The Problem of Liberalism - a talk about Capitalism, Obama and Whole Foods Markets
OK, now I'm probably going to offend someone with this. I have had a raging debate with a friend about money, capitalism, charity and the government's role in fixing the problems of America. He is a very successful businessman who created a company out of nothing and it has already made him wealthy at a young age. He is quite "evolved" in his thinking. He has recently said that he will gladly pay more in income taxes to help redistribute wealth and income to help the plight of the poor in America.

I don't believe that redistributing wealth or income fixes any problems. First of all it assumes an efficient government will take a bigger bite of higher income earners and quickly, fairly and efficiently redistribute that money into the hands of those who are in greater need. Given the lifetime politicians who control our national budget, that is a big assumption. It is a leap. Big government is not the solution.

But even deeper, what does redistribution really accomplish? If all the doctors in town had to each pay $25,000 a year more in income taxes and $5,000 of that went to five lower income families -- what would that accomplish? Even in the most ideal sense, that would certainly help those families in the short run but after a while wouldn't someone say, "Hey, why $5,000, why not $10,000?" Would a hand out really "fix" the problem? Is that really what the government wants to do anyway? Do they really want to flow through higher income earnings efficiently to lower income earners? No. The government wants a large chunk of that money and very little of it will truly flow through to those who really need it.

Now don't get me wrong, the "model" does sound appealing. Some are incredibly blessed and talented and surely they can pay even more in taxes to help others get out of poverty. It sounds noble. It sounds lofty. Obama talks about "shared national sacrifice" and when he says it, it seems appealing. When Hillary talks about "universal healthcare" and getting every American insured, it sounds noble. She really can't articulate how it will work (other than saying she'll raise taxes) but she and Obama offer up these lofty ambitions to move us.

But there is a real problem with it - it won't work. Never has, never will. Taken to the extremes, this rapidly becomes socialism and eventually communism. Raising taxes and redistributing wealth has the stunning effect of disincentive. Eventually the strong earners will see no benefit in squeezing in that one last surgery or inventing that next product because they know "what good is it, the government is going to take all the excess income it produces." In every case, the government itself explodes in size and soon begins to exist for itself not the people. Don't believe me? Look at pictures of Korea at night from space - the South is lit up like a Christmas tree while North Korea is pitch black dark. Kim has his fancy cars, expensive wines and western sunglasses but his people are in the dark and starving.

I am a big fan of Whole Foods Markets. Whole Foods was started by a very liberal guy that dreamed up this idealistic company that would sell organic food, give to charity and change the world. As he matured in his dream, he quickly realized he was really a communist and was way off base. He's a Libertarian now and has embraced capitalism - but - he also runs a very unique company. They give away 5% of their after tax income to charity and they have embraced "green" culture. He was a hippie, he's still a vegetarian and he practices yoga. He's "earthy", a "tree hugger" and very "un-business" He still wants to change the world but he has realized that corporations and capitalism aren't evil. They are necessary to achieving freedom. He started Whole Foods with $40,000 and it now has a market value of $8 billion. They give away more than $15 million a year, employ more than 40,000 people and he caps his salary at a low multiple of his lowest paid employee.

Listen to what he has recently said...
"I migrated to the Left when I was a young man for my value system. Why did I do that? Because the Left provided an idealistic vision of the way the world could be. However, the reality of the Left's vision proved to be terribly flawed. Its socialist economic system not only didn't work very well, but in it's communist manifestation it justified monstrous governments directly responsible for the murders of over 100 million people in the 20th century. Despite the unbelievable horrible track record of the leftist ideology, millions of young Americans continue to migrate to an intellectual bankrupt Left because the Left still seems to be idealistic, and that idealism is magnetic to the young. Idealism will always be magnetic to the intelligent and sensitive young people of the world."

He's right. Obama is young and dynamic and offers up bold visions of shared sacrifice and dreams. He is like a magnet to the nation's young. Even my 14 year old daughter likes him and says "I can relate to him". Obama is intelligent and idealistic. He reminds me of Bobby Kennedy who captured this same, "We can do better" mentality for America. Crowds swoon and energy flows but it is around a philosophy that cannot work. "We'll make the oil companies pay, we'll make the rich pay, we'll share in the sacrifice, etc." If you buy the logic of making the oil companies pay, you are buying into socialism. Free markets will fix the price of oil. It may be painful but eventually what goes up will come down. We'll either quit splurging on oil or we'll invent more efficient cars or build solar power plants but eventually, the free markets will fix the price of oil. The problem is, we don't want to wait. We get drawn into the message of the Left of big government, redistribution of wealth and universal healthcare. "I don't like pain at the pump, I need the government to fix this..."

Well, if you take this logic to the next step (where does it stop by the way?), we'll be slapping an excise tax on Wal-Mart because they make a lot of money and that "isn't fair to the average American" and then we'll move on to Georgia Power, Bank of America, surgeons, lawyers, etc. "No one should make extra profits, we'll tax the extra profits so we can make everything fair."

Taken to the next step and then the next, we rapidly arrive at full blown socialism. Wal-Mart and BofA and Chevron start laying folks off to help offset their rising taxes. Pfizer cuts way back on their research budget because of their excise tax on drug profits. With R&D cut way back, the drug companies stop finding the new drugs the AARP demands (but is unwilling to pay for). Georgia Power can't build a new nuclear power plant because of their excise taxes so those construction jobs aren't created and we retain our dependence on Mideast oil.

You get the picture....

This has nothing to do with my typical posts but the Whole Foods comments tied a lot of this together. Take your shots at me but I think he is right.

Soar!