State Sovereignty

The Wealth Gap

OPINION

It has been said that, if all the wealth were distributed evenly among all the world’s people in the morning, by afternoon some people would once again be rich and others would be poor, and most of them would be the same people.  There is no avoiding that clever individuals will find ways to increase their wealth, or that those less clever will squander their assets.  This is true, regardless of the economic system in which a society operates, but the freedom of individual self-determination inherent in a capitalist democracy makes it especially characteristic of the United States.  The U.S. prides itself, after all, for being the land of opportunity. 

This chart shows the percent income growth from 1947 to 2001, inclusive. Income statistics provided by the U.S. Census Bureau1 divide the population into fifths by income, and report the percent of total personal income earned by each one-fifth of the population.  In addition, it reports the income percent earned by only the top 5% households.  (That top 5% has been shown separately from the top 20% category here).  In this 55 year period, the only category of income earners whose income increased, as a percent, is the 15% of Americans from the top 80% to the top 95%.  All other categories lost income share.  This can be, and has been, viewed as a wealth transfer to those who are already wealthy.  Of note is the fact that the top 5% of income earners saw the greatest reduction in income percent during the 1960’s and 70’s, but that trend has begun to reverse in recent decades. 

Is this an economic problem, or a social one? Or, is it even a problem at all?  Some would say probably not.  The promise of “a greater share of the pie” is what motivates Americans to achieve.  One who lacks performance-based economic opportunity also lacks incentive toward productivity or innovation, since the benefits of his work do not accrue to himself.  However, at what point does this trend approach critical mass?  Obviously, it cannot ethically continue to the point at which the lowest fifth has nothing.  In fact, my belief is that, because of the way wealth and income statistics are structured, the wealth gap is not as great as it appears to be.  It is also not widening at the rapid level many claim, if at all, in real economic terms.   And, to the extent it does exist, it is not undesirable, either economically, or socially, since a natural ebb tide of real wealth flows away from the top income earners, returning economic resources to those less wealthy.
The Poverty Line

First, when reporting the number of people below the poverty line, it is necessary to determine where that line is.  An unavoidable consequence of drawing a poverty line at all is that, at incomes near the line, some households will be included, and others will not, though their incomes may differ by only one penny per year.  As seen at right, wealth distribution is not linear.  As population increases, from the poorest to the wealthiest, equal increments of population earn increasing marginal incomes.  Therefore, if the poverty line is raised by only a small amount, marginally larger quantities of households are captured beneath it.  Where one draws the line, then, has a tremendous impact upon the percent of population considered poor.  A researcher desirous to show a large poor class, perhaps as a means of criticizing current government leaders, need only set that threshold slightly higher. A researcher anxious to support the current situation, in support of the administration, may lower the line, placing a large quantity of households above it.

Fortunately, the U.S. Census Bureau maintains a system of poverty thresholds in an effort to standardize this measurement. It establishes 48 separate poverty lines, each based upon various factors such as age, the number of people in a single household, the number of those people under 18 years of age, and the cost of living (As defined by the Consumer Price Index for All Urban Consumers.).   The thresholds, shown here for 2004, result from an attempt to estimate the monetary costs of supplying the household with all essential goods and services required for survival.  These are pre-tax gross income levels.

Of course, the USCB poverty line is, itself, somewhat arbitrary and plagued with problems inherent to all such measures.  Namely,

• What goods and services are “essential”?  Somewhere between food, clothing & shelter, and yachts & minks lies a vast gray area, in which it is debatable whether any item is essential for living.  For example, a new automobile is a luxury to most, but having an automobile is absolutely essential, for most workers, in order to maintain a job outside the home.  If public transit is available, does that mean the car payment then becomes non-essential?  What about if the transit fare is higher per month than operating the car?  Are gas, maintenance, and repairs to the car essential, or a luxury?  These questions have to be answered in order to determine where the poverty level should be, and there are no easy answers.

• Poverty thresholds are based solely upon income, not wealth or actual expenses.  A family could own their own home outright, a car, and a large stock portfolio, and be classified as living in poverty, if its income is below these poverty levels.  At the same time, a different family could earn the same income, but have monthly rent or mortgage payments, and an auto loan, all of which inhibit the ability to afford food and clothing.  If a household has a very low income, but great wealth, is the family poor?  Most would say no. But under these guidelines, the answer is yes.

• A single threshold is used for all regions of the country, regardless of the cost of living.  The problems here are obvious.  A cost of living of $10,000 per year in Anniston, Alabama is equivalent to $25,750 per year in San Francisco, California3.  Yet families in the two places, and all others in the 48 continental states, are measured using the same poverty yardstick.

Excluded Income

Once a poverty line is established, by whatever means, next comes the problem of deciding who falls above and below it.  Again, tough questions must be answered.  If a person has no job, but receives welfare or Medicaid payments, should that income count against poverty?  The Census data above exclude three important types of income which, in economic terms, contribute to the family’s standard of living.

