Coming to Terms with Income Redistribution

As I think about it, I am in favor of income redistribution. It is just how the term is used that I don’t like. When most people say income redistribution, they mean something punitive, confiscatory & government mandated. The rich are forced to “share” with the poor and it requires government coercion. But this is wrong. You do not need coercion. People redistribute income voluntarily all the time and the free market is the most effective and aggressive income re-distributor ever invented by man.

descriptionThink about it. Firms are in constant competition. Yesterday's top technology is today's outdated product, made obsolete by the effort of others who then profit and replace the old guys. The richest and most dynamic firms of today were often not even vague ideas a couple decades ago. There is little security for the well-off. Newly rich people are always moving in on their jobs and territory.

Which leaders have the most job security? Certainly it is not those in free markets democracies. Where can a incompetent rich guy hang on almost forever? It is in the socialist block or generally in places where the market doesn’t operate well. The dim-witted Castro brother has been mismanaging their benighted operation for fifty years. Nobody in a free market gets to hang on that long. Colonel Khadafy will not leave while he is alive. Neither will the spate of others. Longevity in the job thrives where markets are throttled. Markets create challenges to the established order. They redistribute wealth and power.

The market is tolerant and democratic. It doesn’t care who is making something or buying something as long both parties want to engage in the transaction. That is why establishments have to enact laws and regulations to limit competition and/or why mobs form to enforce the “community” standards. Think of the Jim Crow laws. Absent the laws and/or community coercion, individual merchants would have ignored or subverted segregation.

It is the market’s toleration and dynamism that annoys so many people. The market breaks down privilege by translating everything into transactions. In a market economy, you are entitled to those things you are willing to pay for. In non-market societies, you are entitled to those things that your rank or position give you. In the old communist states, today too I suppose in authoritarian ones, party position gave you access to the best stuff. Others were not allowed in the door. Their money was no good.

People of position still like to have privileges, even in our supposedly democratic age. I know lots of professors and professionals who are sorely annoyed that someone with no skills, often a vulgar type, can make more money than they do. You hear it in the comment, “I have a PhD, and yet that dumb guy makes more money/can afford better things.” What is really being said is, “I am better than that guy but the market doesn’t recognize it.” This is especially true of those educated in the less practical fields. I knew a woman once who was angry and actually surprised that her degree in gender studies did not command a higher salary.

Such people dislike the free market that has devalued their skills and disrespected their privileges. Another group that dislikes the free market consists of the less ambitious sons & daughters of “the rich”. They find that they have to add a couple dollars to their “heritage” to get a cup of coffee at Starbucks. Aristocrats have almost always disliked commerce. In Imperial China, merchants were considered members of the lowest orders. The Imperial Romans at time made it illegal for the aristocrats to engage in any commerce unrelated to their landed estates. Both these authoritarian states, and many others, recognized and hated the free market’s capacity to create change and redistribute opportunity.

In the film “Wall Street” the villain Gordon Gecko famously says, “Greed is good.” Of course, the very rich but left wing director Oliver Stone wants us to hate this phrase and take it as he does. Greed is one of the seven deadly sins and anything in excess is perilous. But within proper bounds, the desire for profit is certainly a good thing. It encourages us to do business with people we otherwise would avoid. In doing so, it breaks down prejudices and – yes – redistributes wealth.

Therefore, as a proponent of the free market, I am in favor of the system that redistributes wealth and breaks down privileges. I just don’t trust government expedients that use coercion to take from the productive members of society to “share” with the less productive ones.

Many, if not most of us, who are currently not poor have been poor at some time in our lives. Income has been redistributed to us during out lifetimes. Other times we lost money. I figured out my median income over my lifetime, and I found that I am almost exactly at the median income. If I stay working a few more years I will finally get above the median in lifetime earnings; of course if I survive into retirement, I will drop back down. Redistribution at work.

Let's get the terms right. Redistribution is not the same as income equality, which is not a good thing, BTW. When I was younger, less skilled and a little lazier/less reliable, I didn't deserve to make the money I do today. After I am retired and not working, it is absurd to believe I should keep on making the same money. A fair system will never produce equal outcomes.

BTW - If you look at the picture above and you look at the picture on our (C&J) profile, you will see one reason we are not poor. The profile picture was taken in 2008. The car picture was taken two weeks ago. Notice we both are wearing the same coats. I don't recall when C got her coat, but I got mine in 2002 and it will be longer until I get a new one. Some people are not proud to be "thrifty"; we are. It is good to live within your means.

