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Rick Moran


July 30, 2013 - 2:09 pm

President Obama isn’t the only liberal who suggests that the growing gap between rich and poor in America is morally wrong. But I believe he’s the first president to make that argument and hence, brought the issue squarely into the realm of politics.

The Hill:

President Obama is changing gears on the economy, highlighting income inequality as a growing problem in advance of pitched fall battles with congressional Republicans over funding the government and raising the debt ceiling. [WATCH VIDEO]

The focus is intended to make it easier for Obama to argue that new taxes on the rich — and not cuts to social spending — should be imposed to lower the deficit.

It also dovetails with Obama’s call for Congress to raise the federal $7.25 minimum wage and to end the automatic spending cuts known as sequestration.

“This growing inequality is not just morally wrong, it’s bad economics,” Obama said in remarks last week in Galesburg, Ill., where he began a new push on the economy.

“The income of the top 1 percent nearly quadrupled from 1979-2007, but the typical family’s incomes barely budged,” he said.

The president reiterated that message in an interview with The New York Times last week.

“If we stand pat, if we don’t do anything … income inequality will continue to rise,” he told the newspaper. “Wages, incomes, savings rates for middle-class families will continue to be relatively flat. And that’s not a future that we should accept.”

Obama is also discussing the matter in private.

During a meeting earlier this month with members of the Congressional Black Caucus, Rep. Keith Ellison (D-Minn.) said he pressed Obama to issue an executive order requiring federal contractors to provide higher wages.

“He said it’s something that he would take a close look at,” said Ellison, the co-chairman of the Congressional Progressive Caucus. “He should seriously look at doing that because he might be able to help a whole bunch of workers.”

First of all, the idea that any raise in the minimum wage or other mandated pay rate ordered by the government can close the equality gap to any significant degree is a futile gesture, made more for politics than any practical effect it would have. The growing gap between the top 1% and the bottom 50% is a function of a changing economy — a loss of millions of good paying factory jobs coupled with a rise in the lower-paying service sector. Globalization has contributed to the stagnation of middle class wages as competitive pressures keep pay low.

One can argue that this has been detrimental to the economy overall, and a case could be made that the transition from a production to a consumer-oriented economy has helped create these disparities.

But is it “morally wrong”?

If true, perhaps the president and others who support that notion could tell us how big a gap would have to be present for it not to be morally wrong? At what point is the gap morally acceptable? What spread in dollars and cents between the very rich and the middle class would the president pronounce “moral”? The problem with declaring the wealth gap immoral is that it presupposes there is a gap that isn’t. And unless the president has something specific in mind as to what would be morally acceptable, he’s just blowing smoke, stoking the anger and resentment of his supporters.

Unless the president wants to argue that there should be no gap between rich and the middle class and that everyone should have an equal share of wealth, some disparities are going to be present. The fact that a large percentage of wealth created in the last few decades has enriched some while the middle class has stood pat may be disturbing, even unfair, but it is not “morally wrong.” No crime was committed in acquiring this wealth. The myth that the rich have gotten richer by climbing on the backs of the working class is laughably passe. And unless you can look into the hearts and minds of the rich and accuse them of the morally repugnant sin of greed as the driving force in their acquisitiveness, one can’t assume that a moral transgression has occurred. In fact, the driving force for many in wealth creation is to prove themselves a success — the best at what they do. Money is a by-product of that motivating force, not the sole, desired end.

The president knows he can’t do much about the income gap between the very rich and the middle class. He is simply trying to frame the debate in moral terms to claim an illusory high ground. Anyone who argues with him about the income gap on that basis appears to be a moral cretin. Meanwhile, he confirms the anger of his supporters and plays to their resentments of those better off than they.

Effective politics, but not very presidential.

Rick Moran is PJ Media's Chicago editor and Blog editor at The American Thinker. He is also host of the"RINO Hour of Power" on Blog Talk Radio. His own blog is Right Wing Nut House.

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Top Rated Comments   
"Is Income Inequality ‘Morally Wrong’?"