• Food Stamps. Food stamps are classed as a non-cash benefit, and are distributed in electronic form, using a magnetic card.  (In some regions, paper vouchers are still used, but this is increasingly rare).  This means that they are not included as income, and are not subject to federal income taxation.  However, being a voucher system, they are clearly a cash substitute in real terms, and benefit eligibility is even computed in terms of dollars. In any case, the presence of food vouchers frees up household income for other essential, and possibly discretionary, spending and, therefore, should be considered income for the purposes of poverty eligibility.

For a family of four, food stamps can increase the household’s income by  $6,072 of additional, nontaxable income.  Now, referring to the generic example of a two-parent, two child household, the poverty threshold is $19,157 gross income per year, which would translate to around $15,326 net pay.  (Using a realistic 20% withholding rate, though of course net tax liability at year end depends upon several factors, including income sources, deductions, exemptions for age and disability, etc.)  The $6,072 of food stamp benefits received by the family during the year would increase their net earnings by almost 40%, to $21,398.  The de facto equivalent gross income has now risen from $19,157 to $26,747.  Or, more to the point, since the family’s specific income level does not affect benefit eligibility, as long as it, (and the family’s wealth level, since wealth is considered in determining food stamp eligibility) is below the requirements set by the USFDA3, the family’s pre tax poverty level should be set at $19,157 minus $7,590 or $11,567.  ($7,590 is the equivalent gross income at which $6,072 after-tax income would be received).

• Housing Subsidies. The government provides homes for some households in government-owned buildings, subsidizes the building of low-cost housing for low-income families, and supplements rent payments to landlords for the difference between the market price and the price the family can afford, according to a predetermined formula.  Such subsidies are based upon standards for family size and structure, and the cost of appropriate housing in the market containing the required number of bedrooms and amount of living space.  There are many criticisms of this system, including, 1) the government gets into the practice of determining how much home a family is allowed to enjoy, 2) the system traps families into successive generations of a poverty cycle, never allowing them to escape from a life on the public dole, and 3) subsidized housing concentrates the poor into slums, “ghettos”, which drive out economic development and breed crime in its place. 

Aside from those problems, the subsidies relieve the family of the need to provide for housing, either partially or completely.  Since shelter is among the most basic of human needs surely the family would spend money to secure at least some subsistent dwelling in the absence of the subsidies.  Therefore, subsidies contribute to the economic income, and standard of living, of the family, by freeing funds to purchase other goods and services.  But, under the Census system, these subsidies do not contribute to lift the family above the poverty level, even if the family is otherwise near the threshold.

• Capital Gains and Losses At first glance, it might appear that, since people below the poverty level are unlikely to have stock portfolios, the matter of counting capital gains against poverty should be moot.  But such thinking is a product of wag-the-dog perceptions which assume that anyone in poverty must also necessarily be poor, and that only poor people can be considered falling within poverty guidelines.  In truth, there are some valid reasons for discounting market gains and losses, and some increasingly common problems with it.  If gains and losses were included, and a trader who is wealthy with assets, but whose only source of income is capital gains, has a difficult year in the markets and incurs negative or low gains, he could be included as being in a state of poverty.  But, the flip side of that coin, excluding gains and losses, is that everyone whose sole source of income is capital gains is counted in these poverty statistics, regardless how large the gains.  Today an increasing number of people fit this profile, and some earn very nice livings well above those of the average worker.  (Many successful day traders, who typically buy and sell in short-term positions, seldom stay in a single equity long enough to collect dividends, which would be counted as income against poverty, preferring instead to ride long or short against share prices.)  Such a trader would be counted among the poverty-stricken in USCB statistics.

 
Facts about American Poverty

Concerns about the wealth gap necessarily revolve around the plight of its victims, the poor.  After all, what harm would result from a class of very wealthy people, were it not for the suffering on the opposite end of the economic spectrum?  Let’s examine the living conditions that the poor in America must endure.

According to USCB guidelines, those living in poverty in the United States cannot, or barely can, afford the most bare essentials required to live.  By international standards, however, America’s poor would rank anywhere between middle class to affluent in many other countries.  Working class people in Mexico risk capture (by both border patrol, and Mexican slave smugglers) for the chance to be poor in America.  The wages they earn if they do arrive safely and find work are well below what is considered acceptable to Americans.

Robert E. Rector and Kirk A. Johnson, Ph.D. present some surprising facts, taken from the Census Bureau reports, about the lives of Americans below the poverty line.5 
• 46% of poor American households own their own homes.
• 76% have air conditioning.
• Over 67% have more than 2 rooms per person, and only 6% are considered overcrowded.
• The amount of personal living space among the poor in America exceeds the average living space among all residents of Paris, London, Vienna, Athens, and many other European cities, regardless of wealth.
• Almost 3/4ths of poor Americans own their own car. 30% own 2 cars.
• 97% have a color television, and over half have more than one.
• 76% have a Video recorder or DVD player.
• 62% have subscriptions to cable or satellite television service.
• Over three quarters have a microwave oven.
• Over half have stereo equipment.
• One-third have an automatic dishwasher.

Starvation, and chronic hunger, are not present among America’s poor.  Indeed, the poor in America have a problem with obesity.

