29 May

Three Cheers for Income Inequality [Reader Post]

                                       

One can’t but hear the almost daily drumbeat from the left about how unequal things are in the United States. There is an income disparity between the haves and the have-nots where Wall Street bankers take millions of dollars home to their Greenwich mansions while millions of others work for minimum wage and can’t afford their own home, never mind something resembling a mini-Versailles.

That may be true, but the reality is, inequality exists today, inequality has always existed, and inequality will always exist. Why? Because people are simply different. People have different motivations, different skillsets, different temperaments, different passions, different work ethics… essentially, everyone is different. As such, why does it make sense that everyone would be equal? It doesn’t.

It doesn’t matter if it’s at work or at school or volunteering for a church fundraiser, different people perform differently. In school I remember friends who earned straight A’s with seemingly little or no effort while I struggled to get Bs or Cs. Of course, even though I recognized how challenged I was, I rarely did the work I knew was necessary to merit anything other than a passing grade. I always told myself that I could have earned straight A’s had I applied myself. Maybe I was right, maybe I was wrong, but the reality is that I didn’t care enough about earning A’s to do the work to earn them.

And so it goes in life. Most people get out of it what they put into it. The United States is a nation where, for the most part, people have the opportunity to achieve the success they seek if only they work hard enough and smart enough to get it.

No nation of any size has ever created an environment where everyone was equal in outcomes. Lots have tied however from Revolutionary France to the Soviet Union to Communist China. Economic equality has been tried on our shores as well, from the Mayflower Compact to New York’s Oneida Community to the 1960s communes. All failed to achieve anything resembling a sustainable equality and are gone, other than Communist China, which is anything but egalitarian in any sense of the word.

Today in the United States it’s fashionable for union activists and college students to protest the inequality in society where the rich get richer and the rest of us get poorer. The problem with that logic is that while the rich have gotten richer, so has everyone else. Does it matter if the rich are 25 times richer than the poor if everyone is twice as well off as they used to be? Poverty used to mean that someone had little if any food and possibly a ramshackle place to live if they were lucky enough to have a roof over their head at all. Today, poverty in America means something quite different… Refrigerators, air conditioners, televisions, DVD players and cell phones.

Indeed, in America today poor people have far more in common with rich people than perhaps any point in human history. In 15th Century the King of France had hundreds of courtiers whose jobs were to do everything from cook his food, put his clothes on him to literally wiping his behind when he was done with his business. Paupers not only could never afford the King’s luxury, they didn’t have access to the same basic amenities in life from nutrition to leisure time to entertainment. The discrepancy was not something that could ordinarily be erased by hard work or ingenuity. In this respect Royal France was not so different than most periods of human history. Similar disparities existed in Cleopatra’s Egypt, Victorian England and Tsarist Russia as well.

In America however, not only are those listed in poverty far better off than at any time in human history – and indeed better off than many middle class Europeans today – they also have opportunities for upward mobility that have rarely existed anywhere at any time.

Given that we all have unique DNA, we all live unique lives, we are all motivated by and drawn to different things, economic equality and prosperity tend to be mutually exclusive. As William Bradford learned, imposing equality of outcome leads to economic ruin.

Luckily for Americans and the rest of the world, the United States learned early that a society that seeks to be truly egalitarian doesn’t start by declaring everyone share everything they have or that somehow citizens were to become robots where everyone produced the same amount and consumed the same amount. No, the Founding Fathers delivered something far more powerful. They created a nation where everyone (eventually) was able to harness their unique abilities to invent, innovate and simply work to create a better life for themselves and their families. In doing so the United States has led the march of the improvement in the condition of man over the last two centuries.

With that improvement came great disparities. At one point after the turn of the century when the average American was earning $750 per year, John D. Rockefeller’s wealth was $1 billion, or about 1.5% of US GDP. (For comparison, an equivalent net worth today would be approximately $210 billion, four times Bill Gates’ wealth.) Despite the wealth disparity, the average American was far better off because of Rockefeller as energy prices declined by more than 90% between 1865 and 1910 even while demand skyrocketed. The average American benefited from similar disparities with giants like Carnegie, Vanderbilt and continue today with men like Bill Gates and Jeff Bezos.

