In his Jan. 28 letter, Thomas Day claimed income equality’s “free lunch” would kill all incentive to strive and succeed. There are several potential errors in this argument.
The first is to pretend income equality could ever be achieved. We can take reasonable policy steps to narrow the income gap, but the reality is it can never be eliminated.
The second fallacy is Day’s insistence that income equality kills human motivation to improve one’s life through education and hard work. This philosophy suggests America was more productive and workers were more motivated before FDR enacted the New Deal that led us out of the Great Depression. History indicates otherwise.
Further, a majority of financially successful people don’t stop working at the earliest point where they could retire comfortably. This behavior might call the theory into question.
Thirdly, Day claims “since 2008, the number of citizens living below poverty level has doubled according to the department of agriculture. That is the result of government encroachment on our freedom and socialist policies of our current administration.” This ignores the fact the economic collapse began in 2007 and can be attributed to a deregulation trend that began under Richard Nixon and accelerated under Ronald Reagan.
In particular, deregulation of Wall Street and investment banking contributed to the financial collapse. Analysts have focused on unregulated credit default swaps and derivatives as the main culprits. Deregulation of these activities led to the worst financial catastrophe since the Great Depression. The financial collapse of Wall Street led to economic collapse and massive unemployment as manufacturing and retail sectors cut payroll.
Thus, the number of people living below the poverty level increased. This increase is directly tied to insufficient government regulation of investment banks and the financial sector. Day’s claim that President Barack Obama’s “socialist policies” and “government encroachment on our freedom” are to blame for this poverty is at best laughable and at worst disingenuous.
Why did it happen? My opinion is deregulation of Wall Street is tied to a federal strategy to use the U.S. financial sector as a weapon to secure points of an agenda laid out previously by neoconservative think tanks. Obama calls it soft power. This “plan B” allows the shadow government to indirectly attack Russia, Iran, and Venezuela, and manipulate other states — even after American citizens voted against war and military adventurism. Another weapon in play is manipulation of oil prices.
Finally, Day claims government regulation encroaches on our rights, which “exercised in a free society, allow each individual to achieve their maximum potential based on their God-given gifts and talents.”
This isn’t the intent of regulation. Rather, it’s intended to promote fair competition, limit risk, and stop fraud. Deregulation of financial sectors allowed Bernard Madoff to steal $50 billion and lose the life savings of thousands of families and retirees. Preventing people like Madoff from engaging in illicit activity improves stability of our markets and secures nest eggs Americans have worked all their lives to create. That sounds reasonable to me.