The average consumption of protein, vitamins, and minerals is virtually the same for poor and middle-class children and, in most cases, is well above recommended norms. Poor children actually consume more meat than do higher-income children and have average protein intakes 100 percent above recommended levels. Most poor children today are, in fact, supernourished and grow up to be, on average, one inch taller and 10 pounds heavier that the GIs who stormed the beaches of Normandy in World War II. …

Overall, the typical American defined as poor by the government has a car, air conditioning, a refrigerator, a stove, a clothes washer and dryer, and a microwave. He has two color televisions, cable or satellite TV reception, a VCR or DVD player, and a stereo. He is able to obtain medical care. His home is in good repair and is not overcrowded. By his own report, his family is not hungry and he had sufficient funds in the past year to meet his family’s essential needs. While this individual’s life is not opulent, it is equally far from the popular images of dire poverty conveyed by the press, liberal activists, and politicians.6

The Self-Mitigating Nature of the Wealth Gap

It cannot be denied that there is a disparity between the incomes and lifestyles of the wealthy and those of the poor, of course, as always is the case in any economy.   However, the differences between the extremes cannot be quantified in real economic terms by measuring incomes, or by inventorying the value of assets to which the individuals hold title.  The living standards of individuals are affected more by the total value of the economic resources they consume.  Though the poor have little, and the rich have much, in fact, poor households have access to, and use, economic resources they do not own.  Conversely, the rich have wealth they never need, and never use to contribute to their own lifestyles.  In fact, the non-owned wealth used by the poor (and middle class) are exactly the same excess assets owned by the rich.  This is true regardless even of any philanthropy the wealthy may engage in.  In that way, the wealth gap is always self-mitigating.  That is, “real wealth”, as defined in terms of economic resources contributing to a person’s economic standard of living, always transfers from the wealthy to the less wealthy.   Thereby, the gap between the very wealthy and the very poor is narrowed.  Furthermore, as the economy expands, the rich become richer, and the poor become richer as well.

A person whose total wealth equals $500 million does not enjoy ten times as lavish a lifestyle as one who is worth “only” $50 million.  In fact, their lifestyles are often very similar.  The majority of their wealth is not contained in their homes, their cars, the food they eat, or the clothes they wear, though all of those items may be far more expensive than their counterparts enjoyed by the lower and middle classes.  Beyond yachts and trips to exotic destinations is found a shortage of additional available personal extravagances.  Both the needs and the desires of the individual have been satisfied, and excess wealth remains.  Where, then, is that wealth?

A wealthy (and not-so wealthy) person’s money is always in one of three places:  1) it is spent on consumption; 2) it is donated to charity or; 3) it is invested.  Only the first case contributes to the lifestyle of its owner.  But all three options result in the money of the wealthy returning to those less wealthy.  The only way a wealthy person can deprive the poor of his money is to deprive himself of it as well, by storing it away in cash form, in the proverbial pickle jar, where it is never used for anything, removed from circulation. 

1. When anyone, rich or poor, buys items for themselves, whether durable goods, consumable goods, or services, the money spent on that consumption becomes income for others.  The employees of the store who sold the item, employees of the trucking company that transported it to the store, the employees of the factory that made the item, and the employees of all the suppliers whose parts were included, all share in the benefits of the sale.  In that way, consumption returns wealth to all others who work.
2. It is almost universal that very wealthy people find satisfaction in giving some of their excess wealth to needy people, either directly or, more often, through charitable organizations.  Of course, in the US, we have a system under which all people with money donate to support the poorest, through taxation.  When contributing through an organization, some of the donation is filtered away in administrative costs, logistics, and salaries, but 100% of the donation is returned to the economy, contributing to the well-being of all.
3. Investments take two general forms, loans and capital.

a. When money is placed in a deposit account in a bank or a credit union, or when it is invested in a lending organization such as Fannie Mae and others, it is loaned to people who, almost by definition, don’t have wealth of their own, in the forms of mortgages, car loans, and consumer debt.  The investor may retain title to the money, but the money is actually in the possession of the borrower, working to provide him, not the lender, a bigger slice of the economic pie.   The lender accrues interest, of course, but above his consumption needs, even that is re-invested. Greater wealth belonging to those able to lend contributes to the money supply, and makes needed resources more accessible to those in need of it, by lowering interest rates.

b. Instead of investing in loans, the excess wealth may be invested in capital.  Its owner may invest in a business as a silent or managing partner, buy shares of the stocks (or mutual funds) of multiple companies, or buy government treasury bills or municipal bonds.  (Government investment does not strictly fall within the category of capital, since government produces no independent economic wealth, but for the purposes of wealth transfer to individuals, it works in the same manner).There, the money goes into the buildings, equipment, inventories, salaries, and other assets which provide employment for others, and create wealth through manufacturing and commerce.  So, once again, the excess wealth of the very rich, and the only moderately rich, is in the possession of others engaged in economic activity.

This de facto wealth transfer is central to the capitalist democracy.  It is the capital that gives Capitalism its name.  It may appear on the surface that the wealth gap is widening when one looks only at income levels, or title to wealth, over time.  But this gap is self-mitigating, due to the ebb tide which returns value to the poor. 

