Commentary Magazine


Posts For: April 2, 2010

RE: The Ever-So-Convenient Myth

John, as you say, “The rich have certainly been getting richer in the last thirty years. In 1982 it took a measly $80 million or so to make it onto the Forbes 400 List. Today it takes over a billion. But this is an artifact not of crime but of the technological revolution the world is undergoing, thanks to the microprocessor. Every major technological development has produced an inflorescence of fortune making.”

But let’s not forget inflation, which compounded since 1982 amounts to 95 percent, and whittles down that Saganesque Billion to barely above $500 million. So the pockets of the rich have not grown quite as heavy as might appear at first blush. But that is beside the point.

For even if income inequality in America could be traced back to winner-take-all circumstances, which it can’t, I find it hard to believe that Democrats would shun zero-sum games on principle: all the entitlement programs of which they are so fond constitute zero-sum transactions — games I cannot call them, because a game opens to an uncertain outcome in a world where, in fact, everything is so, except, to quote Ben Franklin, “death and taxes.” But the principle remains predatory: take from some to give others, redistribute existing wealth without creating any new value.

President Obama and the other bleeding-heart egalitarians in Congress can’t even claim to be doing all this vigorous reshuffling for the poor little guy’s sake alone. Not after they authorized the bailout of imprudent banks and automobile giants — “big baaad businesses” par excellence. Not after they taxed indiscriminately, including among lower-income brackets, to subsidize the purchase of such expensive, ultra-fuel-efficient cars that, even after the “cash-for-clunkers” rebate, only the relatively rich could afford. Not after they handed out generous rebates to those wealthy enough to afford purchasing a home in this miserable economy.

No, if the party in power had any qualms about zero-sum games, it would blush at its own record. In mentioning income inequality as a rationale for nationalizing health care, Senator Max Baucus was probably just throwing some red meat to his leftist constituency, to whom everything looks more virtuous and worthwhile when seen under the prism of wealth redistribution.

John, as you say, “The rich have certainly been getting richer in the last thirty years. In 1982 it took a measly $80 million or so to make it onto the Forbes 400 List. Today it takes over a billion. But this is an artifact not of crime but of the technological revolution the world is undergoing, thanks to the microprocessor. Every major technological development has produced an inflorescence of fortune making.”

But let’s not forget inflation, which compounded since 1982 amounts to 95 percent, and whittles down that Saganesque Billion to barely above $500 million. So the pockets of the rich have not grown quite as heavy as might appear at first blush. But that is beside the point.

For even if income inequality in America could be traced back to winner-take-all circumstances, which it can’t, I find it hard to believe that Democrats would shun zero-sum games on principle: all the entitlement programs of which they are so fond constitute zero-sum transactions — games I cannot call them, because a game opens to an uncertain outcome in a world where, in fact, everything is so, except, to quote Ben Franklin, “death and taxes.” But the principle remains predatory: take from some to give others, redistribute existing wealth without creating any new value.

President Obama and the other bleeding-heart egalitarians in Congress can’t even claim to be doing all this vigorous reshuffling for the poor little guy’s sake alone. Not after they authorized the bailout of imprudent banks and automobile giants — “big baaad businesses” par excellence. Not after they taxed indiscriminately, including among lower-income brackets, to subsidize the purchase of such expensive, ultra-fuel-efficient cars that, even after the “cash-for-clunkers” rebate, only the relatively rich could afford. Not after they handed out generous rebates to those wealthy enough to afford purchasing a home in this miserable economy.

No, if the party in power had any qualms about zero-sum games, it would blush at its own record. In mentioning income inequality as a rationale for nationalizing health care, Senator Max Baucus was probably just throwing some red meat to his leftist constituency, to whom everything looks more virtuous and worthwhile when seen under the prism of wealth redistribution.

Read Less

The Ever-So-Convenient Myth

In an interesting article on the real reason behind ObamaCare — wealth redistribution — in today’s Washington Examiner, Byron York quotes Senator Max Baucus.

Health reform is “an income shift,” Democratic Sen. Max Baucus said on March 25. “It is a shift, a leveling, to help lower income, middle income Americans.”

In his halting, jumbled style, Baucus explained that in recent years “the mal-distribution of income in America has gone up way too much, the wealthy are getting way, way too wealthy, and the middle income class is left behind.” The new health-care legislation, Baucus promised, “will have the effect of addressing that mal-distribution of income in America.”

