Why Progressive/Marxist/socialist/Leftist governments cause greater income inequality

Many seem puzzled that income inequality in the USA is growing, after 8 years of a Democratic-controlled Congress including 6 years of the most progressive administration in 100 years. After all, Barack Obama, a committed Leninist while at Occidental College, son of Marxist parents, protégé of radicals, is supposed to look out for the poor and oppressed.
One should keep in mind that there are two large groups of people who are in the camp of the Left. You have the true believers, who believe in the concept of doing good and making the world better. They believe this way out of genuineness or out of guilt. But they ignore the empirical evidence that adherence to the economic policies of the Left lead to misery. The second main group are people who just want power and money. In a modern state, those who make the rules have the gold. The totalitarian states have the greatest income inequality. Cuba, North Korea, Russia. You may disagree to the extent that Raul Castro owns no shares of any company, does not appear to own any real estate and has no huge salary nor where to spend it. Vova Putin’s salary is only $187,000 per year. But they, like all other dictators, have free use of their country’s assets. You do not need to own something if you can use it as you wish.
Someone who is crazy for power will use whatever political philosophy is available to dupe others, as a window dressing for his or her ambition. Those who want to be on the winning team will profess the political philosophy of those in power.
The US is not a totalitarian society. But let’s start with the premise that the Left favors regulation, including regulation of business activity. I do not think anyone can dispute this premise. After the 2008 financial crisis (brought on, in my opinion, by the government’s pushing banks to loan money to people who could not pay it back, but that subject is for another day) the remedy fashioned was the Dodd-Frank Wall Street Reform and Consumer Protection Act. The premise of Dodd-Frank, like the financial regulation in place prior to the crash, is that the regulators are there to watch over the industry so that it does not fail. Did Dodd-Frank make regulators more intelligent? No. But what Dodd-Frank does, is impose additional regulations on an industry that was already highly regulated. Just a few days before Bear Stearns collapsed, then-Chairman of the SEC, Christopher Cox, said that it was “well capitalized and apparently fully liquid.” Christopher Cox is a highly intelligent person. Like Obama, he was a Harvard law grad and editor of the law review. Only nine years after graduation, he was a partner at Latham & Watkins (one of the US’ premier law firms), and part of its national management. What happened? Whatever happened, is going to happen again.
The result of Dodd-Frank has been to make the big banks bigger and the community banks to close branches and downsize. The big banks have the resources to comply with the new regulations and spread out the costs. You do not imagine that their lobbyists had no input on the legislation? As a result, the big banks are worth more. The big banks are owned by stockholders, and public company stockholders are owned disproportionately by the “1%.” The number of banks in the US, however, has fallen to a level not seen since the Great Depression.
Meanwhile, the small and medium-sized business is called into their bank and told their credit line will not be renewed. The decision has nothing to do with the financial performance of the borrower. It happened because a regulator did not like the company. Maybe the business can get a credit line somewhere else, maybe not. But the effect is to depress economic growth and more importantly for income inequality, keep the small business owner from making more money and paying salaries.
Another example from early in Obama’s watch was the Family Smoking Prevention and Tobacco Control Act of 2009. Don’t peg me as a supporter of tobacco. This law imposes more regulations on tobacco companies. A lot more. But it is common knowledge that this law was basically written by Big Tobacco with the purpose of shutting down small competitors.
The Founding Fathers recognized that self-interest will always be present in human affairs. It does not matter how idealistic our politicians profess to be. There is no way that legislation and regulation will not be framed to cater to those who are already wealthy and powerful. Thus, regulation = entrenchment of the extremely wealthy.

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