Posted by Christine & John at June 1, 2011 8:40 PM
Comments
Comment #323816

BRAVO…Christine and John, this article is one of the best I have read in ages. It is absolutely true and certainly agrees with my seventy years of experience. You hit the nail squarely on the head when writing…”It is the market’s toleration and dynamism that annoys so many people.” I don’t believe I have ever read such a simple statement that explains so much. It is true on so many different levels.

Off subject, but quite interesting is this from The Associated Press.

“Saying Florida residents should not subsidize substance abusers, Gov. Rick Scott signed a bill that will require welfare recipients to submit to drug tests. Applicants for the federal Temporary Assistance for Needy Families program who test positive for illegal substances will not be eligible for benefits for one year or until they complete a treatment program. Liz Schott, a policy analyst at the Center on Budget and Policy Priorities in Washington, which focuses on public programs that affect low- and moderate-income families, said the measure signed into law by Mr. Scott, a Republican, was “about smearing people who are getting welfare.”

It’s about time some state passed such legislation. We can hope many more follow suit. I find Liz Schott’s remark to be absolutely in line with the liberal/socialist view. Totally ignoring the fact that many employees are subjected to drug testing, she believes that for certain “liberal interest groups” such testing is “about smearing people”. Such hypocrisy from a high government official is outrageous.

Posted by: Royal Flush at June 2, 2011 11:04 AM
Comment #323820

Yes, poor people should be required to prove their innocence. They should also be required to recite the Pledge of Allegiance, just to make sure they are loyal Americans, and this should happen as often as possible. If welfare recipients could take a drug test AND recite the Pledge at the same time, this would be ideal. Perhaps conservative volunteers could man the public restrooms of the country with a vial and a tape recorder, and anytime a suspected welfare recipient…

Only disloyal, drugged up communists would disagree with this. And hippies. Don’t forget hippies.

Posted by: phx8 at June 2, 2011 11:51 AM
Comment #323821

I was watching the news last night and a democrat was complaining about the trillions of dollars big corporations are sitting on; rather than using it to hire more people. Liberals are just furious that corporations won’t turn loose of their cash funds; but the problem is uncertainty, and that uncertainty comes from the Obama administration. He has shown himself to be the enemy of free enterprise and a liar, who can trust him?

Posted by: 1776 at June 2, 2011 11:51 AM
Comment #323823

Perhaps phx8 could conjure up some real objections to drug testing for those receiving government benefits. Taking cheap shots is so easy I’ve seen and heard children do it. An adult response would be appreciated.

Posted by: Royal Flush at June 2, 2011 12:10 PM
Comment #323825

RF,
The ‘pursuit of happiness’ takes many forms, and whether we agree or disagree with them, people possess that inalienable right, even if it seems certain to lead to failure or poverty.

The argument about drug testing before receiving government benefits can be applied to virtually anyone in various situations. Obese? No food stamps. Drop out of high school? No loans for education, not ever. Live in a place subject to flooding or tornados? No disaster relief.

1776,
From the WSJ: “S&P’s Valuation and Risk Strategies group found two-thirds of the top cash holders are based outside the U.S., marking the hoarders as a very global group. General Electric, Toyota, China Mobile, Microsoft and Cisco top the list. Apple is at No. 11.”

It’s a worldwide phenomenon, not merely a domestic one. While it’s true high cash reserves are usually seen as a sign of uncertainty, eventually investors expect corporations to do something to enhance stock value, whether in the form of a dividend, merger, acquisition, and so on.

Posted by: phx8 at June 2, 2011 1:09 PM
Comment #323827

phx8 writes; “The argument about drug testing before receiving government benefits can be applied to virtually anyone in various situations. Obese? No food stamps. Drop out of high school? No loans for education, not ever. Live in a place subject to flooding or tornados? No disaster relief.

Obesity, not finishing school and where one lives is not against the law. Using illegal drugs is. Beyond that, one could logically argue that if one is on government assistance and using illegal drugs, the money is being used for purposes other than those intended.

Can anyone, who is paying income taxes, honestly tell us that they wish their taxes to be used in that manner? To support an illegal drug habit!

From time to time my wife and I drive to Bosier City LA to gamble on the riverboats. I have conversations with many other players. Some have told me they are on welfare and just can’t wait for their money to arrive so they can gamble. While not illegal, it should be. There have been some news stories about just such fraudulent actions. I believe some states issue credit cards and track the purchases of those on government assistance. I believe that is very appropriate.

