My, how the rich are under attack these days. And why not? Times are hard; families suffer. Programs are cut. The helping hand the state extends to the needy has become less visible, or withdrawn altogether. Even among the vast middle class, real incomes have shrunk while costs rise, and some are trapped in a can’t win scenario, where they make too much to qualify for assistance but too little to preserve their homes.
When this stuff happens, someone’s to blame. If not the rich, then — who?
Well, for starters, let’s take a subset of the rich, and everyone’s favorite bogeymen: the “Wall Street bankers.” They blew up the economy by creating the housing bubble, right? Hmmmm…time for a diversion.
Lord Copper, a fictional press baron invented by Evelyn Waugh, was so greatly feared by his subordinates that they never dared tell him when he was wrong. When Lord Copper said something that was demonstrably and almost comically wrong, the sternest rebuke he could expect was “Up to a point, Lord Copper,” as in:
“Capital of Japan? Yokohama, isn’t it?”
“Up to a point, Lord Copper.”
And so it is now, with much of the media in the Lord Copper camp. Certain ideas that are at best flawed and at worst complete fictions are so firmly enshrined in the pantheon of Great American Economic Myths that even to hint at their inaccuracy provokes instant wails of almost religious dismay — reflexive responses accompanied by the mantra-like chanting of the codes: “Hater” and “Denier” and the like.
Did Wall Street bankers crash the economy? Up to a point, Lord Copper. As usual, the picture is much murkier. The government itself played a leading role, with none other than Barney Frank calling executives from Freddie Mac and Fannie Mae up to hearings on Capitol Hill to inquire why these quasi-governmental agencies weren’t doing more to provide “affordable housing” to lower-income families. So it was Barney Frank’s fault?
Up to a point, Lord Copper.
Actually, it really was a perfect storm. Greater and greater leveraging of assets by banks, lax oversight and limited comprehension by regulators and supervisors, and a global boom all combined to create a situation that became increasingly tenuous. Many point to the Lehman collapse as a blunder by government. Bushwah. If it weren’t Lehman, it would have been someone else, sooner or later. The entire situation had become completely untenable, and, although many now claim to have “seen it all coming,” they occupy the same space as the economists who have predicted ten of the last two bear markets.
(One notable celebrity of this type, hedge fund manager John Paulson, was so lionized by the media for his anticipation of the housing collapse that his mere presence on the other side of a Goldman trade was viewed as sufficient evidence that Goldman was bilking the investors on the other side. Alas, Mr. Paulson proved to be fallible after all — at this date, his fund is down over 40% because his crystal ball clouded up where gold prices were concerned.)
But what about taxes? Why won’t the rich pay their fair share? Why are the Republicans insisting that rich people get tax breaks that poor people don’t? Isn’t that wrong?
Up to a point, Lord Copper.
First of all, the IRS itself estimates the actual tax rate for the top 10% of all income earners in the US is a little over 33%. For median earners, it’s around 17%, or a little more than half of the top 10%. For almost half the country, it’s zero percent. But these are hard times, and it somehow seems appropriate that those with the most should be doing a little more to help others out. Would it really kill wealthier households to pony up a little more until things get better?
There’s the rub. No, it wouldn’t. But it wouldn’t really help, either, in our opinion. The solution to this country’s fiscal mess isn’t to be found in looting the bank accounts of those who have more than they need, because once that starts (and it started quite awhile ago), there’s no turning back. There can never be enough money for a government that has no accountability for how it spends, or limits on what it can spend.
Look at the government’s record thus far in “job creation.” Frustrated by inept implementation and scarred by scandal after scandal, the government has poured hundreds of billions into this chimerical rathole with no noticeable effect on anything but the rising debt it has accumulated in doing so. Parts of the process have been so hilariously stupid as to become icons in the history of bad decisions: Obama’s first “green jobs” czar, Van Jones, had to leave Washington with his tail between his legs after a cascade of unsavory details about his past — including his weird association with 9/11 “truthers” — cast him as a suppurating boil on the body politic.
More recently, Solyndra, the “No, we’re no broke, so give us another $525 million” scandal still unraveling, has left the program reeling and unprotected from what may be the knockout punch — the recent revelation that SolarReserve, yet another “green” energy company — this one with close ties to Nancy Pelosi’s brother-in-law — was granted a $737 million loan just days after the Solyndra snafu.
Oh, great. “Yes , we need to raise your taxes so we can give a billion or so to Nancy’s brother-in-law and keep some of my campaign contributors happy.”
This is just insulting. Mrs. Pelosi ought to know better, and following up the Solyndra mess with yet another grant to some of the same investors just won’t wash. No one needs to make any points about cronyism or fraud; it’s just common sense: you mean, out of all the companies out there involved in green energy, you still had to include these two in your program?
Then we got the bizarre outburst of Elizabeth Warren, which was so remarkably childish and almost supernaturally stupid that we’ll run it without rebuttal. Let it stand, like the collected quotations of Dan Quayle, as a monument to the incomprehensible:
“There is nobody in this country who got rich on his own—nobody. You built a factory out there? Good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police-forces and fire-forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory—and hire someone to protect against this—because of the work the rest of us did. Now look, you built a factory and it turned into something terrific, or a great idea. God bless—keep a big hunk of it. But part of the underlying social contract is, you take a hunk of that and pay forward for the next kid who comes along.”
Wow. “Keep a big hunk of it.” Is 66% too big a hunk? “Workers the rest of us paid to educate?” Last time I looked, property taxes paid for education — and who pays the highest property taxes? (Okay, a small rebuttal — but I won’t go on.)
Finally, just to really rub it in, today we have Valerie Jarrett, perhaps the closest to Obama of all his advisers, going on television and saying:
“We have to give people a livelihood so they can provide for their families.”
Some has interpreted this statement to mean that it is the federal government’s responsibility to employ people, but frankly, we don’t think she meant that. But it’s still pretty disturbing to hear this kind of naivete from the mouth that whisper’s in the President’s ear.
The sad thing is, we could have done just that — put people back to work — if we had started when Obama came into office. For all their talk about “fixing our crumbling infrastructure,” politicians, Obama in particular, have no patience for long-term planning, because it’s just that: long term. Because we didn’t start planning, permitting, getting the necessary resources lined up and just generally committing to a worthwhile effort however long it would take to get results, we’re right where we were in 2009. We had a housing collapse? Doesn’t that mean lots of construction workers — who build buildings — were out of work? Do you think they might have been put to useful effect working on schools, airports, bridges, parks? No. Instead, we got– wait for it — high speed rail. What were they thinking?
And at the end of the day, that leads us to our point.
On Tuesday, appearing on Morning Joe, Tina Brown, editor of Newsweek, who we had thought was firmly in the Obama camp, blurted out that Obama “wasn’t ready, really, it turns out.”
And I’m afraid that’s the gist of it. We won’t solve the nation’s problems by demonizing its most productive people. We won’t understand what solutions are workable by insisting that “it’s all their fault.” We can’t create an energy-efficient nation by throwing more and more cash at pie-in-the-sky whizbang schemes. And we won’t solve our employment situation by insisting that employment is somehow a function of government action.
To make any headway on these problems, we have to stop looking for scapegoats, stop believing in fairy tales, and face some very hard truths. The current leadership doesn’t seem to understand any of that.
But, many say, doesn’t Obama deserve some more time to get his ideas in place and see if he can turn things around? After all, there’s eight years of Bush that he has to fix. Given all he’s learned, and how admirable his objectives are, and how compassionate he is, and much he wants to help the little guy — hasn’t he earned four more years?
Up to a point, Lord Copper.