Greenspan’s Gambits
As the Bush administration comes corkscrewing back to earth, like one of the early V-2 test shots that nearly obliterated its own launch team, the trickle of self-justifying memoirs from the perpetrators is widening into a flood. For sheer three-hanky mawkishness, nothing will probably be able to match the forthcoming cri de coeur of that noble martyr, Colin Powell. And Douglas Feith’s impending auto-hagiography will doubtless win the championship for impudent effrontery. But until then, we can satisfy ourselves with Alan Greenspan’s The Age of Turbulence, now on sale at your local bookstore.
Spendthrifts and Hypocrites
The media takeaway from this stock “present at the creation” Washington saga is that Mr. Greenspan, the Chairman of the Federal Reserve Board between 1987 and 2006, is highly critical of President Bush, his former patron. “My biggest frustration remained the president’s unwillingness to wield his veto against out-of-control spending,” he writes. How flinty-eyed and prudent of him, just like a Buick-driving Midwestern small town banker of yore.
Yet the former Fed chairman conveniently forgets his own record of tacitly endorsing such spending. The largest single portion of the increase in Federal discretionary spending since 2001 came from the huge boost in Pentagon expenditures, both in its war supplementals and in the regular DOD budget. If there is an example of Mr. Greenspan’s denouncing these increases in any of his statements to the Congressional banking and budget committees over the last several years, we have yet to see it.
As befitted the former Chairman of the 1982 commission to reform Social Security, Mr. Greenspan constantly fretted in his testimony and speeches about the long-term costs of Federal entitlement programs, at least when he was addressing entitlements as an abstraction rather than as specific programs. We are aware of no such jeremiad from him against the enactment of Medicare Part D (the prescription drug benefit) in 2003. This new entitlement added $1 trillion to Federal spending over the succeeding 10 years, and is now a massive unfunded liability over the next 50 years.
Perhaps Mr. Greenspan’s defense against hypocrisy is the obvious fact that the president would never have vetoed Medicare Part D just as he would never have vetoed the increases in Pentagon spending, because neither originated with what Mr. Greenspan condemns as a profligate Congress. Both were actually hobbyhorses of the president he served as a de facto appointee.[1]
Mr. Greenspan shows somewhat less hypocrisy regarding his advocacy of income tax cuts, although here, too, there are inconsistencies. While he acknowledges he advocated the 2001 tax cut that contributed mightily to the $5-trillion swing from surplus to deficit in the 10-year budget outlook, his explanation as to why it was not an economic panacea is unsatisfactory. He observes that when the surpluses dried up a mere nine months after passage of the cuts, the spending policies of the administration “were no longer entirely appropriate.” Well, then, why did he not say so plainly at the time, particularly in reference to Medicare Part D and the Pentagon spending binge? If just a handful of members of Congress, seeking cover to vote against Part D, would have heard publicly from Alan Greenspan, the bill would have failed in the House. [2]
Everything Mr. Greenspan has written in public life suggests he thinks tax cuts at the top marginal rate are a sovereign remedy for all that ails the economy. Yet he goes out of his way to praise President Clinton’s 1993 deficit reduction measure as an act of political courage. This measure included an increase in the top marginal rate. One could say in Mr. Greenspan’s defense that this law took effect in a period of high deficits, whereas the 2001 rate cuts were enacted at a time of surplus. But he did not change his tune as the surpluses swung to deficit.
One can conclude that this seeming inconsistency was trumped by a higher consistency: the need to serve the administration of the day. President Clinton favored the tax increase, therefore the oracular Fed chairman would too. Thus the Bush tax cuts found similar favor.
Free Money, and Other Republican Fairy Tales
The chief indictment against Mr. Greenspan lies not in fiscal policy, where he had no statutory responsibility (even though he could influence presidents and congressmen if he chose). In his own legal bailiwick, the setting of interest rates, we see the former Fed chairman at his worst.
Let us stipulate that every tangible and intangible thing has its cost, particularly money. “Conservatism,” if it means anything at all, means prudence, caution, planning for the worst case, building a nest egg. Mr. Greenspan, the self-described “libertarian conservative,” presided over the greatest binge of money creation in American history through his setting of the artificially low interest rates he knew would politically protect his boss at 1600 Pennsylvania Avenue. Just as free bread would be an impossible economic model for a baker, so would free money prove to be for a central banker.
One of the emerging stealth policies of the Republican Party has been the substitution of free money for social welfare policies. The constituencies benefitting from the two policies may be somewhat different, but the political intention is, at bottom, the same. Moreover, the distortionary effect of free money (that is, artificially low interests rates) may be greater, since it ripples through the entire economy as it gives false valuations to entire classes of assets, whether or not individual units of these assets were even purchased with free money to begin with.
One can see the free money ideology in full bloom simply by listening to any of the orthodox Republican political and economic commentators. Even Mr. Greenspan’s pegging of interest rates at an artificially low rate was not enough for these people. Robert Novak, when he is not too busy leaking the names of covert CIA agents, frequently inveighs against the Fed’s interest rate policies on the grounds that they are too high. One hears the same sort of diatribe from Larry Kudlow on CNBC: apparently, if real interest rates are not zero, it will be an intolerable burden on millions of ordinary, hardworking middle-class Americans (a coded phrase meaning Mr. Kudlow’s millionaire CEO pals and hedge fund manager buddies). The fact that Japan had what were effectively negative real interest rates for long stretches of the 1990s did not alleviate Japan’s economic stagnation; low interest rates cannot “fix” the economy if other fundamentals are unfavorable. But this experience makes no impression on the free-money GOP.
There may be an impression that profligacy in monetary policy is a relatively recent development for the Republican Party, and that the old Republicans were sound-money advocates. But Murray Rothbard, a classic hard-money libertarian economist, argues in his History of Money and Banking in the United States that the GOP provided the fuel for previous economic crises through its fondness for free money policies.
According to Rothbard’s telling, during the 1920s, Benjamin Strong, Governor of the New York Federal Reserve Bank, and Treasury Secretary Andrew Mellon colluded to keep interest rates unrealistically low in order to keep the stock market rising and benefit Republican electoral prospects. The 20s market boom, like the tech boom and real estate boom more recently, was a bubble whose volatility was fed by a politically-driven low interest rate policy. [3]
The difficulty with the administration’s strategy of dismantling Social Security was that it was not particularly popular, even among Republican members of Congress. One possible palliative for the electorate was President Bush’s notion of the “ownership society:” that the public could gradually be weaned off (Democratic) social insurance programs through Republican programs that would make them think they “owned” assets.
Thus it is plausible that the subprime mortgage bubble, however it started, was nurtured and sustained by a Republican administration that wanted increasing numbers of the voting public to think they were land-owning gentry. Given the obsessive secrecy of the administration, we may never know what the precise deliberations were at the Treasury, the Federal Home Loan Bank Board, the Comptroller of the Currency, the West Wing of the White House, and the Federal Reserve itself. But these institutions had, at minimum, abandoned the notion of due diligence in overseeing housing finance.
Now, it is complete bosh to think a new homeowner ensnared in a “no doc” loan, or an interest-only loan, or a no down payment loan, has a stake in anything. But for creating the illusion of ownership (as well as the illusion of a booming economy as reflected by housing sales), the artifice would suffice. President Bush – or at least his economic Svengalis – were counting on the psychology of the Wealth Effect to push a large segment of the voting public into the conservative column. These voters would, as the old saying about land-owners goes, “have a stake in the country.”
Seventy years ago George Orwell noted the political implications of this meretricious Wealth Effect. In Coming Up For Air, the fictional protagonist, George Bowling, a technical member of the English middle class who thinks like the proletarian of his origins, muses about his suburban London housing development:
Merely because of the illusion that we own our houses and have what’s called “a stake in the country,” we poor saps in the Hesperides, and all such places, are turned into Crum’s [the developer and mortgage holder’s] devoted slaves for ever. We’re all respectable householders – that’s to say Tories, yes-men, and bumsuckers. Daren’t kill the goose that lays the gilded eggs! And the fact that actually we aren’t householders, that we’re all in the middle of paying for our houses and eaten up with the ghastly fear that something might happen before we’ve made the last payment, merely increases the effect. . . . every one of those poor suckers would die on the field of battle to save his country from Bolshevism.
Such, in the calculation of the Bush administration, would be the blessings of the expansion of home ownership. And Alan Greenspan would provide the priming for the pump. Not only did he keep interest rates lower than true market forces would have dictated, but he talked up the novel types of loans the mortgage industry was offering. According to Business Week in 2004:
No less an expert than Federal Reserve Chairman Alan Greenspan has sung the praises of ARMs. In February, he told credit union executives that such loans could have saved many homeowners tens of thousands of dollars over the past decade. He noted that ARMs are much more common in other countries, and he encouraged the mortgage industry to create more options. “The traditional fixed-rate mortgage may be an expensive method of financing a home,” Greenspan said.[4]
The writers at Business Week noted the risks inherent in adjustable rate mortgages and other exotic financing packages more than three years ago. But Mr. Greenspan admits now that he “really didn’t get it” about the danger to the mortgage market.[5]
Mr. Greenspan’s talent for missing trends in the real estate market is particularly mystifying given his experience with an earlier crisis: his first appointment as Fed chairman in 1987 was immediately followed by the largest percentage drop in the stock market since the crash of 1929. The October 1987 meltdown was caused in part by the successive collapses of savings and loan institutions which financed their own real estate bubble, mainly in commercial real estate in the Oil Patch.
He also apparently didn’t “get it” about the tech bubble in the late 1990s. Indeed, one heard frequent suggestions from the then-Fed chairman – suitably hedged, of course – that the “new economy” of the 1990s was so fundamentally different from what had gone before that the business cycle may have been banished and that an era of perpetual growth was at hand.