Essential for preventing real economic hardship for the poor is not preventing the rich becoming richer, but discouraging economic activity, as would occur in conditions of deflation.  Deflation results in increased valuation of the currency, providing an incentive for the wealthy to use that pickle jar, and withhold his wealth from the greater economy.  Therefore, deflation is a far more serious threat to all economic players, rich and poor, than an apparently widening wealth gap.
The Power Gap

A final argument against a widening wealth gap, not addressed by the mitigating ebb tide, is the matter of social and political power.  While the poor and working classes may have possession of the assets of the wealthy, the wealthy do retain title to it, after all.  It may be argued that they can, and will, use the wealth to buy political power.  And, to an extent, that is true.  But, it is true of every system and not unique to capitalism or democracy.  However, there is an ebb tide here also, transferring power back to the less wealthy. 

Wealthy contributors may buy the actions of current government officials, and may succeed in having some “rules of the game” customized for themselves for a limited time.  Cases of this are plentiful.  For example, in 1989 Charles Keating influenced five U.S. Senators to exempt his Lincoln Savings & Loan from certain federal regulations.  But the United States retains government based upon populist ideals, and real, lasting political power still lies in the hands of voters. As nominal wealth is concentrated in the hands of fewer individuals, those fewer individuals, as a group, constitute a smaller direct voting bloc.  Votes in an election can be bought, of course, but only insofar as image makers, speech writers, policy wonks, and spinmeisters can influence the voting public.  It is possible to “buy an election” only by getting a message out, in an appealing form.  (A few cases of direct vote selling occurred in the elections of 20007 and 20048, and vote selling in the US dates to the late 1800’s, but it is highly illegal, and the likelihood of buying the votes outright of sufficient numbers of private citizens to actually sway an election without detection and prosecution is effectively zero.  It is also unlikely that a sufficient number of voters required to change an election’s outcome would be found willing to sell their votes, even less likely in a close election, where vote buying might make a difference.) 

And finally, attempts of the wealthy to change the rules to make unlawful self-interested actions on their parts lawful, has met with limited success, at best.  Charles Keating was convicted of fraud, racketeering, and conspiracy, and sentenced to 22½ years in prison.  He served only 4½ years before the sentences were overturned, but more to the point, he was removed from power.  The Sarbanes-Oxley Act of 2002 requires executives to personally certify financial reports, and places criminal liability upon executives who knowingly certify false reports, or who willingly fail to know about the existence of fraud.   In the post-Enron world, where scandals involving abuse of wealth and power are becoming commonplace, we are finding that the wealthy and powerful are being held responsible for their actions, if not criminally, then at least civilly.  At this moment we await verdicts in the criminal trials of Kenneth Lay and Jeffrey Skilling of Enron.  Even if they are acquitted of criminal behavior, they are sure to be found liable in a civil class action, where the burden of proof will be reduced from “beyond a reasonable doubt” to “a preponderance of the evidence.”  The newest developing scandal on the horizon is the practice of back-dating stock options, as a means of awarding executives with enormous compensation packages, which do not appear on the company’s financial reports. But it appears at this time that light shining on this practice will end it, and new regulations be put in place to prevent future occurrences.
Putting it all together.

As long as both capitalism and democracy are at work, a widening wealth gap is of no threat, either to the economy, or to the lower classes.  Greed exists in all economic systems, as a component of human nature, when resources are finite.  The Soviet Union and eastern bloc operated without either capitalism or democracy, where both power and wealth concentrated in the hands of oligarchies, and vast economic resources were withheld from the massive population. 

Many nations, such as Sweden, France, Germany, and others, have preserved democracy in government, but eschew the invisible hand of capitalism in favor of central planning of the economy.  In these economies, the wealth gap, as well as most other natural economic phenomena, is checked by regulation. 

An experiment opposite to socialism, (democracy sans capitalism), is taking place in China, where capitalism is being explored without democracy.  Political communism and economic capitalism have not been combined before, and may appear on the surface to be incompatible.  After all, free capitalist markets require the right for individuals to own property (capital), and the liberty to make personal economic decisions.  The predictable path is that the enormous Chinese economic engine will concentrate wealth in the hands of a very small elite class.  And, since power follows money, and more money follows power, the system will produce a tiny oligarchy of incredible wealth, while a billion workers toil in effective slavery.  Ultimately, this will result in either a democratic revolution, or a return to collectivism. 

In the United States, and several other countries which maintain both capitalist economies and constitutional democracies, the concentration of wealth is mitigated by the return of wealth to the economy, where all can partake of it.  And the concentration of power is mitigated by decentralizing the ultimate political power into the hands of 300 million individual citizens. 
Sources.

