My concerns with the inequality debate are twofold:
- The poor are seldom rescued from poverty by redistribution. Raising taxes on the rich to bolster welfare payments increases dependence of the latter on government. While this may be a sound political strategy to garner votes, dependence on handouts robs people of their self-respect and foments other social issues. The welfare system should focus more on assisting the disadvantaged to become independent: teaching skills, improving access to higher education, and providing support for those striving to achieve autonomy.
- Progressive taxes on the rich foster resentment at the unequal treatment and encourage tax evasion/avoidance. Raising income taxes also acts as a disincentive to produce further income. Any tax acts as a disincentive, but income taxes are particularly inefficient as the following chart from the Henry Review shows. Taxes collected from raising income tax rates often fall short of expectations, with higher taxes acting as a handbrake on economic growth. Past attempts at taxes on wealth, on the other hand, have proved largely impractical.
Marginal welfare loss is the loss in consumer welfare per dollar of revenue raised for a small increase in each tax (the extent of compensation required to restore consumer satisfaction reflects the distorting effect of the tax on the economy). Taxes at the top of the graph are the most inefficient in terms of outcomes, while those at the bottom achieve the greatest net benefit.
I should explain that my attitude to welfare is shaped by my own experience. My mother was widowed when I was four and faced the daunting prospect of raising children on her own. She went back to work and, because of her circumstances, was offered a partial interest rate subsidy (on a mortgage) by the local municipality. This enabled her to build a modest home and raise four children, who (apart from myself) grew up to make a useful contribution to society. Without assistance, I shudder to think how we would have fared. But I appreciate that the help offered was to restore our independence, rather than foster ongoing dependency and a sense of entitlement.
When I hear President Obama talk of the top 1%’s share of “our income” or their share of “our nation’s wealth” I do a double-take. It is not “our” income or wealth, but “theirs”. We have not earned it and have no claim to the income or assets of others other than that they pay their fair share of taxes. And shifting a disproportionate share of taxes onto them is just as misguided and immoral, in my opinion, as exploiting the less fortunate. For an economy to succeed you need a healthy partnership between the haves and have-nots, where both will benefit from prosperity. Not like the present tug-of-war, with abuses and mistrust on both sides. Raising taxes would drive a further wedge between the two sides rather than restore trust and cooperation. We need to seek a win-win outcome, rather than an outcome where all of us will lose.
In my opinion the inequality debate and higher taxes are a red herring, designed to distract the public from the real issue: globalization and the insidious partnership between large corporations and their Asian suppliers. Globalization opened up new export markets for corporations while lowering input costs through access to cheap labor. On its own, globalization is manageable, but politicians turn a blind eye to currency manipulation by Asian exporters like China. By saying much but doing little, they allow a continual drain of jobs to offshore markets. Many corporations silently welcome a weak RMB because it lowers the cost of imports while enabling others to make offshore investments and acquisitions cheaply with the strong Dollar.
Corporate profits as a percentage of GNP have soared…
…while manufacturing workers suffer from a shrinking job market and lower wages.
If you want to fix inequality, don’t raise taxes. Instead, reduce progressive tax rates while closing many of the loopholes to create a level playing field. But, most importantly, end currency manipulation to ensure that the Dollar trades at a fair, market-clearing rate. That should help regain international competitiveness, go some way to revive a struggling manufacturing sector…
… and restore jobs lost over the last two decades.
Colin..Whilst I could not agree more with your comments on equality..which by the way have been repeated down the ages…”robbing the rich to support the poor is not the way to go”..etc..it is a personal view and don’t think it is appropriate to use your “incredible Charts” website as a personal soapbox
Having said that…good on you for feeling strongly enough about the issue to use it
I subscribe to this newsletter to hear your thoughts on Trading, not to hear your political views, which I mostly disagree with.
Separating economics and politics is difficult. As long as we share a common objective — to improve the welfare of the battlers in our communities — then I am sure we can disagree on what are the best methods to achieve this without taking offense.
I’ve never regarded trading and politics as mutually exclusive, so I’m very interested in your political views Colin – whether I agree or disagree. Political views & decisions effect markets every day of our lives.