Oil on Troubled Persian Gulf Waters
One feature of Mr. Greenspan’s memoirs that has caused Beltway politicos to contract a case of the vapors is his statement that the invasion of Iraq was “largely about oil.” In only one day, he issued one of Washington’s usual non-denial denials that trips itself up in its own contradictions. Through Bob Woodward, the imperial capital’s amanuensis of record, he now says that oil “was not the administration’s motive.” [5] So which is it? – if no less a figure than the then-chairman of the Federal Reserve board believed securing Middle East oil supplies against Saddam Hussein’s potential depredations was a legitimate and defensible motive, why was he so quick to issue an anxious dementi saying it was the furthest thing from the administration’s mind? One expects that Mr. Greenspan, now a private citizen, received a testy phone call from either President Bush or Vice President Cheney. Note that he did not see the need to issue a denial of his statements about overspending; its alleged fiscal conservatism to the contrary notwithstanding, the administration is truly sensitive about only one issue: its false justifications for igniting a war.
Even Mr. Greenspan’s corrected version of the oil quote shows an almost laughable amount of geopolitical ignorance from this supposedly brilliant polymath. Greenspan says that it was his own prediction at the time in his capacity as Fed chairman, that Saddam remaining in power would somehow cause oil to increase to over $100 per barrel. On what evidentiary basis did he believe that? Did he think that Saddam, under crushing sanctions, with a dilapidated army, and with half his country a no fly zone, could successfully invade Kuwait or Saudi Arabia? That is sheer fantasy.
He gives the game away by stating “My view is that Saddam, looking over his 30-year history, very clearly was giving evidence of moving towards controlling the Straits of Hormuz, where there are 17, 18, 19 million barrels a day passing through.” But Iraq’s narrow outlet to the Gulf is nowhere near the straits. Second, Iraq had no navy or other long-range systems capable of closing and/or controlling the straits. Third, the Persian Gulf was and is essentially an American lake.
But let us assume instead that Saddam did nothing; why would that cause oil to quadruple in price from its 2002 level? That would be the first time in history that a condition of peace would spike oil more than a condition of war – in this case, a US invasion of Iraq. And it is ironic that most competent analysts now believe a U.S. war against Iran would cause an increase the price of oil similar in size to what Mr. Greenspan says would have happened if we had done nothing about Iraq. It is odd indeed that the U.S. government seems blithely willing to strike Iran now even if it causes an oil price spike, whereas the administration rationalized attacking Iraq in order to avert an oil price spike. This is plainly irrational, and shows what sort of delusional and dishonest people are running the government.
As it is, the invasion and occupation of oil has contributed to the more than doubling of the average price of crude oil since 2002. Certainly there are other factors involved, such as China’s industrialization, but it is undeniable that present-day Iraq has not reached the average daily flow of oil achieved even by Saddam’s rickety pre-war infrastructure. Add to that the “war risk premium” of there being a shooting war in the Middle East, and it is evident that the U.S. invasion of Iraq has partially achieved what Mr. Greenspan alleges the invasion was intended to avert. Finally, it is strange that a self-described libertarian economist believed that oil, uniquely among all items, would not respond to market forces, and must be secured at bayonet point. After all, Saddam could not drink the oil; he was desperate to sell it in order to get the revenue in order to keep his vast system of bribery and corruption intact.
Some antiwar writers have latched onto Mr. Greenspan’s statement about oil and said in effect, “aha! I knew it! It really was all about oil!” But this overstates the matter and in so doing, lets other factors off the hook. We have always been critical of exclusively monocausal explanations of huge historical events like the invasion and occupation of Iraq, and this explanation is no exception.
Of course, it was about oil. But it was equally about Israel and its disproportionate influence on U.S. Middle Eastern policy. At the same time, Karen Kwiatkowski (Col., USAF, Ret.) has eloquently written about DOD’s parochial desire to have permanent megabases in Mesopotamia from which it could militarily dominate the region as well as threaten Iran. This view also has merit. And what about the alleged Bush/Rovian desire to become a “war president” and intimidate the Democrats so effectively that it would be electorally beneficial to Republicans? We see no way to refute that. And finally, is there any truth in believing that the Vice President’s relentless desire to expand executive power and secrecy via the avenue of war may have played a role? To borrow a phrase from George Tenet, that thesis is a “slam dunk.” It appears that just as success has a hundred fathers, so does a fiasco.
Alan Shrugged
For all Mr. Greenspan’s supposed empirical expertise, he has shown a surprising inability to learn from experience. Perhaps the reason is that, far from being a seasoned Washington pragmatist, he is attracted to abstract ideological statements about libertarian conceptions of the so-called “free market,” and a mechanistic understanding of “how the world works.”
Libertarianism, properly understood, is less a mechanistic ideology than an elaboration of the phrase, “live and let live.” If you will, it is the Sermon on the Mount with the pious interpellations left out. But in the minds of dogmatic adherents, libertarian economics is a scientifically proven truth that they believe with the same certitude as the Marxist believes in the labor theory of value.
It is probably no accident that during his early years, Mr. Greenspan was an acolyte of Ayn Rand, one of the most dogmatic and personally unpleasant individuals ever to have infested the American political scene. She bequeathed libertarianism a legacy of sectarian schism and personality cults rivaling Trotskyism. It is highly indicative of the drift of these types of movements that Rand’s current official heirs have out-neoconned even the neocons in their love of military aggression.
To be fair to Mr. Greenspan, it is unlikely that he holds all or even most of the tenets of Randianism to this day. But a residue of that thinking is detectable in his preference for abstract theory over historical experience. Garn-St. Germain deregulated the savings and loan sector, requiring in only a few years the largest government bailout in history. The Securities Litigation Reform Act of 1996 reduced the duty of due diligence and honest disclosure by executives of public companies. It also, not coincidentally, greatly limited legal recourse by aggrieved shareholders. Overvaluation of stocks resulted, contributing at least in part to the bubble bursting in 2001, not to mention the outright fraud committed by Enron, Tyco, and MCI Worldcom.
It is possible to see the same problems in hedge funds, many of which through financial alchemy transform debt into asset. It is telling that Mr. Greenspan “didn’t get” the subprime mortgage risk; these subprime mortgages are invariably sold, ending up in many cases in the form of highly leveraged hedge funds. Yet he adamantly maintains to this day that hedge funds must not be regulated. The deregulations of the 1980s and 1990s should have taught us that government regulation is not merely some namby-pamby stuff about protecting ignoramuses from themselves that ends up making markets “inefficient” (a favorite pejorative of the Greenspan crowd). Sometimes, it is about protecting the economy itself. What is crucial is having elected and appointed officials with the sound judgment necessary to distinguish when regulation is prudent, and when it is overkill. The former Fed chairman was so enamored of theory that he often lacked that judgment.
The Age of Turbulence reminds one in some ways of those tedious memoirs by German generals after the Second World War. Our overall military theory was sound, they would imply, it’s just that the idiot at the top executed it so badly that the whole affair came a cropper. But we are unable to recount an instance when they had rejected a field marshal’s baton or refused an East Prussian estate when these trinkets were proffered by the very same idiot. In the same vein, President Bush has subtly become a retrospective alibi for an entire political class that had once served him so eagerly.
* Werther is a Northern Virginia-based defense analyst.
[1] We are well aware of the rhetorical flummery to the effect that the Federal Reserve Board is “independent.” But this is like saying that Congress is independent of lobbyists, simply because there happen to be ethics statutes in effect. In reality, Mr. Greenspan was the culmination of a long line of Fed chairmen who essentially served as executors of the monetary policies of the administration of the day. There is a tradition in Washington almost as hallowed as the springtime blossoming of cherry trees at the Tidal Basin, whereby interest rates begin to fall six months before a presidential election.
[2] One of the persistent falsehoods of Republican propaganda is the insistence that “9/11 caused the deficits,” thus placing the onus on Osama rather than Republicans’ own fiscal imbecility. In terms of the effect on the economy, 9/11 was minor and transitory: the stock market had already fallen further between January 2001 and September 11, 2001 than it would fall subsequently. As for the military spending spree after 9/11, the vast majority of the war spending was devoted to invading and occupying Iraq, a country that had nothing whatsoever to do with 9/11. The increases in the Pentagon’s regular budget were simply crass political opportunism occasioned by the war. The ballooning budgets bought things like Littoral Combat Ships, which have about as much utility in warfare against al Qaeda as Spanish galleons.
[3] Rothbard points out that this was not the only reason for the Strong’s and Mellon’s policy. Both men, being early-20th century American financiers in good standing, were Anglomaniacs dedicated to doing Perdifious Albion’s bidding in the manner established by J.P. Morgan. When the United Kingdom decided it would reestablish the pound on the gold standard at the old pre-World War I parity, Strong and Mellon did everything they could to assist. The problem was that the war had destroyed Britain’s pre-war position as the preeminent financial power in the world. Achieving the old parity was completely unrealistic, but once H.M. Government decided to do it (another disastrous decision in which Winston Churchill played a significant role), the American banking establishment fell all over itself to help by agitating for a cheap money policy which would depress the dollar in world exchange markets relative to the pound. As a result, Britain got an overvalued pound leading to massive unemployment, and America got a stock market bubble – leading a few years later to massive unemployment.
[4] http://www.businessweek.com/magazine/content/04_15/b3878093_mz020.htm
[5] 60 Minutes. Interview with Leslie Stahl, 16 September 2007.
[6] http://www.washingtonpost.com/wp-dyn/content/article/2007/09/16/AR2007091601287.html?hpid=topnews
Comments
This is a very interesting article which certainly covers a lot of ground with in-depth analysis. I think it could be argued that Greenspan did exactly what he was hired to do with his monetary policy. He kept the US economy afloat, able to wage war throughout the world and at the same time satisfy the demands of the insatiably greedy American consumers. War and prosperity - that’s the goal of the new world order, right?
