Biden pushes consumption not wealth creation

Liberal Democrats have been harping the wealth gap narrative for decades citing data that shows whites have 13 times more wealth than blacks.

According to data from Pew Research, while whites owned assets exceeding liabilities averaging $144,200, blacks’ average wealth ownership was approximately $11,200. The difference between the two numbers comes down to the amount of income either amount can generate.

Using the rate from a one-year Treasury bill, the black household could generate $585 a year in income compared to $7,527 in income for the white household. This income could be higher depending on the other investment or business opportunities available.

But the Biden-Harris Administration’s “middle out “approach to managing economic growth focuses on increasing middle class consumption versus middle class capacity to grow wealth. In some ways this is telling of what government’s primary role is: to facilitate the extraction of taxes out of the masses, particularly the middle class.

Last February, President Biden released a fact sheet explaining how well his economic plan was working. The plan calls for the promotion of workers; investments in America; making the economy more competitive; and reforming the tax code to reward work not wealth.

Mr Biden would like to make the consumption of health care, housing, and education services less expensive. He would also like to tamp down inflation in consumer prices with a focus on lowering the costs of prescription medicines, hearing aids, and health insurance premiums.

On inflation Mr Biden is misleading the electorate. Inflation is a monetary phenomenon. Inflation is caused by an increase in the supply of money. This increase means that more dollars are chasing an unchanged supply of goods which leads to an increase in dollar prices even though productivity has not increased.

Americans are feeling these price increases in grocery stores and gas pumps and Mr Biden hopes that promises of more jobs and higher wages will keep Americans ahead of price increases.

The truth is that Mr Biden cannot do anything about inflation until something is done about the money supply. Monetary policy is the duty of the Board of Governors of the Federal Reserve System. Any changes in the supply of money will be the result of the Fed’s decisions on the interest rates at which member banks charge when lending each other money overnight.

We can discuss the Fed later. What the electorate should focus on is how to move from the consumption side of Mr Biden’s government equation to the wealth side. Mr Biden is able to sell the majority of the electorate on the “goody bag” aspect of what government can allegedly do for you.

This narrative plays an integral role in managing the electorate. The more promises that government can make and keep, the more votes government can extract (along with taxes) from the electorate.

If you don’t want to be on the consumed side of government (and we do not have to be), then how should you negotiate with government and what type of government should you be voting for?

Alton Drew

6 August 2023

(Read my latest on the political economy: “Take It From a Black Man: WASPs Need to Take Back Their Country.” amazon.com/author/altondrew )

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