A lot of people are moaning about the gap between the rich and the poor - the rich get richer, the poor get poorer, the gap gets bigger. If you are one of those people who think it's a rich/poor issue, you are peeing on the wrong hydrant. Rich vs. poor is an early 20th century problem. What we are facing now is a global/local problem.
50 or 100 years ago, America was its own captive audience. We built stuff here, we bought it here, and all was good. If businesses took advantage of workers or customers, you had laws and unions to balance the playing field. It worked because we were a relatively closed society. Now the situation has completely changed, but we haven't. We live in a 21st century global society, but we want to use 20th century ideas to solve our problems.
Today's wealthy people aren't that way primarily because of some government advantage. It's mostly because they work really hard and in most cases they are positioned to take advantage of a global society. Here are some examples:
Global Corporations - They can transfer resources across the world to where they can get the best competitive advantages. This not only includes material and labor costs, but regulations and taxes and on and on.
Investors - Investors, both billionaires and 401K holders, get richer because they can participate in the global economy through active and passive ownership and the ability to share in the profits of the globally connected.
Idea Workers - These are people with new ideas that can be transformed into something that is globally unique. Inventors and entrepreneurs fall into this category.
On the other hand, look who is getting hurt:
People Without Assets - They miss out on global opportunities because they can't afford them - they get relatively poorer.
Local Workers - These people, like service workers and tradesmen, have a natural advantage because a person in South Korea can't fix your car or remodel your house. On the other hand, local workers are subject to the ups and downs of the local economy.
Our recent (and proposed) attempts to "fix" the rich/poor gap have the opposite effect because the globally connected (read: rich) can move globally to minimize the effect of these actions. If we raise taxes (anywhere), the globally connected avoid them leaving the locally isolated people with the burden. More regulations mean the globally connected leave for a place with fewer burdens and the locally isolated pay the added cost of the regulations. Labor union strikes, government suing businesses - same thing -- the locally isolated pay the price while the globally connected go to a more "business friendly" place.
The counterintuitive 21st century solution is to do things that enhance global competitiveness both for our country and for our citizens - like lower taxes, less regulations, education in creative thinking. This doesn’t help the globally connected (they are already there) as much as it helps the locally connected become more global. Only when we recognize that we have a global/local problem will we be able to make any progress on the rich/poor situation.