I would favor tight money and very high interest rates for decidedly non-economic motives - to force the US to abandon its attempt at world domination, as well as the consumerism so often condemned by recent popes. I think it was Richard Pryor who said that cocaine abuse was God’s way of telling you that you have too much money. Wars in Iraq and central Asia, Britney Spears, and an endless stream of electronic gadgets are God’s way of telling the American people as a whole that they have too much money.
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Excellent article on Greenspan’s various frauds, and his
history of sucking up to whatever powerful special interest
he could for his own self-advancement.
Particularly of interest is his commentary on the so-called
“Libertarians” idea of tax cuts---paid for with long term
debt instead of budget cuts. One could hardly argue that
tax cuts create growth, when the tax cuts are accompanied
by Keynesian style federal spending. It is indeed, the
“libertarian Republican” version of the “free lunch”, that
tax cuts will create enough additional revenue so that
spending cuts are not necessary. It’s a ponzi scheme, and
Greenspan has been it’s chief promoter.
Note the Republican talk these days that entitlement spending
are creating all the problems with the federal deficit, while
the Social Security Payroll tax is now accounting for 67%
of total federal revenue! And then the “libertarian
Republicans” sponsor “nation building” foreign policy of Bush2 and his Wall Street/Israeli Lobby variety, which is the chief reason
behind the budget deficit in the first place.
Sheer hypocrisy. If anyone wants an example of how
“libertarianism” is nothing more then a fraud, and mere
rationalization for giving those that have the most, a little
more, then I give you the example of the most prominant
“Libertarian” in the USA, Alan Greenspan.
Ravi Batra did a great job of debunking the Alan Greenspan/
Libertarian myth in his book, “Greenspan’s Fraud”.
Lobby sponsors
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Well, Greenspan is scum. Had he been a true patriot,
the moment he saw the Administration going down a path
that he knew would mean damage to the country, he
would have screamed bloody murder and refused to
go along, resigning if necessary.
what good does it do to say it now? What good does
it say that Clinton’s policy was sound while Bush’s
wasn’t, if he was complicit in replacing a good
policy with a bad one?
Thanks for nothing, Mr. Greenspan
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Best quote of this article:
“In the minds of dogmatic adherents, libertarian economics is a scientifically proven truth that they believe with the same certitude as the Marxist believes in the labor theory of value...It is probably no accident that during his early years, Mr. Greenspan was an acolyte of Ayn Rand, one of the most dogmatic and personally unpleasant individuals ever to have infested the American political scene. She bequeathed libertarianism a legacy of sectarian schism and personality cults rivaling Trotskyism. It is highly indicative of the drift of these types of movements that Rand’s current official heirs have out-neoconned even the neocons in their love of military aggression.”
Exactly, what I’ve been saying for years. “Libertarians” are
dangerous utopian ideologues, and for this reason are
incompatible with “conservativism”.
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Another great article on Taki Top Drawer. I can only add:
Hillary will be even worse, fiscally, than Bush. She has on tap even more spending (Hillary-care and “reparations” to her supporters. Yet the money isn’t there, the deficit will grow until lenders will stop lending and holders of bonds will demand payment, and in desperation Hillary will ask the Fed to print money, just as the Germans did in 1922 to pay off the Allies’ idiotic reparations. Such printing will lead to a massive inflation, and it’s good-bye to the US Economy; the EU will dominate the world. Let’s hope the Fed chairman will say no to such printing.
Ron Paul is our last hope.
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Sid sed: “Yet the money isn’t there, the deficit will grow until lenders will stop lending and holders of bonds will demand payment, and in desperation Hillary will ask the Fed to print money...”
The US dollar is technically not “fiat” money, as were the
greenbacks printed by Lincoln during the Civil War. The
“Fed” is a private institution, the “privatization” of money,
technically.
There is plenty of money for things like Medicare if the rich
paid their fair share of the tax burden, and we ended our
Imperial plans for the “flat earth” theory of economic
“interdependence”, and the military spending that sustains
it.
And with the Social Security Payroll tax accounting for
67% of all federal revenues, it’s hardly in a position to
go bankrupt if we end the occupation of the Mideast, and
cut military spending by 1/2.
One of the dirty little secrets of the Greenspan years
has been the transfer of the tax burden from the rich to
the middle class, via the income and capital gains tax cuts
and the increases in the payroll taxes. The rich DO pay the
majority of income taxes, but the middle class and the working
class pay the majority of ALL revenue to the Federal Government.
In all fairness to you, Ron Paul DoES want to abolish the FED, and the International
Finance Capitalists that profit from it, but there is NO
hope that what he’s talking about will actually come to pass.
Ron Paul doesn’t represent mainstream “libertarianism”, Alan Greenspan,
Dick Armey and Neuter Gingrich do.
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A part of me desires a Hilary victory as an
adequate punishment for those who were so
willing to believe in lies.
Unfortunately people cannot get out of the
trouble they are in until they convince
themselves they are in trouble. As long as
they are in denial, they will go on as before,
believing Bush, believing Fox News, believing
Petraeus.
As Dr. Johnson said, the certainty of being hanged
in the morning concentrates a man’s mind most
wonderfully. The prospect of a Hillary swearing in
might finally concentrate enough minds to do what
they must do.
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It’s no accident that the majority of people believe the crop of pres candidates are poor. Only one recognizes the coming maelstrom. Ron Paul, and while I root for him, what he’s going to face is 535 establishmentarians, hence, inactivity.
Once the baby boomers are gone or suffering from dementia, the Gen x’ers and Gen y’ers will put this country back together. By back together, I mean together as a union of states as opposed to a nation state.
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JP states: “There is plenty of money forthings like Medicare if the rich paid their fair share of the tax burden...”
When I read something like this, I always wonder what the person who wrote it means by “the rich.” Does he mean the top 50% of people filing personal income tax returns (who pay 96% of all personal income taxes) - or the top 1% (who pay 36% of them)? Or who?
Although the present top marginal tax RATE is relatively low in comparison to some levels at which it was set in the past, the personal income tax BURDEN is still steeply graduated, and the majority of personal income taxes are paid by a relatively small percentage of the population.
And what is the “fair share” that ought to be paid by “the rich?” The top Federal income tax bracket is now 35%. It has been as high as 90%. How much of any person’s income ought the government to be able to take?
Just to put things into perspective, it’s not too difficult to find examples of people in the top 1%. The annual income necessary to belong to this group is around $400,000 per year, not beyond the reach of a successful professional or small-business owner. Persons in the top 1% are far more likely to conform to the description given in the book “The Millionaire Next Door” than to be members of the private-jet set. CEOs of publicly-traded companies may have incomes within the top 0.1%, or even the top 0.01%. Several orders of magnitude above them are the Buffetts and Soroses. There simply aren’t enough taxpayers of this last calibre to foot the expense of the United States government even if 100% of their incomes were confiscated.
It should be noted that the graduated income tax was an idea first proposed by Marx and Engels in the Communist Manifesto. The United States Constitution forbade the imposition of any Federal income tax - graduated or flat-rate - until 1913, when the Sixteenth Amendment was passed. Income taxation has been the great engine powering the growth of the Federal government. Old-fashioned conservatives used to argue for its repeal. Where are they now?
I’ll conclude by observing that our economic troubles have to do with government spending, rather than taxation. In a sort of corollary to Parkinson’s law, spending expands to consume available revenues, and to go as far beyond them as the bond markets permit.
Boom or bust, it has been very rare that the Federal government has not run a deficit. The only recent period during which there has been surplus was for a few years during the Clinton administration. The main reason for this was not Clinton’s tax hikes, but that by a happenstance of history, the Cold War ended just before Clinton took office. I can remember talk at the time about how there would be a “peace dividend” as a result of lower government spending on the military. This “peace dividend,” nonetheless, was never returned to American taxpayers. The government kept it, hence the Clinton-era surpluses.
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With my limited knowledge in Economics I am bound to make a stupid suggestion, but I’ll go ahead with it, no matter how undignified I come out with it.
In the U.S., the conservatives (I consider myself one of them- sui generis, nota bene)constantly screem or cry about the Government spending. According to them we are always on a brink of bankruptsy. We can’t afford, for exemple, a universal Medicare without ruining ourselves, they say.
Strange, but little Denmark,Belgium, Holland or Ireland- can ; and never mind Spain (now about to introduce a free dental care),France or Italy- and all of them economic midgets compared to the U.S.A.
None of these countries seem to be unduly worried about going broke, this- despite what our American conservative Economists keep prophesizing for years.
On the other hand, and from my extensive personnal experience, I find the European standard of life considerably higher in quality than ours.
Proposition:
Either the American Way of Life should be scrapped as inferior, being oriented mostly towards our insatiable greed for money, Or
The laws of Economics shoud be scrapped,(or at least debunked) as having no universal value like Physical Laws.
Anyone dares to answer?
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MSS is full of economic myth and misconception that one
doesn’t know where to begin correcting him. Here are few of
his worst misconceptions and mistatements of fact.
MSS asks: “When I read something like this, I always wonder what the person who wrote it means by the rich.”
To clarify, the “rich” are the top 20% who earn 90% of the
national income.
MSS asked: “Does he mean the top 50% of people filing personal income tax returns (who pay 96% of all personal income taxes) - or the top 1% (who pay 36% of them)? Or who?”
Your yapping about INCOME taxes is irrelevant, because income
taxes do not contribute but to a fraction of federal revenue.
It is payroll taxes that provide the vast majority of federal
revenue. Approximately 67% I believe. Anyone making
less then $100,000 pays more in payroll taxes then he pays
in income taxes. Yet most income over $90,000 is not subject
to payroll taxes. Consequently, the effect of the income and
capital gains tax cuts---combined with substantail increases
in the payroll taxes during the Clinton/Gingrich era,
has been to shift the burden of the federal government from the “rich” to the middle class.
