Vail Daily letter: U.S. at a crossroads
Vail, CO, Colorado
“It has been said that money is not the key to happiness. I always figured that if I had enough money I could have a key made.” – Joan Rivers.
Why are Republicans so angry? They already have most of the money. They have the tax code dramatically tilted in their favor, thanks partly to favorable tax rates on capital gains and dividends — important sources of income for the wealthy but not the middle class.
When I hear someone making the argument that the rich are already taxed too much, and attempt to prove it by stating that the wealthy already pay nearly 80 percent of federal taxes, I have to laugh. The logic says just the opposite. The reason the wealthy pay such a high percentage of total taxes (in spite of low tax rates on capital gains and dividends) is that they make dramatically more money than the average person. Rue the day that they pay 100 percent of the taxes!
On a per capita basis, Republicans have higher income and wealth numbers than Democrats or independents. Despite all of their rhetoric about wanting to create jobs, they own most of the capital and are busy sending jobs overseas, often to places with hideous working conditions and subsistence pay.
Maybe we need to understand that wealth redistribution works in both directions. About three decades ago, what had been a relatively lengthy period of wealth and income distribution stability ended, and was replaced with an unrelenting march of an increasingly smaller percentage of our population acquiring an increasingly greater share of the nation’s wealth. Now that the middle class would like some of that wealth back, it’s called class warfare.
The annual World Economic Forum ended its 2012 conference in Davos, Switzerland, a while back with a warning that Western capitalism was in jeopardy. A primary reason is wealth and income inequality, not just in the United States but around the world. Perhaps Western capitalism, as opposed to managed capitalism as practiced in China, has left an old era and entered a new one.
We also should stop perpetuating the myth that America is still the land of opportunity. Research from around the world concludes that “Americans enjoy less economic mobility than their peers in Canada and much of Western Europe … and one reason for the mobility gap may be the depth of U.S. poverty, which leaves poor children starting especially far behind.”
This research is filled with data that demonstrate that Americans in larger percentages grow up and stay in the same economic class as their parents compared to other developed countries.
Even conservative Rep. Paul Ryan, R-Wis., wrote that “mobility from the very bottom up is where the United States lags behind.”
In Adam Smith’s “The Wealth of Nations,” first published in 1776, the Scottish economist and moralist addressed the question of why some countries are rich and others poor.
As recounted by Adam Davidson in The New York Times Magazine, Smith was the first to raise the idea “that the wealth of a country is most closely correlated with the degree to which the average person shares in the overall growth of its economy.”
Although other theories have come and gone, a Turkish economics professor at MIT by the name of Daron Acemoglu, author of “Why Nations Fail,” along with several collaborators have researched the rise and fall of ancient Rome and medieval Venice as well as the economic emergence of countries like Botswana, Costa Rica and Thailand, and concluded as reported by Davidson: “If national institutions give even their poorest and least educated citizens some shot at improving their own lives – through property rights, a reliable judicial system or access to markets – those citizens will do what it takes to make themselves and their country richer.”
The United States is at a crossroads. What should we do? Think about it.
You won’t find the answer on a cable news channel or a radio broadcast.
Think about it.
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