"If
you don't read the newspaper, you're uninformed. If you read the
newspaper,
you're mis-informed." Mark
Twain
Speaking to San Diego
Rotary on Feb. 10, 1977, Adm. Hyman Rickover gave a talk I’ve saved for
30 years. Rickover stressed, “A cause of many of our mistakes and
problems is ignorance — an overwhelming national ignorance of the facts
about the rest of the world.”
http://nielsolson.us/Writing/RickoverRotaryAddress10FEB77.html
Last month, ignorance
about the widening gap between the rich and poor was strewn about the
media. People mindlessly parroted, “The rich get richer, and the poor
get poorer.” Walter Williams, distinguished economist at George Mason
University, wrote a column asserting that the U.S. has the “richest poor
people in the world.” Dinesh D’Souza speaks of a friend in India dying
to move to the U.S. Why? “I want to move to a country where the poor
people are fat.”
Informed people
understand the only way the majority of poor people in the world get
richer is for the already rich to get richer. Think China, India,
Brazil. Rich people create jobs directly or indirectly by investments.
Think Henry Ford, Thomas Edison, the Wright brothers, Bill Gates, Meg
Whitman, Steve Jobs, Warren Buffett. Fewer rich — fewer jobs — more
poor. Proof that poor people around the world are getting richer? You
need only look at world population. It took until 1800 for world
population to reach 1 billion people, as starvation, slavery and early
death prevented advancement.
In a little more than
200 years since the Industrial Revolution and capitalism (another word
for savings), poverty has so diminished that world population this year
will reach 7 billion — an impossible feat if the world’s poor weren’t
getting richer. Since 1800, per capita income has skyrocketed 10-fold,
freeing billions from dependency on their rulers or their governments.
Capitalism inherited poverty, began overcoming it and must still fight
it every day because wealth must be created every day. Marxists at first
complained that capitalism kept the poor both hungry and poor. Now they
complain capitalism makes poor people fat.
The census reports
that about 15 percent of the U.S. population lives in poverty. It’s
fascinating to discover that, of the households defined as poor by the
government, 80 percent live in an apartment or home with air
conditioning. Nearly 75 percent own a car, and nearly one-third own two
or more. The average poor household has two color TVs, a DVD player,
microwave, refrigerator, oven, stove, a washing machine and a cordless
phone, making them the richest poor in the world. Using government
statistics, the Heritage Foundation reports, “The home of the average
poor family is in good repair and not overcrowded. In fact, the typical
poor American had more living space than the average European." (Note:
average European, not poor European.)
This is not to say
there aren’t poor people struggling, but only to acknowledge that things
are not as dire as we are misinformed and that both rich and poor in
reality are becoming richer. In fact, the United States' poor today are
richer than all but the wealthiest people 100 years ago. My mother, on
the basis of income, was determined poor by the government shortly
before she passed away because she lived on her Social Security checks,
even though she owned a free and clear $600,000 home, free and clear
Buick, two TVs, three radios, air-conditioning, a solar panel system,
Jacuzzi Spa, and a stock portfolio.
In May 2011, The
Federal Reserve Bank of St. Louis published Income Mobility, wherein it
stipulated that the wealthiest 20 percent and poorest 20 percent of
income households are implicitly assumed to be the same households over
time. Those who exploit the poor fail to acknowledge that most people
start out with low-paying jobs and over time their income increases as
they become more competent in a field, more experienced and more
productive moving into their peak earning years. Over a 10-year period,
58 percent in the lowest quintile moved to a higher quintile. And 50
percent of those in the top quintile fell out of that category,
including 57 percent of the wealthiest 1 percent of households. Over
time, there’s a lot of movement up and down the income scale.
http://research.stlouisfed.org/publications/net/20110501/cover.pdf
Additional
misinformation ignores that the top 20 percent of households have more
members working (twice as many) as the bottom 20 percent during
snapshots in time when the bottom 20 percent may have no one employed in
most households. Families and households differ and can be comprised of
one person or more than six. Imagine that: People who work earn more
money than people who don’t.
The Cato Institute
published the study, “Has U.S. Income Inequality Really Increased?"
pointing out that comparing income reported on tax returns in the 1970s
and 1980s with today’s returns is misleading because numerous changes in
the tax laws have been enacted that change the way income is calculated.
Also, many comparisons between rich and poor do not include transfer
payments to low-income households, intentionally misleading or not.
Imagine not including welfare benefits, food stamps and housing vouchers
in calculating the income of poor people.
"There are three
kinds of lies: lies, damned lies and statistics," Mark Twain said.
Additionally, with today’s ubiquitous Internet, there’s a lot of
“misinformation,” often unintentional, as well as intentional
“disinformation” hawking the “cost-free compassion” of liberals.
Government is comprised of people like you and me — some smart, some
not. Most aren’t bad people; they're not uneducated, unintelligent or
irrational in ordinary matters. More than 300 million people in the U.S.
make trillions of decisions a year in what’s known as the “free market.”
The wisdom in the free market is a trillion times greater than that of
any discrete group of politicians and bureaucrats harking back to
Rickover’s comment about ignorance. Yes, we must be on guard over the
“military/industrial complex.” We also must be cognizant of the enormous
“poverty/education complex” that through misinformation and
disinformation has a vested interest in promoting “the poor are getting
poorer.” In the name of the poor, a lot of people go to Washington to
“do good” and wind up doing extremely well.
Schnaubelt, president of Citizens for
Private Property Rights, has been a commercial real estate broker
for 39
years and was a San Diego City Councilman from 1977-81.
Fred Schnaubelt, 2728
Adams Ave, S.D. 92116 (619) 280-2082
