Sunday, August 21, 2011

Issues for Americas 1% Wealthiest


This short Vanity Fair article from May 2011 is one of the most impacting short articles I have read in a long while. In light of Warren Buffets op ed this past week suggesting that the USA government SHOULD tax more heavily the richest of Americans...the Vanity Fair bit titled "Of the 1%, by the 1%, for the 1%" truly lays out some supportive reasoning along with Buffets apparent willingness to gift more to the US government through higher taxes.

It has always been obvious to me in my adult life that politics, governments and big money run together especially in a democracy. Yet it has now come to the point where one questions if there is any such thing as a pure democracy as it appears that most governments are bought and paid for by various rich corporations and the "top 1%" in most any country. As the USA continues to be mired in the muck of heavy debt, lowering production expectations, and in general a downgrading of the entire culture via ineffective education standards...this article rings home to me that harder times are ahead for my home country and revolution could be just around the corner...unless by some miracle the hyper rich 1% come to their senses.

Anyone who reads much of my material understands pretty clearly that my bent is a "libertarian" mode of political philosophy. I believe in small government, lowest possible taxation and individual freedom and responsibility instead of entitlements and bailouts. Yet, because my government has floundered so poorly in managing the country economically and failed the expectations of the people for honesty and integrity in leadership...it is truly time for the wealthiest of Americans to take action towards securing their country before it is further devastated in the competitive international arena of trade and commerce. There is a strong undercurrent of justified American discontent...and the people of our country have a history of turning quite violent and passionate when put in a corner of desperation.

Without further extrapolation of my viewpoints, I will let these key statements from the article in Vanity Fair make the rest of my case:

...in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income—an inequality even the wealthy will come to regret.

In terms of wealth rather than income, the top 1 percent control 40 percent.

...many of the distortions that lead to inequality—such as those associated with monopoly power and preferential tax treatment for special interests—undermine the efficiency of the economy

The top 1 percent may complain about the kind of government we have in America, but in truth they like it just fine: too gridlocked to re-distribute, too divided to do anything but lower taxes.

Much of today’s inequality is due to manipulation of the financial system, enabled by changes in the rules that have been bought and paid for by the financial industry itself—one of its best investments ever.

Virtually all U.S. senators, and most of the representatives in the House, are members of the top 1 percent when they arrive, are kept in office by money from the top 1 percent, and know that if they serve the top 1 percent well they will be rewarded by the top 1 percent when they leave office.

The rules of economic globalization are likewise designed to benefit the rich: they encourage competition among countries for business, which drives down taxes on corporations, weakens health and environmental protections, and undermines what used to be viewed as the “core” labor rights, which include the right to collective bargaining. Imagine what the world might look like if the rules were designed instead to encourage competition among countries for workers. Governments would compete in providing economic security, low taxes on ordinary wage earners, good education, and a clean environment—things workers care about. But the top 1 percent don’t need to care.

Everyone possesses self-interest in a narrow sense: I want what’s good for me right now! Self-interest “properly understood” is different. It means appreciating that paying attention to everyone else self-interest—in other words, the common welfare—is in fact a precondition for one’s own ultimate well-being.

The top 1 percent have the best houses, the best educations, the best doctors, and the best lifestyles, but there is one thing that money doesn’t seem to have bought: an understanding that their fate is bound up with how the other 99 percent live. Throughout history, this is something that the top 1 percent eventually do learn. Too late.

I think this is the realization that Warren Buffet and other wise people of wealth are starting to comprehend. If they don`t start helping the other 99% to earn a bigger share of the wealth...the 99% will eventually just TAKE IT ANYWAYS. To that end, I suggest America find a way to bring back the growth of its middle class and get people working and off the public "dole". Otherwise...the 1% is in big trouble.

5 comments:

KUMONTOTH said...

Well articulated Edward....Unfortunately much of the Libertarian viewpoint, in my opinion, has played into the hands of the super rich. Inept or nonexistent regulation by government has led to most of the mess we're in now. I think we need "good government" not necessarily small, limited government. A government that is sensitive to main street rather than wall street. Yada, yada, yada! I'm just a hopeless, bleeding heart liberal so what the hell do I know! I just try to live like Jesus said, Love God and love my neighbor and share with those who need a little help. I just wish my government had similar sensitivities.

edward said...

I feel your pain Sr Toth...but alas I think Jesus was a "conservative"...in the pure sense of the term. He believed in individual responsibility yet caring for those who cannot help themselves. I don't think he was a big government "liberal" who thinks governments are supposed to take care of people. I think he thought PEOPLE are supposed to take care of PEOPLE. Even his "render unto Cesar" instructions were not very enthusiastic as a solution to mankind's ills:). I have yet to see a government that was humane and even handed. Its more about RULING...and that is never healthy in my book. Humans should serve other humans out of mutual respect, not RULE over them.

I do appreciate the dialogue and look forward to doing so in person as soon as life grants us the opportunity.

Dave McDonagh said...

I can understand the point of view and I agree with it. If the government gets any more involved in Wealth redistribution it’s all over. The communist countries have and still are under the concept that wealth and property redistribution is the way to go. However, when we speak of equal opportunity in the U.S. this must mean everyone. Rich and poor must be on an equal setting and not subsidized with welfare, credits, waivers, tax incentives, etc. The problem with all governments is that they want to get on the “good side” of those who their power flows from (rich, special interest groups, etc.) rather than doing the right thing. This means they “bend the truth” and are not honest by stopping corruption, theft, drug trafficking and other crimes because it is to their financial advantage to “look the other way.”

In a true capitalistic system there is the opportunity to succeed honestly, but the government has put so many regulations in effect it has stopped success in its tracks. I look at the Amish in the U.S. as a group who don’t desire to get as rich as a person like George Soros. Instead they rely on their principles and virtues toward hard work and self reliance to collectively create prosperity in their communities.

Some of the great entrepreneurs of the past, Thomas Edison, Henry Ford, the Wright Brothers and recently people like Steve Jobs and Bill Gates started on a shoestring out of a backroom or their garage to become self reliant entrepreneurs. They saw a need and created products to fill that need, no different from musicians who use their talent to fill a need or want of the public. These people didn’t sit on their past glories and cash in on the past. They not only create products and services but they also employed other, including businesses they supplied & contracted for logistic, energy &, advertising purposes. Using money in the exchange of products, services, or entertainment is how the public choose freely & show their appreciation to what others produce & provide, respecting property by exchanging property or money. Self interest comes into play with entrepreneurs because the goods and services that they have created provided each of them and their families as well as others the opportunity to continue their success. They should be able to then choose who they share their financial success with, and not the government choosing for them.

Security Leaders Group said...

The top 1% already pay a hugely disproportionate amount of the tax burden. It is pure fantasy to think taxing the highest earners magically fixes the problems that have been with us since *before* the imposition of progressive income taxes.

The first step is to realize that the government is not supposed to solve all problems. Not only that, it can't solve all problems. It should provide for the common defense. Stop there.

Hank Robinson said...

Ed you said "I believe in small government, lowest possible taxation and individual freedom and responsibility instead of entitlements and bailouts."

Well the bailout just pushed the buck forward and bank regulations have loopholes with few being implemented.

I see taxes coming in a big way along with inflation. Taxes are coming and are going to hit the middle class too. Social Security can't support the debt when the govt spends more than it takes in.

I also see the govt moving in to save the day. Thus higher govt.

You make a good point with the bailout and I recall you against it before. I see the other things you are against as right around the corner.

Maybe another boom for Panama?