A Rich Guy's Very Compelling Response to Krugman's Column "Let's Not Make A Deal"

stopbush

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Mon Dec-06-10 05:50 PM
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A Rich Guy's Very Compelling Response to Krugman's Column "Let's Not Make A Deal"

Krugman's column may be read here: http://www.nytimes.com/2010/12/06/opinion/06krugman.html?ref=paulkrugman wherein he says let the bush tax cuts expire.

This rich guy wrote a great response.

John Jazwiec
Chicago and Old Naples
December 6th, 2010
10:04 am

I am a CEO and someone who makes a lot of money.

If you are going to lead a company, there is no substitute for strong leadership. Part of being a strong leader is to take risks. There is an old saying that "there can be no breakthrough without a breakup". Unless a leader is willing to stand up for the long-run, call a competitors bluff, live with the short-term pain of the breakup, and be confident that taking a hard line stand will eventually lead to a breakthrough, they will never last in the top job.

As a high wealth earner I have three points I would like to make to Washington. One is that after my first $ 250,000 I just in invest my money into banks. While that my be good for banks, it does nothing for the economy's ability to create a multiplying effect because I am not going to spend the additional money on consumption.

The second is that I would would gladly have my marginal tax rates be higher so that the 99% of Americans with only 75% of the nation's wealth can prosper. I am not saying I academically believe in a progressive taxation. I am saying, that I can't make more money if there is no thriving middle class to buy things I make.

Finally I am anti-government spending. More to the point I am against throwing too much money into too many pots. What I want is a national government to set strategic goals, and make a small amount of infrastructure investment bets that will eventually lead to long term growth.

The mythology of free enterprise alone leading to national wealth growth is an urban legend. The Erie canal that connected the Atlantic Ocean to the Great Lakes turned Manhattan from an island port to the world's financial center. No canal, no skyscrapers, no free enterprise.

The same can be said by the North building a railway and telegraph system that defeated the South, kept the Union in-tact and was used by free enterprise to productively exploit western expansion. FHA and the GI Bill provided free enterprise with an unprecedented educated middle class to exploit. The national interstate highway was built, despite the national debt being 60% of GDP, allowed suburban expansion and better supply chains. Finally the Apollo program led to many inventions we use today. Most impressive though was the inspiration of a generation to become engineers and become the world's greatest inventor.

In each case, came targeted government investment and then free enterprise and wealth creation of everyone.

Today all we are doing is arguing about how a fixed amount of wealth should be distributed, instead of targeted investment for long-term wealth creation. The next big thing is a world class infrastructure and green jobs. A nation like China has the political will to win this race in a flat world. While the U.S. is still fighting 20th century battles.

Until everyone understands that one percent of us have 24 % of the nation's wealth and are not going to spend it, until everyone understands that wealthy people have a vested interest in a vibrant middle-class and is more than happy to pay higher taxes to achieve it, and until we realize we need a federal government to be the chief national investor instead of the chief national spender, Rome will continue to burn.