“Income Equality Is Undesirable”

Dear Editor,

The issue of income inequality is not new. It is probably as old as mankind itself; as soon as the human mind was cognizant of differences in wealth accumulation. So President Obama is wrong in that this is the defining issue of our time; it has been the defining issue throughout the ages.

What humanity has learned from countless experiments of forced income equality is that the idea is undesirable no matter how good it looks on paper. Even where it has been achieved, society sacrifices a higher standard of living. Liberal pundits like to point to third world countries as shining examples of fair income distribution without acknowledging that there is perhaps a connection between the two.

The fact is that income equality is incompatible with human nature and a free market. Income represents the flow of resources, if you will, and in a free market, resources will follow the demands of consumers and producers in the marketplace.

Those consumers and producers have different levels of talent, commitment, motivation, education and ideas. The marketplace is going to freely determine which combination of those things is going to be rewarded with the highest level of income based on demands of the free market.

And why should we want that to happen? For one, resources are by nature, scarce. Scarcity is the very reason we study economics in the first place. Two, you can extract different levels of efficiency from a resource. For example, if you only had one tree on the whole island, would you want that lumber to be used by a construction company who can build one house out of that tree or a company who can build three?

While the above example is an extreme one, the principles are exercised through millions of transactions in the marketplace that determine where income, or the flow of resources, is going to be. And we need this market to be free, so that we know that the best combinations of talents, commitments, motivation, education and ideas are rewarded with resources necessary to meet the demands of the market. Our demands.

While our demands can be unlimited, our resources are not. Like the one tree on the island, we want the best combinations out there to get those limited resources so as to get the most out of those limited resources. So instead of distributing that tree so as to ensure equality (everyone getting a stick of lumber), we want to give that tree to the company who will make three homes versus just one.

I agree with many conservative pundits who argue that American society is dynamic – meaning that today’s rich were yesterday’s poor and vice versa. You can come from the bottom and make it to the top by virtue of your own merits. That is the nature of the American dream, not income equality.

The problem today at the national and local levels is cronyism, which many unfortunately relate to capitalism. On the national level, financial institutions, Fannie/Freddie, the auto industry, big agricultural companies, Solyndra and other pseudo-green complanies have been bailed out with hand outs. That is the 1% who don't deserve the money they have received.

On a local level, I just feel sorry for everyone. I don’t know where to start. The game looks so rigged, it’s disgusting. Everyone wants so much control or will not let go of it that I believe it’s just choking the life of opportunity out of everyone else.

Taifaitasi Satele

(Editor’s Note: In his speech, U.S. President Barack Obama did not advocate income equality, he advocated working together, government and the private sector, to realize the American dream — “you can come from the bottom and make it to the top by virtue of your own merits”. To do this, Obama urged the nation, as one, to invest in the ‘middle class’ that he noted is fast disappearing under the weight of the greed of the 1%. ra)


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