From Wealth Creation to Wealth Destruction

How Conservative Capitalism is "Right" on the Money

Wealth is a good thing. Civilizations always have sought to improve themselves by upgrading their economic status, which improves every aspect from their mortality to their artistic output.

Wealth can be seen as a horizontal line with Wealth Obstruction/Destruction on the left and Wealth Creation on the right. In between is Wealth Appropriation, which can range from a highly positive factor, to a very negative one.

Through the media, our citizens are taught wrongly about wealth, that there are only two classes of people in America, “the rich” and then the rest of us. And “the rich”, say media experts over and over, are nothing but a bunch of Scrooge-like Republicans who run factories, pollute the air and make us work like slaves. These “rich people” keep all the money for themselves, and allow a few crumbs to fall to the floor for those lucky enough to be near the table. And for the rest of us, there are the crumbs of the crumbs.

Without liberals to take it away whenever possible, the media tell us, the “Republican rich” simply hand this money down to their children who then repeat the cycle. And were it not for the endless laws and social engineering of the Democrat party, the nation would be one miserable cesspool of a few wealthy and then many poor.

If only it were so.

And remember the caricature of “a few wealthy and then many poor.” It will be turned on its head further down in this essay.

First it is important to remember that there are two opposing types of rich people, that “the rich” are not in any way one unified bloc.

There are those who create new wealth, and who believe fervently in, and always advocate, new wealth creation. They then rightly keep some of this new wealth for themselves. These are called conservative capitalists.

And then there are those who only appropriate existing wealth for themselves, while not creating any new wealth or additional jobs for others at all. They are called socialists, and they inhabit the society pages of America’s urban newspapers and magazines.

People who create wealth are those like Henry Ford, the quintessential American capitalist who started with just an idea in his head – to manufacture cars on a large scale. Ford then went on to create first and foremost the mass-produced automobile, a product that revolutionized life immeasurably for the average person; to create countless jobs and trillions of dollars in wealth for Ford employees over the past century; and to create a fortune for himself and his heirs, all out of the new wealth that he produced with his own idea, ingenuity and hard work.

Ford did this by manufacturing something, which is how wealth always is created, by taking resources from nature which have no intrinsic value (like iron ore) and creating a value for them by turning them into a product that people want. A tree, for instance, certainly might be said to have intrinsic value in its beauty, but wealth is created only when the tree is cut down and turned into a product that every person needs, like a house or a chair. If you leave all the world’s trees untouched, as some environmentalists suggest, then the world will be without houses and chairs, and will be much poorer.

Liberals in the media love to criticize people like Henry Ford or companies like Georgia-Pacific that cut down trees to make lumber or paper. They loved to say that Ford wasn’t paying his workers enough, that his factories polluted the air, that the work was monotonous, that he made too much money. And at the same time, environmentalists have contended that companies like GP are damaging the ecology, and that too many trees are being harvested for the endless demands of mankind.

Meanwhile, of course, the media and environmentalists create no products or wealth at all but produce only words of criticism. So which would you prefer to live in? A house built out of words, or out of wood? Which would you prefer to drive? A car made of sentences, or of steel?

And these liberals need to have a way to communicate their endless criticism of people like Henry Ford. So perhaps they express their opinions through a newspaper full of editorials about the ills of the world. Without mentioning that trees need to be cut down to make the newspaper.

Or they are environmentalists whose organizations are funded in large part by upper-income and wealthy donors. Yet those enviro organizations would never have money at all if our economy did not create a lot of wealth in the first place by actually making things like automobiles.

In fact the political positions of virtually all liberal newspapers and enviro organizations always result in the obstruction or destruction of wealth. The relentless media push for more and more taxes on businesses and individuals thwarts wealth creation; it is a proven historical fact. Endless government meddling and regulations hurt business every day and drain wealth away. And environmentalists’ never-ending attempts to stop mining, ranching, quarrying, oil production, timber-cutting, land development and myriad other wealth-creating practices does exactly what it says it will do: STOP THE MINE or NO NEW SUBDIVISION are signs that are popping up all over America.

