Railing Against the Rich: A Great American Traditi

[GG]

http://online.wsj.com/article/SB123396621006159013.html

Railing Against the Rich: A Great American Traditon
By ALAN BRINKLEY

The Great Depression of the 1930s created hardship and suffering among millions of Americans. It also created populist resentment of elites. Among the many signs of this anger was the astonishing popularity of Huey P. Long, governor of Louisiana and then U.S. senator, a figure so dominant in his own state that his enemies called him a dictator. But to the ordinary people of Louisiana -- and later to millions of ordinary people across the U.S. -- Mr. Long was a heroic figure, fighting for the "common man" and challenging the right of elites to monopolize power and wealth.

Starting in 1933, Mr. Long created a national organization called the "Share Our Wealth Society." He publicized it through his frequent national radio broadcasts (with time provided free by timid network executives), and through his many speeches before many audiences. His goal, he claimed, was a radical redistribution of wealth. Every needy American would receive a "household estate" of $5,000 (almost $80,000 in 2008 dollars), an annual wage of $2,500 ($40,000 in 2008 dollars), and other benefits. This great boon would be financed by high taxes on people making over $1 million. There would be an $8 million cap, with everything above that confiscated for redistribution. The plan was economically, and probably politically, impossible. But the inability of a wealthy nation to provide jobs and support to millions of citizens made Mr. Long's proposal appealing and persuasive. "Let no one tell you that it is difficult to redistribute the wealth of this land," he told a radio audience in 1934. "It is simple."

Whether or not we are now entering a new Great Depression, we are almost certainly entering a period in which resentment of financial and corporate titans will increase, and in which many politicians will feel they have no choice but to join the chorus of denunciation -- perhaps even a president with almost unprecedented approval ratings as he begins his term. In the 1930s, the popularity of "big business" -- high in the prosperous 1920s -- dropped dramatically, even catastrophically, and did not revive until the corporate world recovered its wealth in World War II. In the meantime, the wealthy and powerful encountered challenges that make President Barack Obama's $500,000 salary cap on companies seeking federal assistance seem pale by comparison.

In the 1930s, plans similar to Mr. Long's proliferated and attracted broad support. Francis Townsend, an aging physician in Long Beach, Calif., launched the Townsend Plan, a promise to everyone over 60 of a guaranteed $150 to $200 a month from the government "on condition that they spend the money as they get it." A nationwide "transaction tax" (similar to a V.A.T.) would, he improbably argued, provide enough money to finance the system. Dr. Townsend claimed that he had up to 25 million followers two years after launching his plan -- an unverifiable but not impossible number. The novelist Upton Sinclair almost won election as governor of California in 1934 by proposing the seizure of idle factories and farms from their capitalist owners. The properties would be managed as cooperatives to give work to the unemployed and to replace the profit system with what he called "production for use." Father Charles Coughlin of Detroit, known as the "radio priest" for his weekly political broadcast, chastised bankers and financiers and demanded a radical inflation of the currency -- an old populist proposal that Father Coughlin insisted would redistribute wealth.

Franklin Roosevelt himself, trying to steal the thunder of the populists, proposed the so-called "soak-the-rich" tax, passed in 1935, which targeted high corporate salaries and investment income, even though it did little to increase government revenues or reduce the real wealth of those required to pay. He made a series of speeches in 1936 excoriating the selfishness and greed of the "economic royalists." He had struggled, he said, "with the old enemies of peace, business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.... Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me, and I welcome their hatred." This polarizing rhetoric was greeted with some of the most enthusiastic responses of any of his speeches.

In the end, this powerful, anti-capitalist populism had relatively little impact on economic life. Mr. Long was assassinated in 1935. Mr. Sinclair lost his election. Father Coughlin and Dr. Townsend joined forces in a third-party presidential challenge in 1936, an effort that received less than 2% of the vote in an election Roosevelt won by a landslide. Few New Deal measures bore any significant relationship to the proposals from these populist movements, although some historians believe that the Townsend Plan helped spur passage of the 1935 Social Security Act. A few years later, the New Deal abandoned its anti-business rhetoric in the face of a deepening recession. Instead, the government began to embrace Keynesian solutions, which promised economic growth through increased government spending, a strategy that required no significant intrusion into the prerogatives of capitalists.

[cannon_fodder]

When Bank of Oklahoma is turning a profit for shareholders, employing 3,000 Tulsans, paying property taxes on downtown skyscrapers, and George Kaiser donating money for new park trails they are a great corporate citizen.

