Argument against redistribution of wealth

There’s an old joke that a heart surgeon goes to a mechanic to get his fuel pump replaced. While he’s working on the car, the mechanic muses that their jobs are pretty much the same. “I figure out what the problem is, take out the old pump, put a new one in, and sent the ‘patient’ on its way. So how come I make $40,000 a year, and you make $400,000?” The surgeon smiles and says “try doing it while the engine is running”.

You might think my point is that the 1% earned their wealth through their superior skills. That’s actually not it at all. My point is that the economy isn’t about static wealth that can just be grabbed and redistributed. The economy is a vast machine with millions of moving parts in constant motion. If you disrupt that engine, then we’re all worse off than we were.

And this is a big deal. There was a time when wealth was primarily a result of who owned which land and natural resources. In such an economic setting, one can imagine seizing the land from the landowners and redistributing it among the peasants (that has it’s own issues, but it’s conceivable).

In the modern economy, it doesn’t work like that. Let’s say we wanted to physically seize Jeff Bezos money and redistribute it? How do you do that with force of arms? The vast majority of that wealth is in stocks, which means that it’s entirely theoretical. Armed mobs could seize Amazon trucks and warehouses, and occupy their corporate offices, and… then what? You’d end up with a few trucks and buildings divided among however many members of the uprising there were. Even all the inventory you could seize wouldn’t be all that much, once you divvied it up. In order for Amazon to have it’s value, it needs to continue to function. To tear it down, or even to disrupt it’s operation by violence, means that something that was once incredibly value now becomes nearly worthless.

And the same goes for most of the wealthiest people in the world. Very few of the uber-rich have large amounts of wealth in any form that you could physically seize and occupy without destroying most of their value.

And that’s one of the issues with communist rebellions. They’re sometimes successful at pulling down the wealth of the wealthy, making people more equally poor, but redistributing the wealth to make everyone roughly equivalent? They’re terrible at that.

The best you can hope for is to create a social and governmental system in which successful businesses and individuals have to continually contributed some portion of their profits to the common good, as a condition of doing business in this society. That has its issues as well, but it has much more potential than trying to rebel and grab wealth that doesn’t exist in a grabbable form.

Marianne Williamson Knows How to Beat Trump

We need an uprising of decency.

If only …

If only Donald Trump were not president, we could have an interesting debate over whether private health insurance should be illegal. If only Trump were not president, we could have an interesting debate over who was softest on crime in the 1990s. If only Trump were not president, we could have a nice argument about the pros and cons of NAFTA.

But Trump is president, and this election is not about those things. This election is about who we are as a people, our national character. This election is about the moral atmosphere in which we raise our children.

Trump is a cultural revolutionary, not a policy revolutionary. He operates and is subtly changing America at a much deeper level. He’s operating at the level of dominance and submission, at the level of the person where fear stalks and contempt emerges.

He’s redefining what you can say and how a leader can act. He’s reasserting an old version of what sort of masculinity deserves to be followed and obeyed. In Freudian terms, he’s operating on the level of the id. In Thomistic terms, he is instigating a degradation of America’s soul.

The Moochers of Middle America

The Democrats aren’t radical, but Republicans are.

Last week’s debates clearly weakened Joe Biden and increased the odds that a more definitively progressive candidate — probably Kamala Harris or Elizabeth Warren — will win the nomination. And you can hear the wailing from much of the Beltway, the claims that Democrats are moving too far left.

So it’s worth parsing those claims. In what sense are the Dems moving too far left? What I’m seeing are three fairly distinct claims.

  1. First, that the party is endangering its electoral prospects.
  2. Second, that the party is being fiscally or economically irresponsible.
  3. Third, that Democrats are unfairly proposing to redistribute income from those who create wealth to those who don’t.

So you should know that the first claim is probably wrong, the second is definitely wrong, and the third ignores the extent to which we already do a lot of redistribution in this country — with Republican voters some of the biggest beneficiaries.

On the politics: Politicians and pundits alike tend to have a lot more contact with the wealthy than with ordinary voters, and often seem to imagine that the priorities of the 1 percent — keeping top tax rates low, cutting “entitlements” — actually resonate with the general public. But polling overwhelmingly shows the opposite: Voters want to raise taxes on the rich and expand government social programs.

In moving to the left on taxes and spending, then, Democrats are actually moving toward voters’ preferences, not away from them. Yes, Republicans will try to demonize their proposals, but they would do that in any case. Remember, they called Barack Obama, with his incrementalist policies and willingness to consider Medicare cuts, a socialist, too.

In fact, the best argument against “Medicare for All” skeptics like me, who worry how voters will react to proposals to eliminate private insurance, is that Republicans will scream about a government takeover of health care — and Fox News viewers will believe them — whatever you do.

On fiscal and economic responsibility: Nobody who endorsed the 2017 tax cut has any right to criticize Democratic proposals to spend more on things like child care. That tax cut, after all, appears likely to add around $2 trillion to federal debt — with around a third of that going to foreigners. Meanwhile, the promised surge in business investment is nowhere to be seen.