Isn’t it interesting that the wannabees always oppose wealth redistribution (this and socialism have become perjorative words for them.) Mark Faber attributed the GFC to the fact that wages did not keep up with productivity. So savings became replaced with borrowings to keep the economy going, and when borrowing limits were reached, presto the GFC. Incidentally I noticed that fast food workers world wide are going on strike for a living wage that is slightly less than our minimum wage. Now isn’t a minimum wage a tax on us. Let’s get rid of it.
Thanks John,
We are inundated so frequently in the media with opinions on why inequality is bad …and something has to be done… that I feel we are being set up. Most likely a further rise in progressive income taxes. And the net will be widened from the top 1% in order to deliver the $$ required. Couldn’t resist pushing back.
…Not that the 1% are completely innocent. Crony capitalism is rife. But the real target should be the corporations that benefit and not an entire class of individuals, many of whom are completely innocent.
An equitable fair tax base equals social justice and growth. I know its hard to believe but thats how the US use to operate (shock horror) in it’s halcyon boom years. In Germany its still the case that the tax base doesn’t rob social security, education and health and instead still asks for a return from those who can pay. It provides a yardstick of a society that the rest of us refuse to admit works and try to avoid at all cost with cheap political fixes that usually mean picking on refugee’s and the unemployed. Greece on the hand cheated the tax base to the point of collapse and services were half baked at best of times. Abbott sold a rogue story to the voters via a bent NewsCorp about a ‘budget calamity’ that doesn’t exist. During the GFC the government step up to plate with a debt rescue package. Had they been fiscally tight the conservative would have hang them out to dry for that too. Fighting the fight for cheating mining companies and tea party conservatives will only fill there pockets and empty yours. They do not value add to Australia’s greater good………….. Who would have thought Clive Palmer was an old fashion lefty fighting taking good fight right up to the Hockey, Abbott and GOP of Sydney.
Mal Turnbull has a spring in his step.
PS good on you Colin for having the discussion. I love a soapbox.
Thanks Lenny, The Australian system seems to encourage too much focus on politics and not enough on leadership.
“The poor are seldom rescued from poverty by redistribution.”…. This depends what you mean by distribution. If you mean straightforward handouts that gets spent on rubbish, then I agree.
“The welfare system should focus more on assisting the disadvantaged to become independent: teaching skills, improving access to higher education, and providing support for those striving to achieve autonomy.” I generally agree.
“Progressive taxes on the rich foster resentment at the unequal treatment and encourage tax evasion/avoidance.” Unequal treatment? Come on! The rich mostly have social, political, and economic capital that they don’t deserve. A nurse, for example, deserves more than some media magnate. The media magnate makes money by manipulating people’s lower instincts. Many of the rich should be in jail. But it’s the poor who end up in jail.
“Raising income taxes also acts as a disincentive to produce further income. Any tax acts as a disincentive…” If you’re blindly attached to money.
But I think the focus on taxes and welfare is basically the wrong place to start. We should start with our fundamental motivations, which are survival then happiness. The basics of survival should be guaranteed. After that, we all need to understand that happiness is innate to being in a good environment, and so we should work together to create a good environment of goodwill and continuing improvement, not an environment based on “independence” and competition.
Thinking within the paradigm of the capitalist culture we were brought up in will not do. We need to step back from it all and be honest about or basic motivations and see how we can fulfill our greatest potential.
“The rich mostly have social, political, and economic capital that they don’t deserve.”
The rich are not all heroes, but they’re not all villains either. There’s good and bad at every station in life.
“If you’re blindly attached to money.”
The capitalist system is based on self-interest, which is why it works….again, at every station in life.
“we should work together to create a good environment of goodwill and continuing improvement, not an environment based on ‘independence’ and competition”
Alternatives to capitalism have been tried…and failed. Fortunately independence does not rule out cooperation to achieve a mutual benefit/goal. And placing profits ahead of concern for the welfare of your employees, your customers and your community is not in a capitalist’s self interest…. it’s just that some tend to forget that. To their own detriment. Again, there’s good and bad at every station.
To sum up. There’s good and bad in every race, creed, class or religion. Some will pursue their own self-interest to the detriment of others, while others will work cooperatively to achieve a mutual benefit. It’s more about one’s character than one’s station in life. At least that is my experience.
“Some will pursue their own self-interest to the detriment of others, while others will work cooperatively to achieve a mutual benefit. It’s more about one’s character than one’s station in life.”