1 “Income Statistics.” United States Census Bureau. 30 Aug 2005. 20 May 2006 <http://www.census.gov/hhes/www/income/incomestats.html>

2  “How the Census Bureau Measures Poverty.“ United States Census Bureau. 14 Dec 2005. 20 May 2006. <http://www.census.gov/hhes/www/poverty/povdef.html#1>

3 Sperling’s Best Places. 20 May 2006. <http://www.bestplaces.net/>

4 “Fact Sheet on Resources, Income, and Benefits.” United States Department of Agriculture Food Stamp Program. 20 May 2006. <http://www.fns.usda.gov/fsp/applicant_recipients/fs_Res_Ben_Elig.htm>

5 Rector, Robert E. and Kirk A. Johnson, Ph.D. “Understanding Poverty in America”. 5 Jan 2005. The Heritage Fondation. 20 May 2006. <http://www.heritage.org/Research/Welfare/bg1713.cfm>

6 Ibid.

7 Derfner, Jeremy. “Buy This Vote!  The Web puts democracy on sale”. 23 Aug. 2000. Washingtonpost.Newsweek Interactive Co. LLC . 20 May 2006. <http://www.slate.com/id/88646>

8 “Authorities halt man’s eBay offer to sell vote.” 27 Aug 2004. USA Today, Associated Press. 20 May 2006. <http://www.usatoday.com/tech/webguide/internetlife/2004-08-27-ebay-stops-vote-sale_x.htm?POE=TECISVA>
© May 20, 2006 Rex Stanfield  All rights reserved

OPINION

The USA today ran a feature story on January 31, 2008 about cozy lobbying between congressmen on influential regulatory committees and the companies those committees regulate.( http://www.usatoday.com/news/washington/2008-01-31-cover31_N.htm). It describes how companies get around the laws that prohibit the trading of political contributions for official action, by sponsoring fundraisers for officials rather than making direct contributions. In that way, the contributions of others are bundled so that credit for delivering them can accrue to an entity that is prohibited from contributing directly. The story featured a photo of Congressman James Oberstar (D-Minnesota 8th) arriving at the United Parcel Service (UPS) lobbying house in Washington for a breakfast fundraiser.

Oberstar chairs the Committee on Transportation and Infrastructure, the committee charged with regulating the industry that includes UPS. Later that same day, Oberstar passed through his committee an amendment to the FAA Reauthorization Act. The amendment changes the regulatory structure, not of UPS, but of its primary competitor, FedEx.

As quoted in the USA Today article,

This is business as usual,” said Malcolm Berkley, a spokesman for UPS, which opened its doors for lawmakers 57 times during the first 11 months of last year. “We are participating in the system that is established, and we do it by the rules and guidelines.

This use of verbal calisthenics is a way of validating something that has the same aroma as pay-to-play. It defends something that might appear unethical by pointing out that, no matter how dirty it may seem, it is nonetheless not unlawful. Only in Washington can something so clearly unethical be sanitized simply because it is legal. Indeed, it was intentionally left as a loophole in the campaign finance laws by the same lawmakers who take advantage of it. Maybe it’s more an indictment of fuzzy Washington ethics than of UPS. But out here in the countryside, I think most people have an askance view at such a cozy relationship between a regulator and one of the regulated entities.

FedEx has tried to portray this as a “Brown Bailout.” Supporters of the amendment point to the fact that UPS and FedEx are in the same industry, and therefore should be under identical regulatory structure. UPS grew from a trucking company to become the largest freight logistics organization in the country, adding some aircraft in order to offer rapid service on certain high-density, long-haul lanes. FedEx began as an air cargo company, and in-sourced its local pickup and delivery operation by adding a relatively small ground operation. Today, the UPS operation is still almost entirely ground-based, while FedEx is almost entirely a air-based.

In July 2009, managers at some UPS locations instructed all employees to write their US Congressmen in support of the anti-FedEx amendment. Indeed, they were told they must write these letters, and that it would be done on company time. Only if an employee strongly objected to the mandate would that employee be told privately that it is really optional, not compulsory. In that way, the company could not be legally charged with violating the first amendment free speech rights of employees, though that is exactly what the company did with its initial publicly-declared mandate.

The bill, with the amendment, has passed the House of Representatives and is now before the Senate. In summary, My problems with the amendment are as follows:

(1) It is being attempted through influence peddling and legislative corruption. Even though it may be legal in the strictest sense, it is still influence peddling, and it is still unethical.

(2) More importantly, the objective is to pave the way for outsiders from the International Brotherhood of Teamsters (IBT) to coerce FedEx employees into a union they do not want to join. Getting employees into a union is easy, if they want to join. If they do not, organizing a workplace requires others who are not employees to coax them to join against their will. Often, lies and intimidation are used in these cases. UPS employees joined the IBT many years ago. UPS is widely reputed in the industry as a company that treats its employees poorly. FedEx, on the other hand, is known to have very high employee morale, among the best in the industry, and has been listed by Fortune Magazine as one of the 100 best companies to work for in America four of the past five years. If it were not the case, their employees would have signed union cards years ago.

(3) Maybe most importantly, I don’t condone the practice of government managing competition among companies, essentially to pick winners and losers by manipulating the rules. UPS is a trucking company with a few aircraft for long-haul lanes. FedEx is an airline with a relatively small ground operation to make pickups and deliveries. FedEx has built a better business model by being a smarter company. If someone builds a better mousetrap in a free market, then that person may expect the government to refrain from intervening and removing the competitive advantage they have fairly earned.

Finally, If the government must intervene to level the playing field, perhaps everyone would be better served if it instead forced UPS to treat its employees better, and make it easy for those employees to decertify the IBT, then everyone would be happy.

