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Web Letters | The Nation

Web Letter

John Nichols correctly documents the decline of industries due to technological creative destruction, but his race to lay the blame on the free-market system, while not inaccurate on the surface, is misguided.

It is hardly unfettered laissez -faire ideology that has given us short-term Wall Street logic. This is as much a reflection of tax policy-induced incentives as free-ranging animal spirits. Our tax policies on capital accumulation have favored capital gains over cash-flow metrics such as dividend payouts and interest. The result has been a corporate financing casino that runs on short-term trading rather than long-term productivity. (You can also witness what it has done to our housing sector.)

We don't need to turn the free market for information over to the government authorities (the casino bosses work in Washington as well as on Wall Street) to correct this. We can start by some simple tax changes that recognize that capital is essential to a capitalist society. If we treat "capital" as the enemy, we will surely suffer unforeseen consequences. Frankly, do we really want some political gatekeepers deciding what is in the "public interest" in the new information society?

Michael Harrington

Los Angeles, CA

May 12 2009 - 9:48am