A headline from NPR about the New York City Mayoral race, was refreshing because it actually expressed doubts about government superiority, “NYC Race Focuses On Income Gap, But How Much Can A Mayor Do?”
Voters in New York City go to the polls Tuesday to choose their next mayor, and it appears all but certain that they’ll elect Bill de Blasio, the city’s public advocate.
The Democrat has built a wide lead in the polls by distancing himself from the incumbent mayor, billionaire Michael Bloomberg. In fact, de Blasio has made income inequality the central issue of his campaign, name-checking the Charles Dickens novel A Tale of Two Cities dozens of times at debates and stump speeches.
“It always falls back to, ‘It’s a tale of two cities,’ ” Republican candidate Joe Lhota complained in a recent interview with MSNBC. “There’s nothing more divisive than saying we are two cities, whether it’s rich versus poor, black versus white.”
But de Blasio won’t back down. “There’s nothing divisive about acknowledging the struggle that so many New Yorkers face. It’s not class warfare,” de Blasio said in a speech last month to a group of business leaders. “It’s arithmetic. And it’s reality.”
de Blasio is right, but there is not a thing he can do about it except raise a few taxes and offer a few freebies to the poor in the community. This will give people temporary satisfaction but it won’t stop the widening income gap. The “solution” of de Blasio and many others who harp on the income gap amounts to “trickle-down economics.” The rich keep getting richer but we can take some of that and then give it to the poor. Of course, if you only tax the truly rich the amount the poor get becomes pocket change. It doesn’t work.
In fact, the increasing income gap can’t be fixed by tax or welfare policy. That makes it perfect for Democrats because they can keep going back to the income gap as a source of pain to voters and make promises that have nothing to do with fixing it.
Do you know what would help stop the growing income gap? Getting rid of the Federal Reserve; stopping QE-to-Infinity; not only refusing to raise but lowering the debt ceiling.
As Mish has explained at GlobalEconomicAnalysis.blogspot.com,
As a result of Fed policies, there have been some income gains, but only at the top end.
“Per Capita”, by definition, averages out those gains.
In reality, a select few percent have done exceptionally well as a result of Bernanke’s tremendously misguided policies. Another few percent have simply done well, and another perhaps slightly larger group have barely kept up.
The bottom 80 percent or so have fallen much further behind than the per capita charts suggest.
Except for the banks, brokers and bondholders, and everyone else bailed out by the Fed, most have been clobbered by Fed policies.
Ironically, many of those bailed out have the unmitigated gall to whine about their plight. Please See Unbelievable Stress of Making “Only” $200,000 After Taxes for details.
Or, as he wrote here,
The solution to income disparity is not wage caps on executive pay or hikes in the minimum wage, but rather the elimination of the Fed, the elimination of fractional reserve lending, and a return to sound money policies that do not benefit the already wealthy at the expense of everyone else.
But as long as politicians can misdirect the populace from the real problems, they can forever propose new hurt-the-rich schemes because such schemes will always leave the real problem alone to provide more anxiety and anger to be milked by future politicians.