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Wealth redistribution in America

October 19, 2008

Barack Obama told Joe (the Plumber) Wurzelbacher that his tax policy would “spread the wealth around”.  As a result Joe’s become famous world wide.  The McCain campaign has exploited Obama’s gaffe and the media created a human interest story that didn’t quite pan out.  I don’t know if I feel sorry for Joe, even though some of his personal problems have been exposed.  It seems he has liked being in the spotlight.

As Bob Herbert wrote in the New York Times, there are much more pressing stories to tell than Joe’s.

Wealth redistribution through tax policy sounds pretty bad, but wealth redistribution has always been a key part of the American dream.  I have to believe that trickle down Reaganomics is another form of wealth redistribution that used tax policies as part of the scheme.

The people that Mr. Herbert wrote about and the thousands of others like them are victims of a different kind of wealth redistribution.  Wherever there are economic bubbles (as there was in housing in this decade) there is wealth redistribution.  Some people get away with more than their fair share and others are left with the pain of their losses.  The mortgage practices of this decade were a massive wealth redistribution scheme with at least some amount of government support and a number of winners but many deeply damaged victims.

We have seen a widening gap between the haves and have-nots in America over the last few decades.  Some call it the shrinking middle class.  To me it seems like it is probably a clear case of wealth redistribution and its a topic worth exploring in a lot more depth.  The question is what has government’s role been in this decline.  We don’t want to become a welfare state, but figuring out what a fair distribution of wealth is a much more difficult question than what is being portrayed in the campaign now.  Its the main reason I don’t believe in unregulated economic systems – it doesn’t look like they work for most of us – whether we are the Joes of the world or the elderly and recently homeless.

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One comment

  1. I found your blog on google and read a few of your other posts. I just added you to my Google News Reader. Keep up the good work. Look forward to reading more from you in the future.



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