The proof is definitive; capitalism makes people richer, both the capitalists themselves and everyone else. As such, the question for the left is: Is their goal to make the lives’ of everyone better or simply destroy the capitalists? Their actions seem to suggest the latter, but if their true goal is the former, they should throw down their “I am the 99%” banners and storm Washington. Not to demand the heads and wallets of the rich, but rather to inveigh against Congress for creating a bureaucracy that hinders a citizens ability to harness their passions, skills and ingenuity to earn themselves millions of dollars as they enrich consumers willing to pay for whatever goods or services they provide.

It’s no coincidence that six of the ten richest men in human history are Americans, three of whom started their lives as paupers. We should celebrate their wealth and success as we benefit from their efforts. Perhaps such celebration would inspire millions of would-be entrepreneurs, inventors and innovators to follow their examples. We should be so lucky.

About Vince

The product of a military family, growing up in Naples, Italy and Guantanamo Bay, Cuba, and being stationed in Germany for two years while in the Army, Vince spent half of his first quarter century seeing the US from outside of its own borders. That perspective, along with a French wife and two decades as a struggling entrepreneur have only fueled an appreciation for freedom and the fundamental greatness of the gifts our forefathers left us.
This entry was posted in Class Warfare, Economy, Obamanomics, Politics and tagged , , , , , . Bookmark the permalink. Tuesday, May 29th, 2012 at 12:00 pm
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25 Responses to Three Cheers for Income Inequality [Reader Post]

  1. Greg says: 1

    It makes little sense to me to use the pervasiveness of modern technology and the availability of common consumer goods as evidence that the lot of the wealthiest and the poor aren’t all that different. The fact that someone has a cheap cell phone in his pocket or a working TV or air conditioner in the home isn’t a measure of how hard someone struggles to pay the bills, or how often there’s very little in the refrigerator to feed the kids.

    The inequality issue doesn’t center on the fact that some families have a couple of luxury cars and $250,000 a year combined income, while others struggle along with 10-year-old vehicles and $25,000 jobs. Rather, it centers on the top 1% of the population owning 43% of the total financial worth and 35% of the total net worth, while the bottom 80% collectively own only 7% of the nation’s total financial worth and 15% of the total net worth. It centers on the fact that the concentration of wealth at the top continues to grow unabated, and that some wish to change tax rates in a way that would accelerate that trend beyond what it is at present. It also centers on the fact that the upward redistribution and concentration of wealth has contributed to growing public debt that some now want to address by removing all mechanisms that redistribute some of that wealth back downward.

    Most people understand that there will always be the wealthy and the poor. That doesn’t mean we should willingly embrace a set up that will create increasing extremes of both, with a growing percentage of the population stuck at the bottom. The largest distribution of total wealth belongs in the middle. I’ve never really understood why average and upwardly aspiring Americans would dispute that.

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  2. terryfizz says: 2

    Wealth “belongs” to those who earn it, not those who just want it. If you want to sit on your a** , you deserve absolutely nothing from the State, if you want to work, innovate, create, risk….then you deserve whatever you earn. Nothing more…nothing less. The government has certain responsibilities which are spelled out in the Constitution, providing for those not willing to provide for themselves is not one of their obligations, that is what charities and religious organizations have chosen to do. The government has the right to take from me (taxes) for certain well defined (again in the Constitution) duties that it is to provide, taking from me to give to others is not one of them. Why is this so hard to understand? If any citizens wish to do more, then power to them and I whole heartily support them. They are free to do so with their own money and resources just as i am free to give generously of my resources, but it is not the right or the role of the government to take my money/resources to redistribute to others in any form or fashion.

