“Liberals Love Wealth”

A very thoughtful commenter, and fellow blogger (Brucetheeconomist’s Blog) who calls himself a “disaffected conservative,” appended the following to a piece I wrote on Mitch McConnell’s characterization of liberals as being “interested in wealth destruction” :

Saying liberals want to destroy wealth is absurd. I do think it is fair though to ask how much flattening of the income and wealth distribution should be a goal.

I’d like to see improved opportunities for those at the bottom of the ladder more than for those at the top rather than redistribution. That said the use of progressive taxes and social benefits for the poor is appropriate if all else fails to avoid the distribution of wealth being too inequitable.

If we could get the distribution of wealth back to where it was say in 1990 that would seem an appropriate goal to me. I don’t think any sensible person wants to perfect equality.

Any thoughts on this anyone else.

My reply:

Bruce,

Liberals love wealth. We want a lot of Warren Buffetts running around, making money, helping the country, and, uh, paying taxes.

The opportunities you (and I) seek “for those at the bottom of the ladder” can only come through investing tax dollars to create those opportunities, most of which come via education or job training. And since we have to get the tax dollars from those who have the money, “redistribution” is inevitable. How much? how much from whom? is fair to ask.

Apparently, we both agree that a grossly inequitable distribution of our nation’s wealth would not be a good thing. What about a moderately inequitable distribution? What, indeed, is a reasonable level of wealth inequality?

I don’t favor progressive taxation because I am a liberal. I am a liberal because I favor progressive taxation. I favor it because of my guiding concept of fundamental fairness (those that benefit the most from society should pay the most to maintain it as a civilized one—by 21st-century standards) and because, as I said, we need the money to do things we agree need done. And rich people have more money to spare than the rest of us.

I don’t know what a reasonable or realistic goal for national wealth distribution would be, only the ideal: a relatively equal distribution. I know that such a thing is not now, nor will ever be, possible to achieve, for a lot of reasons, including that some folks will always work harder than other folks and thus deserve more. How much more do they deserve? Beats me.

I only know that in order to provide the opportunities you and I agree are necessary, it costs a lot of money. It also costs a lot of money to keep the government doing other things for us, like inspecting our food and water; funding basic scientific research, supervising air travel; protecting us from enemies abroad and criminals at home; and keeping poor children, the sick and disabled, and the elderly from dying in the streets. In short, it costs a lot of money to keep America a desirable place to live for all.

And it is only fair—only fair—to ask those who have the resources, who for whatever reason have benefited the most from this bountiful land, to pay higher tax rates than those who have benefited less. How much higher? That is, inevitably, a political question that will always have evolving answers because of a changing polity.

But I suggest that we pay more attention to the growing divide between wealthy Americans and everyone else while there is still time to narrow the divide without recourse to more drastic measures, which will undoubtedly come when social instability becomes impossible to manage with a simple tweak of the tax code. As Justice Louis Brandeis famously said,

We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.

The relatively tiny progressivity involved in the restoration of the Clinton high-end marginal tax rates—which irritates Mitch McConnell so much he feels it necessary to slander liberals—is just one fix among many that should follow. 

Duane

21 Comments

  1. ansonburlingame

     /  December 6, 2012

    Bruce and Duane,

    I “intrude” once again only because the discussion above is reasonable and balanced.

    I have just completed a semester of study of macro economics at MSSU. I provided a course critique and sent it to my professor, the Dean of the School of Business and the President of MSSU. Bottom line it was a great course of study EXCEPT….

    Not one word, not one textbook assignment, essentially not “anything” was taught about income distribution in the entire course. No “Keynesian vs Classical” theories, no debate of differing views over WHAT is the real income distribution, how do we measure it, what is “good” or “bad” income distribution or most important what to do about it.

    That makes me wonder how the “science” of economics addresses that hot political potato of today. What are the means of measuring such things and various theoretical solutions to correct “bad” things seen from such measurements. None that I read or heard in a full semester of academic study on the matter.

    Instead I only hear politicians and pundits opining on the matter. To me that is akin to political arguments over nuclear power without understanding to some degree at least the “science” behind such a source of electrical power. Just take the subject of radioactivity. The word scares people yet few really understand the implications of that word and how it can and is controlled for the benefit of everyone, as just an example.

    As all of you discuss income distribution I offer this challenge to further consider. WHICH is more important today, growth in REAL production of goods and services that will SELL around the world, a competitive world OR redistribution of WEALTH, not just income, amongst various segments of America? CAN you achieve BOTH at the same time? I frankly don’t know the answer to that question nor have I “studied” such an issue in academia yet.

    But before I can leap into the solutions to such an issue, I do believe people far smarter than me should develop the theoretical arguments one way or the other. THAT for example would be a great topic for the likes of Krugman or……. (some Friedman like guy) to write extensively about, it would seem to me.

    To do so I would further suggest the argument entail WEALTH distribution, NOT JUST income redistribution. How for example do we as a society measure WEALTH, not just income. I am sure there are many millionaires living on the edge of disaster and some fall over that cliff all the time when millionaires are measured only in terms of income yet their wealth is so leveraged that a “derivative”/”house” blows up in their faces and they go bankrupt quickly.

