Romney's former partner at Bain wrote a book about income inequality.Guess what--he's in favor of it
Last edited Wed May 2, 2012, 07:57 PM - Edit history (1)
Edited to add:
I'm going to shamelessly kick my own thread because Paul Krugman finds this guy newsworthy too, and his op-ed has a great title: "Rich Guy Says We Should Be Grateful for His Wealth"
There are many things you could say about this, but surely high on the list is the degree of historical ignorance it requires. I mean, this argument might have some surface plausibility if the era when America didn’t have such an overweening plutocracy — the 50s and 60s, when the top 0.01% received only about a fifth the share of income that it commands today — were a time of economic stagnation and low innovation. In fact, the postwar generation experienced the best economic growth — and the fastest productivity growth — of any era in the past century.
But this is how it’s going. If the right continues to make political gains, coming next is a reaffirmation of the hereditary principle.
http://krugman.blogs.nytimes.com/2012/05/02/rich-guy-says-we-should-be-grateful-for-his-wealth/
Thank you, Mr Conard, for sharing with us little people how Mitt Romney may very well think:
Conard understands that many believe that the U.S. economy currently serves the rich at the expense of everyone else. He contends that this is largely because most Americans don’t know how the economy really works — that the superrich spend only a small portion of their wealth on personal comforts; most of their money is invested in productive businesses that make life better for everyone. “Most citizens are consumers, not investors,” he told me during one of our long, occasionally contentious conversations. “They don’t recognize the benefits to consumers that come from investment.”
snip
The idea that society benefits when investors compete successfully is pretty widely accepted. Dean Baker, a prominent progressive economist with the Center for Economic and Policy Research, says that most economists believe society often benefits from investments by the wealthy. Baker estimates the ratio is 5 to 1, meaning that for every dollar an investor earns, the public receives the equivalent of $5 of value. The Google founder Sergey Brin might be very rich, but the world is far richer than he is because of Google. Conard said Baker was undercounting the social benefits of investment. He looks, in particular, at agriculture, where, since the 1940s, the cost of food has steadily fallen because of a constant stream of innovations. While the businesses that profit from that innovation — like seed companies and fast-food restaurants — have made their owners rich, the average U.S. consumer has benefited far more. Conard concludes that for every dollar an investor gets, the public reaps up to $20 in value. This is crucial to his argument: he thinks it proves that we should all appreciate the vast wealth of others more, because we’re benefiting, proportionally, from it.
Google’s contribution is obvious. What about investment banks, with their complicated financial derivatives and overleveraged balance sheets? Conard argues that they make the economy more efficient, too. The financial crisis, he writes, was not the result of corrupt bankers selling dodgy financial products. It was a simple, old-fashioned run on the banks, whom, he says, were just doing their job. There are a huge number of people in our economy who want ready access to their savings — pension-fund managers, insurance companies and you and me with our bank accounts. And because economic growth comes from long-term investments in things like housing, factories and research, the central role of banks, Conard says, is to turn the short-term assets of nervous savers into risky long-term loans that help the economy grow.
snip
Conard concedes that the banks made some mistakes, but the important thing now, he says, is to provide them even stronger government support. He advocates creating a new government program that guarantees to bail out the banks if they ever face another run. As for exotic derivatives, Conard doesn’t see a problem. He argues that collateralized-debt obligations, credit-default swaps, mortgage-backed securities and other (now deemed toxic) financial products were fundamentally sound. They were new tools that served a market need for the world’s most sophisticated investors, who bought them in droves. And they didn’t cause the panic anyway, he says; the withdrawals did.
Whether his argument is good or not, nobody's going to read a book about why the 1% are awesome and so nobody's going to read his argument. All most people are going to hear, if the Democrats get out in front and let people know about this book, is that a former partner at Bain, who retired at 51 with hundreds of millions of dollars, is saying that the government should help the investor class.
The majority of the comments are a pleasure to read. And as at least one person has pointed out, even if somebody becomes fantastically wealthy as an investor, what the current debate is about is TAXES, not wealth.
http://www.nytimes.com/2012/05/06/magazine/romneys-former-bain-partner-makes-a-case-for-inequality.html?hp
= new reply since forum marked as read
