Thursday, November 04, 2010

If it were a C&W song it might be called: Take this billion and share it...

I know I'm letting myself get detoured from the founding purpose of this blog, but there's just been so much going on with respect to the election and its aftermath that I find it hard right now to worry too much about Deepak Chopra. We shall return, soon, to your regularly scheduled programming.

So, last night on the news a local GOP politico with a longstanding reputation as a cost-cutter, who rode Tuesday's Red Wave to even higher elected office in D.C., was comme
nting on the need to rein in runaway spending. In the course of his sermonizing, he mentioned as an example the "endless" series of extensions in unemployment benefits that are, of course, funded (or at least supplemented) by federal largess that requires periodic authorizations from Congress. Of which he said, more or less,* "We can't just keep extending these benefits indefinitely. Absolutely it's tragic that people are out of work, and nobody wants anyone to get his house foreclosed, but the solution is to get people back to work. We can't just keep paying them to be unemployed."

My question is: Why not?

Now, I do realize that there is nuance to this argument, that the issue isn't as deceptively simple as it may seem to some "bleeding-heart" types. During the course of his gubernatorial campaign, Republican Tom Corbett, now our gubernor-elect, got himself in a bit of hot water by musing, "The jobs are there. But if we keep extending unemployment, people are just going to sit there." This echoes the most cynical and incendiary sentiments voiced by early opponents of the welfare state and its so-called "welfare queens"; they argued that generational, no-questions-asked welfare provides a strong disincentive for people to go to work and is therefore self-perpetuating ad infinitum. I do think there's something to that, and what's more, the (qualified) success of latter-day, transitional "workfare" programs seems to prove that case. However, in today's economy, with the unemployment rate lolling around 10% (and as high as 15% in Las Vegas, where, naturally, two of my three kids live), and the foreclosure rate as high as it also has been throughout 2010, common sense tell us that a lot of people simply can't find work. I don't care how much merit there is to arguments about "enabling" and "coddling," the U.S. economy flat-out sucks, and there's no way to sugar-coat that.

I am thus bemused by arguments that seem to posit as a given that "well, you know, we can't keep paying for this forever." As if a person is entitled to a certain amount of compassion and that's it, you've reached your lifetime benefit limit. I fail to understand why a nation like the USofA cannot embrace as a core value that no one will go without food, shelter or healthcare
those are priorities 1, 2 and 3and we will do whatever we must do, even it means moving into crisis mode, tax-wise, in order to uphold that goal. According to Forbes, the U.S. presently has 403 billionaires whose collective net worth is $1.3 trillion. What follows is slice-and-dice economics, and I'm not putting this forward as a serious proposal; it's just a hypothetical, an exercise. But let's say that when the unemployment rate (or homeless rate) reaches a certain threshold, a special tax kicks in that seizes 10% of that money. Or, to phrase it in more genteel fashion, the billionaires agree to "volunteer" the money. Anyway, if my math is correct, that operation yields a cool $130 billion. In one lump sum. And remember, at this point we're still working with only the billionaires, which is a pool of a whole big 400 people. If we extend the program to cover anyone with, say, in excess of $50 million....?

(Reminder: The foregoing "system" is far too offhand and unworkable. And besides, as a practical matter, there's no way the government could just swoop in and take 10% of someone's net worth, a process that almost surely would require liquidating assets
possibly including entire corporationsand other steps that might in themselves have a severe, dislocating impact on the economy. But you see what I'm driving at. Maybe we could devise an alternate formula that mega-taxes current income. Or illegal offshore holdings. Or we can simply confiscate the bribe money normally paid to Saudi princes or Chinese provincial governors for the right to do business there.)

Bottom line, I do not understand why we can't just say, authoritatively and with no parsing, that the most fortunate must kick in more to prevent the least fortunate from having horrific lives and/or suffering irrecoverable losses (like foreclosures). Period. And I do not understand how any billionaire could in good conscience oppose such a plan. What's wrong with the idea? Is it not the moral thing to do? Those aren't rhetoricals, folks. I'm seriously askin'...

