Wednesday, May 22, 2019

"Rich" People Are Rich Because "Poor" People Get Poorer

ANOTHER CLASS ENVY ATTACK TO GET YOUR VOTES: 
Democrats, Socialists and Liberals in general believe in the zero sum game. In other words, in order to get "rich" you must take from someone who is "poor." (Only criminals do that, and I assume you're not a criminal. Not a good career move).
From Daniel Mitchell, Phd at TownHall Finance 
In the debate over “fairness,” my statist friends mistakenly see the economy as a fixed pie. This leads them to claim that rich people are rich because poor people are poor.
But there’s no data to support this position (other than in kleptocracies such as Venezuela where a ruling socialist elite steals wealth).
So some folks on the left will back down from that extreme claim and instead assert that the rich are the only ones enjoying more prosperity as time goes by. 
For evidence, they cite data showing that incomes have been mostly flat over the past 30-40 years for poor people and middle-class people, particularly when compared to the rich.
But there’s a big problem with their data. They look at income levels in some past year and then they compare that data with income levels in a recent year. 
But, as I wrote back in 2015, this means they are comparing apples and oranges.
There is considerable income mobility in the United States, which means today’s rich and today’s poor won’t necessarily be tomorrow’s rich and tomorrow’s poor.
I don’t necessarily expect people to automatically believe me. So if you’re one of the skeptics, watch this video from Russ Roberts. It is almost eight minutes and it is filled with rigor and data, but it’s worth watching since it masterfully demonstrates that lower-income and middle-class households actually enjoy larger gains than rich households.



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