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Cookie Jar Mentality


Liberals make the mistake of attacking those with money because they misunderstand the economy. So here's a simple primer.

Liberals believe that the rich are not "fair" to others because they have more money than others. Liberals see the economy as a fixed amount of money, like dollar bills in a cookie jar. The rich, as they see it, grab more of the money in the jar and crowd others out.

If that were true, it would be unfair. But the economy is not a fixed pot of money where everyone gets a share.

If there are four people - a therapist, a mechanic, a grocer, and a truck driver - and between them they collectively have $1,000, the economy instead works like this:

  • The grocer pays the truck driver $100 for the food delivered to the store.
  • The truck driver pays the mechanic $125 for maintenance for the truck.
  • The mechanic pays the therapist $75 for marriage counseling.
  • The therpist buys groceries at the grocery store for $100.
And let's say that this happens once a month.

At the end of the year, collectively, their total income is nearly $5,000, which far exceeds the total amount of money in the system.

How fair is this system? In this system, there is really no limit to the amount of money you earn.

So I ask you: which model better represents real life? The system I describe above? Or Obama's model that he presented in a campaign speech last fall:

I shared my toys in kindergarten. I shared my peanut butter and jelly sandwich.
Unfortunately, our president believes that the economy is most simply and truly explained as dividing up a PBJ sandwich - of which there is only so much, like money in a cookie jar.

From my example above, socialism says that each person should get $250. That's "fair."

Capitalism says that each person has an income of anywhere from $900 to $1,500. Who exactly is on the short end of the stick in this system?

Which system sounds more attractive to you?

Kindergarten... I mean I know that capitalism requires just a bit of sophistication to understand it, but didn't this guy go to Harvard? Maybe he didn't take any economics courses. Which is too bad - for all of us.

ETC: What I illustrate above is exactly why Liberals can't fathom how lowering tax rates can actually increase revenue to the government. How? Because taxation in America is based on income... the greater the income, the more can be taxed. Therefore the greater the velocity of money, the more revenue is collected.

If Liberals were really interested in fairness, they would not go after income for taxation, but wealth. The problem with that for them is that there are too many Liberals with old money and accumulated wealth for that to even be considered, so they invent the straw man of the "rich" being those with the highest income. Which is how John Kerry was welcomed as a man of the people by the Left in 2004.


by Brett Rogers, 2/28/2009 1:05:23 PM


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