© 2010 Rex Stanfield All rights reserved

For more than a decade prior to his assassination in 1968, Dr. Martin Luther King, Jr. went into the homes of white American families, particularly in the deep south, and talked to them about their attitudes toward African-Americans. He spoke to white children in their own living rooms as they sat on their couches and recliners. True, he was not there physically, and he did not enter the homes through the front door. That would have been unlikely in the racially-charged 1960s. But nonetheless, it was Dr. King himself, in the form of flickering back-and-white images on television screens, delivering the most powerful lines of his speeches during news broadcasts.

 When Dr. King said, “I have a dream of a day when my children are judged not by the color of their skin, but by the content of their character,” the message was not filtered through a scrim of journalism simultaneously reporting and interpreting it. It was not drab newsprint the children would have found too boring to read. It was the great man himself, making his case “in terms so plain and firm as to command their assent,” as Thomas Jefferson once described his own declaration. Nothing could shake the fundamental truth once the message had been delivered - not parents, not schoolteachers, not friends or parents of friends, not the governor standing on the steps of the university, and not the brick-throwing unrest and fist-fighting school integration of the next several years.

 
 Dr. King was a great man because he fought a social cancer that had inflicted American society over 300 years. But his message was not new. It had been expressed by a thousand other great men and women since the 17th century. He did, however, have the advantage of being the first to deliver the message via the newly-invented television directly to the upcoming next generation of children while they were still young enough for his words to influence their yet-unformed attitudes. It seems doubtful he would have been as effective without it. He himself probably did not comprehend how the new appliance would help him ultimately and posthumously accomplish what John Adams, Benjamin Franklin, Abraham Lincoln, Frederick Douglass, Harriett Beecher Stowe, and others could not.

Barack Obama is not the realization of Dr. King’s dream. We are. Millions of white children of the 60s and 70s who did not grow up to become racists despite having been born into a racist society. Dr. King did not care about electing a black American president; he cared about an America where the color of the president’s skin is trivial. President Obama was elected by a multi-racial majority. More importantly, Obama’s opposition is based strictly upon issues, not upon skin color. By anyone’s standards, White America has achieved Dr. King’s dream.

His speeches were delivered to assembled crowds of primarily African-American attendees. But the messages contained within those speeches were not directed at African-Americans. It asked nothing of them. It did not ask them to change their attitudes; it was white attitudes that needed changing. He did not ask African-Americans to achieve; it was assumed that once they were given the opportunity to achieve, they would need no prompting. African-Americans already cheered King’s words. Caucasian-Americans were the ones who needed convincing.
 
The political left owns racism in the US today by the way it defines everyone according to the demographic categories it assigns them: heritage, gender, sexual orientation, physical limitations, etc. By identifying, categorizing, and allocating everyone into groups, leftists strip people of their individuality and their individual freedoms. Last January, Chris Matthews of MS-NBC had an epiphany - for one hour while the President was delivering the State of the Union Address, Matthews stopped thinking about the fact that the President is black. Apparently, prior to last week, Matthews had never had seen President Obama without focusing his thoughts on skin color instead of issues. Now, he has put thoughts of race out of his head. Welcome to the conservative majority, Mr. Matthews, even if it only lasted for an hour.

Last weekend a large and diverse crowd gathered at the western end of the National Mall around the Lincoln Memorial, where Dr. King gave that speech 63 years before.  The message of this meeting was not about repression of one race, or about promoting one race over any other.  It was about Americans - all Americans coming back together under the principles upon which the greatest nation in the history of the world was founded.  Those principles have come under attack during every generation, and every generation has been called upon to rededicate itself to them.  Some on the left have predictably claimed that the “Restoring Honor” rally was meant to usurp Dr. King’s message.  That assertion badly misses the point.  On the contrary, it represents a social movement that grew naturally from the realization of The Dream.  Many who were gathered in Washington on August 28th were among the very people to whom Dr. King directed his famous speech, and their children, and children’s children.  The fact that race had nothing to do with the message of the Restoring Honor gathering is a testament that The Dream has been realized.  And those who accuse it of racism appear, sadly, to be those who have not realized it.

The left’s philosophy is that you cannot be one of them unless you agree with them on every issue. No one who disagrees with the leftist views on race, abortion, gay rights, or any other individual issue would be welcome as part of the leftist movement, even if they agree on everything else. The political faction that claims to embrace diversity will not accept diversity of opinions, the most underpinning of all civil liberties, within its own ranks.

 Last year a grass-roots political movement began to stretch its wings at an estimated 800 tea parties on April 15th. It is a movement that focuses on a return to the vision of the Founding Fathers and the Constitution. Some reporters at CNN, NBC and its cable counterpart MSNBC, and most notably, liberal activist Janeane Garafalo have claimed that these tea parties are mere racist demonstrations. Infuriatingly, we all know that they know it is untrue. No racism was in evidence at any of the tea party rallies. In fact, this new socio/political energy is more inclusive and issue-based than any our generation has seen. Garafalo and the NBC news organization have abandoned all journalistic ethics and are attempting to make news that doesn’t exist rather than report the news that does.