* As if often the case with topics suggested by things I see on TV, I'm quoting as accurately as I can; I caught his remarks in-passing as I was leaving the room.


Rational Thinking said...

"I do not understand why we can't just say, authoritatively and with no parsing, that the most fortunate must kick in more to prevent the least fortunate from having horrific lives and/or suffering irrecoverable losses (like foreclosures). Period."

I don't understand it either. And if you think things are bad with the US economy, we have the same problems here in the UK. And our next general election not until 2015. We live, as they say, in 'interesting times'.

RevRon's Rants said...

I strongly disagree with the notion of singling out those 400 (or the top 4,000 or 40,000) and making them assume the entire burden. However, requiring EVERYONE to pay an equivalent percentage of their income/net worth would more than take care of the truly needy, while still being fair to everyone else.

Problem now is that the individuals and companies who earn the most are granted incentives, tax breaks, and even subsidies, to the extent that they pay a fraction of the tax rate that even a waitress in a chain restaurant pays. Some folks are quick to scream about the "welfare queens," but the fact of the matter is that the benefits they get cost us a mere fraction of what the corporate welfare queens cost.

Let everyone pay taxes at a level that has an equivalent impact on their net financial condition, and the cost of programs would be a moot point, as would the concerns about out deficit. But good luck getting such a system passed. Those who would pay the most would much rather buy themselves a few elected officials than pay taxes.

roger o'keefe said...

Wow. I can't think of anything else to say now. Just wow. I may write more when the shock wears off.

You did say America, right? That these were supposed to be American core values?

Anonymous said...

This is not an easy topic. I sympathize with people who are suffering, and at the same time I read your blog and I'm completely uncomfortable with what you suggest here. We can't just confiscate money in the name of fairness. It's a nice thought in a way, at least for the people on the receiving end, but it's not an American thought, which is what I believe Roger is suggesting. Maybe some of these problems just don't have neat solutions in the context of a free market democracy?

Anonymous said...

Here's an analogy that will really hit home for you, Steve. In baseball they have revenue sharing. In football they have salary caps. Those are certainly not Communist environments with players making many millions. They simply recognize that they have to make concessions to fairness and spreading the wealth or else the whole enterprise will fall apart at the seams.

If we can do it in SPORTS, why not in society where it matters?

Steve Salerno said...

If we can do it in SPORTS, why not in society where it matters?

The parallels aren't perfect, but it's a question worth asking.

Dimension Skipper said...

Apparently this caused quite a stir on the internet the other day: It's from UK SF/F author Charles Stross, but honestly I'm still not sure what to make of it...

Did somebody just try to buy the British government?

(In mostly unrelated background technical news Stross posts this "Ouch!" today.)

Also sort of on topic with this SHAMblog post, but coming at it from a different direction, Earl Pomerantz (noted sitcom writer/producer/creator of yesteryear, blogger of the present) wonders this morning about the disconnect between what kids are taught vs. the reality of an adult's economic world...

A very confusing early lesson

(Of course, I fully realize that they're communal crayons at the center of the "controversy," but Mr. P's overall point of the incongruity may still be valid.)

Dimension Skipper said...

Pop culture ref...

Did Star Trek get it right?:

"The needs of the many outweigh the needs of the few. Or the one." *

(* Unless we're talking about Spock, of course.)


And in a bit of nostalgia...

Whatever happened to all those flat tax proponents of years ago?

Always kind of liked the concept in theory. Thought it made sense and would be fair, but also always knew that A) it was never gonna happen, or B) if it did happen it would end up in some bastardized form unrecognizable from the proposed concepts.

Steve Salerno said...

Re flat tax: The media, which were then far less restrained in their cheering/hooting, certainly made a laughingstock out of Steve Forbes for it. It was, in fact, a hit piece on Forbes and his "wacky" flat-tax proposal that ultimately inspired the book Bias, by Bernie Goldberg.

