Monday, January 26, 2009

Creeping redistribution

Socialism is being sold to Americans, some of it behind curtains. The financial crisis is being used as a decoy to push through all kinds of ludicrous pieces of legislation that never would have passed three years ago. With Barack Obama in charge, there will be no one to put on the brakes.

Robert Reich, an Obama advisor, and his comrades are actually suggesting that handouts should be given not to those with skills who just happen to be currently out of a job but to those with no skills, no job prospects (many of who are long-term unemployed already) and to minorities and women. This is derived from Marx's "From each according to his ability to each according to his needs." Apparently the skilled should be punished for having acquired skills and the unskilled should be rewarded for not having acquired skills.

There are economic arguments for such handouts such as the average propensity to consume of low-income individuals which is higher than that of middle- and high-income individuals. But, unlike investing in infrastructure, such handouts make no sense in the long run. Supporting low income individuals with no prospects makes no sense since it simply allocates money away from more productive purposes. Why support those with no prospects instead of those with prospects and who could actually, one day, contribute to economic growth which then could lift even the ones with no prospects? And if we're talking about long-run prospects for growth then we only need to look at the example of the Soviet Union where unproductive pursuits were rewarded. Sending money to slums and inefficient car companies is no way to pursue a stable long-run growth policy.

Even more bizarre was Reich's talk of handing out money based on skin color & gender. How does that make any sense?

Like always, the left is using a crisis to seek ways to implement egalitarian policies.

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