No, it’s not about one’s character, it’s about our ignorant cultures. Cultures trigger and nurtures particular aspects of our potential. Furthermore, they support some people’s natural talents and not others. If you are an aggressive achiever type with an instinct for money making schemes, the culture supports you. If you are a sensitive type, the culture, at best, ignores you, and at worst, treads on you.
“At least that is my experience.”
It’s our experience in this world of ignorance. What if we stepped out of this worldly mindset and looked freshly?
“Alternatives to capitalism have been tried…and failed.”
They were reactive and simplistic, rather than considered and wise. Anyway, I don’t think we need an alternative to capitalism. We just need to understand ourselves and understand what works best for survival and happiness. Then capitalism will be more like a game than the context of our lives.
Yes and we should free the labour markets as well, get rid of the minimum wage that is just a tax on the rich. Give us a break, Kennedy reduced taxes from 90% to 70% and the budget in the US was nearly balanced. then under Reagen lower taxes and huge budget defiicits ultimately leading to a GFC. And what do the obscenely rich spend their money on Huge power boats, huge mansions etc. not for lifestyle but show. You could probably balance the budget on the money wasted on barely used million dollar power boats that do nothing but clog up the harbour. By the way I have never complained about the tax I pay, please let us not go down the US path of regarding all tax as evil.
I suggest that more money is spent on cigarettes and pokies (poker machines) than on power boats and mansions. How you spend your money is your business. So long as you spend it, so that it becomes the income of the next man/woman.
The GFC was caused by a debt/housing bubble, not fiscal deficits.
The rich will complain if they only had to feed workers rice. Same is they only had to pay 10% they would still complain and push the same blind inanities you just have. Nothing new there at all in what you said You get no empathy for me for those who have earned a lot. We all have 24 hours, there is only so much you can do. People do work hard, and it is hard to get ahead when you aren’t even paid a living wage let alone one where you have enough spare cash to invest… many did and of course lost it thanks to the largesse of the rich. The rich love to talk about how poor wages are an incentive to work harder yet can’t seem to understand then that the burden of tax lies with those that make it… don’t like it then don’t become wealthy. Of courser that assumes that they really do pay the kind of tax they think they do and not the pittance after they spend their money on accountants.
Yes, if a rich person pays too much tax, they need a better accountant.
And I like the 24 hour comment. The idea that the rich deserve the money they have is bizarre on so many levels. But cutting to the chase, if you’re rich, it means you don’t give enough to charity, and therefore you don’t deserve to be rich, at least in terms of morality.
We should all donate to charity. People who don’t have money, donate your time. But don’t leave it up to others. That is where we go wrong: when we fail to share collective responsibility and attempt to shift the entire burden onto others.
Glad to see that this has stirred up some heated opinions. It is important that we apply our minds to these issues and not accept the inanities pedaled by others. The best cure for poor wages is not to raise taxes, but to fix the exchange rate to prevent unfair competition. The second best solution would be to encourage new capital investment and job creation through lower taxes. Closing the loopholes to prevent income tax avoidance has been tried and failed. This can only be achieved by broad, flat-rate indirect taxes like GST, fuel excise and land taxes (ones near the bottom of the graph from the Henry Report).
Aren’t corporations run and owned by people? Aren’t these people the 1% that we are talking about?
I agree that the main issue is not actually the tax rate, but the loopholes that exist. The richer people become the LESS tax they pay. Just ask the Billionaires Club.
The biggest shareholders are often pension funds and the like — millions of small investors.
Colin, I enjoy hearing reasoned arguments about economics and I find your arguments well thought out even when I disagree. Separating the welfare of the economy and investing seems difficult to me. And to prove I disagree with some of your arguments, I want to take issue with the idea that we have to increase manufacturing employment back to pre-globalization levels.
What we are observing is the increased use of computers and robots in manufacturing. Productivity is rising significantly. Compare the corresponding situation in agriculture. I will use the U.S. because I know the numbers, but the same is true worldwide. In the U.S. in 1900, we needed 16 million farmers to feed 100 million people. Now we have 1 million farmers feeding 300 million people. This was caused by an increase in ag productivity. The solution to the job crisis is not to change policies to hire 15 million more farmers. All those farmers now make computers and jet engines to take all the vacationers all over the world. The reason people have the money to buy computers and expensive vacations is that the price of food has been held down by the productivity increase.
