On Wealth Redistribution… or not…

28Oct08

I want to take a few minutes to talk about the slew of articles, referencing or alluding to Obama’s remarks regarding wealth redistribution, be they his “spread the wealth” comment to Joe the Plumber or to the 2001 radio interview that has recently surfaced.

First, the more general comments.

When you talk about wealth redistribution, you are inherently talking about your view on markets. I like markets for the most part. I was trained in economics at Duke University, and I like to think I know a thing or two about how the theory, philosophy, actuality of economics intersect. I’ve learned to respect what a market based system can do when given the proper framework and safeguards, and I think that so long as you understand the primary incentives at play, market-based structures are excellent at setting clearing prices for scarce goods.

That said, I think they have limits. The economics that a number of policy makers have in mind when they push free market fundamentalism assumes equal actors in both preferences and influence (ie. no Warren Buffet’s or Simon Cowell’s), complete adherence to any rules in play, and perfect foresight into the future. A free market made of these people does not actually exist, and legislation should not be written or considered as if it were, or we risk finding out that humans are not perfectly rational and predictable all with our economy on the line.

Now, as for Obama’s remarks…

I’ve listened to the radio interview Obama gave, and I’m not particularly concerned. In my view, he believes there was an economic component to America’s racism, and that it’s a shame that the civil rights movement focused so primarily on the courts, who have been restricted by design and history from righting wrongs economically, as the primary vehicle of change. In his view, they should’ve put more focus on organizing people to bring about that change via legislation… which sounds very similar to a key function of labor unions.

So nothing there concerns me.

Then there’s the idea that perhaps some wealth redistribution (or at the very least, incentive changes) are increasingly merited in the US, given that income inequality has been growing since 1980 according to the OECD. Pick your graph for the visuals.

But the main thing I want to say about these articles is that, in terms of presidential duties, I can’t think of a single responsibility where this matters. The president does not write or interpret laws. The president is entitled to talk about anything they wish, but he does not have power to carry those wishes out. Most anything that could possibly be described as radical redistribution would have to come from Congress, making this discussion of Obama’s views on redistribution of any kind a moot point.

So in the end, I’m thankful that there’s only one week left before election day, because this incessant banter about irrelevant issues will hopefully start to die down, and with calmer public there might be a better opportunity to raise the level of thought in our discourse.

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