Anonymous said...

The blind spot in thinking that wealth distribution is stealing is often the fact that somewhere along the line that wealth itself is often based on stealing. First example - hey let's steal America from it's natives.
America is the latest empire, all the rest were based on conquest and theft, yours is no different.

Why is it such a sin for a military man to leave his comrade dying on the battlefield, but when you leave the army it's fine to watch your countrymen losing it all and going under.

NormDPlume said...

RevRon: The typical waitress pay zero in federal income taxes. She might pay some state or payroll taxes, but I am sure she pays zero in federal income taxes. So your assertion that Individuals who earn the most pay a lower tax rate. Forty seven percent of the people who file tax returns pay absolutely zero in income taxes.

Why do we let 47% pay no tax? It's actually more when you add in the retirees on social Security who don't even file returns. Why not make everybody pay some tax, and then exempt the second $30,000 in income? Make everybody put some skin in the game. 47% is too much of a parasitic drag on the economy. The "truly needy" is not 47% of the population.

Instead of targeting the Forbes 400 rich folks, why not target college and University Foundations? Why does Harvard have $20+ billion sitting around? Why do we give tax breaks to those who give more to Harvard?

RevRon's Rants said...

Norm, things must have changed since I waited tables. While I usually got a refund, it still wasn't all that had been deducted.

As to that 47%, how many of those do you suppose have enough money at the end of the month to put anything into savings, if only to carry them over should they lose their jobs? If an individual earns so little that they can't even protect themselves from a minor crisis, I can't see making them pay taxes while letting those Fortune 400 CEO's tax-proof their income.

Neither do I think we need to be taxing our universities. I'd much rather see them provide scholarships for deserving but financially challenged students than to pour money into the general fund. If we're gonna go after sacred cows, I'd start with the religious groups that are glad to make use of their status to remain tax-exempt, yet have no compulsion against supporting candidates. If they are going to claiom exemption from taxation based upon their status, they should also adhere to regulations covering political participation by churches. Either church & state are separate or they're not... can't have it both ways.

namowal said...

There are so many different points being made at once in this post that I'm not sure where to begin.

I'll start with what I agree with - progressive taxation. (Though I probably support this at a much lower degree than the poster and many of the commenters would support.) I believe in no taxes for the first 15K, and then slight increases in percentage as you go up from there. (Actually, I support the fair tax, but politicians aren't good being creative, so I won't hold my breath on that one.)

What I can't get behind are things like 'foreclosure bailouts' or infinity welfare, etc. No one needs to own a house. I haven't bought a house because I don't have a big enough down payment yet. Why should I chip in for other people's recklessness while I'm trying to be patient and responsible? I do support homeless shelters, so if you can't pay for your house, you can go live there if you have no other options. Why should we be required to provide more? And this is exactly the problem with government funded social programs. The government is a horrible middle man and will always mismanage the money and make poor decisions regarding its use. Privately run charities can handle these things more efficiently, and if they don't, individuals can choose to stop giving them money.

Basically, I agree with the sentiment that those who are more fortunate should help those who are less fortunate. But being forced at gun point (which is what the government does) to give will not solve our problems. It only leads to resentment from the 'more fortunate' and entitlement from the 'less fortunate'.

Steve Salerno said...

Nam et al: There are excellent points to be made in opposition to the sentiments in my post, or at least in opposition to their practical implementation; I do not dispute that. For now, I just want to emphasize again that I'm not asking you to "chip in for other people's recklessness," because you are not--I assume--a billionaire.

I guess at bottom this post expresses a not-very-new sentiment, which is that the extremes of wealth in our society are a bit too stark for my liking (or understanding). I do not understand--I literally do not understand--how a billionaire can go shopping on Luxist for the likes of solid-gold toilets when there are people in America who live in cardboard boxes. (Yes, I know that some of the people in those cardboard boxes are mentally ill and won't leave even if you give them the means; let's not complicate the argument, for now.) From my point of view, it's like the old line from Richard Pryor (?), "Cocaine is God's way of telling you that you've got too much money." When you're shopping for solid-gold toilets, you've got too much money, especially if there are people who have no toilets at all.

namowal said...

