Concentrated wealth endangers U.S., democracy

Ron Smith’s letter of May 9 raises several points which beg comment.
First, aside from the demands on his income and where it places him on the income scale, it is a simple fact that wealth in America has become more narrowly concentrated than at any time since the height of the Gilded Age with its robber barons in the 1890s.
Many of us ‘ far too many of us ‘ have fallen sway to the steady barrage of radically conservative think tanks and do not realize how such concentration of wealth endangers the country and democracy. Supreme Court Justice Louis Brandeis (from Louisville, incidentally) stated it clearly: ‘We can have a democratic society or we can have great concentrated wealth in the hands of a few. We cannot have both.’ He was a liberal who earlier represented workers in their quest for the eight-hour workday. But conservatives too have seen the dangers of concentrated wealth. Herbert Hoover said, ‘Excessive fortunes are a menace to liberty.’ Andrew Carnegie endorsed a steep inheritance tax as a proper penalty for those who failed in their moral obligations to society. And Lincoln said, ‘Labor is the superior of capital and deserves much higher consideration.’
The problem with concentrated wealth is that it begins increasingly to close off opportunities for anyone but those who have wealth, ensuring that wealth in turn remains with those who already have it. In last Sunday’s Courier Journal there were citations of studies indicating that America now provides less opportunity for economic mobility than does some European countries; that a child born in poverty here has less chance at prosperity than such a child born in Europe or Canada. It is also a matter of fact that the middle class, that mainstay of democratic stability, is shrinking in America.
As in the 1920s, concentration of wealth promotes irresponsible casino-like attitudes, becomes parasitic, and brings down the whole system. Today’s replacement of high-wage jobs with low-wage ones has obvious dangers for an economy driven by consumer spending. People making $20 million a year do not usually buy a thousand times as many cars as those making $20,000 a year.
Concentrated wealth corrupts not only business but government, public policies, the work ethic and values in general. Francis Bacon put it succinctly: ‘Money, like muck, is good only when it is spread about.’ Yet Republicans want to do away permanently with the inheritance tax, and Bush, in addition to his deficit-creating tax cuts mostly for the rich, touts an ‘ownership’ society in which investment income will not be taxed at all, only labor. Back to the feudal ages and an heredity aristocracy of money instead of land!
Contrast all that with a period when government actively promoted opportunity and created real ownership ‘ the post World War II period of prosperity and an expanding middle class. Federally-sponsored mortgage insurance dramatically increased home ownership. The G.I. bill and student-aid grants expanded educational opportunities, creating great gains in ‘human capital.’ Social Security and employer-sponsored pension plans institutionalized decent retirements. Union bargaining rights, won earlier, allowed workers increased say about their pay and working conditions. One spouse, even if usually the husband, could earn his family a middle class standard of living, send his kids to college, and leave the other spouse free for full-time nurturing of family values. At the same time America was financing the Marshall Plan to save Europe from Communism, building schools at a record rate for their boomer babies, constructing the interstate highway system, reducing poverty, creating health-care insurance, and putting a person on the moon ‘ all with fewer workers per dependent than there will be per retiree when the baby boomers, according to Bush, will bankrupt the Social Security system. And ‘ get this! ‘ with a top income tax rate of 91 percent established during the war because Roosevelt was determined that ‘Not a single war millionaire will be created in the country as a result of the war.’ Contrast that with Bush’s tax cuts mostly for the wealthy during the course of his war in Iraq or the overbilling of the government by Halliburton, Cheney’s old employer from whom he still draws deferred compensation.
As for feeling sorry for the upper 10 percent of wealthy elite, Mr. Smith cites Lincoln’s concern for slaves, Susan B. Anthony’s for women without the vote (women were only 10 percent of the population?), and Rosa Parks for Black civil rights. Now really, to equate these people’s concerns for issues of true morality and justice with concern for top tax beneficiaries shows either thoughtlessness or a flawed sense of morality and justice. It is reminiscent of anti-tax Republican and conservative think-tank spokesman Grover Norquist saying that taxing the elite wealthy minority simply because it is in the minority is like the Nazis wiping out the Jews because the Jews were a minority. Apparently, in some of us money stirs up enough passion to cloud our judgments.
Mr. Smith, I gather from his letter, coaches little league and helps support a church, his ways of doing some of the nurturing so important to the development of all of us, and I would guess that he is a better person than some of his beliefs might suggest, particularly his faith that ‘successful’ people somehow pull it off all on their own. That myth, which admittedly embodies a limited ‘ but very limited ‘ amount of truth, feeds easily into a dangerous self-righteousness. The Puritans, contrary to the very Bible they believed in, saw worldly success as a sign of favor with God. The Social Darwinists of the 19th and early 20th centuries attributed their great wealth and power, not to the scandalously corrupt political and economic system they manipulated to their advantage, but to nature’s law of the survival of the fittest.
It would seem far more productive ‘ as well as humane and civilized ‘ to work towards creating more opportunity for people than to perpetuate a system designed to produce winners and losers, particularly when the ‘successful’ are prone to using the ‘unsuccessful’ as a way of feeling good about themselves and even more particularly when they want to feel that because they have to pay taxes, they are abused by the system that has provided them their opportunities.
Supreme Court Justice Oliver Wendell Holmes said that ‘taxes are the price we pay for civilization.’ Compared to the alternative, the exchange is a quite a bargain.