The 2012 Election Is About "Fairness" 1

The media have claimed that the 2012 elections are about many things - the economy, foreign policy, personal confidence in Mr. Obama, racism, war, the 1%, banksters, and much else.

When we get right down to it, however, just about all the arguments over our political future boil down to a dispute over the definition of a very important word.  We and Mr. Obama disagree profoundly on the proper definition of “fairness.”

All Americans agree that "fairness" is important; virtually all Americans, including conservatives, agree that government has a role in ensuring fairness.  The trouble is in how we define what "fairness" is and how it ought to be achieved.

One side of our political spectrum believes that it’s unacceptably unfair that Bill Gates is worth billions of dollars when other people have little more than the clothes on their backs.  “Fairness” demands that “the rich” should be taxed and the money given to those less fortunate.

The other side believes that it's utterly unfair for Mr. Gates to be deprived of the just results of his labor, and just as unfair that benefits be gifted by the power of government to those who have not earned them.  This side also points out that taking away what people produce makes them less eager to work, making society poorer overall.

Liberal Fairness

Mr. Obama told us his definition of fairness during the campaign.  ABC's Charlie Gibson addressed this issue at the Democratic debate in Philadelphia.  Here's the transcript:

MR. GIBSON: You have however said you would favor an increase in the capital gains tax. As a matter of fact, you said on CNBC, and I quote, "I certainly would not go above what existed under Bill Clinton, which was 28 percent."  It's now 15 percent. That's almost a doubling if you went to 28 percent. But actually Bill Clinton in 1997 signed legislation that dropped the capital gains tax to 20 percent.

SENATOR OBAMA: Right.

MR. GIBSON: And George Bush has taken it down to 15 percent.

SENATOR OBAMA: Right.

So far, so ordinary.  Barack Obama wants to double the capital gains tax, placing it 50% higher than it was placed by the legislation which Bill Clinton signed to lower it.  Mr. Obama has always set himself to the left of the Clintons and particularly much farther left than Slick Willie himself.  The truly astounding part comes next:

MR. GIBSON: And in each instance, when the rate dropped, revenues from the tax increased.  The government took in more money.  And in the 1980s, when the tax was increased to 28 percent, the revenues went down.  So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?

SENATOR OBAMA: Well, Charlie, what I've said is that I would look at raising the capital gains tax for purposes of fairness.  We saw an article today which showed that the top 50 hedge fund managers made $29 billion last year -- $29 billion for 50 individuals. And part of what has happened is that those who are able to work the stock market and amass huge fortunes on capital gains are paying a lower tax rate than their secretaries. That's not fair...

MR. GIBSON: But history shows that when you drop the capital gains tax, the revenues go up.

SENATOR OBAMA: Well, that might happen or it might not.  [emphasis added]

To Mr. Obama, the thought of rich people having more money than poor people is so offensive that he wants to tax it away from them even if total tax receipts go down!  Mr. Obama believes that it is the role of government to level, not the playing field, but the scoreboard, though he fully understands this will lead to much lower scores (wealth).

Conservative Fairness

The Wall Street Journal gave a somewhat different definition of fairness:

Is it fair that the richest 1% of Americans pay nearly 40% of all federal income taxes, and the richest 10% pay two-thirds of the tax?

Is it fair that the richest 10% of Americans shoulder a higher share of their country's income-tax burden than do the richest 10% in every other industrialized nation, including socialist Sweden?

Is it fair that American corporations pay the highest statutory corporate tax rate of all other industrialized nations but Japan, which cuts its rate on April 1?

Is it fair that Treasury Secretary Tim Geithner, former Democratic Senate Majority Leader Tom Daschle, former Ways and Means Chairman Charlie Rangel and other leading Democrats who preach tax fairness underpaid their own taxes?

Is it fair that those who work full-time jobs (and sometimes more) to make ends meet have to pay taxes to support up to 99 weeks of unemployment benefits for those who don't work?

Is it fair that those who took out responsible mortgages and pay them each month have to see their tax dollars used to subsidize those who acted recklessly, greedily and sometimes deceitfully in taking out mortgages they now can't afford to repay?

Is it fair that nearly four out of 10 American households now pay no federal income tax at all—a number that has risen every year under Mr. Obama?

The Journal's questions are based on their view that "fairness" means letting people who work keep the fruits of their labor.  Another Journal article used the Greek economic collapse to explain the long-term outcome of following the liberal definition of fairness:

Despite its storied past, modern Greek democracy, like much of modern European democracy, is of a post-liberal variety. Post-liberalism seeks to replace the classical liberalism of individual liberty, limited government, property rights and democratic sovereignty with a new liberalism that favors social rights, social goods, intrusive government and transnational law.

In practice, post-liberalism is a giant wealth redistribution scheme. It bankrupted Greece and will soon bankrupt the rest of Europe. What happens to bankrupt democracies? Think Weimar Germany, Perón's Argentina, and, more recently, Yeltsin's Russia.  [emphasis added]

"Fairness" as liberals define it panders to greed, a universal human characteristic.  Liberty-loving Americans once understood that There Ain't No Such Thing As A Free Lunch (TANSTAAFL).

During the financial crisis of the 1890's, William Jennings Bryan advocated abandoning the gold standard so that the government could inflate the currency.  This would help debtors and hurt savers.  Despite the popularity of his "Cross of Gold" speech, Mr. Bryan lost the Presidential election to William McKinley, who ran on a "sound money" platform.  The voters understood quite well that giving government control of the money supply would lead to inflation.

Thirty years later, Franklin Roosevelt used the economic distress of the Great Depression to persuade Americans that the government was the rightful source of prosperity and economic well-being.  Since that time, American political history is a series of votes creating new entitlement programs whose continuous expansion threatens to bankrupt the American economy.

This article has explained the basic difference between the two views of fairness.  The next article in this series shows unarguable proof from recent history that the liberal definition of fairness, that is, the idea that people who create wealth must be taxed to achieve economic equality, leads to economic disaster.