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Conservatives don’t understand the value of income redistribution
I was not the least surprised to read that my friend Charles Torkko is not amused at Sen. Barack Obama’s proposal to place a windfall profits tax on U.S. oil companies and use the proceeds to pay for a $1,000 energy rebate to consumers.

Obama’s proposal amounts to income redistribution, which is a cardinal sin to American “conservatives” these days. Torkko likens the very notion to “Bolshevism.” It’s a view that exposes, perhaps more than any other, the complete disconnect between today’s radical brand of conservatism and the real world.

In truth, there’s a term for those nations that don’t engage in income redistribution as a matter of public policy. They’re called Fourth World, and they exist mostly in war-torn regions of the planet where governments are either too weak or too corrupt to concern themselves with the basic needs of their own people or the many ways in which income redistribution expands opportunity.

Every modern, successful nation in the world engages in income redistribution and most do so to a far greater degree than here in the U.S.— and their people and their economies are better off for it.

Perhaps because income redistribution has been so integral to the building of modern America, it’s easy to overlook its significance. Income redistribution was directly responsible for the building of much of this country’s public infrastructure. With few exceptions, if you utilize a highway, a municipal sewer or water system, or send your kids to a public school in Minnesota, you are a direct beneficiary of income redistribution. The GI Bill, which has paid for the college educations of millions of veterans since the 1940s, and more than any other single policy helped America’s economy prosper for decades, is a classic example of income redistribution. So was the Rural Electrification program under President Franklin Roosevelt, which brought electric power to millions of rural residents who otherwise could never have afforded the cost of installation.

When you hear someone claim they don’t support income redistribution, keep in mind what they’re really saying. They’re saying that they don’t care whether or not the city of Tower dumps its sewer directly into Lake Vermilion. They’re saying they don’t care whether residents of our area can get an affordable education at Vermilion Community College, in Ely, or at any of the state’s public colleges and universities. They’re saying folks in Cook should still be using outhouses and residents of rural areas should still be relying on kerosene lamps to light their homes.

Not one of our area communities could have afforded the cost of their municipal sewer and water systems without income redistribution. Actually, without income redistribution, through programs like the Community Development Block Grant or Local Government Aid, the communities of our area would be able to provide very little in the way of services. Wastewater treatment would be rudimentary at best. Access to clean drinking water would be in doubt. Most small cities would be unable to provide police or fire protection. Public libraries? Paved sidewalks? Not a chance.

These things are possible because, and only because, of public policies that redistribute income from people and places of high income, to those areas and individuals with more modest means.

Of course many of today’s conservatives don’t think the people of our communities deserve the benefits that rich Americans in wealthier communities take for granted. They believe that if we can’t pay for it locally, we should do without. To hear them tell it, income redistribution lessens the incentives of the wealthy to produce more wealth— as if that is the only objective that matters in America.

There, of course, is not a single scintilla of evidence for the conservative’s claims that the economy is bettered through the accumulation of wealth in fewer hands. Indeed, all of the evidence, and it is overwhelming, shows that income redistribution has been enormously beneficial to the economic growth of America. The transportation system built by income redistribution has generated huge amounts of new economic activity and created millions of good construction jobs along the way. Bringing electrical power to farms has helped make American agriculture more productive, fueling new wealth in rural communities. Quality public education, from elementary to the university, built the workforce that made America the wealthiest country in the world. None of these achievements would have been possible had the policies of today’s conservatives held sway.

Income redistribution has been a matter of policy in America from our earliest days, and was manifested through policies as diverse as the Homestead Act, the implementation of the progressive income tax, and Social Security.

And it hasn’t just been government as the driver of income redistribution. The rise of unions gave workers more power and a rising standard of living. In some cases, it was enlightened capitalists who advanced the cause. Henry Ford understood that by raising the wages he paid his workers, he could expand the customer base for his automobiles, and his ideas helped build a large consumer class in America that has been the engine of our economy for decades.

Without income redistribution, America would not have the large middle class it enjoys today. Indeed, no country in the world without significant income redistribution has a middle class of any note. Without income redistribution, a nation is invariably left with two primary classes, a small elite of extreme wealth and a vast majority that lives in poverty.

Sadly, America is quickly heading in exactly that direction today. The growth in income disparity in this country over the past ten years has been nothing short of astounding. As even the conservative news journal The Economist bemoaned in its July 26 editorial, fully three-quarters of all new income generated in the United States since George W. Bush took office, has gone to the top one percent. Go ahead. Read that sentence again. It’s an absolutely stunning statistic.

Many Americans used to complain about the trickle down economy under Ronald Reagan. These days, trickle down looks pretty good by comparison. We no longer have trickle down. It’s a trickle up economy, and lately that trickle has become a torrent as average Americans have fallen victim to the predatory practices of unscrupulous energy companies and mortgage lenders, along with the skyrocketing cost of health care. There’s plenty of income redistribution in America these days, but it’s all going to the top.

Today’s strange brand of conservative looks at this situation and thinks that America’s problem is that the wealthy still don’t have enough money. John McCain wants to extend and even expand upon George W. Bush’s tax cuts that have offered millions of dollars in tax cuts to billionaires, and higher taxes for the rest of us.

And when I say higher taxes for the rest of us, that’s a fact. Because as the federal government doles out tax breaks for millionaires, oil companies, and CEOs, the effects trickle down to the state and local levels, where we get socked with higher property taxes, higher college tuition, and higher fees that vastly overwhelm whatever trifling federal tax cut most Americans received under Bush. Minnesotans are certainly aware that under the Bush-cloned policies of Gov. Tim Pawlenty, we’re getting nickled and dimed like never before. As Pawlenty’s own Department of Revenue stated recently, those of us in the middle are now paying a larger percentage of our income in state and local taxes than folks like Carl Pohlad.

Barack Obama says he’s going to try to reverse this trend, by demanding that those at the top start paying their fair share. Imagine poor Mr. Torkko’s horror at the very notion.