Web Letters | The Nation

Web Letter

Inequality is getting worse, but it seems that the way you're presenting it isn't very accurate. The focus in this edition of The Nation is on the ultra-rich, as if it were a contest between a few billionaires at the top and everyone else. It's much easier to look at people who occupy the commanding heights and define yourself as being against them than it is to consider people who actually exist in larger numbers and can be found in any American city much more easily. Wealth has been transferred to the top, but that top includes people who define themselves as "upper middle class," while being doctors, well-off lawyers and professionals, as well as businessmen who make a lot but aren't on the top of the heap.

If what we're talking about is capitalism and on top of that class and class power, the idea that it's only Mr. Rockefeller and the Vanderbilts, or Donald Trump and Warren Buffet up there versus everyone else makes little sense, because the system is more complex than that. I'd argue that it isn't individuals but actual classes of individuals who occupy certain positions that are the problem. It's a distraction bordering on a kind of escapist conspiracy theory to present how society is changing in the other way.

Bringing up actual people makes certain folks who criticize uncomfortable because it brings it closer to home. We all see folks who drive SUVs, we can probably all locate a tony mall or shopping center in our area that sells designer clothes, and look at the people who shop there. Really being against inequality means being able to criticize these folks, who aren't convenient abstractions that we never see or have contact with.

It's a particularly American evasion not to do this. In the rest of the world, when they criticize inequality, it's much less anchored in the stratosphere, and this approach is considered normal.

Web Letter

People correctly say we have capitalism in the United States. But having capitalism is something like having religion. It can cover a multitude of saints and sinners. What kind of capitalism do we have?

We started out with largely unregulated capitalism. However, we found that largely unregulated capitalism didn’t work because it begot such evils as child labor; unsafe working conditions; exploitation of the poor through long working hours and poverty level wages; unsafe food and drugs; exploitation of natural resources and the environment; deception of consumers; dishonest and fraudulent business practices--etc. It became clear that in order for capitalism to work in a fair and balanced way, it had to be socialized, that is, made fit to live among the people without exploiting them. That is why there have been laws and regulations to rein in raw, unregulated capitalism.

It is still capitalism, but it bears little resemblance to the predatory capitalism of the late nineteenth and early twentieth centuries. These various laws and regulations may be said to have the purpose of socializing predatory capitalism so as to make it fit for the general population in the same sense that we socialize children and animals so that they can fit comfortably into society without hurting society too much.

The genius of capitalism is that it gives people freedom to do as they want, so that their instincts for improving their own personal lot can result in improving the lot of society as a whole. In effect, it puts man’s greed to work for the benefit of all. But greed is not inherently concerned with the rights of others; left untended, greed will find a way to exploit rather than benefit. It is like a campfire that initially warms people but, left untended, reaches out to devour the forest, or like a wild horse that can be of great service to man but only if it is socialized, that is, only if reins are put on it to control it.

So, laws and regulations are put in place to rein in man’s greed, to socialize capitalism so that it can benefit society without exploiting it. Socialize in a sense similar to the way owners socialize dogs, prisons attempt to socialize criminals and juvenile detention facilities attempt to socialize delinquents so that society can benefit from their presence without being victimized. To domesticate, civilize and tame might also to describe the process.

Because of this socialization of capitalism, we now have child labor laws, wage and hour laws, industrial safety laws, food and drug laws, business regulation laws, securities regulation laws, environmental protection laws, usury laws, deceptive advertising laws, consumer protection laws etc.

Capitalism has proved its worth. It has catapulted the US into first place in world economies. But it is not the predatory capitalism of the past but the present socialized capitalism that has given the United States its greatness. Keeping capitalism socialized is, however, an never-ending process. Greed cannot be eliminated, only controlled and channeled. So greed will continue to look for ways to exploit, and we must continue to look for ways to regulate. The examples of this are legend: Enron, WorldCom, Global Crossing, Tyco, Imclone, Adelphia, Halliburton, to name some of the more publicized cases which have cost taxpayers billions of dollars and have cost thousands of employees their jobs and their life savings.

It should be no surprise that neither unfettered capitalism nor too-fettered socialism has worked very well, and that what works is a middle course. It has ever been thus.

Web Letter

To all the free traders, consider this: most of American cash is out of country, sovereign funds are buying out American real estate at a record pace, 37 million people are hungry, several million are without homes, 47 million don't have access to health care, sneakers cost .90 cents to produce in China and sell for $90 here. How about the great American lie, that we can all retrain to replace our industrial jobs? How does retraining for a greeter job at Wal-Mart replace a job at Ford Motors? We are exporting all the sweat equity of our parents, and it is coming back in scams perpetrated by free traders and our billionaire, free trade and ping-pong diplomacy, while people wade in sewage in New Orleans. I know of senior citizens who are collecting returnable bottles to eat. This isn't the country my parents left me.

To all you tree traders, give up the lie, the trite platitudes and stop pimping for the corporate gluttons. They will not let you in their gated communities. Once they are done with you they will throw you out like a common street walker.

