by their definition, means that everybody is the same. If everyone makes the same amount of money (fairness), then everybody will be poor.  

The irony here is that progressives complain all the time about how it is unfair that rich people make so much money.  So they raise their taxes, redistribute their wealth, have the Federal Reserve print more money, and all that money goes into the stock market, and the rich get even richer.  How else do you explain how the rich keep getting richer even under Obamanomics when Obama hates the rich.

Since high taxes and regulations discourage potential entrepreneurs from creating new jobs, and prevent corporations from expanding, fewer jobs are created.  The end result here is that the middle class stagnates, and more people enter into poverty.

You simply cannot create wealth and fairness by taking from those who make and giving it to those who do not make.  The reason is because in order to give to the poor you have to take via taxes from those who make money.  And once you take their money, they don't have it. The rich can afford this, the poor and middle class cannot.

Then they create programs that give people money to live by without them having to do anything, and then they become dependent on the government to survive. They are not encouraged to seek work because that would mean losing their government subsidies. So the cost of government goes up while income goes down. So progressives have no choice but to raise taxes to make more money. It becomes an endless cycle.

Then children growing up in these families never see capitalism, so they don't see any better way of life.  So they too end up trapped in poverty.

Yes, this is what unfettered liberalism does.  This is what they call fairness. This is why 30 plus years of progressive leadership in Detroit has driven that city from one of the most prosperous cities in the world during the 1950s into complete and utter bankruptcy.  The New York Times wrote an "Anatomy of Detroit's Decline' back in 2013.

Under unfettered progressivism, or socialism, or communism, or fascism, everybody is the same, everybody is poor, except for the the few on the upper end, and that would be the progressive leaders.  This is the system, by the way, the people lived under for 99 percent of our history.

It's called totalitarian government.  It's a system where only the aristocracy gets to enjoy the benefits of profit.  They accomplish this by taxing the people who do all the work.  Unless this is what we want to go back to, progressivism must be stopped in its tracks.  

The bottom line is that unfettered liberalism creates more poverty, it does not create more wealth.  This is why the income gap has increased after six years of Obamanomics, as opposed to decreasing.