Politics, Community & Society > Suicidal Genius

Suicidal Genius

By GREG MAFFETT
Published: December 9, 2011

The current state of politics in America is based on a policy that, empirically, will destroy the country economically. Yet at the same time, the math says the policy is political genius.

Sure, it is the traditional left vs right class warfare that we have seen for decades. But it is becoming more ominous due to the underlying math.

The current policy is to vilify the top 1% of American income earners and tax them into oblivion because they command roughly 20% of the income. (This income percentage peaked at over 23% at the height of the housing boom and is now under 18%. In fact, the percentage is now at a number lower than it was during the last 4 years of the Clinton Administration. Just a side note for people who like to think that the political right somehow created this situation in this millenium.)

This problem here is that we are looking at targeted socialism. You may recall socialism as the approach to government that failed, let me see, everywhere on earth. The Soviets collapsed. China went capitalist. Sure North Korea is hanging in there with the "help" of huge subsidies and a population where starvation is a legitimate concern for the average citizen. I think the idea of this targeted socialism is like the old saw about going blind from masturbating and asking "Can I just do it until I need glasses?" I think that is the idea here, just be enough of a parasite that the top earners only need glasses. Because if the government blinds them, they can't tax them anymore as they stop earning.

The current argument, that the top earners make "too much" is being put forth by people in the US who, by and large, have made nothing. These people are lawyers who got into politics. The argument is not being made by people who make things like iPhones and new houses. Those are the people that make products that improve the quality of life for fellow citizens. And in a market economy, the market price determines how much they make. Not a lawyer.

A baseball player just signed a contract for $200 million. Is that too much to hit baseball's? No. That is the market price to hit baseballs as well as that man does. Now, I don't watch baseball but one day a year, so I'm not paying that man's salary. But the people who support baseball by going to games, watching games on TV, etc. have decided that they will still go to games where a guy is making $200 million on the field.

What has happened in every society where the government has decided to wipe out capitalism is the same. Economic collapse and starvation. The incentives to get out of poverty by your own efforts is what makes a modern country work. Socialism takes that incentive away,

The alternative is what kills the economy. Take a large sum of money from the high performers and transfer it to people who contribute little or nothing. It doesn't take long for people to figure out that all working does is feed someone who isn't working. Over time you get the Soviet System where the one line summary of the condition was "You pretend to work and the government will pretend to pay you." But since the Soviet run economy was not delivering iPhones and quality houses, there were no products to back the funny money the government was issuing.

So even though we have seen the failure of this economic system for the last century, the average citizen doesn't seen to be able to comprehend the logical consequences of this approach. And there is where the political genius lies.

The issue is this. The top 1% of American earners only command 1% of the vote. The bottom 20% commands 20% of the vote. So if the left in America can take a huge chunk of income from that top 1% and buy the votes of the bottom 20%, they can create a political dynasty. (It doesn't matter whether the top 1% is all on the left or on the right politically, the left can alienate all the multimillionaire liberals in Hollywood and still hold power with this approach.) Granted it is an approach that will in time bring the country to financial suicide as it has in every country that has pursued this policy. But as with every case where people "mortgage their future" there is no immediate downside for the people being elected now.

Get the votes, get the office, get the power, ruin the economy and then...oh yeah, call in the conservatives to clean up the mess. It's what California has been doing for the last half century...and by the looks of it, we'll being doing it on the national stage for the near future.

Stay tuned.

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