At the same time, there’s a very good case for arguing that Democratic proposals would have economic as well as humanitarian benefits.

Support for child care, for example, would free more women to enter the paid work force — where they would pay taxes that would offset some of the cost. And the children benefiting from that support would eventually become healthier, more productive adults.

In other words, while progressive Democrats are mainly arguing for greater social justice, they can also make a much better case than conservatives ever could that their proposals would help the economy and at least partly pay for themselves.

Last but not least, if your view is that the progressive agenda is morally wrong, that people shouldn’t receive more in government benefits than they pay in taxes, you should be aware how many Americans are already “takers,” “moochers,” whatever. In fact, we’re talking about a vast swath of the heartland that includes just about every state that voted for Donald Trump.

I’ve been reading a recent Rockefeller Institute report on states’ federal “balance of payments” — the difference for each state between what the federal government spends in that state and what it gets back in revenue.

The pattern is familiar: Richer states subsidize poorer states. And the reasons are clear: Rich states pay much more per person in federal taxes, while actually getting a bit less in federal spending, because Medicaid and other “means-tested” programs go disproportionately to those with low incomes. But the magnitudes are startling.

Take the case of Kentucky. In 2017, the state received $40 billion more from the federal government than it paid in taxes. That’s about one-fifth of the state’s G.D.P.; if Kentucky were a country, we’d say that it was receiving foreign aid on an almost inconceivable scale.

This aid, in turn, supports a lot of jobs. It’s fair to say that far more Kentuckians work

  • in hospitals kept afloat by Medicare and Medicaid,
  • in retail establishments kept going by Social Security and food stamps,
  • than in all traditional occupations like mining and even agriculture combined.

So if you really believe that Americans with higher incomes shouldn’t pay for benefits provided to those with lower incomes, you should be calling on “donor” states like New Jersey and New York to cut off places like Kentucky and let their economies collapse. And if that’s what you mean, you should let Mitch McConnell’s constituents know about it.

The point is that while you can criticize particular Democratic proposals, you can only portray progressives as radical or irresponsible, especially as compared with the modern G.O.P., by ignoring or suppressing a lot of facts. I guess facts really do have a liberal bias.

What’s Been Stopping the Left?

If progressive political parties had pursued a bolder agenda in the face of widening inequality and deepening economic anxiety, perhaps the rise of right-wing, nativist political movements might have been averted. So why didn’t they?

Why were democratic political systems not responsive early enough to the grievances that autocratic populists have successfully exploited – inequality and economic anxiety, decline of perceived social status, the chasm between elites and ordinary citizens? Had political parties, particularly of the center left, pursued a bolder agenda, perhaps the rise of right-wing, nativist political movements might have been averted.

.. Part of the reason for this, at least in the US, is that the Democratic Party’s embrace of identity politics (highlighting inclusiveness along lines of gender, race, and sexual orientation) and other socially liberal causes came at the expense of the bread-and-butter issues of incomes and jobs. As Robert Kuttner writes in a new book, the only thing missing from Hillary Clinton’s platform during the 2016 presidential election was social class.

.. One explanation is that the Democrats (and center-left parties in Western Europe) became too cozy with big finance and large corporations. Kuttner describes how Democratic Party leaders made an explicit decision to reach out to the financial sector following President Ronald Reagan’s electoral victories in the 1980s. Big banks became particularly influential not just through their financial clout, but also through their control of key policymaking positions in Democratic administrations. The economic policies of the 1990s might have taken a different path if Bill Clinton had listened more to his labor secretary, Robert Reich, an academic and progressive policy advocate, and less to his Treasury secretary, Robert Rubin, a former Goldman Sachs executive.

.. Until the late 1960s, the poor generally voted for parties of the left, while the wealthy voted for the right. Since then, left-wing parties have been increasingly captured by the well-educated elite, whom Piketty calls the “Brahmin Left,” to distinguish them from the “Merchant” class whose members still vote for right-wing parties. Piketty argues that this bifurcation of the elite has insulated the political system from redistributive demands.

The Brahmin Left is not friendly to redistribution, because it believes in meritocracy – a world in which effort gets rewarded and low incomes are more likely to be the result of insufficient effort than poor luck.

.. Ideas about how the world works have played a role among the non-elite as well, by dampening the demand for redistribution. Contrary to the implications of the Meltzer-Richard framework, ordinary American voters do not seem to be very interested in raising top marginal tax rates or in greater social transfers.

What explains this apparent paradox is these voters’ very low levels of trust in government’s ability to address inequality. One team of economists has found that respondents “primed” by references to lobbyists or the Wall Street bailout display significantly lower levels of support for anti-poverty policies.

.. Trust in government has generally been declining in the US since the 1960s

.. But a progressive left that is able to stand up to nativist politics will have to deliver a good story, in addition to good policies.