MSS asked: “The top Federal income tax bracket is now 35%.
It has been as high as 90%. How much of any person’s income ought the government to be able to take?”
I might mention that real growth during the time when the
income taxes were 90% was much higher then when they were
35%. Over 4% compared to less then 3% in the 1990’s, and
now after the Bush tax cuts, barely 2%.
The principle that built the modern United States, the funded
Rural Electrofication,the Space Program, the US military, and
the technological developments that made the US economy the
most advanced and productive in the world would not have been
possible without a progressive income tax. Not to mention our
transporation, health and safety infrastructure.
I might also point out, that besides creating the modern
middle class from the working class, this system benefited the
rich, because it created WEALTH that the “free market” could
have never created. It made millions of workers into business
owners, entreprenuers and small property holders. Everyone benefits from the progressive income tax in the long run, where as only the rich
benefit from NO or flat income taxes.
MSS sed: “The only recent period during which there has
been surplus was for a few years during the Clinton
administration. The main reason for this was not
Clinton’s tax hikes, but that by a happenstance of
history, the Cold War ended...”
Actually the Clinton/Gingrich era “surplus” was a fiction,
it never existed. Most of the “surplus” was an illusion,
of the internet bubble, the projected capital gains taxes
from the “dot.CON” speculation, if the bubble was sustainable,
which it was NOT! I believe there was only year that there
was actually a surplus was due mostly to the payroll tax
surplus, which Greenspan/Clinton/Gingrich passed.
A lot of this goes back to the Reagan era when the nonsense a
about “Supply side Economics"---the original voodoo economics---
proved a failure. To minimize the huge budget deficits that
resulted from the Reagan tax cuts, Greenspan invented the
charade of the Social Security trust fund, in which the
Social Security Payroll taxes were raised along with excise
taxes to make up for the failure of “voodoo economics”, the
ideology of tax-cuts-create-growth, which don’t work.
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‘Bubbles’ Greenspan was great at putting out fires; the only problem is he’s the one who started the fires.
He’s the John Law of the 20th century, and should there ever be a new edition of ‘Extraordinary Popular Delusions and the Madness of Crowds’, he definitely deserves his place in it.
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Taxation of labor/income/sales and capital is theft, plain and simple.
With that being said, it doesn’t really matter, because there is no salvation through government or money anyway. The government or money cannot make your life any better - life sucks, period.
When God tells us <<[r]ender therefore to Caesar the things that are Caesar’s; and to God, the things that are God’s>> He is telling us to pay taxes, because we couldn’t have done anything better with the money than the government anyway; the money is a secular object, a tool to be used, and why bother risking our lives for something inconsequential? Money, government, or anything else that is secular does no good. Only by loving God, ourselves, and our neighbors can anything good come about.
All this talk about tax rates is under the assumption that so-and-so can do something better with the money than the other guy. They can’t. NO ONE can do anything particularly “better” with the money. Sure, the money “feels good” to both the people, but neither person has any real power to “make the world a better place” - that power belongs to God and God alone.
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“When God tells us <<[r]ender therefore to Caesar the things that are Caesar’s; and to God, the things that are God’s>> He is telling us to pay taxes, because we couldn’t have done anything better with the money than the government anyway; the money is a secular object, a tool to be used, and why bother risking our lives for something inconsequential?”
...No, he was responding to a trick question posed by the priests, or agents of the priests, in such a way that he could not be charged with sedition. They (the priests) were always out to ‘get him’.
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@Robert Burch
Sure, it was a “trick question”, but Jesus, being God, didn’t respond with a “trick answer”. He responded with TRUTH to the “trick question”.
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Another glass of vodka from me to Joe Populist. Your take-down of MSS is spot on.
One of my creepy American colleagues in Russia during the Yeltsin years - one of those who buggered Russia up the bunghole - was a self-described “anarcho-capitalist.”
I had no idea what that term meant until recently, and now I know he was even more dangerously insane than I had imagined. He said he considered Greenspan to be a “candidate for cloning” - thus demonstrating that Libertarian-Love is blind.
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Greenspan’s career shows how obsolete the idea of
“honor” has become. After years of aiding and abetting
a policy that he knew was bad, he comes out and says
so to sell books. And people praise him.
Can we still remember what a honorable man is?
That’s one of the reasons why we like people like Denis
Kucinic and Ron Paul, not for their ideologies but because
they act as if honor mattered.
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Andy Capp sed: “When God tells us <<[r]ender therefore to Caesar the things that are Caesar’s; and to God, the things that are God’s>> He is telling us to pay taxes, because we couldn’t have done anything better with the money than the government anyway; the money is a secular object, a tool to be used, and why bother risking our lives for something inconsequential?”
Actually, that’s not the interpretation most people have.
This Jesus teaching was actually one of his most seditious
comments. What he was saying is to give no personal loyalty or
enthusiasm to the State, and just get along in a system that
you are powerless to change anyway. That was also his
criticism of the Pharisees
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“Joe Populaist” apparently doesn’t get his tax data from the information released by the Internal Revenue Service. I’d like to know what his sources are.
He writes: “To clarify, the ‘rich’ are the top 20% who earn 90% of the national income.”
According to theTax Foundation, in 2004 (the last year for which they provide data) the top 25% earned only 66.13% of personal income, and paid 84.86% of Federal personal income taxes. This information may be found at <www.taxfoundation.org/news.show/250.html>
Joe writes: “It is payroll taxes that provide the vast majority of federal revenue. Approximately 67% I believe.”
According to the Tax Foundation’s Special Report 139 (March 2006), In FY 2004 individual income tax represented 43.8% of the Federal tax burden, while social insurance (i.e., the payroll tax) represented 39.7%. This information may be found on page 8 of the report, which is available as a .pdf file downloadable from the Tax Foundation’s website.
Joe writes: “Anyone making less then [sic] $100,000 pays more in payroll taxes then [sic] he pays in income taxes.”
The payroll tax combines a levy of 6.2% to cover Social Security OASDI (Old Age, Survivors and Disability Insurance) and 1.45% to cover Medicare. The 6.2% OASDI rate is levied on all wages up to a ceiling, which in 2006 was $94,200. The 1.45% Medicare rate is levied on all wages without a ceiling. The amount withheld from an employee’s paycheck is matched by an equal amount that is levied against the employer. Thus, only half of the percentage of Federal tax burden reported by the Tax Foundation (citation supra) as “social insurance” is borne by the employee.
Assuming for the sake of simplicity a single taxpayer with a 2006 taxable income of $100,000, all of which is wages, the payroll tax levied against this taxpayer would be $7,290.40. According to Schedule X of the 2006 Federal income tax schedule, this taxpayer is in the 28% marginal tax bracket. His income tax would be $21,557.50. The schedule may be found at <www.irs.gov/formspubs/article/0,,id.150856.00.html>
Joe’s assertions in the above instances are not borne out by the published facts and figures. I’ve not bothered to investigate his other claims but have no reason to believe that there is any more truth in those.
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The URL for the first Tax Foundation citation in my post immediately above contained a period where it should have had a slash. For those who might wish to read it for themselves, the information on the percentage of income earned and the percentage of individual income tax paid by the top 25% may be found at <www.taxfoundation.org/news/show/250.html>
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More “libertarian” nonsense from MSS. MSS cites as
his “authoritative” source, the Tax Foundation. The TF is
one of the older ivory tower think tanks, paid for by the
rich businessmen, whose sole reason for existance is propagandize against the progressive income tax.
One could hardly cite the Tax Foundation as a unbiased
source of data on tax burdens, for good reason.
SEE: http://www.cbpp.org/5-10-99tax2.htm
Since all of MSS’s arguments are based on source documents
from the Tax Foundation-- whose existance is dedicated to misleading
the public on the progressive income tax ---I believe we can \
dismiss the rest of what he says as well.
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The data given in the Tax Foundation studies I cited are taken from the IRS’s own statistical abstracts. If Joe wishes to attack the veracity of the data I cite, let him do so by showing in what way they are false rather than by ad hominem attacks on the source.
As for the progressive income tax, it is my view that the government has no business redistributing income or wealth. This is a perversion of the Founders’ intent. James Madison said that the most important duty of government was the safeguarding of its citizens’ private property. Redistributive taxation makes government a predator of its citizens’ assets rather than the guardian it should be.
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MSS sed: The data given in the Tax Foundation studies I
cited are taken from the IRS’s own statistical abstracts…
Redistributive taxation makes government a predator of its citizens’ assets rather
than the guardian it should be.”
The “Tax Foundation” skews the data, as does MSS in his
theoretical example comparing the tax burden between the
income tax and the payroll tax. The payroll tax consists
of SS & Medicare as well as unemployment taxes, which
amount to 15.3%, not the 7.2% in MSS’s example.
MSS also forgets that the IRS allows a number of different
tax credits, from the home mortgage interest deduction to
the $1,000-a-year child tax credit to a separate credit for money spent by working parents on child care. In addition, under the current tax system, such an affluent wage earner is also able to shelter large amounts from taxes in tax-preferred
savings vehicles like IRAs and Keogh Plan pensions.
None of these deductions apply to payroll taxes.
Incorporaating the payroll tax into a total tax analysis
shreds your assertions that the the rich are bearing the
majority of the tax burden.
While YOU may call the progressive income tax “redistribution”
of income, the progressive income tax is not government fiat,
but the principle that those who benefit the most should
pay the most to sustain our government and domestic security.
There is nothing in the constitution that specifically
prohibits the progressive income tax. It is also an extention
of the teachings of Jesus, and the Judeo-Christian ethic on
which the United States was founded.
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MSS sed: “Assuming for the sake of simplicity a single taxpayer with a 2006 taxable income of $100,000, all of which is wages, the payroll tax levied against this taxpayer would be $7,290.40. According to Schedule X of the 2006 Federal income tax schedule, this taxpayer is in the 28% marginal tax bracket. His income tax would be $21,557.50.”
