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Posted by on Nov 18, 2010 in At TMV | 0 comments

A Bank Robber’s Great Economic Insight

In recent days we’ve been presented with two bipartisan plans to address America’s horrific annual deficits. The spending cuts suggested in both these plans are similar. They envision extremely painful reductions in Social Security payments, much higher co-pays for Medicare recipients, and a sharp decrease in military spending.

The tax-related ideas in these plans, however, are not so straight forward. Rather, they feature complex tweaks and reshapings of the tax code. Neither plan mentions, much less suggests, the most obvious thing to be done on the revenue-enhancing side to reduce deficits — taxing the very rich far more heavily.

Why should we do this? Willie Sutton, America’s most famous bank robber, summed up the operative reality here as it applied to his own specialty. When asked why he robbed banks he replied: “Because that’s where the money is.”

In 1976 the top 1 percent of earners garnered 9 percent of total national earnings. Today, that figure is almost 24 percent. Why should we tax the very rich far more heavily? Because this is where the money is!

Failure to understand this necessity does not so much anger as confuse me. The necessity here is not just simple arithmetic, its grounded in natural law. In the animal kingdom, the alpha male gorilla or baboon gets his choice of mates, but he’s also the one that must confront a leopard threatening his tribe. The hyena queen always gets first crack at the kill, but when the time comes to bait a lion away from the pack, she’s the bait.

With great privilege comes great responsibility. This is not only true in the animal kingdom, every human society with the slightest pretense to being civilized has always understood the same thing. Certainly, it has been copiously in evidence in our own American society. When the Declaration of Independence signers gathered in 1776, they pledged their lives, their fortunes, and their sacred honor toward the creation of a new nation. And they knew they were indeed putting their entire fortunes at risk by doing so.

A generation of parvenus who’ve attended some of our leading B-schools may have convinced themselves that they need contribute nothing to this country’s present financial crisis other than continued giant swilling at the national income trough. Now it’s time for a better spirit to appear among them — and also time for a libertarian claque to stop pretending that the rich and the poor should be taxed at the same rates because they have an equal right to sleep under a bridge.

Taking big chunks out of the standard of living of the elderly and poor, without a giant matching bite from the gluttonous compensation of the top one percent earners, is so dumb, so skewed, so fundamentally unnatural and unAmerican. that it couldn’t even pass the common sense “where the money is” reckoning of a bank robber.

More from this writer at wallstreetpoet.com

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