    Anson

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    • Anson,

      Your study of macroeconomics is admirable, and, like you, I would want (demand?) a discussion about what politicians and pundits argue about all the time: income (re)distribution, especially since, at bottom, what constitutes an economy is the way we collectively use our resources to produce and distribute goods and services.  I can’t think of anyone better suited to help us understand the issue you raised than folks trained to analyze the economy.

      As far as how economists in the field address your question, there are think tanks, etc., on all sides that publish papers; there are economists like Robert Reich or Joseph Stiglitz or Paul Krugman (on my side) who write currently about your topic and appear on TV or radio, as well as countless others who have published works in the past. So, it turns out that economists do have a lot to say about the subject.

      Among ordinary folks, talking about income and wealth  distribution is not really akin to talking about nuclear power for the reason that people don’t need a degree in economics to know what fairness-justice is (perhaps they do, though, need a course on John Rawls), and it is our collective sense of fairness (expressed through our political choices) that determines whether, say, we will spend X on redistributive social programs or nothing at all.

      You asked which was more important, economic growth or “redistribution of wealth, not just income.” You also asked, “Can we achieve both at the same time?

      I went back on your blog and looked at an exchange we had more than three years ago about “How Do We Pay For “STUFF” (your title). Your first sentence was:

      I am not sure how the federal government can pay for all the “stuff” demanded by voters, are you?

      My rather lengthy response (I was willing, in those days, to invest the time in debating you) included this sentence:

      Without economic growth, there is no way to solve any of the fiscal problems.

      I hope you read and reread that sentence I wrote three years ago, Anson. Often it is that folks on your side ignorantly claim that liberals like me don’t give a damn about economic growth, only about spending more rich people’s money. Hooey.

      Of course growth is essential to doing the stuff we liberals want to do. We are keenly aware that too much taxation and regulation stifles growth, just as conservatives should be keenly aware (few are, though) that too little taxation and too little regulation stifles civilization.

      But I said all that to say this: Of course we can have both growth and a more equitable distribution of wealth (and income). In fact, both are necessary for our national well-being. The economic story of America in the twentieth century is the story of how we grew into an economic badass and yet began to figure out how to divvy things up a little more fairly (at least until conservative thinking began to take root in government and media in the 1980s).

      Now, just how we get more economic equality without negatively affecting economic growth is what makes public policy choices so difficult. However, we first have to agree—we liberals and you conservatives—that a more equitable distribution of income and wealth is a goal we should pursue. Very few on your side think so (beyond helping those who can’t help themselves), and that is the source of a lot of our disagreements.

      I will agree with any conservative who believes that economic growth is the best way to fight poverty. The problem is that some among us inevitably won’t get much from that formula. Indeed, some will get left out altogether, for whatever reason.

      What do we do about them? Their children? And what do we do about older folks who are no longer competitively productive?

      I’ll give you a hint: we don’t leave them to fend for themselves or agonize in the streets. We should help them, provide for their children (bread, butter, and books), and give them some sense of security in their old age. In a civilized society, that is what we should do.

      But those things are expensive. And to pay for them we need to get the money from those that have it. Call it redistribution, call it whatever you want. But in a myriad of ways we do it each and every day, and we should strive to do it better.

      And economists can and should help us understand how to do so, and if your professor failed to even bring up the subject then you missed something important.

      Duane

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  2. Jane Reaction

     /  December 7, 2012

    Seriously Anson, an MSSU course? You expected to learn something?

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    • I’m not sure I get it all, but the Pope does seem to have a soft spot for collectivism. Maybe it comes from that collectivist, Jesus, who, as his most ardent advocate said,

      If you have any encouragement from being united with Christ, if any comfort from his love, if any fellowship with the Spirit, if any tenderness and compassion,then make my joy complete by being like-minded, having the same love, being one in spirit and purpose. Do nothing out of selfish ambition or vain conceit, but in humility consider others better than yourselves. Each of you should look not only to your own interests, but also to the interests of others.

      Your attitude should be the same as that of Christ Jesus…

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      • Jesus promoted voluntary care for others.

        The Pope promotes theft.

        That’s like comparing Jesus to a Grand Larcenist.

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        • Look, I won’t defend the Pope. You want to call him a promoter of theft, I won’t get in your way. Lord knows his Church has done some horrific things since its founding, and theft would not make the short list.

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      • If you, as a liberal, want to help the poor by robbing the rich like Robin Hood, then why don’t you tax the Vatican? Let’s see how far you get with that. It’s amazing how close liberals are to the Vatican. They both want to redistribute OTHER PEOPLE’S MONEY, not their own. Wow – that’s real compassion.

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  3. 1. Taxation is not theft or robbery no matter how many times libertarian-conservatives say it. Taxation is lawful and there is no such thing as “legalized theft.” It’s contradictory.

    2. I have no power, being an American, to tax the Vatican. But I do wish I had the power to tax the churches, all of them not just the Catholic Church.

