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Five Things: The "Mirage" of Wealth


The state of the American Dream in 2009 is that the mirage of wealth is a given; the speed of its discovery the only surprise.

1. It Was All Just a Mirage

"The leap in wealth that Americans thought they were enjoying over the last several years has already turned out to be a mirage, according to new estimates by the Federal Reserve."
- New York Times, February 12, 2009, "Fed Calls Gain in Family Wealth a Mirage"

Pretty heady stuff from the "newspaper of record," eh? I guess what I like most about that sentence is its heavy dose of stone-faced weariness spiked with despair. Read it again. Just for fun.

"The leap in wealth that Americans thought they were enjoying over the last several years has already turned out to be a mirage..."

Yes, that is one beaten down, cold-veined sentence. See, the point of the thing is not that the wealth turned out to be a mirage in the first place, though for the average American that was surely a surprise kick-in-the-crotch, but that it already turned out to be a mirage.

Heh. In the end it wasn't the mirage itself that got us, it was the speed of the thing; like being trampled by a herd of Clydesdales. They look like sluggish equine cuddle pets, but they possess tremendous oversized hooves the size of Volkswagens and are capable of running 20 miles per hour, enough to track down any reasonably fit adult male within 100 yards and crush him like a tin soda can.

And so that's the state of the American Dream here in 2009. The mirage of wealth is a given; the speed of its discovery the only surprise.

2. Tin Foil Hat Actually Made of Lead

In In the U.S., as bailouts and "economic stimulus packages" continue, and ultimately fail, inevitably the question will arise as to why it makes sense for, say, the citizens of one state to subsidize via federal tax payments foreclosure relief for citizens in other states, or banks located hundreds of miles from them, or auto companies, or the airline industry. The list goes on and on. There are individual counties in the state of CA right now asking that very question about the state government right now. If that sounds like tin foil hat stuff, consider the success of tax revolt during the Great Depression.

I recently ran across a paper, written by Mark Thornton of the Ludwig von Mises Institute with Chetley Weise, "The Success of the Great Depression Tax Revolts," which made the case that tax revolts during that era, which are rather obscure because of their perceived ineffectiveness (most have never even heard of them), were actually quite successful.

"[T]he enactment of tax limitation statutes and the Repeal of Prohibition are shown to be tangible evidence of the [tax revolt] movement's success. These policy victories mark the end of the revolt because the primary goals of the movement had been achieved. How else
would one explain the rather sudden demise of a movement that consisted of local organizations unconnected by a national network? In our view the timing of these events
support our hypothesis that the revolt was a success and that Repeal, which affected the entire nation, was indeed a pivotal event for the tax resistance movement.

Like many, I suspect, I assumed the government eventually repealed prohibition because 1) it was stupid, and 2) it was ineffective. The paper makes the case that prohibition was actually repealed for tax relief.
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