Straight Talk from Al Jacobs
A PLEA FOR EQUALITY
You might note that Fed Chair Janet Yellen embraced the crusade to eliminate wealth and income inequality. In a recent speech at a Boston Federal Reserve conference, she highlighted ways to help narrow the growing income gap, and criticized “a rise in the concentration of income at the top few percent of households.” In particular, she singled out large inheritances that “play a role in intergenerational mobility,” and bemoaned the fact that we now experience the “greatest disparities of wealth and income since the 19th Century.”
Whether Ms. Yellen’s comments are merely a one-time foray focusing on the November elections, or an intent by the Fed to fully interject itself into partisan politics, is uncertain. In either case, the Administration might have chosen someone else to make the pitch for equality. With annual income of about $400,000, several million dollars in stock and bond funds, hundreds of thousands of dollars worth of specific securities, and a number of bank accounts in six-figures, this particular spokeswoman lacks the credentials required to portray appropriate concern.
It’s true that a substantial portion of the U.S. population lives in or near poverty, while other citizens are well-heeled. There has never been a society in which this was not so. However, our nation is among the most aggressive in combating this condition, with a progressive tax system designed to transfer assets from rich to poor. The top ten percent of taxpayers pay over 70% of the total amount collected in federal income taxes, and this figure is going up. And of the remaining ninety percent of citizens who pay the remaining 30%, the bottom forty-seven percent pay almost nothing at all—a fact that in 2012 got Republican presidential candidate Mitt Romney into political hot water.
There’s a moral here: The enduring conflict between rich and poor will never end. Those poor who exploit their status by calling on government to fix things will remain poor forever. However, those who choose to conduct themselves in ways to improve their lot in life often join the ranks of the more prosperous. You can easily guess into which category I fit. And, mind you, I was once very broke—though I was never “poor.” The difference: Broke is a financial condition; poor is a mental condition.
To receive Al’s free monthly newsletter, On the Money Trail,
sign in at the right side of this page.
To view or order his new book, The Road to Prosperity, click the Featured Book link at the upper right corner of this page.