Some Thoughts On Class Warfare

[Morgan Orlins]

There is a plague of economic populism emanating from the political left these days. More than ever we are seeing class warfare used as a weapon to pit the "Haves" against the "Have-Nots", the "rich" vs. the "poor" and the middle class. Democrats are the main practitioners of this ugliness, but Republicans aren't totally immune to it's allure. Florida Governor Charlie Crist has "taken on big insurers" repeatedly as part of his platform because he's "The People's Governor."

This strategy is nothing more than the political equivalent of the Divide and Conquer strategy for waging war, which has been variously attributed to Julius Caesar and Sun Tzu. By pitting the majority middle class and poor (collectively referred to as "working people") against the so-called wealthy, the political left seeks to cause a seething resentment against those same wealthy people. This resentment is then used to increase taxes and enact legislation that "levels the playing field."

A typical class warfare practitioner wrote this at the jax.com opinion board not to long ago:

"The taxpayer gets very little return on investment for money spent on the wealthy. While a small amount might accidently trickle back into the local economy, the majority goes into wall-street and banking games."

Note how he refers to a tax cut as "money spent on the wealthy"? That assumes that the money NOT seized by the government is only lent to the person who actually earned it. In other words, a tax cut equals government spending. This turns property rights as we know them on their head. The ongoing attempt is to delegitimize the wealthy person's claim to their own money.

A high percentage of my customers are very wealthy people. Oftentimes my company isn't the only one doing work at a customer's home. There are painters, crews who pave driveways and decks with paving stones, pool cleaners, insurance salesman, irrigation guys, personal trainers, tanning bed vendors, carpenters, roofers, and the list gets very long.

The companies and the crews who are employed at these wealthy homes then spend their money at stores of all sorts, pay their bills and maybe even manage to save for their children's education. In turn their customers also do well. In case you're wondering, this is true economic activity. This is the "return on investment" the class warrior attempted to diminish.

What happens when the class warrior is successful in his mantra, "the rich aren't paying their fair share" or "greedy corporations are pilfering the Treasury"?

We raise taxes on the wealthy. Social justice, right? Not so fast! The chances are better than even that the class warrior hasn't thought through the unintended consequences of his divisive rhetoric and poisonous name calling.

The wealthy family or individual will pay more in income taxes and they receive a clear message from the rest of America; "We want your money, and we'll use the government as an instrument of plunder to make it happen."

If that "rich" guy is a small businessman, as I suspect most of them are, they'll look to trim the fat from their budget asap. They will wonder: Who are my most expendable workers? Which ones can I spare without hurting profitability? Those workers will get the axe because they were probably a detriment anyways. What's the result?

Unemployment goes up, which is usually the first unintended consequence of successful class warfare and it's resultant tax increases.

If that "rich" guy is a former business owner who is semi-retired and living off investments and/or part time income, he may prioritize expenses in different ways. He may offload a car or two (in addition to the guy who details his cars), he may decide that his total relandscaping project can wait until his investments tick up again to offset his bigger tax bill. He may only want his windows cleaned every 18 months instead of every 9 months. He may decide against that new paint job or decide that the new inground pool can wait, or ALL OF THE ABOVE!

The simple and unavoidable truth is that when you seize the wealth of the rich, they take a hit for sure. Their annual income may go from 1.3 million dollars to 1.1 million, or from 980 thousand dollars to 860 thousand. So what says the class warrior defiantly, "He still has 860 THOUSAND dollars!"

And tens of thousands--if not HUNDREDS of thousands--of "working class" people are left holding their bills and wondering, "where did my job go?"

Thank your local class warrior! That's hope and change he can believe in.

[tamara stephenson]

Tracy, I completely agree. Well said on all fronts.

[Tracy]

I think that the hatred of the rich is simply a matter of envy. Politicians are quick to use this human weakness to foster class warfare.Envy is a powerful tool that can be grown using the right rhetoric.But that being said I have to say that some corporations don't help matters when they run to the government for help (TARP) or form a "partnership" with government that protects them and gives them special favors @ the expense of thier competition. When this happens corporations can no longer call themselves free market competitors.They have traded that status and become beholden to politicians for subsidies and government policies to keep thier uncompetitive business alive.

[Morgan Orlins]

It's a shame that I've never heard of an American Government course that takes the time to study Bastiat or Burke. My daughter's taking an American government and economics course in high school now, and I hate to think that I might know a bit more about it than her teacher. She's well versed on free markets and government thanks to the great Thomas Sowell and Milton Friedman.

Tracy, why are people SO quick to hate those they don't understand? I know that sounds like a simplistic question, but that's THE reason class warfare rhetoric is so effective. What do you think?

[Tracy]

Your welcome.And you're right The law is an amazing book. It's my favorite book actually.One that I have read over and over again.
The book that I mentioned I found on amazon.Amazon also has a Bastiat collection that I would love to get my hands on!Its on my wish list,maybe I'll get lucky this year for my birthday. : )

[Morgan Orlins]

Thank you Tracy! I'm a HUGE fan of Bastiat. Now I'll have to read that book. "The Law" is also an amazing philosophical work on governence written by Bastiat. If you haven't read it, it's on line for free. I suggest it to everyone who wants to know about the moral and philosophical underpinnings of fredom-based societies. Here it is, enjoy!

http://bastiat.org/en/the_law.html

[Tracy]

Excellent post. I'd like suggest to everyone a book that would go along great with this post,"That which is seen, and that which is not seen" By Frederic Bastiat.