Posted by: Royal Flush at June 2, 2011 2:01 PM
Comment #323830

RF,
I’m not entirely unsympathetic with what you are saying. In 2005 - 2008 I underwent a horrendous experience with identity theft. A criminal, a homeless person with a rap sheet as long as your arm was released from the county jail because they did not have enough money to keep him incarcerated. The rap sheet indicated a history of drug abuse and alcoholism. We’re not talking about a master criminal or the crime of the century. The guy stole my wallet, and the second time the police came after me they made a hash of things and tossed me in jail, even though there were a dozen different indications that it was a mistake, and records too from the first time, although that was a different police department. Anyway, it eventually cost me $15,000.

However, despite all the expense and the grief he caused me, do feel sorry for that petty criminal. He needed help.

You make a good point about the illegal nature of drug use, but nevertheless, we are all innocent until proven guilty, and no one should ever be forced to prove their innocence or engage in self-incrimination before receiving government benefits.

Posted by: phx8 at June 2, 2011 2:43 PM
Comment #323831

1776,
By the way, if one wanted to create uncertainty in US financial markets and possibly even drive the country into depression, refusing to raise the debt ceiling and defaulting on financial obligations would certainly do the trick.

Posted by: phx8 at June 2, 2011 3:13 PM
Comment #323833

phx8, that must have been a horrible experience and one I hope to never have. Many companies require drug testing before hiring and I find that acceptable so why not with those getting government assistance. Why should they be treated better than those who work? Good for the gander…good for the goose.

Posted by: Royal Flush at June 2, 2011 3:27 PM
Comment #323847

Well for one thing it cost about a thousand dollars per drug test seems like a waste of money.

Posted by: Jeff at June 2, 2011 5:21 PM
Comment #323851

Why stop at drug testing for welfare recipients? Why not have everyone renewing their driver license take a drug test? Better yet, a polygraph test about driving habits. After all its not a right, just a privilege. How about all government contractors be subject to polygraph tests about their business practices. The potential is enormous for ferreting out criminal behavior. Just think about it. Any relationship to a government benefit or contract can be leveraged as a justification for intrusive investigation without probable cause. If we just think hard enough, we can stand that pesky 4th amendment on its head.

Posted by: Rich at June 2, 2011 5:55 PM
Comment #323864

I don’t have a problem with drug testing welfare recipients. Like RF said, it’s a requirement in some jobs. However, Jeff said it costs $1K per test? I wonder why it’s so expensive.

I really want welfare reform. It should be a springboard not a way of life. I wish there were more welfare-to-work programs. The housing and food subsidies can help them and other working poor people.

That said, if nothing changes, I’d much rather see our tax dollars helping our poor people vs. being in two useless wars.

Posted by: Spinny Liberal at June 2, 2011 6:55 PM
Comment #323869

Spinny Liberal I got that figure from what was reported about the cost associated with the passage of just such a law here in Missouri or as I call it Mississippi North. We had a very important jobs bill up for passage but instead we got this oh and keeping it legal to kill puppies after the will of the people was overturned. We also had some dumb ass abortion law. Kinda of funny the sponsor of the bill just happens to own just such a business.

Posted by: Jeff at June 2, 2011 7:11 PM
Comment #323870

The sponsor of the bill for drug testing owns a drug testing business? Hahaha how convenient.

Posted by: Spinny Liberal at June 2, 2011 7:15 PM
Comment #323871
I don’t have a problem with drug testing welfare recipients. Like RF said, it’s a requirement in some jobs. However, Jeff said it costs $1K per test? I wonder why it’s so expensive.

I really want welfare reform. It should be a springboard not a way of life. I wish there were more welfare-to-work programs. The housing and food subsidies can help them and other working poor people.

That said, if nothing changes, I’d much rather see our tax dollars helping our poor people vs. being in two useless wars.

My thoughts exactly. Welfare benefits are a privilege, not a right and are subject to whatever restriction the majority of the electorate deems necessary. People should not be chronically dependent on government welfare. It should be a handup not a handout; if it ever becomes simply a handout then it’s not worth having at all.

Posted by: Warped Reality at June 2, 2011 7:17 PM
Comment #323872

Spinny and Jeff, I just googled the cost of drug testing, a hair testing kit will run on the average of $75.00 and test for the most common street drugs, so the guy getting 1k per test is ripping somebody.

Posted by: KAP at June 2, 2011 7:23 PM
Comment #323877

“Like RF said, it’s a requirement in some jobs.”

The private sector can do basically whatever it wants. The 4th Amendment does not apply to private actions. But this is the government. It cannot just go drug testing any employee, applicant, contractor or beneficiary it wants. The government must adhere to the constitutional restrictions of the 4th Amendment. In order for the government to randomly test or as a condition of employment it must show a compelling employment related safety reason, i.e., use of firearm, dangerous equipment, etc. The seminal case is Von Raab. Police, heavy equipment operators, etc.