First of all, the payroll tax (SS, Medicare & Unemployment) is 15.3, and the payroll taxes in this particular example would be $15,300, not $7,290.
SEE: http://www.alllaw.com/articles/tax/article5.asp
Secondly, the IRS allows a number of different tax credits, from the home mortgage interest deduction to the $1,000-a-year child tax credit to a separate credit for money spent by working parents on child care. In addition, under the current tax system, such an affluent wage earner is also able to shelter large amounts from taxes in tax-preferred savings vehicles like IRAs and Keogh Plan pensions.
I is extremely unlikely that someone with a wage income of $100,000 would have NO tax deductions. Because these tax deductions do NOT apply to payroll taxes, the relative tax burden easily shifts from the income tax to the payroll tax in the example of the $100,000 wage earner that you provided.
Furthermore, incorporating the payroll tax into a total tax analysis shreds your assertions that the the rich are bearing the total tax burden.
Instead of those earning $200,000 paying approximately 40% of the total federal personal income tax collected, and the top 1% paying 33.6%, the shares plummet to 27.5% for those earning more than $200,000 and 18.6% for the top 1%.
By including payroll taxes in the tax burden equation, it is easy to prove that over 2/3 of all taxpayers pay more in payroll taxes.
http://www.allbusiness.com/north-america/united-states-virginia/363946-1.html
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As noted, half of the payroll tax is paid by the employee, half by the employer. Joe arrives at his 15.3% figure by combining the employer’s half with the employee’s. Legally and from an accounting standpoint, this is incorrect. Furthermore, it is questionable economic theory to assume that the entire burden of the payroll tax is borne by the wage-earner. The only people who pay the entire burden of their OASDI and Medicare taxes from their own income are the self-employed. We further note that Federal and state unemployment taxes are entirely borne by the employer, and are in addition to the Social Security payroll tax.
“Taxable income” is income after deductions and exemptions, i.e., that income subject to the tax algorithms given in the referenced schedule. Joe, I hope you have someone competent prepare your tax returns, since you don’t seem to understand taxation very well. We’d hate to see you pay more than you need to, or get in trouble for failing to calculate a sufficient payment.
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@ Adriana
Greenspan and collin Powel belong to the trash-can of American honor which has been overflowing for quite a while now.
You are right, very soon we won’t even be able to recognize what is Honor(well, it ain’t money, fellow Americans-try another guess).
Agree completely with you,Dennis Kucinich and Ron Paul couldn’t be more different on social issues but they are identically noble. Ditto for Mike Gravel.
(Outside of these three, Osama Bin Laden would have to ran for the Presidency that I would consider any of them- Hillary, not even then)
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MSS sez: “Joe arrives at his 15.3% figure by combining the employer’s half with the employee’s...Joe, I hope you have someone competent prepare your tax returns, since you don’t seem to understand taxation very well.”
No, the individual payroll taxes are 15.3%. The links I provided pretty much prove that your statement is rot. They also prove that when payroll
taxes are put into the tax analysis, it is the middle class
that bears the burden, and not the rich, who have a free ride.
Quoting the “Tax Foundation” as an authoritative source on the
burden of taxes on the American citizen is like quoting Marx
to explain collectivization.
What is clearly of note here, is that your concern over the “tyranny” of taxation
is quite selective. You are not against ALL taxes, only the
progressive income tax that burdens the rich.
Consequently, we see you exactly what you are---a pimp for the Park Avenue
set, the trust fund babies, the CEO classes.
What delights me about our little exchange is that YOU illustrate exactly what I’ve
been saying about “libertarians”, that all their arguments
about “freedom” are really so much rant and rave, ideological
nonsense spouted by the likes of Dicky Armey or Neuter Gingrich
or Alan Greenspan, to give those who have the most, a little
more.
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MSS sez: “Joe arrives at his 15.3% figure by combining the employer’s half with the employee’s..
From the Congressional Budget Office document, “Historical Federal Tax Rates 1979 to 2004:
“CBO’s analysis of effective tax rates assumes that households bear the burden of the taxes that they pay directly…such as individual income taxes and employees’ share of payroll taxes….CBO assumes—as do most economists—that employers’ share of payroll taxes is passed on to employees in the form of lower wages than would otherwise be paid. Therefore, the amount of those taxes is included in employees’ income and the taxes counted as part of employees’ tax burden.”
LINK: http://www.cbo.gov/ftpdocs/77xx/doc7718/EffectiveTaxRates.pdf
The only people who believe that the employer’s contribution to payroll taxes is isn’t ultimately a deduction from wages, and therefore, an individual tax on the wage earner.
Obviously, MSS is only concerned about the progressive income tax because it’s “progressive”. It’s such a “tyranny” to ask the rich to pay their fair share of the tax burden.
“Libertarians” would rather tax the working stiff then those who benefit from their labor.
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I am an employer and I know who signs the check to the government for the employer’s portion of Social Security; I know that it shows up on my P&L;statement as a tax paid to government, not wages paid to employees; I know that it does NOT show up on the employees’ W-2 forms as a tax paid by them. These are matters of legal and accounting fact.
Joe cites the Congrssional Budget Office, which is at least as partisan an institution as the Tax Foundation which Joe derides, as to the opinions of economists. Well, let us hope readers of this blog understand the difference between the facts of the tax code and the opinions of CBO economists, and recognize also that there are other economists who have opposite opinions to those of the CBO.
More humorously, Joe states that the progressive income tax is “...an extention [sic] of the teachings of Jesus...” Somehow I missed Christ’s endorsement of the New Deal in my reading of the New Testament! Anyway, this reminds me of an anecdote told by the British author John Buchan, who witnessed this exchange between a parliamentary candidate and one of his constituents:
The candidate, speaking in favor of Lloyd George’s National Insurance Act of 1911 (the foundation of the British welfare state), concluded his speech by asserting that the Act was motivated by the purest of Christian principles as expressed in the Sermon on the Mount.
A questioner rose in the back of the room and asked the candidate, “Is it no’ true that the Act contains a maternity benefit?”
The candidate responded that it did.
The questioner then asked, “And is it no’ also true that the benefit is paid whether the mother is married or not?”
The candidate replied, yes, it did.
“Well, sir, how d’ye explain this?” came the riposte. “The Bible says the wages of sin is death, but the Act says forty shillin’s!”
This is one of the great problems of taxation for purposes of redistribution through the welfare state. It gives perverse incentives to people to engage in behavior that is contrary both to Christian morality and to common sense. The very failing that Buchan’s story so aptly illustrates is disastrously seen in our own welfare system in the United States. The rate of illegitimate birth in the black community, which alarmed Pat Moynihan when it was around 30% back in the ‘sixties, now exceeds 75%. The number of these children, growing up without stable homes in which their fathers are present, foreshadows many serious social pathologies to come. And what is to blame for this situation? Largely the incentive given to poor women by AFDC, paid for by taxes on productive citizens.
Christian charity differs from the welfare state in that Christian charity is voluntarily given to deserving recipients, whereas the welfare state is financed by compulsory exactions and its benefits are given indiscriminately to people whose own aberrant behavior is the principal cause of their poverty. Why should I as a taxpayer be compelled to give over funds for the support of petty criminals, dope addicts, people with venereal disease, and other scoundrels whose only due from any just society ought to be a rod for their backs - or a halter for their necks?
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The welfare state is the debt paid by the State which
was incurred by the massive confiscation of Church
property.
You are right, for a long time there was no welfare
state, and all charity was done through the Church,
which had a large amount of property to manage it.
Then the temporal princes confiscated Church property,
with the Reform (in Germany and England), leaving
charity unfunded, and without a central system of
delivery.
This would happen in France during the Revolution.
The princes and the REvolutionaries distributed the
Church property to their friends and followers, and let
those served by the charities manage as best they could
(or hanging them as the English did to those who
begged too often to their taste).
So, when the State takes over Welfare, it is merely
paying off that old debt. If you want to turn back
the responsibility to Christian Charity, then ask too
tht the state should return to the Church the means
to do so. That is, return to it the stolen property.
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MSS asked, “Why should I as a taxpayer be compelled to give over funds for the support of petty criminals, dope addicts, people with venereal disease, and other scoundrels whose only due from any just society ought to be a rod for their backs - or a halter for their necks?”
You’ve just described Congress.
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@M.S.S.
I looked back at your comments on criminality and
lower and higher classes.
Are you aware that the British aristocracy was
complicit in Henry VIII’s rapine of the Chruch propert?
That they greedily participated in that spoliation?
There is hardly a noble house in England that has
not received those stolen goods in the past.
Now, if you want to do away with the welfare state,
then by all means, get all those nobles to give up what
they stole, so that the Chruch can take of charity
and there will be no need to tax the common man for it.
But until that property is returned, by all means taxk
the higher classes to make up for the stolen property.
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MSS sed: “I am an employer and I know who signs the check to the government for the employer’s portion of Social Security; I know that it shows up on my P&L;statement as a tax paid to government, not wages paid to employees...”
I suppose that you resent paying matching funds as well.
Well, despite your protests that YOU pay the bill, it’s just
an accounting triviality. It’s PART of your labor costs, and
considered a deduction from wages. It’s rather simple, but
you seem to be a simpleton, when it comes to anything that
contradicts your ideological bias.
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MSS sez: “Joe cites the Congrssional Budget Office, which is at least as partisan an institution as the Tax Foundation which Joe derides, as to the opinions of economists. Well, let us hope readers of this blog understand the difference between the facts of the tax code and the opinions of CBO economists...”
The Tax Foundation exists to skew the data and confuse the public with the purpose of railing against the progressive income tax. The CBO is just reflecting the prevailing view of MOST economists
that the employer contribution is part of his labor cost, and therefore a deduction from wages that would otherwise be paid directly to the individual.
