Column

World Inequality

We hear all the politicians talking about inequality worldwide and I agree with them totally.

You have Theresa May opening her administration talking about protecting the less fortunate and not the privileged. What privileged? There are very few privileged left in the United Kingdom. The traditional Lords are all broke. They cannot even live in their old homes without the tourist business opening up portions of their home. The new Lords like Sir Richard Branson are investing more and more outside of the United Kingdom. Wealthy Europeans do not live in their countries because they are pursued fiscally. For some reason, European internal revenue systems feel that 75% tax on zero is worth more than 20% on billions. Who have they taxed to the hilt? The middle class. The wealthy leave.

What would you do if you are penalized for success? Ask yourself why Europe cannot create an Apple, a Google, or an Uber? Why? Because Europe does not reward success. It penalizes it. Who will take risks there?  

The reasons for inequality are, in my opinion, as follows.

Firstly, government legislates against the most powerful equalizer of all – education.

Public education costs multiples of private education and is lower in quality. The cost of educating a student at the University of the Philippines is around double the tuition of La Salle and Ateneo. The student that goes to UP pays less but the taxpayer has to cover the difference. In many parts of Europe and the United States, it is even more. So the less fortunate get a lower quality education at a higher cost to the taxpayer. The more fortunate go to better and better private schools, and then, graduate to go on to earn more, widening the gap between the rich and the poor.  Now, who is responsible for this? Who hires the teachers that cannot be evaluated nor fired? Would you in your household hire someone you could not fire? How do you think they will perform when they know they can do as they like in your home? The wealthy? Or the politicians we elect? And who elected them? We, the voters, are responsible. Now, are we going to do what they did in Europe as they increased tax over and over so the entrepreneurs and the creators of wealth all leave to invest elsewhere?

How will taxing the more fortunate more improve our education system?

Secondly, the present interest rate atmosphere is one of very low interest rates. Those that save, the insurance companies and the pension funds, are being screwed royally. Those with strong balance sheets borrow cheaply. So the rich get richer and the poor gets screwed. Why is this so? Who has overspent taxes to the point where all countries have deficits and way too much debt? Who has promised people a state where the government will take care of everything from cradle to grave? Who has believed it and voted for them? Does the voter have any responsibility for the morons he elects all over the world?

How will taxing the more fortunate improve the fiscal situation? We will take from them, give it to government who will burn it, waste it, and/or steal it. Do we want a palliative or do we want a solution?

Who created this inequality?

You raise the taxes on the rich and their money will leave – as they have all over the world. Let us learn from among the most stupid of all nations, the European nations. How will government do anything better than an individual?

Now, with this low interest rate atmosphere, what does government do with regards to debt and deficits? They keep increasing it because there is no penalty. You do not have to pay back the debt nor pay interest on the debt.

The Japanese people worked very hard to save many trillions of dollars. Their government is in the process of borrowing it all. And then they will pay it all by buying it back with printed money. Now, who is responsible for the slow decline of the Japanese economy? The wealthy? In Japan, they tax very heavily and they are still in decline; a decline that started 30 years go when they did not adapt to change. How will they end up?  As some form of vassal state of China!  Which rich will they blame then?

The governments of the world are depleting capital and building debt that impoverishes the middle class who has to pay for it.

Thirdly, the new left is regulation. Communism has failed. The experiment of everyone working together and sharing benefits together was stupid to start.

There is a guy called God and he instilled in man certain survival instincts, among them greed and envy. Man is unable to alter behavior through culture against what God has hardwired in man. Now, civilized and long-term, enlightened, self-interest man works together with his fellow man to create more wealth and divided it – but not equally, because it was not created equally, because man was not created equally. Where did this stupid idea of all men are created equal come from? Look around you – where in heaven’s name is equality? Now, civilized, long-term, self-interested man makes sure that all men are treated equally even though they were not created equally. Man has to alter what God has created so unequally.  God creates unequally and he destroys unequally. Nobody destroys more unequally than God. We call it his calling, a calling no one is in a hurry to heed.

Regulation is necessary so that man is treated equally and fairly – but just a little. Just enough so that everyone gets a fair shake and so that playing fields are level. Bureaucrats with left leaning tendencies equalize by abusing their power to add regulation in the name of fairness. They are destroying wealth and taking it away from the less fortunate.

Do not let the government fool you. They have wiped out a lot of the wealthy in Europe, they have built up debt, they have built up expectations and they are in a very, very deep mess. The European politicians are among the biggest con artists in the world. They have led their people to believe that leisure is a priority over work and that they are smart enough and well-educated enough to work less every year and live better. Even the Germans have fooled their people. They think they are wealthy. Well, I would not feel so good if I were German and I lent all my savings to the French, the Portuguese, the Spanish, the Italians and the Greeks. That balance sheet is seriously impaired because they, the PIIGS*, contain among the laziest regions in the world.

Fourthly, technology makes things worse. God made one guy smarter than all the rest in a room. But when you arm that smarter guy with technology, it’s like arming him with a gatling gun against the rest with bows and arrows.

How can we not have inequality when the main author of inequality is a guy called God?

*PIIGS is an acronym used to refer to the five eurozone nations that were considered weaker economically following the financial crisis: Portugal, Italy, Ireland, Greece, and Spain.