York quotes several others, including Howard Dean, to the same effect. This opinion, nearly universal on the Left, is implicitly based on one of the oldest, biggest, and dumbest fallacies in economics: that an economy is a zero-sum game, that for someone to get richer, some — or many — have to get poorer. Poker is a zero-sum game. So is robbery, which is why it’s illegal. And Honoré de Balzac is widely but incorrectly supposed to have said that “Behind every great fortune is a great crime.” Well, Paul McCartney was born into a poor family in rundown Liverpool and is now one of the richest men in England. Whom, exactly, did he rob?

The rich have certainly been getting richer in the last thirty years. In 1982 it took a measly $80 million or so to make it onto the Forbes 400 List. Today it takes over a billion. But this is an artifact not of crime but of the technological revolution the world is undergoing, thanks to the microprocessor. Every major technological development has produced an inflorescence of fortune making. The Industrial Revolution produced so many new rich that Benjamin Disraeli had to coin the word millionaire in 1827 to describe them. Railroads, steel, oil, automobiles, the movies, television, all produced prodigious new fortunes.

But the people who rode the railroads and automobiles, watched the movies and television didn’t get poorer by doing so. Just like the millions who so willingly bought Paul McCartney’s music, they got richer too. They had quicker, cheaper transportation, and better and cheaper entertainment. No one forced them to buy the product, which is a good deal more than can be said for ObamaCare.

As the rich got richer, of course, their tax bills got bigger, a lot bigger, and both the federal tax revenues and the percentage of those revenues paid by the top ten percent and, especially, the top one percent, have been growing swiftly. But as long as the Left clings to the ever-so-convenient myth of the zero-sum economy, that isn’t enough.

In an interesting article on the real reason behind ObamaCare — wealth redistribution — in today’s Washington Examiner, Byron York quotes Senator Max Baucus.

Health reform is “an income shift,” Democratic Sen. Max Baucus said on March 25. “It is a shift, a leveling, to help lower income, middle income Americans.”

In his halting, jumbled style, Baucus explained that in recent years “the mal-distribution of income in America has gone up way too much, the wealthy are getting way, way too wealthy, and the middle income class is left behind.” The new health-care legislation, Baucus promised, “will have the effect of addressing that mal-distribution of income in America.”

York quotes several others, including Howard Dean, to the same effect. This opinion, nearly universal on the Left, is implicitly based on one of the oldest, biggest, and dumbest fallacies in economics: that an economy is a zero-sum game, that for someone to get richer, some — or many — have to get poorer. Poker is a zero-sum game. So is robbery, which is why it’s illegal. And Honoré de Balzac is widely but incorrectly supposed to have said that “Behind every great fortune is a great crime.” Well, Paul McCartney was born into a poor family in rundown Liverpool and is now one of the richest men in England. Whom, exactly, did he rob?

The rich have certainly been getting richer in the last thirty years. In 1982 it took a measly $80 million or so to make it onto the Forbes 400 List. Today it takes over a billion. But this is an artifact not of crime but of the technological revolution the world is undergoing, thanks to the microprocessor. Every major technological development has produced an inflorescence of fortune making. The Industrial Revolution produced so many new rich that Benjamin Disraeli had to coin the word millionaire in 1827 to describe them. Railroads, steel, oil, automobiles, the movies, television, all produced prodigious new fortunes.

But the people who rode the railroads and automobiles, watched the movies and television didn’t get poorer by doing so. Just like the millions who so willingly bought Paul McCartney’s music, they got richer too. They had quicker, cheaper transportation, and better and cheaper entertainment. No one forced them to buy the product, which is a good deal more than can be said for ObamaCare.

As the rich got richer, of course, their tax bills got bigger, a lot bigger, and both the federal tax revenues and the percentage of those revenues paid by the top ten percent and, especially, the top one percent, have been growing swiftly. But as long as the Left clings to the ever-so-convenient myth of the zero-sum economy, that isn’t enough.

Read Less

Cutting Angels’ Wings

Congress has passed or contemplated so many blunders of late that I, for one, am finding it harder and harder to muster fresh outrage toward every new one. But this latest being cooked up by Chris Dodd deserves a special shout out:

First, Dodd’s bill would require startups raising funding to register with the Securities and Exchange Commission, and then wait 120 days for the SEC to review their filing. A second provision raises the wealth requirements for an “accredited investor” who can invest in startups — if the bill passes, investors would need assets of more than $2.3 million (up from $1 million) or income of more than $450,000 (up from $250,000). The third restriction removes the federal pre-emption allowing angel and venture financing in the United States to follow federal regulations, rather than face different rules between states.