Newspapers, for instance, are “services” to the economy. If the economy is prosperous and the newspaper has a lot of advertising revenue, the newspaper can maintain a big staff, pay good wages and publish hefty editions. If the economy is failing, the newspaper lays off employees, and its page numbers drop. So it is important to remember that newspapers only may become as wealthy as the economy that they exist within. The same with Hollywood actors. They have become rich only because they live in a wealthy society.

So the newspaper publisher may become prosperous not by creating wealth but by getting a chunk of the existing wealth for himself, or appropriating wealth by offering the economy a service in exchange – his newspaper. This is all fine and good. Our Gross Domestic Product (total national wealth) is made up of “goods and services”. Many parts of our economy are listed as “services” - restaurants, lawyers, hotels, lawn-care companies, television repair, photo developing etc. But if in servicing the economy and enjoying its prosperity you then take a political position that contravenes wealth creation in the first place (more taxes, regulation, environmentalism) then that is somewhat antithetical.

Enviro organizations represent another stage of wealth appropriation. They are not even services to the economy, like newspapers or restaurants. They are organizations that are allegedly “protecting the environment”, although they never do that. It is technology that protects the environment by creating cleaner and more efficient ways to clean up the environment or to produce wealth. If we wanted to follow the dictates of the Sierra Club, we simply would shut down all the factories and leave mankind destitute.

If the Sierra Club operated its own steel mill that produced the wealth that the Sierra Club needs to conduct its endless criticism of people like Henry Ford or Georgia-Pacific, it would not need outside wealth. But of course the type of people who run the Sierra Club would not dare dirty their hands making anything like steel, because the Sierra Club indeed is a “club” of intellectuals who sit around at their desks and imagine new ways that the world is going to end (like through the nonsense of ‘global warming’) so that the Sierra Club then can take credit for saving us all and, even more important, to get more membership money in the process.

When it comes to socialism, always follow the (appropriated) cash!

In fact the Sierra Club and organizations like it get the money to pay rent and salaries and to conduct their affairs from making phone calls and sending our fliers, another example of wealth appropriation. And many of its contributors are quite rich. But the Sierra Club gets this money not even by offering any service in return, except to falsely anoint themselves as saviors of the planet. And as they enrich themselves, these enviro organizations at the same time are endlessly critical of, and seek the obstruction or destruction of, everything that helps to create wealth in the first place, from oil drilling to powerplant construction to manufacturing processes.

A good example of a more extreme form of wealth appropriation is the conduct of a person like George Soros, a hard-leftist liberal who has been called the most successful speculator of all time by one internet entry. Soros gets his money not by making steel or houses or chairs, or by offering a service like a hotel, or offering intellectual solace about saving the planet like the Sierra Club, but rather he sits in an office behind a keyboard and manipulates markets in bonds, stocks, currency exchanges, securities etc.

Of course there are many people who get wealthy this way, as stock brokers do for instance, and it is a legitimate service to the economy as long as your practices are within the law, and are not hurting others. A stock broker actually helps to grow the economy more directly than many other services by aiding (servicing) “capital formation”.

But in fact, George Washington specifically warned about the speculation practices of people like George Soros, saying that that is one of the activities that should be carefully monitored by law, and punished when it becomes detrimental to the economy at large.

In other words a speculator like Soros appropriates his wealth in the most unsavory way of all: For every dollar that goes into his pocket, somebody else loses a dollar. This is not wealth creation by the likes of Henry Ford, where hundreds of thousands of other may share in the wealth. Soros is not even offering a service. This is simply the lowest form of wealth accumulation, or getting as much wealth as possible for oneself without regard for others. It is called greed. Soros then gives his money solely to leftist groups and radical environmentalists who then go on to oppose the creation of wealth at every step.

One of the greatest speculators of the 20^th century was Joseph P. Kennedy, father of Senator Edward Kennedy, who accumulated much of the Kennedy family’s $1 billion fortune through the manipulation of securities markets during the 1920s. In that process of hardball wealth appropriation, every dollar flowing into Kennedy’s pocket was a dollar lost by someone else. Kennedy then went on in 1934 to become chairman of the Securities and Exchange Commission, and in that role he helped to craft laws to outlaw the very same practices that made him rich.

