LBJ’s Secretary of State, Dean Rusk, was in France when De Gaulle decided to pull out of NATO. De Gaulle said he wanted all US military out of France as soon as possible.
Rusk responded, “Does that include those who are buried here?”
You could have heard a pin drop.
And . . .
There was a conference in France where a number of international engineers were taking part, including French and American. During a break, one of the French engineers came back into the room saying, “Have you heard the latest dumb stunt Bush has done? He has sent an aircraft carrier to Indonesia to help the tsunami victims. What does he intend to do, bomb them?”
A Boeing engineer stood up and replied quietly: “Our carriers have three hospitals on board that can treat several hundred people; they are nuclear powered and can supply emergency electrical power to shore facilities; they have three cafeterias with the capacity to feed 3,000 people three meals a day, they can produce several thousand gallons of fresh water from sea water each day, and they carry half a dozen helicopters for use in transporting victims and injured to and from their flight deck. We have eleven such ships; how many does France have?”
You could have heard a pin drop.
You get the picture.
Many of the things we’re proudest of as Americans, whether it be saving the world from fascism and communism or funding creation of the Internet — or our beautiful national parks or our unparalleled system of higher education or our putting men on the moon — were paid for in part or in full with our tax dollars. Likewise, our roads and schools and cops and courts and social safety net.
Yet some have succeeded in persuading people that most of their tax dollars are wasted . . . and should, in any event, be paid by someone else. Taxes are bad. Government is bad. Private consumption is good. (Build that giant house.) Public consumption is bad. (Don’t fix that bridge.)
Waste is often in the eye of the beholder. The military contractors and their employees paid to build planes the Pentagon doesn’t want may not see themselves as parasites on the taxpayer. But some government spending — like the disability payments one of my tenants used to collect by falsely claiming her son was mentally disabled — is unquestionably wasted.
If it’s 20% — to pull a number out of the air — that’s hundreds of billions of dollars a year. Then again, it’s still “just” 20%. Zero percent should always be the goal, but zero waste in almost any undertaking is unrealistic. (How much of the food you buy goes to waste? And even if every morsel goes to waist — do you sometimes wish you had eaten less?)
The charity you support may spend 30% or 40% of your contribution just collecting it — everything from fundraising salaries and direct mail to the cost of the annual gala fundraising dinner and the fee that MasterCard takes — and who is to say how well the remaining 60% or 70% is spent? Yet few would suggest we shrink non-profits to the size they could be drowned in a bathtub.
And how about insurance companies? Do any of them waste your premium dollars? Well, of course they do — I could write a book about it! Their sales and marketing costs are far higher than the IRS’ cost of collecting your taxes; and the same people who defraud the government defraud insurers — and that fraud and waste gets built into your premiums. Yet few suggest we drown the insurance industry.
The same could be said of private enterprise generally: Built into what we pay for its products and services are, often, lavish marketing costs, all manner of bureaucratic inanities, and, yes, even some fraud, such as shoplifting and “shrinkage.”
And even if this were not the case, the very premise of much of what we buy from private industry is, arguably, waste. Do we really need all the things we buy? We should be free to buy them, of course; but is the money we spend directly, via our private consumption, really always better than the money we spend collectively, via our tax dollars? Who doesn’t love a granite counter top or a new convection oven? But wouldn’t most of us prize even more highly a sewage system that keeps us from living in our own filth?
Ever since Ronald Reagan began demonizing government — and lowering taxes primarily for the rich — that balance has swung further and further from public consumption to private consumption. Especially private consumption by the rich. Which is why people are paying more than $100 million for single-family residences while our infrastructure crumbles.
So that’s my first point. That, sure, grumbling about taxes is our birthright — but we’ve taken this too far.
Almost all agree some taxation is necessary (“the price we pay for civilization”); and almost all agree that rich people should pay more than poor people.
But how much more?
Nick Hanauer busts the myth that the wealthy must not be taxed at high rates because they are “the job creators.” If you still haven’t seen that clip, I recommend it yet again.
Steve Jobs didn’t fail to start Apple or Fred Smith, Federal Express, because tax brackets in the Seventies were too high. Entrepreneurs don’t fail to pursue their dreams because 30% of their eventual billion might be taxed away instead of 15%.
Progressive taxation, with those best off paying the largest share, is not just morally sensible — it works best. The economy did not tank when Bill Clinton raised tax rates on the best off. Job growth was spectacular.
The economy did not boom when George W. Bush slashed them. Job growth was anemic.
And far from tanking, now that Obamacare requires that we pay an extra 3.8% on each million dollars of dividends and capital gains we make above the first $250,000, private sector employment has been rising for the last 55 months.
This is a 20-year real-world “experiment” in taxation. It’s not an academic exercise. Or a trial balloon in one small region of the country. And yet the Republicans in Congress are certain that taxes must never, ever be raised because, they say, raising taxes on the wealthy kills jobs. Even though it hasn’t. And lowering taxes on the wealthy, they say, creates jobs. Even though it hasn’t.
I’ve written before about my signed copy of the 1941 budget, wherein Franklin Roosevelt called on Congress to pay for increased military spending with increased taxes and hoped Congress would “follow the accepted principle of good taxation of taxing according to ability to pay,” avoiding “taxes which decrease consumer buying power.” (It’s consumer buying power, Nick Hanauer makes clear, that is the real “job creator.”)
Which brings me to . . .
A MEDICAL BREAKTHROUGH YOU’LL LOVE
This young woman is worth $4.5 billion because — look at this! — she’s come up with a way to “take your bloods” that involves just a pinprick . . .