Do any racists attend these tea parties? Who can say? No one suggests that there are not some racists extant in America, only that they are not in positions of leadership and that racist attitudes are no longer socially acceptable. If a few racists were in attendance, we have not yet made the Orwellian leap into thought control. Individuals are still entitled to their opinions, even ignorant and unpopular opinions. Anyone has the right to have a racist attitude if that is the attitude he has. He may not act on it in a way that denies the rights of others, but he may have and express his opinion short of that without fear of molestation. If he happens to agree with the principles this country was founded upon, and if that belief inspires him to attend tea parties, it does not require the movement to adopt or defend his racist attitudes. But it also does not require the movement to turn him away and refuse his support for other causes they agree about, such as limited government and market capitalism. In fact, the dissent on various issues among participants illustrates the very fundamental freedom of thought and expression tea parties are seeking to protect.

Television, which four decades ago gave Dr. King the power to speak truth directly to millions is failing its duty to the American people today. Rather than allow the message of tea parties to pass through unfiltered, reporters and anchors at NBC, ABC, CBS, CNN, MSNBC, PBS, and CNBC distort their reporting to suit their own editorial orthodoxy. Only at Fox News and C-SPAN can anyone hear the tea party message in its own words, sans interpretive commentary.

 The political conservatives believe the USA and our society were built upon a belief that everyone is an individual, not a mere representative of all others who appear similar in some superficial way. One might think that this, too, is a plain and firm truth that everyone, even Janeane Garafalo, would embrace.
© 2010 Rex Stanfield, all rights reserved

Three Important Points About Health Care

OPINION

How many unemployed doctors do you know? How many are not seeing patients because there just aren’t enough patients to go around? What about nurses? Why do you think the Immigration and Customs Enforcement agency has a red carpet fast track to legal residency for health care professionals who desire to come to the USA to live? Aren’t you always hearing, as I am, that there is a shortage of qualified doctors and nurses? How many hospitals and clinics have you seen recently closing their doors, laying off all their employees and leaving vacant buildings behind, as manufacturing plants are doing in the US? I don’t know anything about medicine, but I do know quite a bit about economics. Therefore, I have three major points about the American health care system.

Point 1. The only way to reduce the cost of medical care is to increase the supply, reduce the demand, or a combination of the two. The single-payer plan that the government is sprinting toward will have exactly the opposite effect on both supply and demand. That is, it will reduce supply and increase demand. Therefore, the real economic price for everything medical will be higher than it is today, but since pricing will be capped, shortages will result, and government-imposed rationing will be required.

- Supply: How many more people are going to want to spend years of hard work and study, and hundreds of thousands of dollars to become doctors, when they know the government will limit their earning potential but not limit their potential liability? If they become doctors and ever make one mistake over the course of an entire career, They could be ruined and all that work and cost will have been wasted. Answer: There will be fewer doctors and nurses. Also, when limits are imposed on what hospitals, clinics, doctors and nurses and drug companies can charge, shortages will result, as they always do when artificial price ceilings are imposed.

- Demand: Who goes to see a doctor more frequently: Someone who knows they’ll have to write a check each time, or someone who can see the doctor for free? Of course, the person who must pay for doctor visits will critically evaluate the need against the cost. Once in Canada I literally saw someone take her 8-year-old daughter to an emergency room in Vancouver in the middle of the night because the girl had a minor case of the sniffles. No exaggeration. She knew it wasn’t a serious health problem; she simply wanted to get some antihistamine, and the drug stores were closed. She knew she wouldn’t have to pay for the hospital visit, because her health coverage was all government-provided. I’ll repeat that. She went to the ER to treat a runny nose, and thought it was the most natural thing in the world. She wondered why I was flabbergasted. Hopefully there weren’t any people there at the time needing limbs re-attached or bones reset.

Point 2. The newest technology is always expensive. If you want latest model of iPod/Kindle/HDTV, etc., you’ll pay dearly for it, but if you’re economizing, you’ll settle for an older model. New technology is a luxury. But this is not the case with health care. A newly-developed medical procedure is a necessity the instant it is invented, if it’s a procedure you need. Therefore, the best, most advanced medical system in the world (still the USA for now) is always going to be the most expensive. Get used to it. So in any system that results in health care costs being capped, the development of new technologies will be less common. Why would any company spend millions on R&D if they cannot sell the technology for more than it cost to invent?

Point 3: People often say that because medical care is necessary to save lives, and because of the Hippocratic Oath, doctors should be altruistic and treat people without expecting to receive high salaries in return for their skills. Why doesn’t that apply to everyone? For example, I would argue that truck drivers also provide life-saving services to the society. In fact, I’ll assert that if beginning tomorrow there were no truck drivers to deliver basic goods and food, citizens would begin dying sooner and in greater numbers than if there were suddenly no doctors. But no one expects truckers to donate their time and work. Rather, in an ideal world, people should be paid according to a combination of how much value their work brings to society as a whole, and how rare and difficult to obtain their skills are. Therefore, doctors and other health care professionals rightly earn very high salaries. In my opinion, far more than much-more-highly-paid movie actors and athletes earn theirs. Of course the market determines the proper compensation for any job, and I’m not advocating the government regulate incomes. But if it were to do so, why should health care providers, who provide the most immediately vital services, be the ones to receive less?

© 2009 Rex Stanfield All rights reserved

This State Sovereignty Movement site wants to draw your attention to an excellent article written by Jack Hunter of the Charleston, South Carolina City Paper.