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  3. Greg says: 3

    Perhaps conservatives need to mount a campaign to have the General Welfare Clause stricken from the Constitution entirely:

    The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

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  4. vince says: 4

    @Greg:

    I think I’ll let James Madison handle that one:
    “With respect to the two words ‘general welfare,’ I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution
    into a character which there is a host of proofs was not contemplated by its creators.”

    http://www.imperfectamerica.blogspot.com/2009/11/progressive-noose-around-neck-of.html

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  5. terryfizz says: 5

    I respectfully disagree that the “general welfare of the United States” has anything to do with providing support to someone who doesn’t wish to contribute to society. The United States is referred to as an entity, not as individual. Using your arguement it also states that all duties, imposts and excises shall be uniform throughtout the United States. I am glad that you obviously support a flat income tax so that everyone pays their fair share.

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  6. Nan G says: 6

    Oprah Winfrey is a great example of what can happen only in the America that existed before Obama.
    She went from wearing 2nd-hand dresses to being a billionaire.
    She picked her charitable giving in her own way.
    Thus she assisted in the rebuilding of Katrina-ravaged New Orleans.
    She also backed HIV/AIDS testing programs.
    She gave to churches of her own choice.
    She also assisted in setting up shelters for abused women.
    And she is known for giving scholarships to poor children so that they can get out of our public schools and into church and private and charter schools.
    Then there was her book club which encouraged women to read more.

    She has also had a few duds.
    Some of her book club books turned out to be written by liars.
    Some of her fame was based on a very materialistic attitude where she might give everyone in her studio audience a trip or a car or a new this-or-that.
    One of her charities, setting up a school for girls in Africa, turned into a horrid failure.

    But overall, would Americans have been better off if Oprah had not had enough reward for her hard work to bother?
    I really doubt that.

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  7. FAITH7 says: 7

    Great Post Vince…

    You are a ‘useful idiot’ if you don’t understand the concept of it…

    …there is No Country, No Government, No Communist Country, No Socialist Country, No Democratic Country, No Ruler, King, Dictator, Socialist, Communist….EVER!! Nor will there ‘ever’ be in existence, Equal Outcome of People… it is not Possible…

    There will ALWAYS be a Rock Bottom – Bottom – Middle – Top…

    ….There will ALWAYS be the bottom – the Middle – the Top of a… Mountain… and not everyone is ‘cut out’ to be at the ‘top’ ….. Life doesn’t come with a guarantee..there are no guarantees in life.

    Read stories about people who have won millions in the lottery….how fast they lost it….how fast it was ‘pissed’ away….and how many people have said they wished they never won ‘their millions’….and how many are now in the same spot they were before they ‘won’… Not everyone is cut out to be rich…not everyone is cut out to be even close…

    If you are wise, you will instinctively ‘know’ there are tons of ways to be “successful in life” to be “rich” – and these things don’t always involve money….I admit it helps, but if people continue to covet their neighbor….

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  8. Nan G says: 8

    In the 50 states in the USA there are a few high-tax states and a few no and low tax states.
    New York ranked second among the states for the highest state and local tax burden* in 2009.
    The Tax Foundation studies demographics between these states.
    Between 2009 and 2010 alone, 40,195 New York residents moved to Florida, taking $1.3 billion in income. That means the average income lost per resident leaving is over $300,000.
    So, these are ”the rich.”

    Obama would dearly love to force people to stay put an just take it.
    That’s why he wants us in tiny electric cars with no range and gas cars with no spare tires.

    But, for now anyway, we are free to come and go if we can afford it.
    And if you are shopping for a new car be sure to see if there is a spare.
    Obama’s CAFE standard is too hard to make with a jack and a doughnut-spare.

    *New York also levies a gasoline tax at 49.0 cents per gallon and a cigarette tax of $4.35 per pack, along with an additional $1.50 per pack in New York City.

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  9. another vet says: 9

    John Galt has been down this road many times as have others. Here is a list of the Enumerated Powers in the Constitution.

    http://www.info-quest.org/Enumerated.html

    James Madison believed the General Welfare Clause was to support these powers not to give the federal government unlimited powers. Kind of makes sense. If the General Welfare Clause, like the arguments for the Obamacare and the Commerce Clause, were supposed to grant the government unlimited powers, why bother with the rest of the Constitution?