By hiding the tax as an “employer contribution” instead of wages, the State conveniently maximizes the taxes, by sheltering it from deductions such as child care credit, home mortgage, and the rest. In other words, it is a way the State maximizes taxes on labor, to be able to lower taxes on non-labor income, or wealth.
Citing the way the State rationalizes and hides the true cost of payroll taxes is sort of crazy given your ideological bent. If you were really morally consistent, you would oppose ALL taxes on income.
But as I was saying, your ideology is self-serving, it‘s about giving those with the most, MORE. About protecting the rich from paying their fair share of the tax burden.
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MSS sez: More humorously, Joe states that the progressive income tax is “...an extention [sic] of the teachings of Jesus...” Somehow I missed Christ’s endorsement of the New Deal in my reading of the New Testament…It gives perverse incentives to people to engage in behavior that is contrary both to Christian morality and to common sense…Christian charity differs from the welfare state in that Christian charity is voluntarily given to deserving recipients, whereas the welfare state is financed by compulsory exactions and its benefits are given indiscriminately to people whose own aberrant behavior is the principal cause of their poverty.”
Well, here we go with the BLACK WELFARE MOTHER boogie man! It’s really sort of a straw man or red herring. The problematic nature of the welfare system, which encourages the male to leave the family in order to receive assistance, has nothing to do with the progressive income tax. <chuckle>
We might mention of course, that “welfare” in the form of the family assistance you describe is a tiny percentage of what YOUR taxes pay for. National Defense, Interest on the Debt, Social Security and Medicare are 2/3 of the entire Federal Budget.
The progressive income tax is a CHRISTIAN ideal, it’s the idea that those who benefit the most from our economic system should pay the most. It’s the simple Gospel of Jesus about the rich man, the eye of the needle and so on.
You blather on about “Christian Charity”---but the fact is the existence of the progressive taxation on high incomes is most likely the single reason that the rich even contribute to charity at all---at least in the huge amounts that they do---it’s another DEDUCTION from their taxes. A rich person can keep MORE of his/her income by contributing a $1 Million to charity then they can otherwise. Progressive income taxes ENCOURAGE private contributions to charity!
If you support “Christian Charity”, then you must support the progressive income tax.
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Adriana sed: “Now, if you want to do away with the welfare state, then by all means, get all those nobles to give up what they stole, so that the Chruch can take of charity
and there will be no need to tax the common man for it.”
Coincidently, the history of wealth in the United States is associated with the State, the railroad barons, the profits of Wall Street bankers from making war, the privatization of public property, the socialization of private profit is well known and well documented.
Also, we might remind MSS and other self-styled admirers of “Christian Charity” how the progressive income tax accomplished just the goal you mentioned.
The progressive income tax gives an incentive to the rich to contribute more then they might otherwise contribute. A HUGE contribution to charity will actually allow a rich person to keep more of his wealth, by allowing him to lower his/her tax bracket, and his taxes.
The progressive income tax supports the ideal of “Christian Charity”, it doesn’t undermine it.
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The old Church tax was a tithe, or a flat 10% of income, not a graduated or progressive levy. To find the origins of the graduated income tax one must look in “The Communist Manifesto.”
If the state could handle all social welfare expenses for a flat 10% tax and pay for the upkeep of buildings and personnel to administer it, that would be a better deal than we have now.
Even if this were true, the compulsory support of the Church by taxation (which continued in Britain after the Reformation, by the way) was based on the Donation of Constantine, which we now know to have been forged. State churches lead to clergy who are, in Jefferson’s words, “more concerned for their emoluments than with their duties.” Christianity is almost dead in Europe, where it was historically supported by taxes, leading to the resentment expressed in the lyrics to the old English song “Harvest Home”:
“We’ve cheated the parson,
We’ll cheat him again,
For why should a blockhead
Have one part in ten?”
The comparative vigor of Christianity in the United States is precisely due to the voluntary nature of its economic support here. Clergy have to persuade their congregations that they are receiving value for their money, as opposed to collecting a check from the state as they still do in many European countries.
John Ball, you are merely recycling Mark Twain’s old witticism that the only native-born American criminal class is Congress.
Joe Populist, if the employer’s contribution to social insurance is “just an accounting triviality,” then why did the politicians who invented it, stress the employer’s contribution? FDR and his New Dealers carefully emphasized that the employer would pay half of the Social Security levy; Lloyd George boasted that his National Insurance act would be paid at a rate of ninepence from the employer and fourpence from the employee, respectively, for each pound of wages.Somehow the architects of these policies did not understand that all the cost of social insurance comes out of the employee’s pocket. I have taken them at their word. You appear to maintain that they were either ignorant or lying.
As far as what religious attitudes toward income redistribution ought to be, I direct you to Prov. 23:21:
“For the drunkard and the glutton shall come to poverty: and drowsiness shall clothe a man with rags.”
Also to Prov. 25:30-43:
“I went by the filed of the slothful, and the vineyard of the man void of understanding;
“And, lo, it was all grown over with thorns, and nettles had covered the face thereof, and the stone wall thereof was broken down.
“Then I saw, and considered it well: I looked upon it, and received instruction.
“Yet a little sleep, a little slumber, a little folding of the hands to sleep:
“So shall thy poverty come as one that travelleth; and thy want as an armed man.”
It is not the proper purpose of charity to ease the lot of people who have come to ruin through their own improvidence or vicious habits.
I’m against income taxation generally. It would suit me fine if the Sixteenth Amendment was repealed, and the cost of the Federal government cut back to the 5% of GDP it was before the First World War.
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M.S.S.
Wouldn’t it be much simpler to return the stolen
loot once and for all to the Church? Until that
stolen loot is returned, the State must fill in the
place of the Church.
As for the tithe, it was the minimum contribution, if I
recall my History. There was ostentatious display,
as well as the desire for absolution of sins in giving
wealth to the Chruch well above and beyond the tithe
(Does anyone recall Black Adder trying to convince the
old sinner in his deathbed not to give his property
to the Church, because if he does, the King will have
him killed?) The State migtht well manage with a 10%
tax if rich people starting getting generous to it as
they were to the Church. But of course, the State does
not grant remission of sins…
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Whether any “loot” was “stolen” and by whom is a matter of dispute. Let’s remember that the pre-reformation church gained its status as an established and tax-supported institution through its forgery of the Donation of Constantine, so one might say its gains were ill-gotten in the first place.
Surely the great wealth of the church was a matter for great internal debate within it during the middle ages, which produced such eloquent advocates of its divestment as St. Francis of Assisi. The later hunger of the Roman church for money, raised through such scandalous practices as the sale of indulgences, was after all one of the principal causes of the Reformation. The transfer of assets from rapacious prelates to rapacious secular lords was mostly an even trade. In some cases they simply switched titles, as in the cases of Albert of Brandenburg-Anspach, the last Grand Master of the Teutonic Knights, who became a Lutheran in 1525, took the former monastic state of the Knights for his own, and assumed the title of duke of Prussia; or the last preceptor of the Knights Hospitallers in Scotland, Sir James Sandilands, who surrendered the lands of the preceptory of Torphichen to the Scottish crown, and bought them back as a private individual, being created Lord Torphichen in 1564. Can one imagine such persons having been any more faithful servants of the Christian religion before the Reformation than they were after it?
In any event, there never was an establishment of the Church of Rome in British North America, so the question of what happened to the patrimony of that church after the Reformation is really Europe’s, not ours.
The various Christian denominations exist here as they did in the time before Christianity was an official religion, supported by the voluntary gifts of the faithful. I suspect this is better both for the churches and for the communities they serve. I l find in the New Testament no suggestion of a platform for government. Christ’s message was to each of us as individuals. He said to render unto Caesar what was Caesar’s, and unto God what was God’s. Taxation is Caesar’s province, not God’s; and it is to pay the cost of Caesar’s works, not God’s. Let us therefore view it, together all of Caesar’s projects, with the scepticism they properly deserve.
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Prior to the “transfer” of funds, the functions of what
you call the welfare state were covered by those funds.
Afterwards, those functions remained unfunded until
the State accepted its historical debt and started
covering them.
It is rich to say that Christian charity should take
care of the “deserving” cases after its means to do
it adequately have been taken away and turned to
private use.
I say, rebuild that fund, and then let’s talk about
turning over the hard cases to Christian charity. Not
enjoy the fruits of spoliation and refuse the
obligation that come with the fruits.
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MSS sed: “As far as what religious attitudes toward income redistribution ought to be, I direct you to Prov. 23:21: “For the drunkard and the glutton shall come to poverty: and drowsiness shall clothe a man with rags.””
Well Biblical injunctions against slothfulness aside, for the SECOND time, that has little to do with the progressive income tax.
I’m expecting that you are one of those rich men that has a better chance of fitting his fat ass through the eye of a needle, then getting into Heaven. Bringing up BLACK WELFARE MOTHERS has been dirty trick for years, an appeal to white working class resentments of their shrinking economic security, which the Republican Party has been responsible for all along.
Here’s some Bible thumping back at ya…you ARE an amazing hypocrite, but then you ARE a “Libertarian”…shades of Neuter Gingrich, Dick Armey, and Alan Greenspan!
Do not judge, lest you too be judged. For in the same way you judge others, you will be judged and with the measure you use, it will be measured to you. [Matthew 7:1 & 2.]
But if ye forgive not men their trespasses, neither will your Father forgive your
trespasses. [Matthew 6:15]
If you would be perfect, go, sell what you possess and give to the poor, and you will have treasure in heaven. [Matthew 19:21]
Watch out! Be on your guard against ll kinds of greed; a man’s life does not consist in the abundance of his possessions. [Luke 12.15.]
Truly, I say unto you, it will be hard for a rich man to enter the kingdom of heaven. [Matthew 19:23]
You cannot serve both God and Money. [Matthew 6:24.]