The next time you get a blood test, you might not have to go to the doctor and watch vials of blood fill up as the precious fluid is drawn from your arm.
No more wondering to yourself, “Ah, how much more can they take before I pass out?”
Instead you might be able to walk into a Walgreens pharmacy for a reportedly painless fingerprick that will draw just a tiny drop of blood, thanks to Elizabeth Holmes, 30, the youngest woman and third-youngest billionaire on Forbes’ newly released annual ranking of the 400 richest Americans. . . .
. . . and that cuts from days or weeks to just hours the time it takes to get results. What a breakthrough for efficiency and better health!
Which brings me to the part about . . .
REDUCTIO AD ABSURDUM
Techonological innovation — which Kurzweil argues will be 32 times as great in the next 50 years as in the last — has the potential to make our economy ever more efficient and productive, our lives ever better and healthier. But consider what it will do to the employment of lab technicians and their support staff. And to employment at Walgreens, once the blood-test machine requires no attendant — you just stick your finger in — and no cashier, as it reads the payment info from your phone. Just a security guard and a janitor. Except the janitor could be replaced by a Scooba. And the security guard . . . well, what if as you tried to leave the store with something unpaid-for the revolving door, sensing the still-activated security chip, stopped revolving? With you trapped inside, as a friendly customer service rep in Mumbai negotiated your release or arrest?
My point is, for the sake of argument, imagine a world where almost every dreary chore was done for us by a network of machines and robots that were self-diagnosing and self-repairing, run off a solar grid, and showering us with capabilities like those on my iPhone. My iPhone can already do practically anything. It is magic. There is no such thing anymore as boredom or getting lost. And not a lot of delayed gratification. If I want something, I can order it within seconds and it will arrive at my door in a day or two — unless it’s a book or a movie or an album, in which case I can begin reading or watching or listening in a few seconds.
So here is this imaginary, for-the-sake-of-argument world where 1,000 people, let’s say, hold the key patents and own the uber-machines that make everything and grow everything and deliver everything. (No need for truck drivers or cab drivers, now that we have driverless cars and tractors and combines and fork lifts.) All powered from the sun.
The question becomes:
. . . Do we arrange things, in this world of Abundance, such that those 1,000 people live like emperors while the rest of us live like slaves, competing desperately for any job that will feed us?
. . . Or do we find a way to . . . I hope you will pardon the expression . . . spread the wealth?
If we do the latter well enough, those 1,000 can still live phenomenally well, but the rest of us can live pretty darn well, too.
There will be lots of jobs for masseurs and macrame instructors and soccer coaches and poets and troubadours and people who guess your weight on the boardwalk . . . jobs not essential to life but hard for a machine to fill with a human touch. There will be a yoga instructor and a philosopher at every Starbucks. (But perhaps no barrista — by then, a machine be able to accept voice orders, proffer the brew, and charge your phone.) And few of us will have to do jobs we hate (does anyone enjoy being a security guard?) . . . or forgo the six weeks of vacation many of us dream of (just as factory workers during the Industrial Revolution dreamed of what we now call “weekends”).
But how do we do it well enough?
As now, the free market will need some enlightened regulation — and collectively-agreed-to redistribution mechanisms. Which may horrify the Koch brothers, who may feel that $100 billion* is not enough . . . who may feel robbed of their incentive to work if they are not able to amass (and pass on to their children tax-free) $100 trillion. Why shouldn’t they or their heirs be allowed to own, say, half the world’s wealth (remember, this is reductio ad absurdam) if they violated none of the laws passed by the Congress and President their unlimited political contributions installed?
But I guess that’s my point. My vote would be to limit the power of the Kochs and other very wealthy people to determine who writes the laws.
My vote would be to write laws, regulations, and a tax system that helps everyone enjoy the fruits of all this potential efficiency and prosperity, so much of it owed to the sacrifice and suffering and hard work and ingenuity of our ancestors, not to today’s plutocrats.
. . . Boundless, essentially “free,” energy from the sun, once the infrastructure is built out.
. . . Boundless, essentially “free,” communications, entertainment, and information, now that the infrastructure is largely built out. (Not literally free — my iPhone cost a few bucks and Verizon isn’t giving anything away. But compared to the cost of a three-minute call from New York to Boston when I was growing up? Let alone a call to China? Let alone a video call to China, free on my iPhone via Skype?)
So I’d like to see the 1,000 masters of the universe in this (absurdly exaggerated) example taxed at, say, a 99% rate above their first $1 billion a year, with that massive revenue available to fund all kinds of wonderful projects and programs — including the bare essentials of a clean, healthy life for those unable or unwilling to strive for more — the income from all of which will flow into the private enterprise system, leaving many of us with plenty of dollars to afford the aforementioned soccer coaches, weight-guessers, and masseurs if we work hard. Though perhaps not as hard as we used to have to — at jobs we sometimes hated.
Because wouldn’t that be a good thing?
The technology is coming to make this largely possible, if we as a species don’t first wreck this little spaceship we all share.
Much of it, in fact, is already here.
Imagine: 32 times as much technological progress in the next 5o years as in the last!
Our challenge will be to figure out how most ethically and practically to allow us all — or almost all — to enjoy it, peacefully and constructively, together.
I’m pretty sure that giving the rich and powerful more wealth and power, while freezing the minimum wage, denying Medicaid expansion, and cutting back on public school funding — all tenets of today’s Republican party — is not the direction we need to be going to get there.
*Their net worth has tripled during the Obama presidency they’ve been so keen to subvert.
Tomorrow: Smoking. Thursday: Drinking.
Quote of the Day
I sincerely believe … that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.~Thomas Jefferson
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