Likewise, I don’t believe that the solution is to change policies so that the number of manufacturing jobs reverts to pre-crisis levels. Reduce taxes that cause investment distortions and free the ingenuity of people to develop new products and processes. All we have to do is train the poor to do these new jobs. Capitalism is not the perfect job generator. But paraphrasing Winney, it is a hell of a lot better than the competitive systems.
In just one final thought that I see over and over. Reagan cut tax rates not taxes. I was working when Reagan was President. My taxes went through the roof. He introduced the concept of passive income and caused the taxes paid by the top 10% to explode. Previously, you could write off passive losses (i.e. depreciation on investments like oil wells and boxcars) against ordinary income (like salary and bonuses). After, you can only write off passive losses against passive income. All those investment distortions caused by the tax rules went away and the economy grew by 40% under Reagan’s 8 years. And the recession of 1991 was slight loss and the economy quickly recovered. That is Reagan’s economic progress was sustainable. Clinton/Bush economic growth resulted from huge consumer and public debt and resulted in an unsustainable economy that is still deleveraging.
Thank you Vic. Always interesting. Just a reminder that I have not adjusted manufacturing jobs for population growth. The decline is far worse when we factor this in. Technology does eliminate jobs, but globalization/currency manipulation has destroyed far more.
Well said
Simply my 2 bits:
The wealthy have had the benefit of societies’ investments in education, health, infrastructure, law, defense, etc. and have received much more of the benefit of that social investment than others. For that reason they deserve to pay back more through taxation. They will further benefit from paying back more at any rate, as they did with the rising middle class through the 20th century.
Capitalism and democracy cannot coexist for long – capitalistic incentive will eventually overwhelm the socialistic nature of a democracy to the point where governers are simply acting capitalistic rather than in the interests of their electorate. We see that in most mature capitalist societies now. If governments are not oriented toward socialism, they are not governments, but dictators, rulers and or, monarchs.
Sheila Baird put it well. Capitalism works well but crony capitalism does not.
But did the wealthy receive more benefit or just make better use of the benefit available to all?
We continue to have serial dictatorship in this is America.
We spend billions on defense, yet we send our young to war no better clad than the Palestinians.
Colin, as an ex South African (like yourself I think) I came to this country and worked continuously throughout my life. My background is in Medical Science majoring in Microbiology and having moved to Busselton WA (Yes the RICH state of WA!) I have now been unemployed for 3 years and am now 62. This of course means that I am very unlikely to be employed even though I continue to apply for jobs. With my background managing Community Services for the last 2 decades I don’t get interviews for more menial positions and don’t get offered positions for senior positions.
I think your comments and the attitude by the current Govt do not consider the situation for many people of my age and background but lump us into the group of ‘ welfare recipients’ as though this was a “Choice” that I have made. This country (unlike the one I left) has in the past had a Social Conscience and of course I have worked in the area of Aged Care, Disability and Indigenous Health in this country and know the situation for many Australians and understand that this may not be your background but request that you make an effort to see how others such as myself are fairing and maybe if people can pay more maybe they should.
In the US companies are expected to pay at least 5% of their profits to Charity. Philanthropy in Australia is way behind other countries.
Colleen I sympathize with your situation. It is difficult to immigrate when you are young, let alone if you are forced to do so at our age. You are obviously highly qualified and have a positive contribution to make. As may be evident from my story, I am not against welfare in principle but believe the focus should be on assisting those in need to become independent.
Have you tried volunteer work? It may be a good way to build contacts and open up new opportunities. I was inspired by WA Senator Mathias Cormann’s story as a German-speaking immigrant from Belgium.
I do volunteer and also sit on Boards of Management and none of this has led to any change in my situation.
My point in responding is that it is impossible to make sweeping judgements of situations and having worked for the Federal Govt as a Senior Project Officer for 6 years and also being in our present situation, that is precisely how the welfare system works. I am treated the same with the same rules applying that a 25 year old with no qualifications would be subjected to and even had to sit and be lectured to by individuals in the Job Network system who have no qualifications about how I should present my CV and do volunteering and train how to write a resume (so they can keep their trainer employed) etc etc.