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MSS sed: “Jesus said to render unto Caesar what was Caesar’s, and unto God what was God’s. Taxation is Caesar’s province, not God’s; and it is to pay the cost of Caesar’s works, not God’s. Let us therefore view it, together all of Caesar’s projects, with the scepticism they properly deserve.”
To take the quote literally, Jesus says PAY YOUR TAXES, you dummy!
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Adriana - How, exactly, did American businessmen profit by the dissolution of the Roman church in Britain tempore Henry VIII, almost a century before the first British colony in North America? And if they did not, how can they be expected to “rebuild” what they did not destroy?
In any event, any funds given over to the church of Rome in this country today would probably be dissipated swiftly in paying off the liability it has incurred by the conduct of its many pæderastic priests. It needs to reform itself before it can claim the moral standing to reform the society of which it is a part.
JP - the Biblical context of the quotation “Render therefore unto Cæsar the things which be Cæsar’s...” found at Luke 20:25 is in response to a question “Is it lawful to give tribute unto Cæsar, or no?” (Lk. 20:22) asked by :spies, which should feign themselves just men, that they might take hold of his words, that they might so deliver him unto the power and authority of the governor (Lk. 20:20). To summarize, these spies were attempting to entrap Christ into saying that it was not lawful to pay tribute to the secular ruler. His response was that it was lawful. Of course it is still lawful to pay taxes, and still unwise not to do so, or to recommend that others not do so.
This says nothing about legitimate debate amongst secular persons - in which we are now engaged - about the nature, incidence, or level of taxes exacted by the secular government. It is, in the end, a secular, not a religious question.
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Further to JP - I have attempted to conduct my end of this conversation civilly. I have not referred to you in a demeaning fashion - you call me a “dummy” and an “amazing hypocrite” while using childish nicknames like “Neuter Gingrich” to describe people of whom you evidently disapprove.
There is an old adage in law: when you have the law on your side, argue the law; when you have the facts on your side, argue the facts; when you have neither, abuse the opposing litigant. Your words reflect both a dearth of pertinent argument and a lack of manners.
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MSS sed: “To summarize, these spies were attempting to entrap Christ into saying that it was not lawful to pay tribute to the secular ruler. His response was that it was lawful. Of course it is still lawful to pay taxes, and still unwise not to do so, or to recommend that others not do so.”
Clearly Jesus was not interested in the temporal world, but you are. Therefore using Christianity to defend a tax system that puts the burden on the middle class and people who live by their labor is not appropriate, and more importantly an affront to the teaching of Jesus.
Pay your taxes and using the bible to defend your selfishness and greed.
MSS sed: There is an old adage in law: when you have the law on your side, argue the law; when you have the facts on your side, argue the facts; when you have neither, abuse the opposing litigant.
Quoting the Tax Foundation to attack the progressive income tax is like quoting Karl Marx to defend collectivization. You have no FACTS on your side, no LAW, just your subjective interpretation of paid pimps for the CEO classes, trust fund babies, and the Park Avenue set.
Worse, you distort the teaching of Jesus to defend your greed and selfishness, which is a form of blasphemy. And like most conservatives/libertarians you resort to using the BLACK welfare mother as a racist tool to incite resentment among working class white people to YOUR point of view. And you cite biblical quotes against sloth and drunkenness and laziness to describe me and my motivations.
Yes, all defenders of the progressive income tax are lazy bums who don’t want to work for a living. That’s the essence of your “argument”.
And now you are asking for tolerance and respect?
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@M.S.S.
The argument about the spoliation of the
Church is that the confiscated wealth was
put to use, and as some say fueled the
economic expansion of England, including the
settlement in America. Family fortunes were
created then, which then were used to create
other wealth.
Now, releasing all that wealth into the economy
might have been a good thing, according to some,
but it created a debt with the former beneficiaries
of that wealth, and a debt has to be paid.
In the US no such wealth accumulation of a Church
establishment occurred, so the State had to make up
for its lack.
@Joe Populist
Curious how it all comes down to “black women bearing
babies and getting paid for it”. One measure that
could be said to be effective to prevent abortion
is the one reason to scrap the whole system. Reminds
me of Bill Bennet saying that crime went down because
of abortion, since babies which would have grown up
to be criminals were aborted.
It is racism? Is it just hartred of babies? It is
worth looking into.
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Joe Populist, you say my mention of how illegitimate births have skyrocketed in the black community in consequence of the perverse incentives given by the welfare state is ‘racist.’ Let me ask you - does a 75% rate of out-of-wedlock births serve the black community well? Do you think it is a good thing? I don’t find fault with black welfare mothers so much as I do with the liberal politicians who devised the programs that brought their situation into being. I’m not sure whether the programs were well-meaning mistakes, or were undertaken as a deliberate move to create a reliably dependent constituency for the politicians who essentially use taxpayers’ money to buy the votes of people on the dole. It doesn’t really matter; the consequences have been terrible.
The scriptural passages you cite commending charity to the poor do not suggest that government should compel it. Voluntary almsgiving is urged upon those who have the capacity to do it, not for the good of the recipient, but for the spiritual benefit of the giver.
Do you suppose that someone who was made to accept baptism or marriage by force would derive any sacramental benefit from them? Of course not - and neither would they be canonically valid. Similarly, charity exacted by force is no charity at all. I’m sure you do not have the slightest concern for the spiritual welfare of the people you deride as the “CEO classes, trust fund babies, and the Park Avenue set” (a group which, by the way, includes the esteemed Taki, host of this forum).
No - what you are expressing is plain old envy for people who are economically better off than you, and a covetousness, disguised as a so-called ‘populist’ agenda, of assets belonging to those people, which you would like government to confiscate and spend in ways you consider desirable. The last time I looked, envy and covetousness were still cardinal sins.
Finally, I am not asking you for “tolerance and respect.” I’m asking that you conduct your part of this dialogue with civility, as I have mine. Resorting to personal abuse merely reveals a deficit in one’s debating skills. If you wish to display before the readers of this forum how bereft of civility you are, that will serve only to damage their respect for you.
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MSS sed: “I don’t find fault with black welfare mothers so much as I do with the liberal politicians who devised the programs that brought their situation into being.”
Injecting Black Welfare Mothers into a discussion of the progressive income tax is obvious an appeal to racism in the white middle class is an old trick that “libertarians” have used for years to convince them to support their economic agenda.
Aid to Mothers with Dependent children (welfare) is a drop in the bucket of the Federal Budget. On the other hand, the inequity in the tax burden of the rich to that of the middle class and the working classes is HUGE!
So deal with it, instead of using dirty tricks to defend your point of view.
MSS sed: I’m asking that you conduct your part of this dialogue with civility, as I have mine.
You implied that the defense of the progressive income tax is motivated by sloth and drunkenness by people too lazy to work. My reference to YOU as a defender of CEO classes and the trust fund Park Avenue set is hardly any different then what you are engaging in.
Your call for civil discourse is as disingenuous as your arguments against the progressive income tax.
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Joe, why don’t you answer my question? do you or don’t you think that a 75% rate of illegitimacy serves the black community well? I’m curious what you think.
It seems to me, at least, that it might be time to try something different than what we have done in the past - the welfare state has not done much to lift people out of poverty. As the saying goes, Lyndon Johnson declared war on poverty and poverty won. There are many in the black community, for example Tom Sowell, Walter O. Williams, or Justice Clarence Thomas, who agree that the incentives given by the welfare system are perverse. Are you going to call them ‘racist’ too? Name calling is not a substitute for rational debate.
The welfare system is certainly not the only cause for our excessive tax burden. Sending troops off on military ventures half-way around the globe to ‘make the world safe for democracy,’ cosy deals between government and certain of its contractors, foreign aid to kleptocratic third-world governments, unnecessary academic make-work ‘research,’ and many other projects that bleed the taxpayer could also be cited.
However, the principle of redistribution - based on the Marxist axiom, “from each according to his ability, to each according to his need” - has the clearest tie of any of these to a graduated or ‘progressive’ income tax rate scheme, as first advocated by Marx and Engels in the Communist Manifesto. It is for this reason that I have spent so much time discussing the welfare state, which goes hand-in-glove with confiscatory taxation.
I did not, by the way, suggest that “defense of the progressive income tax is motivated by sloth and drunkenness.” What I pointed out is that the welfare system financed by redistributive taxation rewards sloth, drunkenness, bastardy, and other vices - in short, that it is counterproductive and a waste of the taxpayers’ money. That is not an attack on you or a speculation as to your personal traits or habits - it is a criticism of the system you defend. Can you not see the distinction?
You have presented no contrary evidence. If all you can do at this point is to respond to my arguments with ad hominem attacks (name calling and questioning of my motives), aren’t you effectively conceding that you can’t refute those arguments factually or logically?
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Welfare rewards sloth, drunkenness, and bastardy?
How about inheritance? Isn’t it the knowledge that she’s
got millions waiting for her that leads Paris Hilton to
make a spectacle of herself, giving an extremely bad
example to all young girls?
Welfare cases which show sloth, drunkenness and bastardy
are not glamorous. No one would like to live like they
do. But when Paris Hilton behaves like that, thousands
of little girls dream of one day being like her.
Paris Hilton shows why we need a stiff inheritance tax,
to keep sluts like her from becoming role models.
Why
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MSS sed: “…do you or don’t you think that a 75% rate of illegitimacy serves the black community well?…the principle of redistribution - based on the Marxist axiom, “from each according to his ability, to each according to his need” - has the clearest tie of any of these to a graduated or ‘progressive’ income tax rate scheme, as first advocated by Marx and Engels in the Communist Manifesto.”
Nobody likes the welfare system, and Clinton reformed it considerably. But while Aid to Families with Dependent children got curtailed, only to be replaced with increased negative income tax, rent subsidies and so on. At any rate, it’s a drop in the bucket of the Federal Welfare state. And irrelevant to the discussion of the progressive income tax, or the burden on taxation that falls disproportionately on the middle class, and working folks.