Of course he didn’t give any of the money back.

So in fact conservative capitalism is based on wealth creation and expanding jobs and wealth for all, while liberal socialism is diametrically opposed to wealth creation and is based on varying degrees of wealth appropriation.

For instance, the wealth that government liberals so generously give to “the poor” and to their bureaucratic friends who work in the public sector (school teachers, state employees etc.) is money that they appropriate from the taxpayer. A small amount of this type of wealth appropriation is fine, and it indeed helps to fund the government, build highways, operate public schools and to aid the less fortunate. But the more money that the government appropriates through taxation for more bureaucracy, wasteful spending or unnaturally high salaries for government employees, the more this appropriation results in wealth destruction for the economy and its people.

Labor unions simply use their political muscle to appropriate as much extra wealth as possible over and above the "market wage", sometimes driving companies out of business in the process (wealth destruction). Every dollar of an artificially high union wage that is above the “market wage” set naturally by market forces is an extra dollar out of the pocket of the consumer (wealth destruction for that consumer).

Colleges and universities today are run by far-left liberals. Their tuitions have risen drastically over the last 30 years. So these leftists are simply demanding more and more and more money each year from the parents of America, a highly immoral form of wealth appropriation that has the end result of undercutting, sometimes severely, the economic well-being of our nation’s families.

The media mention this “academic price gouging” only occasionally, but never stress it in the way that they go ga-ga over gouging every time that gasoline prices rise. The reason is this: They wish to protect their leftist college-professor friends who are getting higher and higher salaries, benefit and pension plans, as American parents scramble and work harder and harder to pay these tuitions.

Meanwhile, environmental organizations get money by making phone calls and sending out fliers warning about the end of the world.

And finally who could forget the dedicated leftist trial lawyers, virtually all Democrats, like Presidential candidate John Edwards (net worth, $100 million). They are the ultimate appropriators who get themselves filthy rich by going into court and suing anybody and everybody for as much money as they can possibly wring out of them, pushing up the cost of business in every field.

At the same time, of course, liberals and labor union activists and environmentalists and college professors and trial lawyers are the most insistent critics of wealth creation, disparaging it at every turn. And the reason is simple; they do not know how to create wealth, so they criticize people who do. It comes out of both jealousy and expediency.

So this ongoing wealth appropriation is part of the socialist plan to channel massive flows of money out of the pockets of entities that create it and into the pockets of liberals on college campuses, in the government, in the cities, in law offices, in unions, in environmental organizations, or among the entitled poor, and ultimately to empower socialism and to undermine individualist capitalism. These people then go on to obstruct the creation of new wealth so as to weaken people who may oppose them for political power (conservatives, capitalists, self-made people at every level etc.)

And as all this happens, the media do not want you to know that the ultimate beneficiaries of this wealth appropriation are ultra-rich leftist billionaire elites who inhabit places like New York City and San Francisco and Hollywood and Jackson Hole, and that these wealthy Americans themselves are the class of “the rich” who are getting richest fastest as our nation becomes increasingly socialistic.

So if you are concerned about the rising power of “the rich”, then look no further.

It is time to set aside the media bias, and to re-think the whole concept of wealth. Today, the 8 richest people in the United States Senate are not Republicans but… all Democrats!

The three wealthiest men in America, Bill Gates, Warren Buffet and Larry Ellison, each with fortunes estimated at $40+ billon, are all advocates of high-tax left-wing redistributionist socialism.  

How could this be? Aren’t all rich people Republicans who wish to hold the “little people” down?

The richest female in the history of American media is liberal Oprah Winfrey, who has accumulated a $2.5 billion fortune sitting on a couch in front of TV cameras and chit-chatting. And like the newspaper publisher mentioned above, she does not create any wealth; she is a beneficiary of the overall wealth of the nation that is created by people who work hard manufacturing things, who do not have the time to sit around every afternoon at 4 o’clock for an hour of pointless conversation.

Yet at the same time the former CEO of ExxonMobil Lee Raymond has been raked over the coals by the ultra-rich socialist captains of the New York media (NBC, CBS, New York Times, Time magazine, Oprah Winfrey etc.) over his $400 million retirement payout, much of which was in the form of stock options whose value increased dramatically for one reason only – because Raymond was such a successful manager of ExxonMobil.