    3. It is amazing how close liberals are to the Vatican. Or maybe it’s not, since this liberal is about as far away, both geographically and spiritually, as a person can be, Maybe you mean because both liberals and the Catholic Church believe that rich people shouldn’t have all the money that we are therefore “close” to the Vatican. Yes, I plead guilty to that one.

    4. The reason we liberals have to “redistribute OTHER PEOPLE”S MONEY” (I love it when you shout like that) is because those OTHER PEOPLE you are talking about HAVE MOST OF THE MONEY. (If I keep shouting like this I’m going to lose my voice.)

    Sincerely,
    Bishop Duane

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    • If you taxed churches, I wouldn’t get in your way. I don’t think most of the large cathedrals inhabited by church goers today are really much like what Jesus intended. Instead, they waste enormous amounts of money on buildings, Greyhound buses, activity centers, trips, entertainment, and more, instead of going across the street and helping their neighbor (as Jesus said to do).

      Apologies, kind sir. I didn’t mean to “shout” via capital letters, but I understand how annoying protocol can be and how frustrating it is to “point up” words without the use of caps when there are no other ways to underline or embolden words to point them up.

      I think we’re closer in ideology than you may think on the point of helping out the poor, but we are far away in the means to do so. I believe the people of GOD should get off their backsides and become active, helping the poor with their money instead of wasting it on their own conferences and social fun. You think we should rob people who work harder of their money.

      Adieu.

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      • King Beauregard

         /  December 14, 2012

        The annual SNAP budget is about $100 billion. There are something like 325,000 churches in the United States. That means, to replace SNAP dollar for dollar, each of those 325,000 churches would have to pony up around $300,000 each and every year. And no, small churches wouldn’t get to shift some of their obligation to larger churches, because that would be “punishing success”.

        I defy you to come up with one single church in all of Joplin that could meet its $300,000 annual contribution, and remember, this is all through voluntary donations. If you can’t realistically imagine a great majority of churches hitting their numbers, then you see why liberals such as myself are happy that SNAP exists, and will happily pay even more in taxes if it actually helps people in need.

        And yeah, we liberals want the top 1% or 2% to pay more in taxes, because they can afford it; they are the only group who have been consistently getting wealthier even as the rest of us have been having a harder and harder time. If we didn’t have a massive debt to pay off, I wouldn’t see a need to increase taxes on anyone; but since that debt exists, if we’re going to pay that debt off, the only people with the money to do so are the rich.

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  4. That’s if you place all the burden on churches (which is absurd). There is a purpose to the government. Imagine the taxes lessened by churches fulfilling their duty to society. Also, not all those who get handouts deserve them. There needs to be more weeding out of lifelong losers.

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  5. Robbing anyone (rich or poor) is never righteous. I’m not one of the rich and I don’t want to see them robbed. I would not punish incentive, but I would limit power. That’s the key. Liberals are going after the wrong thing. It is through abuse of power that some increase their wealth to disproportionate amounts. Imagine boundaries (i.e. geographical) on where people can do business. No global company should be profiting from the misery of the American economy. No politician should be allowed to profit from a company who is out to profit from the same. This list could go endlessly. End the power and the wealth balances out. Instead of a giant Wal-Mart, you have a local Wal-Mart. Imagine all the small businesses that could have “mom and pop” stores. My desire is to increase the power to create money for everyone and take away the power to monopolize “wealth accumulation” from the devious and globally powerful. Justice must prevail. Fight the power and become a hero to the poor. Don’t rob the wealthy or you become a thief.

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    • King Beauregard

       /  December 14, 2012

      Taxes are not robbery, no matter how much you want them to be. Taxes are the fee for using the services of society, which the wealthy benefit from at least as much from as anyone else. Ever notice how few people try to make their fortunes in libertarian utopias such as Sierra Leone? That’s because life there is nasty brutish and short, and additionally, you have to use an open latrine in the summer. Probably no taxes to speak of, though.

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      • You have added words to my mouth. I didn’t say that taxes are robbery but that stealing from the rich is robbery.

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        • King Beauregard

           /  December 15, 2012

          Guess I’m not sure what you’re talking about then: are you literally referring to liberals putting on masks and trying to break into Scrooge McDuck’s money bin? Because that’s the only scenario I can think of where you could be talking about liberals robbing people, but that’s just silly.

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          • Seeing you see not. Hearing you hear not. Those blind to Truth don’t want to see it, but they want to lead as many others as possible into the ditch.

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            • King Beauregard

               /  December 15, 2012

              I’m utterly shocked you didn’t use the word “sheeple”.

              But okay, you speak of robbery, but you don’t mean taxing the rich, and you also don’t mean actual robbery. Starting to think you don’t really have a point at all.

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  6. Let’s cut to the chase. Some people just don’t “get it” … and never will.

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    • King Beauregard

       /  December 15, 2012

      Well you’ve certainly convinced me you must have a point … a point so transcendent in its uncorrupted Truth, no words of human origin can express it. The only other possibility is that you really don’t have a point after all, but that’s just crazy talk.

      Like

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