    “With respect to the two words ‘general welfare,’ I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators.” – James Madison in letter to James Robertson

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  10. Greg says: 10

    What about Clause 18?

    Clause 18: To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

    Doesn’t and all other Powers clearly indicate that those powers just itemized were not the entire lot being vested by the Constitution? If not, why were those words even included?

    I suppose that’s another part of the original document–along with the General Welfare Clause–where the right needs to get out their pruning shears so their Constitutional argument is airtight.

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  11. retire05 says: 11

    Greg, like all progressives, has no understanding of the Constitution and thinks that “general welfare” means take from some to give to others. He also doesn’t understand that in the Constitution, ahead of Clause 18, it says that the federal government has the right to make all laws necessary and proper for carrying out the Execution of the foregoing powers.

    Someone please, buy Greg a dictionary so he can look up the meanings of general and foregoing.

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  12. another vet says: 12

    @retire05: You beat me to it as did Vince citing Madison.

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  13. Greg says: 13

    The long-standing question concerning the powers conferred by the General Welfare Clause was settled by the Supreme Court in 1936 with the decision on The United States vs. Butler:

    [T]he [General Welfare] clause confers a power separate and distinct from those later enumerated, is not restricted in meaning by the grant of them, and Congress consequently has a substantive power to tax and to appropriate, limited only by the requirement that it shall be exercised to provide for the general welfare of the United States. … It results that the power of Congress to authorize expenditure of public moneys for public purposes is not limited by the direct grants of legislative power found in the Constitution. … But the adoption of the broader construction leaves the power to spend subject to limitations. … [T]he powers of taxation and appropriation extend only to matters of national, as distinguished from local, welfare.

    Pruning shears may not suffice. You might need to bring in a bush hog.

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  14. retire05 says: 14

    @Greg:

    Poor Greg, he disputes his own argument.

    “public moneys for public purposes” Read that again, Greg. The ruling does not say “public moneys for private purposes.” When you take from many, to give to one (as in cash enumerated welfare benefits), that is using public money to promote the welfare of one, not the general population.

    Again, how does it promote the welfare of the American populace as a whole to take money from the productive to give to the non-productive?

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  15. Greg says: 15

    Is this a trick question?

    Because it’s not in our collective best interest for old people, the sick, the disabled, children, and others who cannot work to be starving on the streets?

    Because it is in our collective best interest to support unified national efforts to address nation-level problems?

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  16. retire05 says: 16

    @Greg:

    Perhaps you would like to give us the stats of the “old people, the sick, the disabled, children and others” who you seem to think were clogging the streets by dying in them before the statist, FDR, followed by another statist, LBJ, decided that the federal government had the power to tax productive citizens and give it to their own special interest groups?

    At one time, families, and charities, took care of those people through the generosity of those who could afford to help. But then, following the Communist Manifesto, we have been on a track to replace families and charities with Big Brother government.

    If the founders wanted to rob from some to give to others, they would have done so in the Constitution when it was written. But they did not, and that is something you liberals have to choke on, isn’t it?

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  17. johngalt says: 17

    Interesting. Greg brings up a court case from 1936, where Roosevelt and the original progressives had stacked the court with justices amenable to expanding federal government power. He doesn’t explain, of course, that Roosevelt and the progressives did this for exactly the reason Greg quoted in that case. That is, to expand the federal government’s power over the people.

    As for the ‘general welfare’ clause, Madison explained very clearly in the Federalist Papers that the first line in Article I, Section 8, was never meant to give any particular powers to Congress, but rather, act as a general embodiment of the specific powers delineated in the lines thereafter. His explanation itself was in response to an argument from the Anti-Federalist Papers where the fear that such a general statement was akin to giving the federal government unlimited powers to tax the citizens.

    Imagine that. People back in the time of the formation of our country were worried about giving the federal government unlimited powers of taxation. And the response from the architects of the Constitution was to calm those fears by explaining the very wording of the Constitution that was the cause of worry to many. And now, some 200+ years later, Greg is telling us that the Constitution was designed to give such unlimited powers to the federal government, despite the words of Madison, Hamilton and Jay themselves.

