Wednesday, October 10, 2012

Another Voice is Heard From on Fairness Op Ed

Another voice, let's call him "A," is heard from on my opinion piece on "fairness."

On Oct 1, 2012, at 4:32 PM, "A" wrote:

Enjoyed reading your article on the subject in yesterday's Herald.  Well written...but not your best argument.  Consider:

1)  You say liberals argue that it isn't fair that !% of the population control over 40% of the wealth in America.  Why is that not "fair?"  What percentage would you consider fair?  Suppose every 50 years all debts were cancelled and all property that had been sold would be returned to its original owner.  Would you consider this fair? (Read Leviticus 25)

The median family income in America is something like $50,000.  The personal income in Guatemala is $1340/yr.  Would you support taxing the people in the USA who make over $1340/month (12 times as much as a statistical Guatemalan) and giving money to the Guatemalans?  Why not? Wouldn't that be fair?  Why should Americans have 20% of the world's wealth (or whatever the % is?)  Want to try Mali?

As your hero, Ronald Reagan once said, “here you go again.” Your first point is what’s referred to as a “strawman.” Look it up, and then you’ll understand why I’m not going to respond to it.

2)  You start off talking about fairness then let your socialist bias creep in.  You say that "policy distortions lead to inequality?"  This supposedly includes unregulated or under-regulated financial institutions.  Please provide the list of unregulated financial institutions you're referring to.

Come on! We’ve been through this before. What the hell do you think caused the 2008 financial crisis. Oh, let me guess, irresponsible borrowers. You’re so predictable. I even sent you a link to a web site that tracks Wall Street scandals. Do your homework!

About the failure of the SEC and the Justice Department to stop fraud and abuse:

About Greenspan’s perverted Ayn Rand view of the economy:

Preview, here’s what Alan said in Senate testimony:

Greenspan: I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms...

Waxman: In other words, you found that your view of the world, your ideology, was not right, it was not working.

Greenspan: Absolutely, precisely. You know, that's precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.

3)  You say preferential tax treatment for special interests are bad for America.  Does this include a) deductions for home mortgage interest? b) charitable gifts? c) deductions for job-related expenses? d) tax breaks for married people? e) tax breaks for dependent children (and dependent adults, for that matter).  Please explain how these are bad for America. 

Maybe you're thinking of taxing capital gains at less than ordinary income.  Since this encourages investment in business, which grows the economy, how is that "bad" for America?

I think that most informed Americans now understand that the very wealthy end up paying a smaller percentage in taxes than the rest of us do -- it’s been beat to death, with even Warren Buffet chiming in on the issue.
It’s easy to understand the effect of tax policy on dividends and capital gains in lowering taxes, and the fact that people in upper income brackets are going to benefit far more than others, who may feel fortunate just to be able to set aside some of their wages in a regular savings account. But there are other far more complex and esoteric tax dodges that the very wealthy use to reduce their taxes, sometimes to zero. You can read about some of these strategies in this Bloomberg Business Week article.

So tax policies (especially those effecting estate taxes) contribute to a widening gap between the rich and the rest, and they also reduce government tax revenue over and above the major reductions that resulted from the Bush tax cuts.

Other policies that reduce the revenue stream include those effecting taxes paid by corporations. Although we hear over and over again how these “job creators” are being squeezed, it turns out that U.S. corporate taxes actually paid (the effective rate) fell to a 40-year low in fiscal year 2011, despite the current rebound in corporate profits. The U.S. both taxes its corporations less and raises less in revenue from corporate taxes than its foreign competitors due to the use of overseas tax havens, loopholes, credits, and deductions in the tax code.

The decline in government revenue has been accompanied by a a steep rise in college tuition and a decline in programs at the federal and state levels that aid lower income people advance in education and, in turn, earnings, thus further depressing the middle class. Another factor in the decline of the middle class is the decline in union membership. It was 40% in the 1950s, but is just 12% now. Without a prosperous, vibrant middle class the nation lacks the primary engine for a strong economy and, in turn, a broadening of the tax base.