Fair points, Steve. I agree. I guess the way I see it is that the person who buys a 'solid gold toilet' should be utterly shamed by society. And that's about all we can do. If that person does not change their spending habits due to pressure from society, then that's that. We can keep shaming them, but we can't force them to do anything.

I see this as the only option for many of the current 'vices' regulated by government. Take the recent example of San Francisco banning toys in happy meals. If you don't like kids getting fat on happy meals, then say so to the parents who buy them. But don't force everyone's hand through government action.

Anonymous said...

Gold toilet seats reminds me of the part of Upton Sinclair's The Jungle where the poor immigrant finds himself looking at the gold taps in Bull Durham's bathroom.
I sometimes think.... crown jewels, gold sceptres, new hospitals and schools...

Robert said...

Steve, your post today is positively Christ-like.

Anonymous said...

Steve: The problem is inherent in the situation you describe. The people with the money are also the people with the power. They are not going to vote against their own self-interests, even though they are remarkably successful at getting every-day Americans to vote against *theirs*. Never ceases to amaze me that election after election the GOP persuades people with no money, relatively speaking, to support candidates and platforms that will siphon off still more of that money and redirect it to people who already sit on top of unbelievable fortunes!

We need a benevolent despot, maybe?

namowal said...

anon @ 6:51 -
I am so sick of the idea of one voting against their self interests. This is ridiculous for two reasons.

1. For any individual there is no party that has all their self interests at heart. Take the fact that 31% of self-identified gays voted republican in the last election. Were these people voting against their self interests? No, because they are interested in a lot of policies in addition to gay rights issues.

Furthermore, the democratic party has consistently demonstrated that it will only talk the talk on gay rights. This shows just how hard it would be to even determine who has your own interests at heart.

2. (And this is the more important reason to me.) What about principles taking priority over 'self interest'? I am technically poor and have been my entire adult life. But I don't believe in excessive welfare. This is a principle that I think is right. So why should I vote for people who have other principles just because that might mean more money in my pocket? To me, that idea is repugnant.

To criticize poor people for voting republican because it's against their self interests is to encourage them to be selfish. To act like democrats even have the interests of the poor at heart is naive and simplistic.

(best w.v. ever: reads)

Steve Salerno said...

Nam: I think that when people use that phrase--and I have used it myself, perhaps simplistically, as you suggest--what they really mean is that the GOP has created certain provocative and highly divisive wedge issues that encourage people to vote in ways in which they would (probably) never vote, were it not for those issues. As you also suggest, gay rights (specifically gay marriage) is one of those issues. Another such issue is defense. I hear what you're saying about how people aren't monolithic and there are myriad legitimate reasons to vote for a party, but it is hard for me to imagine that many of the NASCAR types who vote straight GOP would do so if it weren't for the wedge issues alluded to above, as well as others. In addition, in recent years in particular the GOP has been very successful at tapping into gut-level xenophobia and racism, and this also has distorted the voting patterns one would expect if people were voting based solely on economics and other "wider" ideals. There is no question that some right-wingers (and many of the Tea Party leaders) appeal to the feelings of those who reject the very idea of being governed by a black president.

However, maybe that's my own close-mindedness in operation.

Insofar as gays voting GOP, bear in mind that there are quite a few well-to-do gays, and--I'm just speaking here on "impression" when I probably should get documentation, but--I have the feeling that the average gay in our society does slightly better, financially, than the average straight. In other words, I think the per capita income among gays is higher than the overall per capita income. If this is true, it would also figure in the mix. If this is true.