Is Secession Crazy?

by Jack Hunter

excerpt: 

If the Founding Fathers had lost the American Revolution to Great Britain, would the colonial’s quest to secede from England have been decided forever, all because of a military loss? The idea that the U.S. could still be an outpost of the British Empire is one that many today would find as laughable as some find secession.

Click here for the full article.

Senator Brogdon Responds to Governor Henry’s Veto of ‘10th Amendment’ Resolution

Saturday, April 25, 2009

Tulsa, OK, April 25, 2009 - In response to Governor Henry’s veto of HJR 1003, legislation that reaffirmed the 10th Amendment of the US Constitution, Senator Brogdon called on the Governor to refrain from any further erosion of the people’s Constitutional rights.

“At the end of the workweek, when everyone else had left the Capitol, Brad Henry used his veto power to reject the Constitution he swore to uphold,” said Brogdon. “With the stroke of the pen, the Governor decided to let President Obama and Congress continue to erode our Constitutional rights.”

“This is not an isolated case,” said Brogdon. He then referred to Governor Henry’s veto on legislation that would have banned embryonic stem cell research. “In less than one week’s time, Brad Henry has vetoed life and liberty.”

“This is not about left vs. right or liberal vs. conservative,” continued Brogdon. “This is about right and wrong. And according to the vast majority of Oklahomans, these Brad Henry vetoes are just plain wrong.”

Brogdon added, “Governor Henry must stop implementing Obama’s policies and start listening to the people who he is sworn to represent.”

Randy Brogdon is the State Senator for District 34 which covers Northeastern Tulsa County and portions of Rogers County. He and his wife of 37 years, Donna, currently reside in Owasso, OK. For more information about Randy Brogdon, please visit www.RandyBrogdon.com.

The Campaign for Liberty is reporting on House Resolution 875, which ostensibly  establishes a new federal bureaucracy, the Food Safety Administration.  This new addition to the “alphabet soup” of regulatory agencies, would have jurisdiction over all food production, in the name of preventing food-borne illnesses and food contamination.  The legislation:

• Legally binds state agriculture departments to enforcing federal guidelines effectively taking away the states power to do anything other than being food police for the federal dept.
• Effectively criminalizes organic farming but doesn’t actually use the word organic.
• Effects anyone growing food even if they are not selling it but consuming it.
• Effects anyone producing meat of any kind including wild game. 
• Legislation is so broad based that every aspect of growing or producing food can be made illegal.  There are no specifics which is bizarre considering how long the legislation is.  
• Section 103 is almost entirely about the administrative aspect of the legislation.  It will allow the appointing of officials from the factory farming corporations and lobbyists and classify them as experts and allow them to determine and interpret the legislation.  Who do you think they are going to side with?  
• Section 206 defines what will be considered a food production facility and what will be enforced up all food production facilities.  The wording is so broad based that a backyard gardener could be fined and more.
• Section 207 requires that the state’s agriculture dept act as the food police and enforce the federal requirements.  This takes away the states power and is in violation of the 10th amendment.

Yes, you read right.  This would make organic farming illegal, and it would outlaw backyard gardening.  In addition, this would be yet another violation by the Federal Government of the 9th and10th Amendment guarrantees of self-government and state sovereignty.

Link to the story at the Campaign for Liberty site

The link to the bill in the article has expired, but you can read a copy of the bill by duplicating the search. Go to http://thomas.loc.gov/ and enter “HR 875” in the search box, and click the “Bill number” radio button, then perform the search.

Discuss this in the forums

CNN picks up a story on sovereignty. Link to article.

The article is a little more balanced than the initial sentence tends to suggest it wil be,

“Republican lawmakers from more than 20 states across the country are willing to take federal funding, but only on their terms.”

To begin, this is far from being a Republican effor, but is and should be supported by members of both major political parties. Second, the article fails to observe that the money belongs to the people in the first place. The government takes it from us, then offers to give us back a portion of it, but with strings attached. And in doing so, it pretends it it somehow their money, and that the offer is somehow magnanimous on their part.

Discuss this article

Today the New Hampshire House of Representatives defeated a resolution in defense of the 9th and 10th Amendments of the Bill of Rights.  And, the Arkansas resolution never even made it to the floor of either chamber for a vote, dying in committee. 

It is up to the people to communicate with their lawmakers  in defense of their sovereignty rights.  Please contact your the congresspeople, senators, and governors in your states to make your wishes known.

See the articles at:

New Hampshire

Arkansas

From WVZ Radio in Boston

Concord, N.H. (AP) — A New Hampshire Republican lawmaker is telling the federal government to stay out of state affairs.

The New Hampshire House is scheduled to vote Wednesday on Rep. Daniel Itse’s resolution asserting state sovereignty, or the right to ignore any federal law or policy that violates the Constitution. Itse groups the federal stimulus bill, the No Child Left Behind Act and any new assault rifle ban in that category.

Lawmakers in at least 15 states are sponsoring similar resolutions. Some sponsors have filed them in prior years but say opposition to the stimulus may be spurring a larger movement this year.

Critics say the sponsors are misreading the Constitution. Itse’s supporters are planning a rally on Wednesday before the vote.

Discuss this story here.