I have no problems with toughening situations where they are blatantly being rorted and that cuts across many of the welfare payments. Having worked across the Community service sectors there is little that can be demonstrated that I haven’t come across already. BUT I have managed a ‘Work for the Dole’ program and had people who for instance could not write their own names where the education system (and possibly parenting) had failed them and others who were experiencing extreme difficulty due to the home situations. HOW will these individuals cope with 6 mths of no money if they fall into the under 30 age. Again it’s too easy to draw a line across all these situations and not take into account individuals circumstances.
Colleen, That is one of the reasons why government is so ineffective — because they apply general rules to specific situations. The current welfare system is failing. How can it be improved to help people more effectively?
Simplistic thinking would be the kindest thing I could offer to your opinions. You seem to be long on opinions and short on global realities.
Fix the economy and inequality will reduce. Increase taxes and growth will slow, causing inequality to rise. Simple but true.
At least ‘Brothers in Arms’ made sense……
Fix the exchange rate and the economic recovery will accelerate. Fix the economy and inequality will shrink. Raise taxes and the recovery will slow (FDR did something similar in about 1936). If the recovery slows inequality will rise.
Colin, you are a brave man for putting forward these thoughts … and I applaud you. Unfortunately the socialist mind, bent by a deep seated sense of vulnerability, dependence, envy and distorted sense of entitlement will never accept the reality of what you say. They are in complete and total denial. And unfortunately we have a major political party who have no problem fostering dependence on them, and whose very existence depends on large sections of the community having these debilitating attitudes. The biggest threat to society is not the Muslim religion, it is the perverted and depraved ideology called socialism.
Thank you Charles. What is important is to recognize that we are working to achieve the same goal: to improve the lot of the most disadvantaged in our communities. Socialism has been tried and failed…. miserably. Capitalism works. Even the Chinese Communist Party acknowledge that. The biggest threat to capitalism is crony capitalism. Not socialism. Unfortunately many people confuse the two (capitalism and crony capitalism).
The Pirate has heard it all before. Yes YOUR mother was a saint, bringing up four kids on the smell of an oily rag, but other beneficiaries of the state’s largesse are slutty girls who lack the capacity to bring their knees together. The rich earn their money with their imagination and drive, while the poor deserve what they get. They are too lazy to work, or too stupid, too drugged, too anything, to add to the nation’s wealth. The government is incompetent and even if it tried to help it would muck things up so bad that no one would be better off.
Perhaps I exaggerate your views which like most opinions may become more nuanced when confronted with a fact. I won’t offer one. Pearls before swine. I apologise if I cause offence, but you have to agree that you started it.
Everybody has a mum that they love even if they don’t deserve it. Most mums do. People love their moms, because in part, they are loved by their moms. They are fed, protected and led as you were. This has economic implications that should not be disregarded.
Kids grow up. They model themselves on their parents. Good and bad. They reflect the community of their peers. When drugs and unemployment dominate kids can go bad. Neighbourhoods matter.
The Pirate looks after his crew. The crew look after the ship. I could judge them for their faults but this would put my future in peril. Your staunch views do not reflect your experience but your prejudice. This is not smart. Love trumps ideology every day.
A 3% loan to buy a house. A deposit contributed by the state. A benefit that kept a family together. A school that educated all who came. Many states have done these loving actions successfully. It is not new or difficult or controversial. The government isn’t the problem. You are. Fortunately you have time to change.Good luck with that.
You are quite right. I am prejudiced. I learned my prejudices from my mum. She disliked people who were bigoted, intolerant, heartless, lying, self-serving, greedy, grasping, hypocritical and who preyed on the goodwill of others. My experience is you will find those flaws of human nature among all races, creeds, colors, classes, religions. Amongst rich and poor. Perhaps your experience is different.
The propensity to demonize any group, based on the deeds of a few, is behind most human tragedy. Blaming someone else for a problem will not solve it, but make it worse. If you want to find a solution, you need to recognize that we are all part of the problem …and part of the solution. It is our collective responsibility to solve this.
A gracious reply to a rather intemperate challenge is a sign of character. Your mom did a good job. A lot to live up to.
Thank you. That is a gracious response.
You are so right Colin.
But write a comment like this and all the little socialists come running out of their bunkers waving their white flags.
Welfare is supposed to be a safety net but in Australia now , and for many years past, it is a way of life and an expectation for millions of people – some very deserving and too many just rorting the system for what they can get out of it. It’s simply plundering the treasury for their own benefit. These are what another writer in another country refers to as the “Free Sh## Brigade”. Hanging around with their hands out – even harassing centre link staff when they get their demands disapproved. Choosing welfare because it is far easier than working for a living, having to pay income taxes and fending for yourself.