    Tell us, Greg. Is it an inherent attribute of liberal/progressives to CHANGE HISTORY! Or is it something liberal/progressives learn over time? Never mind. I don’t really care about your failings at life, Greg. Just don’t be surprised when enough people gather up the courage to actually fix the problems you liberal/progressives have created, and you and your kind are relegated to the dustbin of history.

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  18. johngalt says: 18

    Just a few thoughts.

    -I wonder how loud and long Hollywood stars would scream if forced to give equal acting space and time to newcomers to Hollywood. After all, if equality is the goal, no actor or actress should ever really have top billing during their career, let alone for just one picture. The “extras” should have the same pay, time on screen, and lavish Hollywood lifestyle as the current stars like Clooney and Damon have. Right?

    -How different will MLB, the NFL, the NBA, and the rest of the professional sports be when All-Star games are prohibited. I mean, if we are all supposed to end up equal in outcomes, then no sports star should ever be recognized for ‘superior’ ability, let alone a higher paycheck, than the benchwarmers. Right?

    -And speaking of left-wing heroes, shouldn’t the Grammy’s be canceled forthwith and forevermore? No singer, band, or musician is any better than others in the music industry, and as such, all music entertainment stars should pool their incomes together and give equal shares to Rihanna and U2 that they give to the local bar-bands or nightclub singers. Right?

    – Let’s just make everything equal. No more recognition for HS athletes on ‘All-state’ teams, the day traders who lose are given the same income as those who slave and grind at the mutual fund houses, state and county fair competitions become a thing of the past as ‘Miss Abel’ is no longer able to be recognized as having the best apple pie in the county or state and no 4-H member’s hog will ever be noted as a “prize hog” anymore. With everyone equal, there is no point to running auto races anymore, especially since the carbon credits will cost the sports associations too much to put on a race. And this could go on, and on, and on, and on. Right?

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  19. retire05 says: 19

    @johngalt:

    Let’s take that even farther: how many millions of $$ has Obama made from his books? Perhaps, if he truely believed in the philosophy of equal outcome, he would calculate the number of hours it took him to write the book (although he would have to include the hours William Ayers also spent), add to that the hours that the editor spent on the book, the hours the printers spent printing the book, the hours the shippers and truck drivers spent delivering the book to book stores and retail outlets, the number of hours spent by the stockers who put the books on the shelves and the hours spent by the clerks selling the books.

    Add all those hours up, divide them into the amount of profit made from the book and pay it to all involved equally. At that rate, Obama would not be a multi-millionaire because of his book, would he? But that is the philosophy (socialist) that Obama believes in when it comes to the rest of us; take our earnings and give to those the Democrats feel deserve to be paid for nothing.

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  20. johngalt says: 20

    @retire05:

    It’s the “equality for thee but not for me” mentality of statism. Obama has exhibited this from day one, lecturing the American people to conserve, cut back, and tighten their belts, meanwhile he and Michelle go on “date nights” to New York, Michelle goes on vacations with the daughters by herself, or ahead of Obama, Obama himself racks up countless hours playing golf, the Obama’s entertain at the WH spending millions of dollars hiring singers, bands, and other entertainment celebs, and now Obama is scouring the country for campaign dollars, never staying on schedule(costing the cities he visits even more money than planned).

    And all the while, the ‘useful idiots’ who support them relish in the glow their overlords shine upon them, believing that one day, if they continue to project this “fairness” bullshit long enough, that they themselves will be lifted up on high, to sit with Obama and his friends.

    And I haven’t even touched upon the immorality of this ‘equality’ BS. That alone could take up many, many paragraphs in discussing. Suffice to say, it is highly immoral for one to decide how another should live one’s life. And by taking wealth from a person, using ‘fairness’ as the reason, to give to others IS deciding how another should live their life.

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  21. johngalt says: 21

    One more thought.

    Anyone else find it amusing that Greg, on one topic, rails against a supreme court decision, and in another topic, this one, promotes an earlier court decision as being the last word on the subject?