All the prerogatives over private businesses; all the power over health care, now near absolute; all the dabbling in the inner workings of financial institutions; in short, all the regulation in the world, cannot seem to satisfy this government. Are the Democrat legislators ever going to have enough? Or is their regulatory fetish feverishly looking for new, exotic objects?

While Obama sheds crocodile tears over how hard startups have it, his henchman is working night and day to ensure that they never receive seed funding. Whichever way this bill is looked at, not a single rationalization for saddling angels with such burdens can be found. Unless, of course, Democratic legislators so believe in their own rhetoric of strife against them big, eeeevil corporations that they want to kill them in their womb or prevent them form ever being born, let along growing big. And if such is the motive, conscious or unconscious, no measures could backfire more sorely than the ones being dealt out. For any regulation that raises new barriers to entry eventually hinders competition, confers undue advantages to incumbents, and fosters just the kind of environment where oligopolies can flourish. If there ever were such a sinister monolithic entity as “Big Business,” it could not be more satisfied with this bill. But it is surely an occasion for entrepreneurs to weep, as I can attest from being married to one, all of whose startups owe their inception to angel investment and might have never come into existence under such debilitating regulation. Economic recovery in America is being dealt a crippling blow.

Congress has passed or contemplated so many blunders of late that I, for one, am finding it harder and harder to muster fresh outrage toward every new one. But this latest being cooked up by Chris Dodd deserves a special shout out:

First, Dodd’s bill would require startups raising funding to register with the Securities and Exchange Commission, and then wait 120 days for the SEC to review their filing. A second provision raises the wealth requirements for an “accredited investor” who can invest in startups — if the bill passes, investors would need assets of more than $2.3 million (up from $1 million) or income of more than $450,000 (up from $250,000). The third restriction removes the federal pre-emption allowing angel and venture financing in the United States to follow federal regulations, rather than face different rules between states.

All the prerogatives over private businesses; all the power over health care, now near absolute; all the dabbling in the inner workings of financial institutions; in short, all the regulation in the world, cannot seem to satisfy this government. Are the Democrat legislators ever going to have enough? Or is their regulatory fetish feverishly looking for new, exotic objects?

While Obama sheds crocodile tears over how hard startups have it, his henchman is working night and day to ensure that they never receive seed funding. Whichever way this bill is looked at, not a single rationalization for saddling angels with such burdens can be found. Unless, of course, Democratic legislators so believe in their own rhetoric of strife against them big, eeeevil corporations that they want to kill them in their womb or prevent them form ever being born, let along growing big. And if such is the motive, conscious or unconscious, no measures could backfire more sorely than the ones being dealt out. For any regulation that raises new barriers to entry eventually hinders competition, confers undue advantages to incumbents, and fosters just the kind of environment where oligopolies can flourish. If there ever were such a sinister monolithic entity as “Big Business,” it could not be more satisfied with this bill. But it is surely an occasion for entrepreneurs to weep, as I can attest from being married to one, all of whose startups owe their inception to angel investment and might have never come into existence under such debilitating regulation. Economic recovery in America is being dealt a crippling blow.

Read Less

Lockerbie Balm

So how is Lockerbie bomber Abdelbaset Al-Megrahi faring eight months after Scotland sent him back to Libya, owing to his “terminal prostate cancer”? Is he on his deathbed? Comatose? It’s been eight months, did he die without press coverage?

The Lockerbie bomber celebrated his 58th birthday on Thursday at a Libyan mansion, defying the imminent death Scottish officials predicted when they compassionately freed him from prison nearly eight months ago. …

“Since returning to the love of family and friends, he has made a remarkable recovery,” a diplomatic source told the (London) Daily Mail.

The story gets worse with analysis. The obvious take is that Megrahi was never that sick and the UK freed him in return for some Libyan oil deals. But let’s suppose his cancer was actually fatal in Scotland. If this is the case, it’s hardly surprising that it became less so once he left the UK. Take a look at cancer-survival rates under the British medical system we’re now tenaciously emulating in the U.S.

From the Concord study published in 2008 in Lancet Oncology: The five-year survival rate for breast cancer in the U.S. is roughly 84%. In the U.K., it is around 70%. Overall survival rates from all cancers in males is 66% in the U.S., 45% in the U.K. For prostate cancer specifically, the rather astounding numbers are 92% in the U.S. versus 51% in the U.K. [emphasis added]

In the UK, nearly half of all prostate cancer is terminal. In the U.S., nearly all cases are survivable. Megrahi may have been freed twice: first from prison, then from UK health care. It’s entirely likely that Libyan medical treatment given to a close friend of Muammar Qaddafi could have raised Megrahi out of the 51 percent survivability ghetto of the United Kingdom. My question is, who’s springing us when America adopts prison-like health care?

