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Why no, Hillary, spreading the wealth around has not been good for everybody
One of the favorite tactics of Democrats is to demand to be allowed to do something, and then, once they’ve done it and it didn’t work, pretend they never got to do it and insist the solution is to do the dumb thing they already did.
Remember the conversation in 2008 between then-Sen. Barack Obama and Joe the Plumber? Joe tried to explain to Obama how his tax increases would negative affect a small business like his. Obama’s response was, “When you spread the wealth around, that’s good for everybody.”
That’s worth remembering in 2016, because look what Hillary Clinton and Tim Kaine keep insisting we need to do: Spread the wealth around. If only the wealthy paid their fair share, they insist, we could spread the wealth around to everyone and things would be much better.
As if Obama hadn’t spent the last eight years doing that very thing, and to what effect? We continue to average a horrible GDP growth rate of less than 2.0 percent. Labor force participation is at its lowest point since 1978. We’ve got 12 million more people getting food stamps than before Obama took office.
If people at the top are doing better, it’s not because we’re not “spreading the wealth” enough. It’s because the federal government keeps confiscating the capital that could be used to create opportunities to lift others up.
Last week during a debate about the estate tax, I actually saw a liberal claim it’s better to give rich people’s money to the government because all their heirs will do is “stash it in the Cayman Islands.” Yeah. That is really what liberals thing rich people do with their money. All those businesses get built with money stashed away in the Caymans.
But let’s be honest: There is more money going into tax shelters than there should be, and that’s precisely because the federal government is always trying to grab it. The same is true with all the profits U.S. companies make overseas, and would like to bring home, but can’t because of the massive tax they would have to pay on repatriated profits.
If that capital were freed up, businesses could invest it in plants, equipment, new markets, distribution strategies and employees. These kinds of investments make businesses grow. Businesses want to make them. But the capital to do it is scarce because Obama has spent the last eight years grabbing it and spreading it around.
It would be one thing if the result was the more people were working, but fewer people are working. It would be one thing if more businesses had started because that money got spread around, but the truth is that more businesses are closing than opening.
So you have slower growth, fewer people working, fewer businesses and more dependence on government for food.
How has that spreading of the wealth worked out? Not well. Why? Because you don’t just confiscate capital from people who produce and give it to someone else, and then expect the engine of production to be unaffected. That goes against basic economic logic. But then, so does being a Democrat, which is why Hillary and Kaine keep pretending that none of this ever happened, and the only way forward is to do it anew.
The solution to slow growth and scarcity is not more wealth redistribution. It’s more wealth. And you get that by getting out of the way and letting the people who capital invest it in productive enterprises. And it’s not the government’s job to “spread” the wealth. People who are eager for opportunities will go and grab them if they’re there to be had. The government doesn’t need to do anything.
That’s a hard thing for a Democrat to grasp, because the whole reason for being of the Democratic Party is for government to control everything so life can be fair. That’s why I’m not a Democrat. That’s why no one who really gets this stuff is a Democrat.
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