Oct 18 2008
Teddy Roosevelt Weighs In on the Joe-The-Plumber Deal
The economic crisis has made us think again about how much a government should intervene in the economy and for what purposes. The silly exchange this week between Barack Obama and Joe (the plumber) Wurzelbacher has focused the question on the idea of “spreading the wealth.”
I don’t know this blog at all, but I found Mahablog did a terrific job of excavating President Theodore Roosevelt’s ideas on capitalism, state intervention, and economic justice. Very timely. Here ’s Mahablog quoting TR:
“The absence of effective State, and, especially, national, restraint upon unfair money-getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power. The prime need is to change the conditions which enable these men to accumulate power which is not for the general welfare that they should hold or exercise.
My only moral to the story is to try to tamp down this anti-intellectual streak in political talk that wants to replace social science with anecdotes and gotchas: The U.S. government is going to play a role in a twenty-first-century economy. Do not pretend we are all Jefferson’s yeoman farmers any more or the pin-maker of Adam Smith. The smarter question is what that government role should be, and to whose benefit? By saying “don’t spread the wealth”, conservatives are leaving unsaid their real message: “keep spreading it upward.”
I do not think that spreading the wealth would be a very good idea just because it takes away from the idea of freedom which our country was founded on. Is having a 1% tier of outrageously powerful and wealthy people in out country a problem, of course, but that 1% already takes care of 40% of all taxes brought in and now we want to take more from them? It would be one thing if it was redistributed and everyone took that money and put it into the economy, but you know that it wont. It will probably end up more like 40-50% of the people putting the money to good and the remainder spending the money on useless things, much like we saw in New Orleans after Hurricane Katrina. It would also be another story if that top, elite tier deserved to be taxed more, but the truth is that they do not. They are clearly in that position for a reason, because they are smart with what they do, and chances are they play a big role in our economy because they have so much to invest. So now instead of having all this money invested in the economy you take it out and give it to people who may or may not do the same. It just doesn’t seem to fair or safe to me.
Kyle:
Great comment.
But just to clarify my point in the original post, I am saying that it makes no sense in the 21st Century to assume the government will play no role in the economy. To say the government takes from the wealthy and gives to the poor is to ignore the ways in which the government allows the wealthy to gain wealth. Whether the government should give money to victims of Hurrican Katrina is one question, but almost no one opposes that the government made possible the fact there were levees in New Orleans to begin with or even that we had the equipment and people to tell us about the hurricane.
The real question is what role the government should play and for whose benefit.
Also, as a matter of mathematics, if the top category becomes wealthier, then they will pay a higher proportion of all taxes without the government deciding to change anything. So the government is not deciding to take more from them. If I made $20,000 in the year 2000 and make $200,000 this year, I will be paying a greater share of the overall national tax revenues this year obviously, but not because the government is punishing me more than they did in 2000.