    Of course, he will bend over backwards in defense of the decision he quoted above, simply because it went the way his ideology allows, and then condemn the recent Citizens United case as being judicial overreach.

    The problem that he will have is in reconciling the two court cases with the Federalist Papers. But that won’t stop the ignorance from gracing the pages of FA.

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  22. another vet says: 22

    Somehow, I don’t think this it what our Founders had in mind wth regards to the General Welfare Clause or the Implied Powers Clause. But according to the left, these are the ones who are good and productive members of society are evil.

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  23. Greg says: 24

    @johngalt, #21:

    A Supreme Court precedent that hasn’t been challenged for 76 years and that serves as a foundation stone for modern American government carries a bit more weight than a recent controversial decision that effectively allows wealthy special interests to spend unlimited sums of money in an effort to brainwash the American public.

    The purpose for our right of freedom of speech isn’t served by giving anyone with enough money a license to drown out everyone else’s words.

    Big money needed no further assistance in the matter of buying political power, in my opinion. I think money has screwed the election process up more than enough already.

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  24. johngalt says: 25

    @Greg:

    As I said, you have done.

    The purpose of freedom of speech isn’t strengthened by giving anyone with enough money license to drown out everyone else’s words.

    You are right. It doesn’t strengthen the 1st Amendment. And neither does it weaken it, as it doesn’t allow those with more money to drown out everyone else’s words, despite your assertion.

    Remind me again why it is acceptable for Congress to LIMIT freedom of speech, politically, a specified number of days prior to an election, as McCain-Feingold did.

    The left, including you, are apoplectic over the recent Citizens United case for one reason. That is, it allows for freedom of political speech by anyone, at any time, from one election to another, without limit. You, and your liberal/progressive brethren, would rather that it be limited, EXCEPT, of course, for that political speech espoused on the network programming and cable news channels, the overwhelming majority of which displays a clear leftward lean. That FOX is included in that group(except for the clear leftward lean part) is acceptable because that reduces the number of targets to one for the multitude of asinine, inane, and ignorant chatter from the liberal/progressive masses. McCain-Feingold was a boon to allowing the left to drown out all the other voices, and because the USSC decided against that, allowing for unlimited freedom of speech, that is why the liberal/progressives have come out against it, with the favorite charge of “corporate rule” leading the way.

    Big money needed no further assistance in the matter of buying political power, in my opinion. I think money has screwed the election process up more than enough already.

    Yes, it has, and it’s neither a right-wing, nor left-wing problem. It’s caused by the corrupt atmosphere in DC that allows for giving certain corporations, or groups of people, or unions, or races, or etc. a break, either taxwise or with monetary “help”, assuming that corporation, group of people, union, race, etc. either gives enough money for campaigns, or is an important enough voting block, to sway the politician’s opinion towards their cause.

    Which is exactly why it is insane to continue your inane chatter about the inequity in income, calling for tax policy to right that “wrong”. Your solutions don’t fix the problem. They simply shift it to onto someone else’s back. But of course, as long as it isn’t your back, or those of your ignorant liberal/progressive friends, then you don’t care, do you? As such, you, Greg, are part of the problem that continues to contribute to the need for such massive amounts of money to run campaigns. So please get off of your high horse, lecturing to us here at FA about how your “solutions” are the only sensible ones. One might think that either you are a truly ignorant person, or just immoral enough to know what your “solutions” will accomplish and that you really don’t care.

    As for the court case you cited above, while it may be some 70+ years old, it still doesn’t make it right, especially considering that the arguers for the Constitution specifically addressed that topic in the Federalist Papers and explained, in direct opposition to you and your cited case, that the “general welfare” clause gives no direct power to the federal government.

    The above is why you liberal/progressives are so adamant about changing history. Because ofttimes it completely contradicts the ideas you all espouse. It’s actually a surprise that the liberal/progressives haven’t attempted to outlaw the Federalist Papers, or the Anti-Federalist Papers yet. I’m sure that will be coming at some point as more and more people use them to cite exactly what the Constitution is saying.

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