If we knew what causes income inequality peaks, could we change it?
As history reveals, Income Inequality is cyclical. The current peak began in 1970 and there would seem to be little in the stratosphere to bridge that from continuing unabated.
Historically, between 1850 and 1950 the income equality among all peoples of the US, UK and Netherlands stabilized. But across the board after WWII, those numbers spiked and continued a straight upward trajectory. Economists vary somewhat on the current causes of the spike, but a few make logical sense:
- Globalization. Globalization meant increased trade, meant cheaper goods from China, meant labour in the US could not compete, meant labour caved and created a ridge of zero growth for an entire working class sector. It wasn’t labour unions, it was competition. It was the beginning of the end for small mom and pop stores as big money swirled in and created the mega markets replete with cheap Chinese products. One stop shop – save time – buy more – charge it! Of course free trade wasn’t actually ‘free’ – tariffs were imposed over every market and those tariffs were not equal, hence trade imbalance began simultaneously. Despite being advised to not lower tariff’s, Reagan did anyway, no other country followed suit, and the US deficit spiraled out of control while China and the EU laughed.
And over the course of 50 years, not one president was willing to fix trade to make it truly ‘free’ – as in no tariffs. Trump offered zero tariff trade with Germany, the EU, Canada, and Mexico – the EU and Germany declined.
- Technology Revolution. While no one wants to sensor technology or squelch it, it has vast ramifications on income and labor and it can take a generation or more to catch up. It creates bubbles of wealth for people that have no real philanthropic bent other than to funnel their wealth into tax avoidance foundations. Technology advancement also alienates a class of people who don’t have the ability or wherewithal to create an entirely new career or expertise. As such, they move ‘down’ the ladder.
- Education. In Europe it is accepted that not everyone attends college, in fact the percentage is relatively small. The US proposes that everyone is ‘entitled’ to a college degree because that enables them to make more money… Really? A degree in Art, or Language, of Philosophy, or Communications is really a non-degree and yet they are the most prolific. While Germany has the right idea, they make it a communist dictatorial determination instead of a choice. Germany stresses specific technology or trade certifications in lieu of college. The stigma of not being a college graduate is mitigated, and a specialized trade is facilitated. The number of college graduates in Germany is roughly 20%, compared to the US rate of 34%. But what happens after graduating is more important. And that is where a middle class is created.
- Taxes. A touchy subject to be sure but when the 1%ers are paying the same rate after deductions as the average household, obviously this is not a true progressive system – and is likely meaningless with the exception of those on the cusp of moderately higher incomes being squeezed.
How do you keep the billionaires in the US if the Tax Man is going to up the ante?
Technically speaking, despite the US calling itself a Republic, it truly is a Monarchy with totalitarian bits and pieces. The billionaires are the monarchs, and everyone else, the peasants, are left to scramble in order to eek a living. In the US we’ve simply eliminated the terminology and replaced it with alternate terms that effect the same result – Monarchial rule.
The Bolsheviks assassinated the Tzar of Russia and his entire family because according to socialist history books, the peasants claimed an uprising due to wealth inequality. But the Bolsheviks simply instituted their own version of Monarchial rule under the guise of Communism, the faces of the rulers changed, and money shifted hands.
This ‘shift’ is what the Socialists in the US are hedging for in order to make the Marxist totalitarian state – complete. This is our fight!
Billionaires have two obvious qualities: ; 1. They like to spend money on lavish things that only they can afford and, 2. They like power.
So if you are going to keep your billionaires you have to be willing to concede either power or taxes. Painful.
Ultimately, today, in order to reduce income inequality one measure that Trump is vehemently pursuing is scaling back tariff differentials. Another is Sovereign sustainability.
While taxes were an initial consideration, the US system is so convoluted at this point it is near impossible to scrap the entire tax structure and recreate a true progressive flat tax – unless by EO.
When Trump is re-elected, Education could be the next transformation. Reducing federal funding of universities and redirecting that funding toward technical and trade schooling would not only eliminate the socialist indoctrination, it would secure a greater number of students toward an attainable job market sophistication. Ultimately lifting the whiners out of media attention and forcing universities to rethink their curriculum methodology and their current superfluous degree programs.
Because today, in America, you can have a bachelors degree, $150,000 student debt, and be qualified to work as a hamburger flipper.
Like Climate Change, history reveals valuable insight. Sometimes it is necessary to research a bit more aggressively – instead of simply trying to find the history that fits an agenda. Putting the pieces together means Trump cannot accomplish this alone. It means redirecting all the hate filled memes and criticism toward a viable solution. And then, there is TRUTH.