Obama’s “Zero-Sum” View of America


The President’s economic policies are based either on the view that the American economy is truly a zero-sum game or, for those who are more cynical, it is the excuse used to provide a theoretical “fig leaf” to just more Liberal-Progressive-Democrat (L-P-D) redistributionist top-down, command-and-control economic meddling from Washington.

Zero-sum game theory posits that there is a finite and fixed amount of rewards (or wealth) within a completely closed system, and for anyone to gain more of those rewards, someone else must, of necessity, lose the rewards or wealth that they already have.

Yet history has shown that the total wealth of the world has increased over time, and no one has ever been subject to the total confiscation of their own share of that nation’s wealth, except in extreme cases of criminality.

Yet the administration believes with all the strength of the faith of a recent convert to a religion that our society represents a zero-sum economy, and it also believes that since there are some who possess more wealth than others, the “winners” must have somehow cheated the “losers.”  Yet such a belief ignores the fact that at no time (again, except for obviously criminal acts) does anyone coerce another to transfer wealth with nothing in return.  People make poor choices from time to time, and might transfer more wealth to another in return for something of lesser real value.  The housing bubble is an extreme example of this phenomenon.  But no coercion was ever involved.  No one was ever forced at gunpoint to borrow money and take out a mortgage.  Again they might have made poor choices, but they weren’t coerced.

So how can President Obama, and his L-P-D cohorts, possibly believe that the zero-sum theory of economics is applicable?  Well there might be two reasons.  First, the President himself has said in his memoirs that he selected Marxist professors when he was in college, and the zero-sum theory of economics is an article of faith for those who worship at the Church of Karl Marx.

The second is the fact that Obama and his allies have never actually worked outside the government so has no idea just how wealth is created.

The government itself is an almost perfect model of a zero-sum economy.  For the government to grow and prosper it needs more wealth.  Can the government itself create wealth?  No, not really.  Yes, it can print money, but that’s not wealth creation.  It just means that there are lots more pieces of paper that claim to be wealth, but in fact each of those pieces of paper just means that they are worth less individually.  The totality of the wealth that they represent hasn’t changed by a penny.  So the only way the government can increase the amount of wealth it possesses or controls is to take it (this time by legal coercion) from someone else.

Since politicians of both parties know that raising taxes will increase the amount of wealth that they have available to reward supporters, they will obviously raise taxes up to that tipping point where they risk losing the next election regardless of the contributions of their supporters.  Historically that upper limit has been something between 18% and 20% of GDP and anything beyond that level is resisted by the average citizen.

Yet Obama, raised in the nursery of Chicago politics, can’t seem to accept that there is a limit to his desire for the control of the wealth of this country.  This seems to be at war with the upper limit of taxation that people are willing to tolerate.  So what can he do?

The obvious answer (obvious only because it has already happened) is to ask China to “lend” it to him.  Bingo!  He now can control more wealth to use in getting reelected, and not enrage taxpayers.  But is this borrowed money really an increase in our national wealth?

Real wealth is created by someone who, through hard work or great ideas, provides a product or service that is worth more to the customers paying for it than the money that those customers have to pay to acquire this new good or service.  The invention of the radio, the television, the portable phone, video games, computer programs, new medicines and whatever the latest trend in women’s fashions might be all prove this simple concept.  Services such as Starbucks and Dunkin’ Donuts show the same thing.  People will camp out to be the first to get the latest gadget from the late Steve Jobs.  They will pay a premium for it.  Huge amounts of our wealth will be transferred.  That is the mark of wealth creation.  And at no time was a gun ever held to anyone’s head.

That being the case, the President’s zero-sum philosophy devolves from a sincerely held belief to merely a cynical attempt to play Robin Hood by reducing the wealth of some by the coercion of taxation to others in exchange for their support at election time.  A certain level of cynicism is understandable. In terms of looking at the world without rose colored glasses it might even be called admirable.  But cynicism at this level, merely to delude voters into allowing him another four years of parties, Hawaiian vacations, and the honors associated with the office of President is neither understandable nor admirable.  It rather borders on criminal or the mark of mental instability.

Mr. Obama often claims that he feels a close kinship to Abraham Lincoln.  He should remember his words when he said: “You can fool all of the people some of the time, and some of the people all of the time, but you can’t fool all of the people all of the time.”

He’s accomplished the first, when he was elected in 2008.  He continues to accomplish the second, but only among the most hard core of his party.

Mr. Obama ought not count on avoiding the third of Lincoln’s admonitions.  He is no longer fooling all the people all the time, and he won’t be fooling them next November. People remember when someone has reduced their wealth.  Most people don’t think  of it as income redistribution, Mr. President.

They use a much more abrupt word.

They call it theft.  And thieves are never rewarded.  They are held to account.  Just ask Bernie Madoff about that.

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If you agree with this essay or if it makes your blood boil, it achieved half of its purpose.  But only half.  All my essays are intended to start conversations, and if you don’t comment, then I’m just talking at you, not with you.  Please comment, and rate this article.  Not just for my sake, but share your thoughts with the other visitors to this blog.

Thanks.

Jim Yardley

About Jim Yardley

Retired after 30 years as a financial controller for a variety of manufacturing firms, a two-tour Vietnam veteran, and independent voter.
Gallery | This entry was posted in 2012 election, Barack Obama, Deficit, Economy, Government Spending, Political Doubletalk, Taxes and tagged , , , , , . Bookmark the permalink.

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