Then, the US imposed its first-ever Federal income tax and the titans of industry and capital began to dissipate, disperse, dissolve and die. Some of the mansions remain in Madison, Convent Station and Morristown, New Jersey. These stairs are a decaying reminder of where we've been and where we are now. Perhaps it's time to arrest the decay and rebuild our infrastructure. The train no longer makes a stop at the spot where these stairs are located; the railroad is now government entity, but the remaining mansions and new ones are now occupied by a new generation of robber barons.
The first generation of robber barons left a lasting, though by no means permanent legacy that contributed in some part to the public weal. Witness the railroads, Carnegie libraries and many other dividends that some of these folks paid back to the public. Where are people like this now? How is their amassed capital contributing to the public good? Or doing good works? Or, are they merely sucking the blood out of the rest of us?
Capitalism isn't the problem. It's the lack of rules, regulations, restraints, balance, calibration, incentives, etc. that allow the capital to flow to things that are not productive and that don't promoted public, civic good. It seems that many of the richest people in the US today got rich by trading in instruments that have no connection to reality and that are decoupled from any projects that add to the world. When the titans of industry and banking in the last gilded age invested, at least one could point to the objections on which they risked their capital. Some of these things persist today -- the stairs in this image and the railroad to which they lead being just one example.
What exactly have today's hedge funds and derivatives contributed to the good of society? Can you point to it or measure it? It looks from the sidelines to be nothing more than very fancy, sophisticated and costly gambling. Bailing out automobile manufacturers at least resulted in companies surviving, keeping workers employed, saving the communities in which those plants and workers are and in continuing to produce a stream of something -- cars -- that we can all point to as a result. What did bailing out the banks succeed in doing? Can you point to it? Did it save jobs (other than those some senior executives)? Did it produce something that benefits the greater good? Is Bank of America charging $5.00 per debit card transaction a worthy result of our collective investment in them? Shouldn't we (our government speaking on behalf of us all) have demanded something of value in return for our collective investment directed at keeping them afloat? Shouldn't we all be reaping a return on investment that weighs roughly the same as the risk we shouldered?
If I may weigh in for just a moment....We allegedly do have billionaires who reinvest in our society. But at what cost to the vox populi? Here's yet another argument to follow the money:
ReplyDeletehttp://www.dissentmagazine.org/article/?article=3781
Gab, interesting reading. Passing money around by billionaires is definitely a mixed bag. Some of the folks are very interested in seeing their names on big buildings. Some of them occasionally pay careful attention to producing positive results. It's often a mixed bag. The Gates Foundation has done some great stuff in the area of immunization in the third world and other health-related issues. No question of its value in those initiatives. In education, I'm not so sure. On the other hand, I would be shocked if discovered that you hadn't spent some time in Carnegie Library or two. They've lasted and paid dividend for about a century already. And, an awful lot of that steel from Mr. Carnegie went into the infrastructure that today is crumbling from neglect (a certain bridge in your neighborhood for example). Thanks for weighing in! I need to give that article a more careful read later. My wife and son reached the conclusion from their classroom experiences that teaching tech like white boards are an excuse -- kind of like more opiates for the masses -- to hypnotize the public.
ReplyDeleteBut, allow me to quote from a far more eloquent speaker/writer than either of us:
"Rarely is the question asked, is our children learning?" George W. Bush, 43rd President of the United States.
Back to the topic of capitalism for a moment....
ReplyDeleteCapitalism itself is not the villain in our current socio-economic drama. No, it's capitalism run amuck (or does my grammarian friend Gabrielle Rose prefer amock?) that is a prime culprit here. The system of raising, leveraging and risking capital is not intrinsically good or bad. How we manage it is where the moral, ethical and social value emerges or not.
Our public policy and tax laws can incent good behavior or bad. I would argue that in the past 30 years, our policies and tax code have increasingly been rewarding the worst of human behavior. The rich have gotten richer often because they are rewarded for doing rotten, unproductive things. This is not a necessary feature of capitalism. It can be held in check by some intelligent and fair-minded public policy that seeks to reward behaviors and investment strategies that promote the broadest public goods rather than the narrowest of selfish self-interests. Perhaps we need to balance capitalism and socially-aware social democracy. Anyone who doesn't think that the US has major elements of socialism has spent too much time drinking the kool aid of our self-reliant, pioneer, wild west mythology. We have had elements of socialism in our body politic for a good long time and they've benefited everyone. Ever ridden on the Interstate highway system and wondered where roads would come from if someone hadn't deemed certain projects too important to leave to private enterprise? Or wondered how it that when you turn the handle on your faucet water actually pours out?
Maybe it's high time that we focused on remaking our social-economic-political structures. Not by having a revolution and tearing anything down, but maybe by employing all of our brain power towards some revolutionary thinking. For example, why aren't we promoting the idea that paying taxes can and should be an act of patriotism? That paying taxes can build our country? The Republicans argue that we need to reduce taxes on the wealthiest 1% because they are "the job creators." If that is true and that wealthiest 1% are now paying the lowest net taxes they have paid in something like 70 years, then where exactly are those jobs? Why aren't we taxing them at a fair rate? Why can't someone come up with a formula that incents those who are very wealthy for actual behaviors that produce actual jobs? Tax policy can prod good behavior. Why can't we as society embrace that idea? Why can't people who have reaped the greatest benefits be convinced that their taxes are a contribution to the greater good? That their success is not just due to great ideas and hard work, but also stems in part from their utilization of things that all of us have paid for collectively (highways for example)? Why aren't we encouraging the very richest to be proud of paying more taxes?
Why is that our government paid huge transfers of capital (read: entitlements or corporate welfare) to the tune of billions in tax payer dollars to companies like Xe (formerly Blackwater) and Haliburton for shoddy work in Iraq AND THEN allowed those same companies to abscond from the US as tax expatriates? How come the rest can't simply collect a big fat government pay check funded by everyone else and then leave without paying taxes?
I'm starting to really love this blog. I can't wait to hear what you think of the article I sent;the author reports that our schools fare far better, internationally, than is typically reported, and points to the obvious link between poverty and poor academic performance. Poverty - not educational policy - hurts our students. Just think of what we could achieve if we leveled the playing fields a little! There is a reason why people from all over the world come to the US to study: we have enormous intellectual capital. Indeed, why aren't the very richest among us proud to pay more taxes? This question bears more than cursory attention.....
ReplyDeleteGabrielle, sorry to have vanished without a reply. Shortly after typing my last comment a week ago, my electricity cut out due to downed tree limbs from our freakish pre-Halloween snow storm. The lights (and heat and internet and telephone...) FINALLY returned last night.
ReplyDelete