You are the one avoiding the question.
As usual, you are up to your old tricks, first it was the Welfare Mother bug-a-boo, and appeals to racism. Now we are all communists?
I’ve presented plenty of links proving that the payroll tax is regressive, and that the rich are not paying their fair share. Furthermore without the progressive income tax, the US economy would be a third world economy, like Mexico---which seems to be your ideal of a government where the working class pays for welfare for the rich.
As for being motivated by Marxism, that’s YOUR slur, and not true. I’m more motivated by the social gospel of Jesus and my Christian faith. My values are the values of the working class: religion, family, community and love of country. My ideas on CLASS are more motivated by Max Weber, not Karl Marx. I was the chairman of the Young Americans for Freedom in college, and a student of Russell Kirk.
I’ve spent a lot of time and effort all my life fighting communists in the labor movement and the antiwar movement to be slurred by the likes of as selfish, ideological zealot like you.
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Adriana sed: “Welfare rewards sloth, drunkenness, and bastardy? How about inheritance? Isn’t it the knowledge that she’s got millions waiting for her that leads Paris Hilton to make a spectacle of herself, giving an extremely bad example to all young girls?”
Good point, Adriana! You might also give the example of the President of the United States, a complete failure at every business venture he ever was involved in, not to mention the fact that he relied on his Blue-Blood Northeastern Establishment Banking family’s connections for every business he ever started. Read Kevin Phillips book, The Bush Dynasty. That family made all it’s money in war and Big Government largess.
The problem with libertarianism is that it’s morally corrupt and economically illiterate. Unregulated “free” markets always led to booms and busts, and plutocracy. While libertarian philosophy would have us equally “free” to starve to death, it ignores the fact that we are not all equally at risk of starving to death.
What’s ironic about MSS is that he’s a small businessman, and really doesn’t benefit from the “progressive income tax” any more then the people who work for him. He’s been snowed by the Republican Party, who appeal to economic resentments of working people, but then govern the country like plutocrats.
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I don’t really care what vices or follies a person like Paris Hilton engages in as long as she does so with her own money. It’s none of my business.
When someone’s vices and follies become chargeable to the taxpayer, then I care, because it is an expense to me.
Instead of an inheritance tax there is a much older and surer way of penalizing the frivolous rich. It is summarized by the maxim, a fool and his money are soon parted. People like Paris Hilton are products of the modern egalitarian state in which the upper classes are not taught the duties appropriate to their station in life. “Noblesse oblige,” to be sure, but noblesse can only obligate when it is recognized as noblesse. A levelling social policy, which we have had for several generations, destroys the sense of obligation.
I can recall, as a child, the days when newspapers had ‘society pages’ and when it was said that a lady’s name should only appear in the paper on three occasions: her birth, her marriage, and her death. If the conventions to which society once adhered were still around, such people as Paris Hilton would be ostracised rather than admired.
BTW, Adriana, I did a little research on your claim that the welfare state was made necesssary by the dissolution of the monasteries. It is true that the first English poor laws were passed after the monasteries were dissolved, but correlation does not necessarily imply causation. Your argument is a classic piece of pot hoc, propter hoc reasoning. I hate to cite so obvious a reference as the Encyclopaedia Britannica, but here is what it has to say on the issue, s.v. “Poor Law”:
“The cycle of boom and slump had come to add a new element of instability to the economic life of England. Of less importance in the creation of Tudor poverty is that cause which loomed so large in early accounts of the origin of the poor law, the dissolution of the monasteries… The legend that hordes of monks and nuns were turned adrift to beg their bread has not been substantiated by later research. This new type of poverty was not confined to England; it as appearing in all of the more economically advanced countries of Western Europe.”
For your argument to succeed it seems to me that you would have to show that poverty in countries where the monasteries were not dissolved was more generously relieved than in England. Do you really believe that the lot of the poor was better in the Spain of Philip II, France under the last of the Valois, or the papal states under Sixtus V, than it was in the England of Elizabeth I? Evidence, please!
And of course you still haven’t responded to my point that since tax-supported monasteries never existed in British North America, the American businessman can hardly be said to enjoy some ill-gotten advantage from their dissolution.
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Yes, Adriana, I am a small businessman. I am also a family businessman (the business was founded in the 1920s). My grandfather’s estate was taxable, and my father’s estate was taxable. I am a top-bracket taxpayer on the income from my business, and it’s a wonder it has managed to survive the repeated mulctings it has suffered from government. You are damned right that I resent this.
For every Paris Hilton, there are thousands of “millionaires next door” who seek only to live quietly and do their duties honorably by their families and neighbors. Most people who are in this position are there as the result of diligent work and thrift - often over several generations. They enjoy the benefits of inequality because they deserve them. People ARE unequal in intelligence, drive, and other personal qualities. To use state power to enforce a Procrustean egalitarianism is to violate the ancient principle of justice, “suum cuique” - to each his due.
The existence of elites has never been suppressed by egalitarianism - rather, as in the former Soviet Union and in today’s nominally communist China, egalitarian policies have led to the development of a stunted and perverse elite like the nomenklatura.
We once had an aristocracy in this country. It produced men of the calibre of Washington, Jefferson, Madison, and Lee, who knew their position in society and the responsibilities it entailed. Joe Popuilist, when you studied under Russell Kirk it is unfortunate that you did not acquire his admiration for this strain in the early American character, exemplified by the remark of John Randolph of Roanoke (whose political biography Kirk wrote), to wit: “I am an aristocrat. I love liberty, and I hate equality.” Indeed, liberty and equality are opposed ideals, rather than harmonizing with each other.
To the extent the American elite shows decadence today - as we see in the present cult of celebrity, in which vulgar movie stars, sporting figures, politicians, heirs to old wealth and the nouveau riche all blend together in a frothy and nauseating whirl - it is because egalitarian social policies that have been in place for most of the last century have destroyed the circumstances under which an aristocracy that could produce a Washington, Randolph, or Lee existed. Instead we have Bush, Kerry, Clinton, and Giuliani. Weep!
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MSS: Instead of an inheritance tax there is a much older and surer way of penalizing the frivolous rich. It is summarized by the maxim, a fool and his money are soon parted. People like Paris Hilton are products of the modern egalitarian state in which the upper classes are not taught the duties appropriate to their station in life. “Noblesse oblige,” to be sure, but noblesse can only obligate when it is recognized as noblesse.
That’s biggest load of crapola I’ve ever heard. It doesn’t do the retired worker who just discovered that his pension payment got cut in half because some finance capitalist stole money out of the pension fund in the 1980’s to make a profit that wasn’t there, and pay the CEO a bonus he didn’t deserve. In the 1990’s the new CEO goes to bankruptcy court to dump his pension obligations, so he can pay himself another $25 Million dollar bonus.
Barry Goldwater hated unions because he didn’t see any need for unions, ‘cause he took care of his people. So did a lot early industrialists---like George Eastman, the Hormel Brothers to name a few. But not everyone was a George Eastman. But they were the exception---most were robber barons and crooks, like the Walkers and the Bushes.
So instead of “noblesse oblige”, we’ve got Bush2, the spoiled prep school brat, as the poster child for American “entreprenuership”.
What little men and families of good existed, ended with the 60’s. A good book on this is Christopher Lasch’s books, The Triumph of Narcissism, and the Revolt of the Elites. Furthermore, James Burnham documented the phenomena where actual power was transferred from the owners of property to the bureaucrats and managers. The CEO classes in other words.
Both btw, were ex-Marxists.
MSS, you’re an idiot. Even when your ideas had some merit 50 or 60 years ago, they really didn’t work. And with the changing times they are even more irrelevant today.
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JP, you are again following your usual pattern of ignoring the points I make and going on to address others that I didn’t. By the way, an estate tax at marginal rates of up to 55% on estates exceeding $2 million did not prevent the existence of a frivolous heiress like Paris Hilton. How much do you think should be confiscated? Need I remind you that elimination of inheritance was one of Marx’s platform points in the Communist Manifesto - along with steeply graduated income taxes?
You will probably complain again that I’m calling you a Marxist. I don’t think you really know enough about Marxism to be a Marxist. But, like so many people, you repeat his ideas without being fully aware of their source. We see this also with feminists who, wittingly or not, frame their arguments in terms used years ago by Marx, Engels, and Marcuse.
Since you claim to be a former student of Russell Kirk, it seems appropriate to conclude with a quotation from “The Conservative Mind”:
First, from the chapter on Legal and Historical Conservatism -
“Civilized societies are competitive societies. Their competition is economic and civil: another kind of competition is found even among the most savage peoples living in a condition of status, but it it a terrible competition. The study of primitive societies refutes the notion that all men are brothers, and that all men are equal… The idyllic fantasies of Rousseau are exploded by the sober historian… It is quite true that joint ownership, by community or family, is older than private ownership of land; but this only demonstrates that private proprietorship is part of progres. Ferocious though competition is between groups in a primitive condition of life, in their domestic transactions competition is feeble. Economic competition - in exchange and in the acquisition of property - is relatively modern in origin; and what is more, in its complete form it is distinctively Western. It is a mighty benefit, essential to the higher forms of progress.”
And from his chapter on Babbitt, More, and Santayana -
“In a century when the aristocratic principle, the classical idea of justice, and the institution of property all are menaced, what effective stand can conservatives take? Great advantages are with the radicals - the seductions of flattery, the opportunism which deals with immediate material needs to the exclusion of distant considerations, the force of humanitarian sympathieds. ... Humanitarianism, usurping the place of the Church, endeavors to ignore the existence of Sin and to erect sympathy into a social theory, leaving individual responsibility out of account. Sympathy and justice are confounded.”
What good was studying at the master’s knee when you have evidently either ignored or forgotten what he taught?
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