New Economics Guru, Same Socialistic “Solutions”Posted: May 16, 2014 | |
New Economics Guru, Same Socialistic “Solutions”
By JBS President John F. McManus
The book “Capital in the Twenty-First Century” has rocketed close to the top of the New York Times best-seller list. One report claimed that 200,000 copies had been sold almost immediately upon publication. Nobel Prize winner Paul Krugman gushed that the book is the most important study of economics in at least a decade. And its author, Frenchman Thomas Piketty, has already met with Treasury Secretary Jack Lew and other Obama administration heavyweights.
So what does “Capital in the Twenty-First Century” tell us? Its message is that too much wealth is now concentrated among too few people and that economic inequality invites dangerous reactions. He likens growing economic disparity in the West (especially in the United States) with conditions prevailing in late 18th century France when many of its wealthiest were brought to the guillotine.
Piketty bases his conclusions on years of studying tax records in Western nations and Japan. How anyone could survive such a prodigious poring over that kind of musty history is amazing in itself. But doing so impelled him to conclude that the rich are getting richer and opportunities for members of the middle and lower classes to become well-off are fading.
What does this one-time faculty member at MIT recommend? He thinks a global wealth tax is needed, not necessarily to benefit a global government but for providing local governments with an ability to share the wealth. Karl Marx would surely approve.
The just solution to inequality, of course, is minimal government. This is what formerly characterized America. Here upward economic mobility from generation to generation prevailed – and was expected. Not so anymore. There are far fewer wealth-producing jobs and many more fat cats earning their millions, not through productivity but through shifting around the contents of their portfolios loaded with stock certificates and other paper assets. Too many have forgotten that real wealth comes from productivity, not from financial manipulations.
The recommendations in Piketty’s book won’t solve the main problem he addresses. One can only hope that it will focus some attention on growing wealth disparity here and elsewhere, and then on the need for reductions in government taxation, regulations and controls over the people. It’s the stifling presence of too much government that has impeded wealth creation, especially here in the United States. The need here and elsewhere is to look back at how our infant nation speedily became the greatest producer with the largest middle and upper classes. Summarized, here’s what happened: America became great not because of what government did, but because of what government was prevented from doing by the Constitution.
“Capital in the Twenty-First Century” addresses a problem but ignores its cause. We recommend viewing “Overview of America” to understand how America became great and could be even more so.