Criticism on capitalism misses the bottom line

This will be shocking to you: Michael Moore said something wildly hypocritical, pathetically incoherent, and mostly idiotic.

I don’t want to focus on Moore entirely, mostly because he’s gotten to the point where he’s a walking, talking punchline and there’s nothing else to really say.

What he said however, is startling and underlies the inherent problem with the recent attacks on our capitalistic society.

In an interview with Piers Morgan (who actually does an excellent job as Larry King’s replacement on CNN), Moore and Morgan had the following exchange.

Morgan: You’re a very very successful, very rich filmmaker, apart from everything else you do, in a way, that is capitalism. You’ve got a business

 Moore: Is it really?

(You can already tell this is going to end badly)

Morgan :What is it?

Moore: First of all, I do well. For a documentary film maker, I do really well. I’m very blessed and fortunate that people want to go see my movies, the only reason I do well is because so many millions want to go see my movies. If they didn’t like the movies, they wouldn’t go see them and I probably wouldn’t be sitting here.

So, either Moore really is that stupid, or…no that’s the only explanation.

Moore just literally laid out the definition of capitalism: the market dictates the demand for a product and supply rises to meet it. The person supplying the good profits as the consumers receive what they’ve asked for.

It reads like the answer to word problem on a high school economics exam.

Moore doesn’t get it, and obviously either do the protestors on Wall Street. These people believe that “corporations” as if they’re living and breathing things, are these evil entities out to screw the average person.

Furthermore, they believe Republicans want to further the cause of these corporations and screw over “the middle class.” We know the inherent flaw in that logic, given that the average conservative family makes 6% less than the average liberal family, but that’s apparently beside the point.

Companies have all this money and they shouldn’t because there are people starving in this country.

This is the problem as the left sees it.

Their solution is not altogether clear (in fact, it’s not at all clear). It seems they’d like the government to redistribute wealth to people who have significantly less.

Liberals like to take up their “tax the rich” argument here and point to the nearly 47 million people living in poverty. That’s 14.3% of the population who live in what the government considers poverty.

France, with their ultra-organized labor, 8 weeks off a year, and perceived superior labor system has a poverty rate of 14%

I want to tweak the argument slightly when it comes to taxing the rich to make an important point. We normally talk about taxing the rich as it relates to the deficit.

By now, it should be clear that taxing the rich will not, in any significant way, help finance our deficit which currently stands north of $14 trillion. Remember that.

Let’s look at it another way. In 2008, according to the IRS, people making $1 million or over made almost $1.1 trillion. That’s a lot of money, but notice it’s only about 7% of our total deficit.

Their taxable income was roughly $970 billion. If we raised taxes on those people 50% (we’re talking federal taxes only), we could generate an extra $130 billion in taxes.

If we took that money and gave it directly to every person living in poverty (in 2008 that was 40 million people), they’d each get about $3,250 each.

That’s $270 a month.

I haven’t been able to find firm data on how that would effect the number of people who would continue to live in poverty, but considering the bottom 20% of consumer units live on an average of just over $10,000 in annual income, my estimation would be not many.

Now remember that if you raised taxes 50% on those top earners, they’d likely cut at their companies, laying thousands if not millions of people off to redistribute wealth.

The poverty rate for people with full-time jobs? 2.5%

Currently, the unemployment rate is 9.1% nationally. That means 91% of people have jobs and 97.5% of those people live above the poverty line.

Capitalism is not to blame for poverty (Read yesterday’s post for more).

As I’ve shown even redistributing a 50% increase in taxes for top earners doesn’t make a dent in poverty, not to mention the obscene governmental costs incurred in creating a bureaucratic system to carry out that redistribution.

Here’s why the conservative, individual-based model makes more sense: one of the strongest indicators of a person’s income is their education level.

In 2007, if you didn’t have a high school degree, the median earnings of your household was $20,805 (below the poverty line).

On the other hand, in households headed by a high school graduate, the median income was $40,456. For those with a bachelor’s degree it was $77,605 and a professional degrees was $100,000.

How can Wall-Street be blamed for making money, when the average person who puts in even a minimal effort and gets a high school degree (‘D’ is for ‘diploma’) makes nearly double the poverty line for a family of four.

Capitalism can make millions for a fat, stupid, comi activist. That should be all the endorsement it really needs.

Liberals don’t like a free-market system because it put too much responsibility on them. Conservatives would say it gives them liberty.

Capitalism doesn’t create oppression, government does. Blaming one for the problems another causes proves the dramatic disconnect between liberal perception and reality.

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4 thoughts on “Criticism on capitalism misses the bottom line

  1. thedrpete says:

    Just a note here, YAR. A 9.1% “unemployment” rate doesn’t mean that 91% are working. I recommend researching and studying U3 versus U6. Just trying to be helpful.

    • youngright says:

      It is certainly true that the number of people actually unemployed is closer to 20% but that 10 or so percentage difference is accounted for by people who have stopped actively looking for work.

      On the other hand, that secondary number is slightly misleading and there’s a reason it’s not the one often focused on. If you’re unemployed and no longer looking then you aren’t much different than someone who is retired or can’t otherwise work.

      You’re not part of the workforce in any important way, which is why that secondary number is tough to really give teeth to. Why did they stop looking? We don’t know. Maybe they inherited money, maybe they went back to school. It’s much harder to determine what those people are contributing than someone who is out of work and actively looking for work.

      It should however also be noted, as I’ve stated, that anyone getting the average amount of unemployment from the government receives enough to remain above the poverty line.

      Furthermore, the intent of my point remains intact: First, people who have jobs are not living in poverty, and second that education should be leading the discussion when we discuss unemployment rates and poverty, not corporate profits.

  2. thedrpete says:

    Statistically, youngright, the majority of U6 that are not included in U3, have taken much-lower-paying full-time or just part-time jobs after many many months of rejections while actively looking. A small minority become so discouraged after myriad rejections that they just drop out and abuse the welfare system.

    A household with one worker earning minimum wage has greater take-home money than a household earning $70,000 per annum.

    • youngright says:

      Again, we don’t disagree about the number of underemployed people in the workforce or the reasons people leave the workforce and become part of the welfare system. I simply argued that those people who ARE employed, are not, by and large, living in poverty.

      Your point about minimum wage earners is a good one, and only supports my point that any job is better than no job. Working minimum wage jobs often means pocketing the entirety of your salary, and it some cases entitles you to tax credits where the state will actually pay you money.

      It doesn’t matter if you’re HAPPY in your job. The number of people who are dissatisfied or believe they should have a better job far exceeds the number of people who don’t actually have one. That’s not the issue. There is still nothing you’ve presented that refutes my argument that those who have jobs are bringing in enough money to not be considered “in poverty” by U.S. standards, mostly because statistically that’s just true. More than 97% of full-time workers, whether they are under-employed or not, are not living in poverty. Your semantic discussion does nothing to preclude me from making any of my subsequent points.

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