Saturday, March 7, 2009

Same place, different road

I was thinking a bit more about my previous post, More from the dreaded France, and another thought occurred to me.  My point there was that the current Republican idea of threatening Americans with the specter of turning into France was likely to be ineffective, and betrayed a lack of knowledge as to what the American Dream is all about.  It's not about the chaotic marketplace, it's about the fruits of coming through that chaos.  To claim that Obama wishes the U.S. to become France West is a false claim with a false conclusion.

An underlying theme to all this whining from the Right is that Obama wants to redistribute income, take from the deserving rich and give to the great unwashed; you know, the same marvelous theory that has given us flat median income and a major, not-since-the-Depression crisis.  The Republican idea has been that each earns according to their talents and adaptability, and any deviation from that is inherently unfair.  So we see proposals like a flat tax, which is seen as "fair" by its proponents.  If you can't make it in our system, the argument goes, it's your own fault, and no one should be expected to pick up your slack.  No redistribution, that's socialism, and we can't have that.

So let's take a scenario that's all too common today.  On the one hand, you have a worker who's been at a company for 20 years.  She's done everything she's ever been asked, has worked unpaid overtime when it was needed to get a task done, works well with others.  Her effort has been instrumental in getting the company to a place of profitability and respect in the industry.  She has received steady raises over the years, slightly higher than the rate of inflation, so she is making about twice in real terms what she was making when she started.  Of course, she is more than twice as valuable, so the company has actually come out ahead, but it's a tradeoff with which she's comfortable; she has a life in the community, her kids like their schools, her husband has a job at which he's happy.

The company decides to hire a new CEO.  He's a slick guy, the right degrees from the right schools, moved from company to company on the fast track upwards, shook the right hands.  He never really developed any expertise other than an ability to be decisive in meetings, and he's either been lucky enough that those decisions have been right, or he's gotten out before the wrong ones brought him down.  His fabulous education came from schools which, public or private, have been supported by taxpayers, and he's played the corporate welfare game quite successfully.

CEO Guy comes in and wants to make a splash right away, demonstrate to the board that he's a bold visionary, not afraid to make the tough decisions.  Increasing revenues by creating new products or selling more of the old ones is hard; that usually takes a while and requires some knowledge of the company and its industry.  It's way easier to look at some department profit statements and slash a couple, saving all those salaries.  Or, as he did in the previous company, he can outsource or offshore some "non-core" functions.

Either way, the hard worker loses her job.  She hasn't done anything wrong, she never has, she's just the wrong person in the wrong place at the wrong time.  Depending on the economy, her field, her formal credentials, she may be able to get another position without too much trouble.  On the other hand, she may not, and her family may be forced into a series of tough decisions.

And the money that was saved by giving her the heave-ho?  Some of it went to shareholders, but not all of it.  Some of it went to consumers, but there's ample evidence that prices are lowered a lot less than the actual savings would imply.  Ah, but CEO Guy's contract calls for him to get "variable compensation" based on profits, and he's brought those up, oh yes he has.

So we most certainly have income redistribution here.  But this is Republican-approved redistribution, the kind where one employee of a company gets to make decisions that move dollars into his own pocket.  This is perfectly fine, not that evil kind where the elected representatives of the people decide a progressive tax rate will take somewhat more from those who have to set up programs to help people who have not.

What's the difference?  In the first case, it's all private, it comes from decisions made by one person who has been granted near-life-and-death power over the affairs of another, without any consent of the second person.  In the second case, the people speaking through their official government have made the decision that the nation's interest will be better served if there is somewhat more equality.

In each case, whether you're on the Right or the Left, you support some form of resource redistribution.  Personally, I'm not totally sold on either.  The first seems wrong; it seems to be that, after 20 years, that employee has more "ownership" of her job than a two-month severance check would imply.  The second can easily be overdone; I lived through the Carter years, where it seemed we could solve every problem by moving money around the economy (and led directly to the backlash of the "Reagan revolution" and the Greed Decade of the 1980s).

So, yet again, I urge taking a middle ground, leaving most money in the hands of those who make it, while never forgetting that a nation with millions living in poverty is not a strong nation, no matter how many billions the people at the top have.  Does the current bundle of Obama programs go too far?  I don't know yet, but I'm guessing that, since the president has said that over 90% of the money will pass into private hands, the people at the top will fare just fine - no tag days for Bill Gates, I would wager.

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