What’s a Socialist to Do?

I keep hearing people who oppose “tax cuts for the rich” complaining that we’re “giving” money to these rich people. This is a dishonest distortion of epic proportions. It’s the distortion that makes our whole wretched welfare-regulatory state possible. The person who makes such a claim is actually implying that just because somebody makes over a certain amount of money, the money does not belong to him or her. Wealth, by implication, is the property of the government, the instant you earn it.

If the government considers you poor, they’ll leave you alone. That’s why they want to lower — if not eliminate altogether — taxes for the middle class. It really is about wealth redistribution. But in order to redistribute wealth, you must first have a moral claim on it. If I break into your house, or your bank account, and attempt to steal some of your money, it won’t matter if I say it’s for a person who needs it. It won’t matter if I can even prove it. I’d be treated as a criminal, both by you and by the government. The premise of treating me as a criminal would be that it’s YOUR money and it’s YOURS to decide how to spend it, whether to give it to anybody at all and, if so, to whom to give it to. I have no moral claim on your money or property; but you do.

None of this applies when government is doing the seizing and redistributing. Why is this? Because government has an already established moral claim on the income that people earn. Government has this moral claim because the great majority allow it, and some explicitly insist on it. Government establishes a moral claim on those with lots of money so they can seize much of that money from them, and give it to those who will vote for them (i.e. the vast middle class). It’s a neat trick, and it’s a very powerful one. Evidently the ones who are receiving this money, and giving those “altruistic” politicians power, have mixed feelings. They want to keep getting the money; indeed, many of them feel entitled to all that government gives and promises to them. But that money is taken at the expense of the private sector. As the private sector becomes more impaired, it stops producing jobs. This puts the middle class in a troubling position: Do they allow the government to keep expanding government entitlements? Well, they say: They’d rather be independent and work. At the same time, jobs are going away. Economic innovation is slowing to a halt. It’s almost as if the American economy has cancer. There’s no known cause of cancer. All you can do is fight the symptoms, the President, the Senators and the Federal Reserve all keep telling us. So let’s just fight this out, by going after the symptoms and hoping for the best.

Case in point: Federal Reserve Chairman Ben Bernanke recently said on 60 Minutes that high employment will be around for years. On our current course, it might even go up. Economists, especially those with a personal and professional investment in Big Government, talk about this phenomenon as if it’s causeless, or as if it’s an act of nature like a blizzard or an earthquake. “How unfortunate,” they cry. The implication is that these economic disasters are not man-made. The reality is different. Just as economic prosperity is man-made — every last ounce of it — so too are economic disasters. In some cases, they come from private individuals making errors in judgment or acting irresponsibly. These errors, while painful at the time, are always correctable and are usually short-term in nature. Errors caused by government are much harder to overcome. Politicians who consider most of the wealth made in society to be THEIR money are dangerous people. They seize what isn’t theirs and use it far less productively, with no moral hazard whatsoever other than possibly losing office — and yet how often does that really happen? The prime offenders in Congress, the ones in both parties who have systematically wrecked our economic health, have been around for literally decades. Most of them are not going anywhere.

Another case in point: The government is going to extend unemployment benefits, practically indefinitely. This is a beautiful example of adopting the premise that our economic slowdown is causeless, as if an act of nature, and therefore we must hunker down and react to it rather than remove its cause: government. Where are the innovators? Where are the greedy wealth creators? Where are those job creators? Did they just disappear? No, the potential for such individuals to do their thing is always there. But the potential won’t ever be activated so long as government keeps impairing the private economy.

This is an interesting time in history: Not only American history but all of human history, since America was one gigantic experiment in freedom. The biggest government presiding over the biggest economy that ever existed is promising to bring back that big economy. But it can’t do it, because no government has ever created a big economy, and no government ever will. Once an economy is big and growing, the government can seize profit from that economy, build bridges, create programs, and the like — and then take credit for everything. But the money had to come from somewhere. Rational productive energy — rational exuberance — does not originate in a federal office.

The simplest way I know to put it is: You can’t take the capital out of capitalism, and still expect the benefits of capitalism. Yes, the socialists are still in charge in Washington D.C. But they’re being expected to deliver the benefits of a system they don’t understand, don’t like one bit, and would frankly like to eliminate. They want to spread wealth around, and hold a moral claim on everyone’s money, without being bothered to create all that money.

So what’s a socialist to do? Obama, and people like him, can’t stand capitalism. Yet none of us can live without it.