Originally posted by reeftool A lesson that we all should have learned in 2008 was just how fragile this house of cards economic system we live in is. A hurricane and an insurance company with a cash flow problem started a chain reaction that almost brought down the country. Having a good healthy number of local farmers will make a huge difference if large corporations go bankrupt.
I'm quoting this from the farmer thread as it is so applicable here - and parallels the thing about the housing market I posted here a page or two back...
Leaving aside considerations of 'fairness' and 'ethics' and 'fruits of hard work' and 'american dream' and so on... policies that result in extreme concentration of income and wealth make for a less stable system, economically, politically, and ecologically.
Economically - just like with taxation, the big money comes in from the millions of small potatoes - when incomes stagnate or regress, individual social costs increase, and the tax burden puts more emphasis on the mass market, demand slackens, and people end up over extended... A casino mentality is easily generated, both intentionally through advertising and inadvertently due to human nature: the selling of tax breaks for the rich hinge on the idea of a windfall coming MY way some day, the periodic bubbles are that much more enticing for people hoping to make it up a rung or two to where the spoils of the system start to accrue (or so they think)... And as has been pointed out many times, the excess capital and cash flying around the wealthiest ends up with fewer places to go.
The foundation of the economy, consumer wise, is weakened making the entire superstructure weak.
Politically, I've already mentioned the selling of 'lotto' wishful thinking... but there are other real dangers, the electorate as we've seen can become volatile, demagoguery finds a foothold, resentment grows. The win streak of corporate interests will sooner or later encounter a political counter action.
Ecologically - the cheap goods for low paid people aren't exactly green; and the domination of corporate interests in politics limits what conservation and planning for the future we can do as a nation. In fact, we might say that keeping large parts of the population economically insecure plays into the hands of corporate interests: people are afraid and thus subject to blackmail, people are concerned about making ends meet rather than larger issues...
Originally posted by B Grace Okay, I'll ask my question again. What is the desired outcome here? I see a lot of people complaining about currrent conditions and a few placing blame on a few individuals but I see nothing stating hard facts on why some Americans are wealthier than others, why the situation will never change, or why that isn't necessarily a bad thing.
The idea that some Americans are wealthier than others isn't what's at stake here - it is generally agreed that some are wealthier, some are more talented, and some work harder than others - the liberal position is that society as a whole benefits when
opportunity is equalized, not the result. Conservatives don't see that.
The equalization of opportunity means that there ought to be compensating mechanisms to lessen the effects of wealth and priviledge - so that education and job advancement become available to people otherwise locked out of the system. The equalization of opportunity ironically is where liberals may have a meeting with conservatives around small business - although the liberal's bias is more towards ensuring large corporate interests don't choke out small business.
As long as there are taxes, tax expenditures and deductions, government contracts and regulations, there will be
in effect relative income redistribution. Conservatives don't see this, it's not in the world view. The effect of the flatter tax rates (and continued expenditures) is a relative redistribution of wealth (and under the supply side thinking, ideological justification for income redistribution as well) to the wealthy.
Some of the effects of this I've ennumerated above.
As I've said, Oprah will still be Oprah, and Gates Gates, and Tiger Tiger, even if their taxes were higher: they would still be influential, wealthy, at the top of their heaps... Nobody is saying this shouldn't be so! But the rest of the society might well be healthier and more stable.