Friday, April 30, 2010

Obama is taking flak from the right for his comment that "I think at some point you have made enough money".

Much of the criticism is from the perspective that Obama feels he is qualified to make the determination of just how much is enough... but I think this argument is a mistake as it implicitly accepts that there is a point but that Obama isn't the one to set determine where it is. Like the old joke, once you accept that there is a point, all you're left to argue is where the point is.

I don't accept that there is a point, and for a reason I haven't yet seen advanced.

Nobody makes money unless someone else is willing to give to them, per the cliche, 'it takes two to tango'. For someone to make a ton of money there has to be someone else (or lots of someone elses) willing to hand over a ton of money in return for whatever good or service is being offered.

Bill Gates became a billionaire only because millions of people were willing to pay for the shrink-wrapped boxes Bill Gates was selling. Derek Jeter makes $20+ million a year only because George Steinbrenner was willing to pay Jeter $20+ million a year.

Capping the amount of money a person can make denies the person on the other end of the transaction the right to do with their money as they deem appropriate. Under what standard do you prohibit George Steinbrenner from paying Derek Jeter as much money as Steinbrenner wants to pay him? It's Steinbrenner's money, how do you justify telling Steinbrenner he can't spend it the way he wants to?

Likewise, after Bill Gates has made a billion or so dollars, do you tell people they can't spend their money buying something from Microsoft because Bill Gates already has enough money? Or from Apple or from Oracle because Steve Jobs and Larry Ellison already have enough money? Or that U2 fans have to buy albums from some other group, they can't buy any more U2 albums because the guys in U2 already have enough money?

In a free society, people have the right to spend their money on what makes them happy... and if they want to spend their money for something that in turn makes someone extremely rich, so be it.

Nor is it right to limit what someone makes by confiscating their 'excess earnings' in the form of higher taxes. If someone is providing a service that is worth $XX on the free market, taking away everything they make in excess of $X denies them the right to be compensated for whatever it is they are providing.