The welfare state is all very nice until you run out of money and that is where we are now and have been since the ALP financially wrecked the country and took us from a surplus to a massive debt in just a few years coming out of the biggest economic boom years in our history. So the Government is borrowing money just to pay the society’s inflated welfare bill. It is all totally unsustainable of course as is the entire grossly expensive and unaffordable public medicare system which is just another form of welfare designed and implemented by the idealists who had(and still have) no idea about costs, affordability and sound financial management. And some of them like to call us the clever country. What a joke. The incredibly stupid country is a far more apt description.
The fact is that there are just not enough wealthy people to tax and when you tax them unfairly they move their home base elsewhere. (Monaco is real nice this time of year. ) Just like you would if you were in their position. So Governments are now heavily reliant on goods and services taxes. Thus in the welfare states of Europe most countries GST rates are 20 percent or more, some around 23 -25 % and a few even higher. Germany is an exception at 19%. The lucky Germans – only 19% VAT on top of their income taxes and all the other taxes that apply over their like their numerous carbon dioxide taxes. Hands up everyone who wants a 20% GST here.
In Australia, before they were thrown out of office the ALP Government was about to tax our bank accounts with a financial transactions deposits duty. When you run out of money, because you are so totally inept, just steal peoples bank savings by taxing them when they move their money into the bank or between accounts. It’s the ultimate insult to savers – as are stupidly low interest rates that encourages a mis-allocation of capital, inflates housing prices, encourages stock market speculation and penalises savers with ridiculously low rates of return.
What we need is less money spent on welfare, less money spent on Government and that capital directed to improving the productive capacity of the economy and generating real worthwhile employment. This rather than have billions in capital just squandered annually as it is now. Wealth is generated by savings and investment not with unproductive consumption.
The problem with most stereotypes is that we will find enough evidence of them in any race, group, religion or class of society to reinforce our prejudices. What we need to avoid is electing one set of prejudices to replace another. To be effective, the solution has to be collective and not imposed along party lines.
“What we need is less money spent on welfare, less money spent on Government and that capital directed to improving the productive capacity of the economy and generating real worthwhile employment.”
Welfare is important, but we need to learn how to achieve more with less — and avoid the profligacy evident on both sides of the house. Economic growth and productive jobs have done more to lift living standards of the 99% over the last 100 years than any socialist government has ever come close to achieving through increased welfare and distribution. Well-paying jobs are the best antidote to socialism. And the biggest threat to well-paying jobs is crony capitalism. That is as big an evil as socialism…..and the primary threat to our free market system.
Crony capitalism is as evident in the West as it is in the East. You will find as many examples on Wall Street and in Washington as you will find in Moscow, Kyiv or Beijing. Power corrupts and money = power. Too-big-to-fail banks; exchange rate manipulation; jobs-for-pals; the revolving door between Capitol Hill, Wall Street and the big lobbying firms; kicking the can down the road; focus on short-term (election cycle) objectives; big money spent on political elections;…… all of these are signs of decay of the current political system.
The Swiss demonstrated the success of collective democracy over the past century. Given the poor performance of our current system, do we have the political will to change?
It is of some interest to me that you are doing what you say you advise against. You would have us embrace your reasoning against ” welfare” which is your bias. Is work even ethical? You argue that it is. I argue that it is not. Many Africans had no such concepts until the English of which you are a part, introduced work and taxes to force many Africans into poverty. The American Indians live in a virtual paradise until the Spanish force them into work. Neither the English nor the Spanish had anything. Both the English and the Spanish are the greatest thieves in the history of the world in the past five hundred years. You stole Indian land, Native land in the case of Australia.
You, then, stole African labor, you still are and you promote labor. The question is who profits from my labor. I DO NOT.
Se va sans dire that this is Chinese to you. You know Chinese? The other people you enslave with opium. I has lasted a while.
President Kennedy reduced the top marginal tax rate to 70% and the US had a nearly balanced budget, it is now 30%. Finally Reagan came in and reduced tax rates increased military spending decreased regulation and made Americans feel good. But the deficit blew out and he set the US onto the disastrous path it is on now. So capitalism is good? and wealth redistribution is bad? Unrestained capitalism is bad!!!