The protections of the 4th Amendment are applicable to state governments through the 14th Amendment. In Florida, a previous effort to randomly test state employees in 2004 was declared unconstitutional.

There are really two issues involved in Florida. One is an executive order applying to state employees and the other a legislative requirement for welfare recipients. In the courts, the burden will be on the state to show a compelling safety related issue for the drug testing.

Posted by: Rich at June 2, 2011 8:27 PM
Comment #323879

I don’t know why conservatives support invasive government searches without probable cause such as drug testing. It would seem that they would be the most outraged by such government sponsored actions which clearly stretch the letter and spirit of the 4th Amendment. There was a little blow back by conservatives over the body searches by TSA this past year but apparently that was simply an excuse to slap Obama for issuing the order. I encourage conservatives to read the passionate dissent by the conservative justice, Antonin Scalia, in the Von Raab case.

Posted by: Rich at June 2, 2011 8:44 PM
Comment #323885

Rich

Federal employees are subject to random drug tests, as are many state and local ones.

The welfare cases are essentially a type of employee in that they receive pay. They just don’t earn it, but I suppose some other employees don’t either.

In any case, he who pays gets to make the rules.

That said, many of the currently illegal drugs should be legalized. We fought the war on drugs, but I think drugs won. We should have learned in our fight against booze in the 1920s.

We should make laws against behavior, not against status. in other words, if someone is driving or doing something else difficult under the influence, we should punish that. If someone is just a druggie or a pothead, it is his problem. We should look down on him for his stupidity, but not punish him merely for being “the dude”.

Posted by: C&J at June 2, 2011 9:21 PM
Comment #323886

“People should not be chronically dependent on government welfare.”

The State of Florida provides only short term cash assistance to low income families and those benefits are tightly controlled and require adherence to job training and entry into the work force as conditions for the benefits. There is no opportunity to become chronically dependent upon Florida’s welfare program. The only other assistance is through the USDA’s food stamp program administered by Florida agencies and Medicaid.

The idea that low income families in Florida are living off the state’s assistance for years is complete and utter nonsense.

I do not dismiss the problems of drug addiction in low income families. There are a myriad of problems of which drug abuse is but one: poor education, dysfunctional families, domestic abuse, lack of entry level employment opportunities, criminal records, etc. As C&J are found of saying, the poor are poor for a reason. But those problems are well known by case workers and the recipients of aid. What is missing is adequate resources to address those problems. The drug testing program will only reveal the obvious.

In my opinion, there is nothing wrong with conditioning government assistance on addressing the underlying problem related to the need for assistance. But the truth is that we already know the problems. What is missing is an adequate remedial response to those problems. Better to spend the money on drug treatment.

Posted by: Rich at June 2, 2011 9:29 PM
Comment #323888

C&J,

I basically agree with your statement that “We should make laws against behavior, not against status.”

I disagree and the courts disagree with your statement that federal employees can be generally randomly drug tested. It depends upon their job function. If it is safety sensitive, yes. If not, only upon cause. The same for state employees. That is distinguished from private sector employees that aren’t subject to the restrictions of the 4th Amendment.

Therefore, if welfare recipients are a “type of employee” which is highly disputable, they would fall under the protections of the 4th Amendment as any other government employee.

Posted by: Rich at June 2, 2011 9:44 PM
Comment #323908

C&J,

Why do the wealthy get away with not paying their share of taxes?
Why do the wealthy through a series of loop-holes dating back to the Reagan presidency have the ability to hide income in off-shore accounts?
Because they are wealthy?
Why has wealth disparity grown exponentially over the last several decades?
The free market? Unchecked and deregulated banking policies? Wall Street? The government?
Your readers seem to hate welfare for the poor but are quite tolerant of corporate welfare.

Posted by: Andre M. Hernandez at June 3, 2011 7:25 AM
Comment #323912

Andre, Most people don’t hate welfare for the poor if they are truly in need of it. Also you just gave a bunch of reasons why we need to revamp the way we tax in this country. One question I have for you, Why is it some workers with families recieve more in refunds of taxes then they paid into the system? Is that paying your fair share?

