The bigger the government, the wider the wealth gap

Seton Motley | President, Less Government

We have heard incessantly of the widening gap between rich and poor. President Barack Obama and his minions have been publicly bemoaning it, vowing to address it — and even warning of violence should it not be solved.

Ending “income inequality” is a fundamental tenet of the President Barack Obama-embraced and endorsed Social Justice Movement. “Social Justice” certainly sounds good. But it ain’t:

The “Social Justice Movement” is at war with classical liberalism, which defines equality as the equality of all individuals before the law, irrespective of “class” or any other collective identity. In modern terms, the conflict between these two worldviews is similar to the conflict between “equality of opportunity” and “equality of outcome,” which can only be guaranteed and enforced by some structure of authority.

The “Social Justice Movement” endorses socialism as a means of redressing the alleged evils of capitalism and producing a programmatic equality that it acknowledges will be purchased at the price of individual liberty and require the manufacture of what totalitarian governments have called “the New Man.”

Not exactly a free market approach to things. It’s “spread[ing] the wealth around” — on stilts.

The Obama administration is currently undertaking a war on “equality of all individuals before the law, irrespective of ‘class’ or any other collective identity.”

Obamacare waivers abound for favored “collective identities.” Unions have received more than half of the thousands of exemptions from it. The Congress that foisted the law upon us just received a pass. The list of Democrat-friendlies who have special indemnity is unbelievably long.

Unfavored “collective identities” — Tea Partiers and conservatives — were set upon by the Internal Revenue Service (IRS) and other agencies, receiving exclusive scrutiny, negative attention, and abuse.

If you want some “green” “energy” government money, it’s far better to be an Obama donor than to submit a viable proposal. Around 80% of these loans have gone to the president’s political supporters. As of last October, up to 50 of those campaign-contributing recipients were either bankrupt or on the way.

All of this is woefully unequal treatment before the law.

Founding Father John Adams declared that for our Constitutional republic to endure, we must remain “a government of laws and not of men.”

But one man — the president — has time and again on his whim ignored, altered or created entirely new law.  Beyond the ObamaCare exemptions, the President has willfully missed half of the law’s mandated deadlines.

The President unilaterally gutted welfare reform. And education law. And drug law. He doesn’t like some immigration laws, so he chooses not to enforce them. And sues those that do. He imposes the DREAM Act — even though it has never actually passed Congress.

Presto-ing law out of thin air is a favorite trick of this president. Cap and Trade never passed — but he’s tried to enact it anyway. So too Card Check. He engaged us in military action in Libya without Congressional authorization, and it looks like Syria is next.

The president’s influence has been particularly pernicious in the technology sector.

He imposed “Spread the Wealth Around” cell phone network-sharing mandates. He’s recently mentioned a new unilateral $5-per-cell-phone-per-year tax in hopes of increasing Internet speed in government schools. This despite the fact we already have for years been paying a now 15.5 percent cell phone tax to connect schools and libraries, and 98 percent of Americans already have broadband-speed access.

Still open is an Obama Federal Communications Commission (FCC) order to reclassify the Internet. Which would unilaterally move the now lightly-regulated Web into the landline phone uber-regulatory superstructure. A huge power grab — including the administration granting itself the power to tax the Net.

Then there’s Network Neutrality, an all-encompassing Internet imposition the Obama Administration illegally granted itself on December 21, 2010. This despite a previous FCC attempt to inflict it that was unanimously rejected by the D.C. Circuit Court.

(This same court on September 9 hears oral arguments to undo this unlawful iteration. Here’s hoping….)

Let’s put all these micro actions into macro perspective. This is the government again and again usurping huge new swaths of authority. Without any pretext or predictability. The private sector never knows when the next anvils are going to fall — so they stop, frozen in regulatory, anticipatory amber.

The people with money sit on it. They don’t start new businesses, or expand existing ones. Many start downsizing. Their amassed, inactive fortunes accrue ever so slightly. The rich get ever so slightly richer.

(If the Federal Reserve is pumping $85 billion a month in fake money into the stock market — as President Obama’s is — the rich do better still.)

The people without money pay a far greater price. To advance their lots in life, they need the people with money to start and expand businesses. The government-induced idleness hurts the rich some, but the un-rich much, much more.

The have-nots’ economic status rapidly deteriorates. The greater the depth and length of the government’s hyperactivity, the more of these regulatory victims fall below the middle class fault line into poverty. And the less chance the impoverished have of advancing their way up and out. The poor get poorer.

Government is a wedge driven between the wealthy and everyone else. The bigger government gets, the wider gets the gap between the haves and the have-nots. The haves stay about the same, or advance a little. Meanwhile more and more of the have-nots have less and less. Just the opposite of what the social justice do-gooders intended. You want proof? Here:

Census: Rich-Poor Gap Widens

Rich-Poor Gap Widens to Most Since 1967 as Income Falls

Obama Calls Income Gap ‘Wrong’ – After Widening It“Research by University of California economist Emmanuel Saez shows that since the Obama recovery started in June 2009, the average income of the top 1% grew 11.2% in real terms through 2011. The bottom 99%, in contrast, saw their incomes shrink by 0.4%.”

The road to middle class evisceration and greater poverty is paved with good intentions.

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