What is so difficult about this?

Wall Street

America Needs to Invest Elsewhere

An op-ed in today’s New York Times by Bob Herbert (“Winning the Class War“, New York Times, 27 Nov 2010, A16) does not need much introduction or comment.  It clearly and plainly lays out the growing situation of economic inequity in the United States.  

There is nothing inherently wrong with success.  However one has to ask how much of success that is rewarded with the highest financial gains is truly deserved.  In an adjacent op-ed William D. Cohan notes that Wall Street is the number one destination for “the best and the brightest.”  Is that true?

That makes some presumptions about what defines the best and the brightest.  And it also feels like a cop out when, as Cohan does, we bemoan the fact that “the best and the brightest” are not going into other fields like engineering.  Is Wall Street’s success, deserved or not, also a reason why the United States is losing its competitive edge in fields like science, engineering, and the like? 

I would argue that Wall Street’s success, our loss of global competitiveness, and tolerance for both is tied up complacency and laziness.  Who around this country is ready to do the heavy lifting any more?  I have commented on this blog my complaint about America’s impatience and I think that goes hand in glove with ideological complacency.

Tune into any conservative talk show and you’ll hear result.  Not long ago a series of callers each identified themself as a working class person struggling to get by.  They could not be more emphatic — even to the point of expressing frightening hate — when responding against any idea of restructuring tax policies.  Even when pointed out that tax rates in real terms tend to be lower on higher earners than struggling lower earners the callers said the higher earners had earned the benefit of lower taxes through their hard work. 

Don't Believe It.

Really?  Earning millions a year in compensation, sometimes much more, isn’t enough?  Taking for granted things like health care, housing, food, and other essentials that more and more Americans worry about every day isn’t a reward?  Tax fairness is somehow taking away “our freedom”? 

If people understood economies of scale they might understand that earning millions, even billions, isn’t necessarily a factor of being the best and the brightest.  It is a matter of being in the right place at the right time.  Professional athletes and entertainers earn today many times what pro athletes and entertainers earned just 20 years ago in large part because the product they produce can be sold to more people and sold in more ways.  Is Eli Manning 100 times better than Bart Starr?

And if the best and the brightest need to be bailed out, supported by government subsidies, given extra tax credits and cuts, and given access exclusive markets, how special are they?  Look into how Wall Street is making money today.  They can essentially borrow from the government at zero percent, buy debt from the government that earns them 3%, pocket the profit and charge the government fees for handling the transaction!   Any semi-competent trader could make that deal profitable.

The entrepreneurship and ingenuity that starts great ventures is still out there, but we cannot expect to stay ahead of the curve if we keep reinvesting in the past.  Our economic oligarchs. when they do invest in future technology, are as eager — perhaps more eager — to invest overseas as they are here.   I’ll harp on this again, the private sector is not getting it done for us.   Now is the time for Americans to pull together and support government investment in projects now.  Infrastructure, new technology, education, research.  Dollars that will be spent now.   In other words, support something other than Wall Street and businesses that rely on internal combustion engines.  Wall Street in particular has had their hat out long enough.

Conservatives have been winning the class war.  They have the ideological edge.  Again, I want to recommend George Lakoff‘s books, especially Don’t Think An Elephant, as a quick primer on this subject.  The conservatives have done such an effective job that even the struggling working class are voting against their best interests. 

1929. 2009.

But even more surprising, it is hard to see how supposedly bright people like Tim Pawlenty really think they personally will be better off feeding their economic masters.  How do policies that dismantle the middle class square with their pro-American discourse?  (Answer:  It doesn’t.  They live in the same fog as the misguided people who vote for them.)

There are true villians out there, genuinely bad people.  And there are real idiots out there, genuinely stupid people.  Too many of them are getting our votes and as long as that happens we have only the voter to blame.  It might pay to remind people that this is a democracy.  We can indeed vote in our best interests, but if people don’t understand the facts and the history of the issues affecting them they are vulnerable to misinformation. 

This country thrived when it truly pursued freedom, even when it was not perfect and pretty.  The United States thrived with less austerity and more progressive public investment.  We need to look again at what worked keeping in mind that progress toward a goal is worth more than abandoning the goal all together out of impatience.


One thought on “What is so difficult about this?

  1. U No Hu

    you need to identify the era in which the public was truly free. I thought that historically people always voted against their own best interests, so ultimately it doesn’t make any difference whether we live in a democracy or an oligarchy, I suppose. I just hope I don’t live long enough to see the truly worst of it. Barbara Tuchman makes an argument in A Distant Mirror that the world is now (when she wrote in the 80s, I believe) like it was before the black plague of the middle of the 14th century. That lead to a peasant’s revolt eventually, but I can’t see that happening now.


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