When considering his wealth, it is important to remember that Raymond’s company provides the basic resource that fuels our economy – petroleum. He did not own a string of glossy magazines, or sit in front of TV cameras babbling, or sue people, or manipulate securities, or play-act in the movies like the people in Hollywood, some of whom have more money than Raymond does. No, Lee Raymond arranged for Exxon to successfully merge with Mobil in 1997 when the two companies were experiencing huge financial difficulties over low international oil prices.

After years of stagnation, Raymond brought Exxon and Mobil back from the financial brink, making ExxonMobil the world’s largest corporation that went on to garner $335.1 BILLION in revenues in 2006 alone, while its "obscene profits" that the media so viciously describe are annually divided among its stockholders including schoolteachers, factory workers, plumbers and other "regular folks" who now are invested in the American economy through stocks.

Yet Oprah Winfrey and her media friends sit in front of their TV cameras with their billion-dollar fortunes and pontificate against people like Lee Raymond while sidestepping any possible criticism of Oprah Winfrey for sitting on a couch and accumulating six times as much money as Lee Raymond. Or of colleges for demanding exorbitant tuitions. Or of urban socialists like George Soros or Joseph Kennedy sitting in offices in places like New York City and appropriating untold piles of money. Or of liberal politicians shifting massive amounts of cash out of the pockets of productive America, and using Other People's Money to wield power over the people. Or of enviro organizations raking in huge amounts of money and then turning around and obstructing wealth creation everywhere they can.

One of the richest members of the United States Senate is John Kerry of Massachusetts who got his money the liberal way - he married a female with a $1.5 billion fortune. (Kerry is divorced from his first wife, who had a mere $200 million.) But Kerry’s current wife Teresa Heinz did not herself by any means create that fortune to begin with; she married it. She appropriated it (inherited it) from her husband Senator John Heinz of Pennsylvania who was killed in a plane crash. It was generations of the Heinz family who created that fortune on the successful production of food items like ketchup and relish and mustard.

Yet Senator Kerry and his wife now use that fortune to speak out fervently on behalf of socialism, and against those who would create wealth the way the Heinz family, or Henry Ford, or Lee Raymond did. The Kerrys give huge amounts of money to radical environmental organizations like the Tides Foundation that then thwart, in every way, shape and form, the creation of new wealth by obstructing mines, factories, oil production, timber cutting, agriculture and all of the rest of the processes involved in creating new wealth.

So indeed many, many richest people in America today are liberals. Some estimates say that well over half of all “rich” Americans are liberals. And they rarely, if ever, create wealth. They mostly appropriate it. For the most part, creating wealth is what conservative capitalists do, while rich liberals criticize. When multimillionaire TV news reporter Walter Cronkite was asked if there is a “ruling class” in America, he went on to describe his perception of our productive wealth-creating capitalist culture as the evil “ruling class” without mentioning Joseph P. Kennedy, Senator Kerry, Oprah Winfrey, Tom Cruise, or Steven Spielberg. Or himself.

But then a strange thing happens. These same rich liberals insist on “taxing the rich”? which is an ongoing theme of the left, and oxymoronic in its logic. Because if more than half of the rich people in America are on the political left, how can they say they wish for “rich people” to pay more in taxes?

Easy. And this answer has several parts.

First, these liberals absolutely do not want America to realize exactly how rich they themselves are, and how much richer they are becoming every day as America becomes more socialistic. So they shift the spotlight by accusing someone else of being “rich”. This is an ongoing tactic of liberalism.

Second, it is just a political ploy, much like the political ploy of super-wealthy liberals who contend that we all must use less energy to halt the fairy tale of ‘global warming’ while they themselves continue to use more and more and more energy in their private jets and SUVs and multiple homes.

Third, any rich liberal in New York or San Francisco or Hollywood or Aspen can give their wealth away at any point in time. They can write a check to charity or to the United States Treasury any day of the week with no congressional action needed, no public debate, no Presidential signature necessary. Just give! But they don’t. Because liberals never, ever lead by example. Never. They are too arrogant and self-absorbed.