On the other hand, I also agree with you that there are, or should be, higher principles involved in voting than mere self-interest. But that brings us back to the wedge issues. Is abortion more important than anything else? If it is, that will decide your vote. Regardless, there is no doubt that politicians exploit those ideals for their own benefit.

RevRon's Rants said...

"To criticize poor people for voting republican because it's against their self interests is to encourage them to be selfish."

On the contrary; it is encouraging them to be both pragmatic and realistic. Everybody votes according to their self-interests one way or the other. It might be in one person's self-interest to elect politicians who will help him increase the size of his portfolio, while another person would prefer that his vote constituted an act of altruism toward the less fortunate. Either way, the individual's needs are served.

The Republican ideology is primarily responsible for the erosion of the middle class, the increase in families living at or below the poverty level, and the dramatic divergence in income levels between the wealthiest and everyone else. They scream about the evils of personal welfare, even as they support a corporate welfare system that costs significantly more. They posture about wanting to create jobs, yet have pushed legislation that incentivizes the moving of manufacturing operations - and jobs - to third-world countries.

A big deal was made in Texas about how Republican-sponsored tort reform was going to make healthcare more affordable by capping awards for pain & suffering in lawsuits, thus driving malpractice premiums down. Funny, but the only real effect was that malpractice carriers saw their profits soar to historic levels. Healthcare costs - and malpractice premiums - remained relatively unchanged.

"To act like democrats even have the interests of the poor at heart is naive and simplistic."

Agreed. But to act like Republicans have the interests of anyone save their wealthy contributors and corporate sponsors at heart is both disingenuous and deceptive.

Bottom line is that both sides have their own self-interest agendas going on. The choice facing voters is, sadly, to look closely at those agendas and decide which is least damaging to individual voters and the country in general. For the middle class and the poor, the Democrats are the lesser of the two evils. Ironically, the country's economy has fared better historically under Democratic control, rather than Republican.

roger o'keefe said...

Ron, I respectfully submit that if income and wealth has diverged sharply in recent decades, with greater amounts of money concentrated among smaller numbers of people, it is not due just to the analysis you provide, but because most Americans today are fat and lazy and unwilling to work hard. The Republican motto is that if you work hard and work smart you will be rewarded for your initiative. I continue to believe that people who are willing to work hard and plan their lives out with some degree of foresight and intelligence can do well enough in America. But partly because of the reasons Steve originally wrote about in his book (he seems to have changed his tune since then), people don't want to work anymore. They just want to have it handed to them on a platter. I know people on unemployment whose reasoning goes, "Why should I take a $500 job if I can collect $450 on unemployment?" You should take the job because it's the right thing to do, that's why! You are supposed to EARN your money in this society not just sit back and take it because someone is willing to hand it to you!

If some people are going to find that offensive, well the truth hurts, I guess.

RevRon's Rants said...

Roger, Republican sound bytes and campaign slogans aside, their legislative objectives have actually rewarded those who eliminate opportunities for American workers by encouraging the outsourcing of American manufacturing and service jobs. They have legislated powerful fiscal incentives that encourage the wealthiest individuals and corporations to take their financial operations to offshore tax havens, thus significantly diminishing the tax base upon which our budgets are supposedly built.

The elimination of controls on powerful entities - for whom any concern for the well-being of the citizenry is at best an afterthought - has encouraged an opportunism which literally makes it harder for the "average" citizen to get ahead and realize the success so frequently touted in press conferences.

Like many others, I have worked hard all my life for everything I've got. There have been times when I could have qualified for assistance, but didn't, simply because I didn't want to take resources away from anyone who simply couldn't make it without help. And I've seen entire divisions of companies shutter their doors and move operations overseas. Hundreds of jobs gone in an instant, despite the hard work and devotion of employees who mistakenly trusted their companies to show some degree of loyalty to the employees who actually made the company money.