Is it possible to discuss morality with someone who exhibits none? It's obvious that Obama, like many in his administration, is amoral at best - i.e., what's good for me is what is good - to hell with everyone and everything else.
1 year ago
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In any real-world situation, people will have different incomes. That means that if you have more than 20 families, you'll have a top 10%, a top quintile, a bottom 10% and a bottom quintile.
The gap between the highest-earning family and the lowest earning family could be $10 or $20 out of $250k, but you'd still have inequality.
OK, that's reductio ad absurdum. In the US today, we have a small number of people who literally cannot earn an income; they are physically disabled to the point where the support required to help them shred paper and mop floors is actually greater than the value of them shredding paper and mopping floors. We also have a few people who will not earn, even though they could. That sets the bottom income at zero.
Then we have the opportunity for some few people to make astronomical amounts of money: A-Rod, Steve Wozniak, Barack Obama. I know A-Rod makes more than Obama but believe me, Obama's income looks astronomical next to mine.
If the upper end of opportunity is effectively unlimited, which is why A-Rod makes a fortune playing baseball and Obama makes a fortune selling a book people like to have but not read, then you're going to have an enormous spread of income -- income inequality.
The real test of justice might be how the lowest 15% lives or how people live between the 15th percentile and the 25th percentile. Any border is going to be arbitrary.
In the US, people between the 15th percentile and the 25th are going to live somewhat constrained lives but they'll have a decent apartment, an older car, a TV and a washing machine. They can eat a healthy diet every day, eat out once in a while, and they'll have to pinch pennies to cover their car and health insurance.
I'm doing a good deal better than that and I'm right at the median income.
Income inequality is not morally wrong in itself. In a highly productive society, the one in which the rising tide lifts all boats except the truly sunk, that income inequality comes primarily from providing goods and services at low cost to the 15-to-25-percentile segment of the population, along with everyone else. If costs go down, the 15-25 group can live better.
But if you raise the minimum wage, you raise the working poor's cost of living. If you raise energy costs, you lower the standard of living for the working poor. If you make cars more expensive, you limit their transportation choices.
So it isn't income inequality that hurts the poor and is morally wrong. It's stifling the economy that hurts the poor and is morally wrong.
A very few people get rich by essentially committing fraud. When we identify them, they go to prison, like Bernie Madoff. Or to Oslo, like Al Gore.
1 year ago
1 year ago Link To Comment
If Obama is worried about income inequality, why is he now proposing to give big business a tax break, and samll business a tax penalty?
1 year ago
1 year ago Link To Comment
The inequality argument is the same as the exploitation argument that started with Marx. Ordinary economic activity involves voluntary buying and selling, employing and working. If you don't like the results and want to substitute government force then you must argue that the results of the market are immoral or unjust. On the other hand if there is no immorality and no injustice, then there is no need for government and its men with guns.
1 year ago
1 year ago Link To Comment
"Is Income Inequality ‘Morally Wrong’?"

Is it possible to discuss morality with someone who exhibits none? It's obvious that Obama, like many in his administration, is amoral at best - i.e., what's good for me is what is good - to hell with everyone and everything else.
1 year ago
1 year ago Link To Comment
Hey, if you can, spare a look at the Crooked Lake Review on the Oneida Community. It's sounds abstruse, but it's the first successful socialist experiment. The newspaper the founder wrote was called "The Socialist." Marx and Engels took notes. They just wanted an unreligious socialist utopia.

Anyway- there wasn't any income inequality. The people owned the factory, and the clothes on their back. If someone left- they left with the clothes on their back, only. They really believe this is a good, moral way to live.

They were "perfectionists"- it really is supportable as a religious heresy, on the level of "the marcionite heresy" of the sixth century. So, imagine, no sin, no transcendance. And, btw, no monogamous marriage. They practiced "plural marriage"- every man "married" to every woman, with their sex lives regulated by a committee- no, really. It sounds like "hook-up" culture, b/c it is the seed of hook-up culture.

Obama's really serious when he says he thinks "income inequality" is a sin. He just can't get across, to an America where the average woman owns seven pair of jeans, that he really believes in low income for absolutely everyone. His first campaigns- his wife mentioned he only owned a couple of pair of pants, and one belt. You know, while living in a million dollar house. He really thought this was a good campaign point.

1 year ago
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