In addition, declining tax revenues and the lingering effects of the 2008 recession (including joblessness and increased expenditures on “safety net” provisions) have led to reduced expenditures at the federal and state level on infrastructure improvements -- repairing roads and bridges, improving the electric grid, spreading high-speed Internet, and creating state-of-the-art transportation systems -- which greatly impacts U.S. productivity; another hit on the economy.

We are also seeing a reduction in investments in research and development. These R&D reductions have a big effect right here in the Tri-Cities, where work at PNNL on alternative energy and CO2 sequestration, among other things, have experienced cutbacks, and the Lab has laid off about 200 people.

4)  You say all sorts of things have "decimated the middle class," without explaining how that is so. First of all, no one even knows what defines the middle class ($200K in Manhattan might be considered middle class; so would $40K in small town Mississippi), [Your candidate, Mitt Romney, says it’s $250K and below, but he’s totally out of touch, so we can’t go by that] but you don't provide any example of how the middle tax has been "decimated."  [I think I just did] I realize the median family income has dropped some (not sure, maybe $2-3K) over the past decade, but this is hardly devastating. 
Moreover, do you think the middle class lives better or worse than when you and I were growing up?  I'd argue almost everyone lives better.  They work fewer hours, eat better (too well?), have better health care, live in bigger houses with more conveniences (avg size of new house is >2000 square feet; I bet it was 1200 in 1950), and recreation opportunities are an order of magnitude better. 

The sense of the middle class taking it in the shorts is caused by several things--not the least of which is the global economy and America's movement to a post-industrial society.  Let's face it, the technological age requires smarter, better-educated people--and the world has caught up with us in this regard.  Consider South Korea--a basket case that killed baby girls 60 years ago--now sends something like 80% of its children to COLLEGE.  We graduate 70% from HS (52% or so in Chicago)!  Combine this with a rate of illegitimacy approaching 40% (70% in some places), and you have a permanent underclass--largely of its own choosing. [I was with you until your last line -- why is it you always want to blame the poor for being poor? Is that part of your religion? Will you forgive them for being poor in the year of the Jubilee?]

So, you want to know what negatively impacts the middle class?  Poor personal choices--not preferential depreciation tax breaks for oil companies and certainly not too-big-to-fail companies like AIG or GM.  I've said this before, and I'll say it again--finish HS, learn a trade, get a job, get married, stay married, then have children--do these precisely in this order and you have a 98% chance of being a member of the middle class (or upper class). [I agree that doing the things you’ve outlined will increase an individual’s chances of success in life, but I certainly don’t agree that other factors don’t bear on the problem. Are you arguing that the reason so many people are out of work today is due to their “personal choices?”]

The government can't fix this problem. [Is that why you’re voting for Mitt Romney, because he can’t fix our problems? If so, I suggest you vote for someone else; e.g., Ron Paul.] No policy can.  Actually, government makes things worse in many cases [“Government’s not the solution. Government’s the problem.” Ronnie Reagan] --especially when we make it acceptable to bear children out of wedlock. [This is nonsense] It can only be fixed when society realizes our culture must change. [Do you even know what “culture” is? If you do, you’d know that cultures change organically, not through social engineering -- would you have us emulate China and impose a “Cultural Revolution?” Really, I get so fed up hearing you conservatives rail against government support for Planned Parenthood, while at the same time decrying our culture, by which you mean the culture of those on whom you look down.]

5)  I agree with your comments on political campaign giving.  Our campaigns are too long and cost too much.  I'd support reducing the amount of money any organization or person can give.  And I'd eliminate the ability of ANY public organization to contribute.  SEIU would lead the list.  How can it make sense for public employees to contribute to the election of people who will determine their salary and benefits?  This is a conflict of interest on the face of it. [This is surprising -- I agree with you]

6) Finally, you argue that it isn't fair that we have too many wealthy people in Congress.  Nonsense.  The argument is just the opposite.  We want highly trained and educated people in Congress, and if they're independently wealthy maybe they can concentrate on doing what's best for the country, not what's best for them financially.  I suppose you'd like 30% of congress to be HS dropouts!