The deck has been increasingly stacked against the middle class, primarily due to the faux-conservative devotion to unfettered business practices. The ultimate manifestation of the current Republican ideology would more closely resemble Hong Kong than Middle America. As anyone who has experienced Hong Kong will acknowledge, it's a great place to be fabulously wealthy, but a terrible place to live for everyone else. I'd like to think that our aspirations as a country would include fostering opportunity (not coddling) for everyone. The "conservative" mantra simply does not. And I find THAT truth very offensive.

namowal said...

"Bottom line is that both sides have their own self-interest agendas going on."

That's exactly how I see it. That's why I am not a republican or a democrat and why I usually vote third party. I believe in civil liberties and fiscal responsibility. So both sides have it half wrong as far as I see it. (And the republicans abandoned fiscal responsibility in the Bush years, and the democrats rarely actually support civil liberties, so generally both sides have it mostly wrong.)

Steve, I think the concept the wedge issues is interesting and worth thinking about. I do agree with your recent posts that have discussed how hate-filled the republican talking heads have become, and I see how that may be driving some people of lower incomes to vote for them instead of for the dems. My bottom line is that if you're voting for the repubs out of bigotry or the dems out of 'self interest', you're voting for the wrong reasons either way. (One type of 'wrong reason' may make you a worse person, but it doesn't make you a worse voter.)

Why doesn't anyone ask why so many wealthy people vote demoncratic, thus going against their self interests?

Steve Salerno said...

Why doesn't anyone ask why so many wealthy people vote demoncratic, thus going against their self interests?

In theory asking why a rich person would vote Democratic is the same as asking why a poor person would vote Republican. In practice, however, that's a little bit like asking why Bill and Melinda Gates give away so much money. It's not surprising to me that a certain number of wealthy people recognize their responsibility to "give back," either in the form of taxes or charity. (On a weekly basis, Bill Maher voices his willingness to pay higher taxes.) In fact, I would hope that would be the case; it's the responsible thing to do, from my perspective.

It's a little different asking why a poor person would vote in favor of the mechanism that keeps him poor.

As an analogy, let me put this out there: It's not so surprising to me that a wealthy white person might oppose slavery as a matter of conscience. However, would you not be surprised to hear a black slave argue in favor of slavery?

I think we are coming close to the point where it can almost be said that the U.S. financial system, as presently run, "enslaves" a fair number of people: traps them beneath a certain threshold of success. It surprises me when those people vote to remain effectively enslaved.

RevRon's Rants said...

"Why doesn't anyone ask why so many wealthy people vote demoncratic (sic), thus going against their self interests?"

Perhaps wealth is not the primary motivation of the genuinely wealthy, Nam. I'm far from wealthy, but feel it appropriate to pay for services that I don't need, but upon which many others depend. I suspect that for the truly wealthy (who don't have to worry about funding the bare necessities), such an attitude would be even easier to adopt.

roger o'keefe said...

Every time I think you've shocked or surprised me as much as possible you prove me wrong. So now the GOP is enslaving people? You're seriously arguing an equivalence between Republic politics and slavery. Incidentally, I guess you forgot that Lincoln was Republican.

I generally enjoy the blog, Steve, you know that, but I find it hard to know what to say about this whole thread. Maybe it has something to do with your anger over your own personal struggles, as you describe in your more recent post. Whatever the case it's very unsettling to me.

Steve Salerno said...

Roger, if you read the post and the comments in toto, I don't know why you should be so surprised, shocked or offended. I stand by what I've said to this point, and it has nothing to do with my "personal struggles." I had no particular complaints about my personal situation back when Obama was running for president, and if you recall I supported him and his initiatives wholeheartedly.

namowal said...

I just want to point out the 'demoncratic' was truly a sloppy typo and not some attempt at bad humor! Sorry if anyone took it otherwise.

Elizabeth said...

I have just the article for you, Steve -- Chris Hedges' latest column, A Recipe for Fascism.

Steve Salerno said...

Eliz: You're the second person today to tip me to the Hedges column. Interestingly, I quote him a number of times in my current Skeptic cover story on happiness.