So how is Lockerbie bomber Abdelbaset Al-Megrahi faring eight months after Scotland sent him back to Libya, owing to his “terminal prostate cancer”? Is he on his deathbed? Comatose? It’s been eight months, did he die without press coverage?

The Lockerbie bomber celebrated his 58th birthday on Thursday at a Libyan mansion, defying the imminent death Scottish officials predicted when they compassionately freed him from prison nearly eight months ago. …

“Since returning to the love of family and friends, he has made a remarkable recovery,” a diplomatic source told the (London) Daily Mail.

The story gets worse with analysis. The obvious take is that Megrahi was never that sick and the UK freed him in return for some Libyan oil deals. But let’s suppose his cancer was actually fatal in Scotland. If this is the case, it’s hardly surprising that it became less so once he left the UK. Take a look at cancer-survival rates under the British medical system we’re now tenaciously emulating in the U.S.

From the Concord study published in 2008 in Lancet Oncology: The five-year survival rate for breast cancer in the U.S. is roughly 84%. In the U.K., it is around 70%. Overall survival rates from all cancers in males is 66% in the U.S., 45% in the U.K. For prostate cancer specifically, the rather astounding numbers are 92% in the U.S. versus 51% in the U.K. [emphasis added]

In the UK, nearly half of all prostate cancer is terminal. In the U.S., nearly all cases are survivable. Megrahi may have been freed twice: first from prison, then from UK health care. It’s entirely likely that Libyan medical treatment given to a close friend of Muammar Qaddafi could have raised Megrahi out of the 51 percent survivability ghetto of the United Kingdom. My question is, who’s springing us when America adopts prison-like health care?

Read Less

Getting Tough, Really Tough, with Iran

On CBS’s Early Show this morning, President Obama said regarding Iran that, “I have said before that we don’t take any options off the table, and we’re going to continue to ratchet up the pressure and examine how they respond.”

Continue to ratchet up the pressure? How has the pressure on Iran increased by so much as a single pound per square inch in the 15 months that Obama has been the leader of the free world? Oh, right, invitations sent to Iranian diplomats to embassy Fourth of July parties last year were rescinded after the government stole the election and brutalized citizens for protesting.

Maybe this year they won’t get invitations to start with. That’ll teach ‘em.

On CBS’s Early Show this morning, President Obama said regarding Iran that, “I have said before that we don’t take any options off the table, and we’re going to continue to ratchet up the pressure and examine how they respond.”

Continue to ratchet up the pressure? How has the pressure on Iran increased by so much as a single pound per square inch in the 15 months that Obama has been the leader of the free world? Oh, right, invitations sent to Iranian diplomats to embassy Fourth of July parties last year were rescinded after the government stole the election and brutalized citizens for protesting.

Maybe this year they won’t get invitations to start with. That’ll teach ‘em.

Read Less




Welcome to Commentary Magazine.
We hope you enjoy your visit.
As a visitor to our site, you are allowed 8 free articles this month.
This is your first of 8 free articles.

If you are already a digital subscriber, log in here »

Print subscriber? For free access to the website and iPad, register here »

To subscribe, click here to see our subscription offers »

Please note this is an advertisement skip this ad
Clearly, you have a passion for ideas.
Subscribe today for unlimited digital access to the publication that shapes the minds of the people who shape our world.
Get for just
YOU HAVE READ OF 8 FREE ARTICLES THIS MONTH.
FOR JUST
YOU HAVE READ OF 8 FREE ARTICLES THIS MONTH.
FOR JUST
Welcome to Commentary Magazine.
We hope you enjoy your visit.
As a visitor, you are allowed 8 free articles.
This is your first article.
You have read of 8 free articles this month.
YOU HAVE READ 8 OF 8
FREE ARTICLES THIS MONTH.
for full access to
CommentaryMagazine.com
INCLUDES FULL ACCESS TO:
Digital subscriber?
Print subscriber? Get free access »
Call to subscribe: 1-800-829-6270
You can also subscribe
on your computer at
CommentaryMagazine.com.
LOG IN WITH YOUR
COMMENTARY MAGAZINE ID
Don't have a CommentaryMagazine.com log in?
CREATE A COMMENTARY
LOG IN ID
Enter you email address and password below. A confirmation email will be sent to the email address that you provide.