Fourth, they know that Republicans always will defend the private accumulation of wealth as the keystone of capitalism and self-improvement and economic growth for all the people, and thus they can blame Republicans for inequities in our society.

Yet these same rich liberals act as if they are absolutely outraged that they themselves are not paying more in taxes. Do you see how preposterous this is? But don’t be confused, because it is just a political position. And remember why: Because liberals are infinitely more greedy and more obsessed with wealth than conservatives and capitalists, any day of the week, any week of the year. Liberals love wealth more than any other people in history and that is why they spend so much time trying to get it however they can, particularly without creating it in the first place, and especially without working for it. They then say that they wish to “tax the rich” so that they can assuage their guilt over their love of money.

But wait, there’s more. There is another more critical dimension to their “tax the rich” demands, and it is important to look deeply because it is the essence of their self-centered way of seeing the world. Because ultra-rich liberals in New York, Boston, San Francisco, Seattle, Chicago, Hollywood, Santa Fe, Martha’s Vineyard, and increasingly in the suburbs, do not wish to tax wealth, they wish to tax income. And there is the rub. Because ultimately income is the core of new wealth creation.

Here is how it works: While the wealth of rich liberals is sheltered (as all rich people shelter their wealth), these liberals wish to tax income. The reason is simple: They wish to restrict the creation of new wealth. When you tax people’s income, you are undercutting what is known as “capital formation” by taking newly-created wealth away from its creators in the form of an income tax. You then give it to the government instead of allowing the people who created it to keep it a bank (from where it can be lent out to start new businesses and create new wealth), to invest it in their own enterprises, to invest it in the stocks of other companies (also to create new wealth) or to spend it on themselves (in which case they will employ people, like carpenters to build a new house). Thus with taxes on income increased, there is less money available for investment in new enterprises like Henry Ford’s first automobile assembly line, and thus less new wealth creation.

This is precisely why high-tax nations always founder economically. High-tax Europe has chronic unemployment rates of 8%  to 17%, while its growth rate is now around 1%. American unemployment has traditionally been around 5% and our annual growth has been around 3% to 4%. (Americans still are overtaxed, however. Just not as badly as Europeans.) Thus all the hand-wringer socialists who fret about "the poor" worldwide would do well to advise Europe to lower its tax rates so that Europe can energize its own economy and act as more of a global "economic engine" the way America does. This would help all the world's poor.

The people most adversely affected by taxes on income are not the super-rich who inhabit the social pages of The New York Times. Their wealth already is accumulated and sheltered. The people most affected will be those much lower on the economic chain in the wealth-creating, entrepreneurial class who are building our American economy from the bottom up, which is the way our economy always has thrived. For instance steel magnate Andrew Carnegie came from Scotland poor, and built himself up into the one of the richest men in American history.

And now liberals are saying that “the rich” are anyone making… get this… $100,000 a year or more! So when Bill Gates, with his $50+ billion sheltered fortune, suggests we should increase income taxes on someone who is earning $100,000 a year, you’d better watch out, because you’re next. The idea of Bill Gates demanding this type of tax increase is proportional to a man with $1 million in the bank wishing to raise taxes on somebody making $2 a year. This is the most hypocritical, mean-spirited attitude ever.

What these liberals really wish to do is to start putting the squeeze on people in the entrepreneurial class who actually are creating, in grass-roots fashion, new wealth for themselves and for their fellow citizens, and who are offering a role model for others who wish to be independent from the government. It may be a small factory owner with 25 employees who is succeeding against all odds, making money for himself, and creating wealth and security for his employees. This creates an independent class of people.

But since socialism represents not independence but dependence on the government, raising these income taxes on “the rich” (and $100,000 is not a lot of income for someone who is creating jobs for others) is just another step in transferring political power to the left. Its ultimate goal is to slow or eliminate the incremental creation of capitalist wealth from the bottom up, and to install a top-down economic system dictated by Washington bureaucrats and Harvard eggheads and New York media intellectuals, like the Soviet Union’s now-infamous “5-year plans” offered by the intellectuals and the rulers in Moscow. And those plans never, ever worked but only impoverished the people and starved the nation.

