Plato asserted, “Everything that deceives may be said to enchant.” As middle class Americans scurry about under the weight of their enormous debts, overpriced education, inflated mortgages, unaffordable healthcare, and crushing taxation, they remain captivated by the spells of unworthy leaders. Economic deception is omnipresent within news articles, political speeches, classrooms, and movie scripts. In addition, normalcy bias and willful denial impels us to disparage anyone who conveys unpleasant truths. Consequently, the majority is stupefied whenever economic calamities strike. But middle class Americans do not need an education in economics to realize that the American dream is bending like the elbow of an inebriated politician charging his bar tab to the taxpayers. The American dream envisions a chance for everybody to gain prosperity with hard work, natural talent, and a little luck. It presumes a fair system of compensation for productivity, where the customer is king, and we direct our productive energies to wherever our neighbors vote with every dollar they spend.
The envy-mongering propagandists who weave fairy tales of inequality, have no respect for that liberty. Nor do they respect cognizant Americans who observe equal lifestyles in their communities that make Karl Marx throw parties in his grave. They are poverty hustlers, using terms like the one-percent along with fake statistics to induce wrong beliefs about prosperity incidence, which they incorrectly refer to as wealth distribution. They deceive people with more than inaccurate terminology; they distort basic concepts. Prosperity and poverty is defined by material concerns alone, but they create poetic distortions such as a poverty of spirit, family, love, or culture, as if social dysfunctions can be ameliorated with money. They must not have listened to the radio in the last century to hear song choruses like “can’t buy me love.” They also have not studied the eternal ancient wisdom of Claudius Claudianus, who said, “whoever desires is always poor.”
On the other hand, perhaps they do understand this wisdom, since they frequently inspire malformed desires in the minds of their audiences. The people that they call “poor” have video games, air conditioning, cable television, washing machines, cell phones, and computers. They eat what they want to, and have an infinitesimal chance of homelessness. Legal privileges and redistribution bring them into the same neighborhoods as middle class Americans who can barely afford to pay their bills. They live in the same places, eat at the same restaurants, go to the same schools, and visit the same doctors. They report only $15,000 in income but they spend $39,000. The poverty hustlers exclude the value of public housing, Medicaid, food stamps, and other subsidies. They do not adjust for cost of living, and they make comparisons to before-tax income. Between 96% and 99% of Americans have had reasonable access to healthcare since the 1980s. The proportion of Americans who live in statistically falsified, fake poverty is 14.3%, while 20% of middle class Americans use welfare for perks. Only one-percent of Americans are actually destitute – truly impoverished with inadequate shelter, food, or clothing. They suffer because of the fake poor and their poverty hustlers – not because of inadequate taxation. In this redistributionist society, equality is plentiful and justice is scarce.
How can we better envision this crushing level of equality
within which we are immersed? Death is the great equalizer, but the same could be said about traffic. Since America is over 80% urbanized, we often sit in traffic observing the cars around us. Who is prosperous? The guy in the Mercedes Benz is in debt by $800,000 after his mortgage, car, and student loans. His profligate debt is not prosperity. The guy next to him in the Porsche is a violent drug dealer, one step away from prison. The guy behind him in the Corvette sold his no-interest-loan house for a fortune, stealing from his neighbors through the government bailouts, banking policies, and subsidies that artificially bubbled rental and mortgage prices to the stratosphere. The woman beside him in the Lexus is unemployed, and drawing $70,000 per year from welfare and subsidies while her children crawl around barefoot. The woman at the front of the line in the luxury SUV spends her days as a government bureaucrat barely doing four hours of work a day; she fills the rest of her “work hours” surfing the internet, perusing social networks, and texting friends and family.
One lane over, a college student in a Toyota Prius is living off of her parents and loans. The statistics say she is “poor,” but the thousands of dollars of tattoos on her skin and spring break vacations say that she is rich. A millionaire computer genius in a beat-up economy car slowly approaches the back of the line, sporting his clearance-rack button-down shirt, and tattered loafers. Next to him is a local café barista in a used Mustang. He barely makes above minimum wage, but his lifestyle is similar to that of the “rich” people in his neighborhood because they are paying for most of his rent, schooling, and healthcare through government programs.
It is difficult to discern those who earn their living honestly from those who feed from ubiquitous redistribution. Some acquire wealth from marrying, inheriting, or coercive law suits. Blue-collar union laborers are paid much more than some of their college-educated peers. Teachers, soldiers, and government employees take their compensation through enormous benefits instead of large salaries; consequently, they take a king’s ransom of prosperity in tax avoidance on top of the unstated value of their benefits. Investors reap private gains with public losses due to bank bailouts and government expenditures that salvage their failures. No decent person would claim that a wealthy prostitute, thief, corrupt businessman, or drug dealer is successful in life. They steal their prosperity through illicit actions.
Whether proper or illicit, all redistribution is essentially something-for-nothing. The measure of success is not necessarily prosperity, but a society that embraces the worst instincts of humanity easily confuses the two. Wasteful activity is encouraged from ubiquitous redistribution, and the economy begins to eat itself alive. Legendary Austrian economist Ludwig von Mises called this subtle process destructionism:
Such a policy of destructionism means the consumption of capital. There are few who recognize this fact. Capital consumption can be detected statistically and can be conceived intellectually, but it is not obvious to everyone. To see the weakness of a policy which raises the consumption of the masses at the cost of existing capital wealth, and thus sacrifices the future to the present, and to recognize the nature of this policy, requires deeper insight than that vouchsafed to statesmen and politicians or to the masses who have put them into power. As long as the walls of the factory buildings stand, and the trains continue to run, it is supposed that all is well with the world. The increasing difficulties of maintaining the higher standard of living are ascribed to various causes, but never to the fact that a policy of capital consumption is being followed…
The policy of [Classical] Liberalism is the procedure of the prudent father who saves and builds for himself and his successors. The policy of destructionism is the policy of the spendthrift who dissipates his inheritance regardless of the future.
–Ludwig von Mises, Socialism: An Economic and Sociological Analysis
As capital is consumed through destructionism, another effect is the perversion of scales and measures. Accurate measure of value, labor, and productivity becomes divorced from compensation as the results of productive labor are collectivized and redistributed. Freedom of opportunity is sacrificed on the altar of equal outcome, burying the productivity of the ambitious and diligent.
The unique blend of economic analysis, political principles, and historical evidence in the book Economic Sovereignty dispel the illusions. The discoveries were made possible by looking at American prosperity from very different assumptions. What have we spent our money on for the past century? How much money is actually in our pockets, after all forms of taxation are considered? What are the forms of redistribution and something-for-nothing in any society? How can we estimate the level of redistribution? How have people actually acquired their prosperity in different careers?
The shocking truths that emerge will vindicate every American whose intuition suspects a subverted American dream, along with unprecedented economic equality. What remains is wealth-by-the-trillions that is trapped in overvalued services, civic expenditures, malinvestments, and real estate. The elucidated economic reality shows that the mobs of people screaming about inequality are pumping their fists in the air over illusions in their heads. If middle class Americans do not wake up to the methods of the swindlers, their liberty will continue to be stolen by criminals, scofflaws, and perfectly law-abiding charlatans.
(This article refers to sections 1.1 and 1.2 in Economic Sovereignty. All citations for the arguments here, are within the book)