Web Letter

Envy is one of the least attractive of the Seven Deadly Sins.

Web Letter

Well, I see you liberals don't even try and hide your true intentions anymore. Now, you just come out and call for what you really want, Socialism. You attack free markets and capitalism as the scourge of everything that is wrong in this country. Ironically enough, the authors, for two, make good money in our capitalistic system for attacking it. How ironic?

The scary part about the blatant class warfare that the two authors wage is that it is exactly like the blatant class warfare that Karl Marx waged. Isn't that what you really want? You want a return to Marxism. What you have done is taken the true nature of capitalism and twisted it. Of course, capitalism benefits those at the top unevenly. That's because capitalism invites competition, and in competition there are no points for second place. What you don't point out is that in the end it benefits everyone as well. Talk about wage gap all you want, however compare the wages of those living here to those in the sort of country you want to turn us into and you will see that our poor do better than the average person in any socialistic society.

This sort of class warfare is so obvious and yet so dangerous. Typical just typical. Here is how I wrote about folks like you...

Web Letter

First, you dont even question your basic premise, why is income inequality a "bad" thing?

Address the issue of progress in this light: first, if we dont invent it, someone else in the world probably will. Next, what percent of things that have been invented were invented for no profit? Less than 1 percent; even Thomas Edison was a rich man.

So by reducing (or maybe eliminating) the ability to get rich, you reduce benefits to all and--the most important point--you seen to want to reduce income inequality, when really you are talking about wealth inequality. Then you assume that income=wealth.

Thus you ignore the fact that the number-0ne reason to be on the Forbes 400 is inheritance, and the next is real estate.

Therefore, by taxing income to get at a wealth discrepancy only hurts the few poor people who would like to be better off. It doesn't hurt the already rich and doesn't hurt those who don't care about money.

Stop ranting and be more intellectually honest in your assesment of wealth, income and this country.

Web Letter

Income inequality does not cause poverty! Sounds counterintuitive, but it is true!

Please consider the following:

1. Free markets have historically produced the maximum freedom and overall wealth in all economic sectors of any society. Even the poorest of the poor are always better off where capitalism and individual efforts allow one to market their own labor and ideas without government controls or intervention.

2. Confiscation of legally obtained free market wealth/wages over a certain amount is a proven disincentive to the production of maximum GDP. The reasons are the obvious lessening of the ratio of risk and rewards of investment and physical/mental efforts. There are no silicon or pharmaceutical research triangles in socialist countries.

3. The fact that someone has been able to obtain super wealth like Bill Gates is a major incentive that makes possible innovations that have helped human kind all over the world. I don't recall the many life-changing innovations coming out of socialist countries where innovations are not richly rewarded and allowed the freedom to flourish in untold bounty. Well over two-thirds of today's millionaires are self-made and by definition did something others wanted enough to pay a great deal for. That is a good thing! The wealth is recycled over and over again creating a bigger pie for the whole society. This benefits the poor and creates many many incremental opportunities to escape poverty. In other words jobs jobs jobs, or rungs on a ladder!

4. The fact that someone is wealthy does not mean that someone else is poorer. The economy is not a zero-sum game. I despise poverty and want it to be minimized, but facts are facts: the poorest of our poor today are better off than any time in our history by any measure because our economy and GDP is larger than it has ever been and we can afford a much larger safety net than it could if it were smaller or constrained by socialism. There is simply more goods and services, economic choices, opportunities and safety net programs (taxes raised) than ever before. Government consuming 20 percent of a trillion-dollar thriving economy is a much larger number than government consuming 30 percent of a $500 million dollar socialist economy. It's all been tried before, and we know that removing incentives simply in the name of "social and economic justice" is the same as advocating "misery loves company" in spades. Government distortions of free markets have always produced more misery and most of that misery is at the bottom of the ladder where opportunities for advancement vanish. Free markets produce inequality but all and all everyone has a higher standard of living. Some hope/chance is better than no hope!

So in summary, I know the authors mean well, but their solutions to the problem of income inequality are a case where the cure is worse than the disease.

I would suggest the following for lessening income inequality.

1. Maxim emphasis on providing quality education of all kinds. This helps the individual and the society in too many ways to count. While we increase these investments we should try some new ideas like vouchers and school choice and incentive pay for teachers. But focus on results, not on process!

2. Strengthening of families, every study indicates that families that have two loving adults to nurture and raise children result in happier and wealthier outcomes.

3. Eliminations of economic incentives of victimless crimes. Take the profit out of drugs, regulate them, and I suspect that a lot crime associated with drugs would go away (forcing other more positive choices to be chosen in choosing a profession to make a living).

Web Letter

Does it matter how much one person has as long as he or she earned it or inherited it from someone who created the wealth? Rather than bemoan the riches of the wealthy or dream of wealth distribution, how about rolling up your sleeves and getting into the Zen of Work?