This is the way that socialists plan to dominate our economy with bureaucracy and government. “Taxing the rich” is yet another cog in the system that would start to dry up any growing, evolving capitalist challenge to the power of the socialists, most importantly the power of the Kennedys and the Kerrys and the George Soroses and the Oprah Winfreys. And while some of their own socialist wealth might be affected, this will be more than compensated for by other socialist techniques like pure political power that will funnel more and more of the nation’s wealth into their pockets as they gain more and more political power. That is how communist tyrants like Castro always end up having billions tucked away in private bank accounts while the Cuban people live in utter poverty and their capital of Havana is physically collapsing from neglect.

Viva socialismo!

And now remember the liberal caricature mentioned earlier of a capitalist society, of a few rich people and everyone else poor?

Well that is precisely what socialism produces!

The fact is that the creation of the whole middle class, and the difference between a uniformly poor or feudalistic society and a society in which there is opportunity for people to get beyond poverty, is the result of only one thing – free-market capitalism. Capitalism is the only way that economies grow. Socialist economies, and ultimately communism, always produce unemployment, technological backwardness, economic decline, and material, spiritual and intellectual deprivation. Just look at European unemployment figures.

The idea of a person in, say, a small town who wishes to manufacture chairs in his barn and sell them to the townspeople is the historical ideal of capitalist self-improvement and self-reliance. But socialism seeks to prevent this from happening in myriad ways. Nowadays if you wish to manufacture chairs in your barn, you have to get permits and licenses and government inspections, fill out endless paperwork, install safety devices here, there and everywhere, and give your employees all types of insurance coverage and paid leaves.

You must contribute to a government workers’ comp fund, which appropriates increasing amounts of wealth from entrepreneurs and redistributes it to “injured” workers, often in fraudulent ways, a system that was ruining businesses in California until it was reformed. Trial lawyers will find some little old lady who fell off your chair and sure you. And of course your enterprise is subject to ruthless taxation and endless environmentalist harassment. In other words, the creation of wealth no longer is in the hands of the people, but increasingly is in the hands of the government and its bureaucracy.

President and CEO Kevin Schieffer of the Dakota, Minnesota and Eastern Railroad, a line that is seeking to rebuild tracks across South Dakota to haul coal eastward out of Wyoming said: “A hundred years ago the challenge to build a railroad was a construction and engineering challenge. Today the challenge is just getting the permission to do it.” In other words, we now have access to modern machinery and building techniques that have been cultivated over the last century out of technological advances resulting from capitalist economic growth. These advances have conquered the miserable conditions that confronted the builders of early railroads. But there now is a new man-made obstruction called environmentalism and government regulation and bureaucracy, and it is a much worse and more stubborn obstruction.

Meanwhile, rich people who live in cities are insulated from the wealth dissipation that is foisted on America by the political left’s wealth-appropriation and wealth-destruction agenda. Environmentalists don’t throw New York billionaires out of their jobs the way they threw 30,000 hard-working rural Oregon loggers out of their jobs over the fraudulent ‘spotted owl’ controversy. But these environmentalists and their wealthy urban backers have a lot of “plans” for us “little people” that stifle the economic creativity that would empower a new class of Americans, those who wish to create a better future on their own, from the village level to the national level, and from the bottom up.

So the next time a liberal tells you that we must “tax the rich”, look at his own economic status. Does he drive a nice car and live in a fancy house? Does he give money to environmental organizations? Does he ignore the greed of the price-gouging universities? Does he oppose any reform of the tort system that would rein in the trial lawyers? Does he support an agenda of higher and higher taxes for us "little people"?

If he wishes to “tax the rich”, simply tell him or her to send more money to charity or write a big extra check made out to “United States Treasury.” Nobody is stopping him, and the government will accept it. But don’t expect any action soon. Because liberals are never willing to act as role models the way that conservatives are role models for wealth creation. Liberals only have big plans all drawn up for the rest of us. Then they will continue to live in a separate, elite world, by their own rules as the rest of us descend economically into the society they have created, a society of them, “the rich,” and then us, “the rest of us.”