(The democrats--hypocrites that they are--complain about Romney's wealth but nary a peep about JFK's or any democrats).

Did I say that it’s “unfair” that we have too many wealthy people in Congress? Golly, I misspoke, if I said that. But I know I didn’t say that. You simply twisted my meaning so you could call it “nonsense.”

I wrote “We depend on our elected officials to represent the people, all the people. And yet the median net worth of our congressional “representatives” is almost nine times the typical American household. Fully 250 members of congress are millionaires, and 57 have a net worth that puts them comfortably in the 1%.”

I probably confused you by leading into this statement by writing that, “On a related issue of fairness, voters, both liberals and even many conservatives I know, question the “fairness” of the unrestricted flow of cash to political parties, candidates, and their surrogates. This flood of money resulted from the 2010 Citizens United case in which the Supreme Court decided (5 to 4) that bans on corporate contributions were unconstitutional, or as Mitt Romney put it, “Corporations are people, too” (the ruling applies to unions and NGOs, as well). Justice John Paul Stevens wrote in his dissent, “The ruling threatens to undermine the integrity of elected institutions across the Nation.” In this sense, when we complain that campaign financing is no longer “fair,” what we mean is that it is not “balanced” -- it allows moneyed interests (which go unnamed) to wield disproportionate influence on both elections and the elected.”

You mentioned in your diatribe that “How can it make sense for public employees to contribute to the election of people who will determine their salary and benefits?  This is a conflict of interest on the face of it.” Amen, brother! I’m making essentially the same point.

Now you conservatives and your Tea Party faction are fond of selectively quoting the Founding Fathers. Let me do the same.

The founding fathers were familiar with European Aristocracy and the tyranny of the aristocratic order. They believed in a republic based on shared political power, not one ruled by a wealthy, landowning aristocratic elite. That’s why every Revolutionary state government abolished the laws of primogeniture and entail that had served to perpetuate the concentration of inherited property. Abolishing aristocratic forms of inheritance would, according to the North Carolina statute of 1784, "tend to promote that equality of property which is of the spirit and principle of a genuine republic."

John Adams, in a letter to a contemporary in 1776 wrote, “The balance of power in a society, accompanies the balance of property in land. The only possible way, then, of preserving the balance of power on the side of equal liberty and public virtue,is to make the acquisition of land easy to every member of society; to make the division of the land into small quantities, so that the multitude may be possessed of landed estates.”

In the 1790s, Jeffersonians, in arguing against the policies of Alexander Hamilton and the federalists, made the point that the people must remain vigilant and not let elites manipulate politics, or an aristocracy of wealth would re-emerge in the young republic and eventually destroy it. No republic, the Jeffersonians argued, can tolerate inequality and survive.

Thomas Paine, resurrected by the Tea Party as a sort of guiding light, said, “Separate an individual from society, and give him an island or a continent to possess, and he cannot acquire personal property. He cannot be rich. So inseparably are the means connected with the end, in all cases, that where the former do not exist the latter cannot be obtained. All accumulation, therefore, of personal property, beyond what a man's own hands produce, is derived to him by living in society; and he owes on every principle of justice, of gratitude, and of civilization, a part of that accumulation back again to society from whence the whole came” (Agrarian Justice, 1779).

“The land must not be sold permanently, because the land is mine and you reside in my land as foreigners and strangers. Throughout the land that you hold as a possession, you must provide for the redemption of the land. If one of your fellow Israelites becomes poor and sells some of their property, their nearest relative is to come and redeem what they have sold.” [I take this to mean we should retain the inheritance tax, amen.]
I'm done. [I doubt it]

A [R]

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