Posted by: KAP at June 3, 2011 10:27 AM
Comment #323915

phx8

“You make a good point about the illegal nature of drug use, but nevertheless, we are all innocent until proven guilty, and no one should ever be forced to prove their innocence or engage in self-incrimination before receiving government benefits.”

why not? we are required to do it before recieveing an offer of employment. that money i might add is earned. in my occupation i am required to submit to random drug testing. why should someone recieveing my tax dollars for doing absolutely nothing get a pass?


jeff


“Well for one thing it cost about a thousand dollars per drug test seems like a waste of money.”

bull$h!t. i enrolled myself as an owner operator for 10 years, and sometimes recieved upwards of 3 random notices a year. the enrollment fee at the time was @ $90. the gov’t can enter into a contract with a service provider, and because of volume recieve a much better rate than i ever could. you could effectively hold back less than $5 a month and require the beneficiary pay for it as a requirement for getting benefits.

rich

“Why stop at drug testing for welfare recipients? Why not have everyone renewing their driver license take a drug test?”


driving is a saftey sensative activity. the only reason it hasn’t been done is because of the mass outcry that would occur. i don’t believe in random drug testing. i think it amounts to search without probable cause. the fact that gov’t employees aren’t subject to it, and the same gov’t can mandate that private co.s search my person i find a bit hypocritical. that being said, and as you pointed out a private co. can require as a condition of employment.

we allow the gov’t to infringe on our rights in the name of the greater good. as long as we feel it won’t affect us personally. so little by little they pick off one group at a time. by the time we realize what we’ve given away in the name of saftey or whatever, it’s gone forever.

Posted by: dbs at June 3, 2011 12:24 PM
Comment #323917

That’s what I thought - drug tests are cheap. The sponsor of the bill having that type of business sure won’t tell them that. =)

I would like to see them drug test. There are income requirements to get certain benefits - like Section 8 housing I think. Why can’t there be a drug test requirement too? I don’t want the government to support a tweaker.

Posted by: Spinny Liberal at June 3, 2011 1:23 PM
Comment #323922

spinney

there are a lot of co.s that offer this service. i would see to it that the author recieved no finacial benefit whatsoever. if he or she did that would be a definite conflict of interest IMO.

in general i think random drug testing is an invasion of privacy. that being said, i also believe that it is not good policy to allow people to be comfortable in thier poverty, and for that reason i would support the testing for people on public assistance. i’m not opposed to helping people, but they need motivation to get them up and on thier own two feet as quick as possible. being under a microscope while on assistance would be a hell of a motivator.

“I don’t want the government to support a tweaker.”

wrong way to look at it. it is YOU who would be supporting a tweaker.

Posted by: dbs at June 3, 2011 2:45 PM
Comment #323939

“Why can’t there be a drug test requirement too?”

Spinny,

Because it is an invasion of privacy. A government search without probable cause. The Supreme Court case approving limited drug testing for safety sensitive government positions was a close call (5-4 decision) with strong dissents from both conservative and liberal justices.

I would like to emphasize one more time, nobody is receiving government assistance today in the subject state, Florida, without strict requirements for job training and entry into the work force. The cash assistance is short term.

Posted by: Rich at June 3, 2011 6:34 PM
Comment #323941

“…in general i think random drug testing is an invasion of privacy. that being said, i also believe that it is not good policy to allow people to be comfortable in thier poverty,..”

dbs,

I am in full agreement with you on both those issues.

Government assistance should be short term for able bodied persons and conditioned on actively participating in programs designed to address the problems related to his/her need for assistance. In fact, since the welfare reform act of 1996, that is basically how welfare is provided by the government. You must participate in education, rehabilitation, job training, seek employment and accept available employment to continue receiving benefits which are in, any case, limited in time.

That seems to be a fair deal. We will give you some help for a short time, if you will take the actions necessary to become self sufficient. Those requirements can be monitored. I don’t see the necessity or benefit of adding an invasive drug testing condition to those benefits. Performance is the issue. If a person is holding up her or his end of the bargain by getting job training, etc., that should be sufficient. If you can’t perform, your assistance is cut off. That is, in my opinion, the adult way to approach the problem. True drug addicts will fail every time on the performance issues. There is no need for invasive, without cause, drug testing. They should be offered drug treatment assistance, but not continued general welfare assistance.


Posted by: Rich at June 3, 2011 7:53 PM
Comment #323964

That seems to be a fair deal. We will give you some help for a short time, if you will take the actions necessary to become self sufficient. Those requirements can be monitored. I don’t see the necessity or benefit of adding an invasive drug testing condition to those benefits. Performance is the issue.

OK, that sold me. Short term and job training. Adhering to the program’s requirements can be the “test.”

Posted by: Spinny Liberal at June 4, 2011 12:33 AM
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