If they lost money and laid people off and Mr. Kaiser closed his wallet after losing $500,000,000 in personal wealth he'd be a horrible robber baron and stealing his money would be a popular idea.

Just a matter of public sentiment.

The basic fact is when government tries to "fix" things economically all it can do is scratch the surface.  When it tries to do things better than the private sector it usually fails.  The deeper in it goes, the worse it usually does.  

Russia's GDP quadrupled in the decade after communism fell.

China prospered.  

Eastern Europe rapidly chased the standard of living of Western Europe.

Those that stayed the course, Cuba and North Korea, remain far behind the rest of the world.

New comers to socialist paradises are suddenly begging capitalist pigs to come back - notably our friend Hugo.

Everyone loves social programs and it is popular to be a victim in today's America.  But someone has to generate the wealth to pay for all those victims.  The government does not generate wealth, private industry does that.

[we vs us]

So . . . should I or shouldn't I rail against the rich?

[Conan71]

quote:Originally posted by we vs us

So . . . should I or shouldn't I rail against the rich?

Rail all you want wev []

[we vs us]

quote:Originally posted by Conan71

quote:Originally posted by we vs us

So . . . should I or shouldn't I rail against the rich?

Rail all you want wev []

Hm.  I'll have to gather my anti-capitalist minions (the usual crew:  anarchists, socialists, commies, hippies, Charles Manson and Che Guevara) for some input.  Lemme get back to you.

[rwarn17588]

Like anything else, this issue needs some nuance. Such as, taking it on a case-by-case basis.

Real good rich person: Chet Cadieux of QuikTrip, who creates jobs, a good product and looks out for his employees.

Real bad rich person: A Wall Street banker who is taking taxpayer bailout money and then handing out billions in bonuses.

I know who I'd rail against.

[cannon_fodder]

Good poor person:  guy working 2 part time jobs to feed his family because his career path evaporated.

Bad poor person:  guy who screws off his entire life and gets arrested several times and relies on section 8, medicare, medicaid, food stamps and welfare to take care of his family (which is larger than the working mans family).
- - -

Both the "bad" people are in essence stealing from society.  

[guido911]

quote:Originally posted by cannon_fodder

Good poor person:  guy working 2 part time jobs to feed his family because his career path evaporated.

Bad poor person:  guy who screws off his entire life and gets arrested several times and relies on section 8, medicare, medicaid, food stamps and welfare to take care of his family (which is larger than the working mans family).
- - -

Both the "bad" people are in essence stealing from society.  

Well that's just racist, or something...[]

[we vs us]

quote:Originally posted by guido911

quote:Originally posted by cannon_fodder

Good poor person:  guy working 2 part time jobs to feed his family because his career path evaporated.

Bad poor person:  guy who screws off his entire life and gets arrested several times and relies on section 8, medicare, medicaid, food stamps and welfare to take care of his family (which is larger than the working mans family).
- - -

Both the "bad" people are in essence stealing from society.  

Well that's just racist, or something...[]

Wow.  That wasn't about race at all.  

Kinda sad that poverty = race to you.

[nathanm]

quote:Originally posted by cannon_fodder

The government does not generate wealth, private industry does that.

Sometimes private industry gets stuck on stupid and we need to have the government spend gobs of money to grease the wheels of commerce, though.

Neither way is the one true path to greatness. Unfettered capitalism makes a few people rich at the expense of the rest of the nation. Unfettered communism ends up making most everybody poor. Somewhere in between seems to do the best. A private sector that can do what it wants within reasonable limits and a government that's not afraid to step in when it is needed.

Over in Europe, you have more unemployment (for how much longer at our current rate of job loss, though?), but fewer people doing menial work. Over here, you have (had?) low unemployment but a lot of people underemployed doing low-pay service work.

I can't really say either is better, they are just different ways of doing things.

And Cuba and North Korea? Their biggest issue is the tin pot dictator leading the place, not their economic system.

Another way of pointing out the inherent double standard is that when a communist country has starving people, it's all the government's fault. The evil economic system. When we have people starving it's lazy people who refuse to work starving themselves. Or an "unfortunate economic downturn."

While I completely agree that communism isn't the way to go, I think the double standard makes it nearly impossible to have a rational discussion on what path is the best balance of private capital creation and not leaving regular people by the wayside.

[cannon_fodder]

Double standard?

Here is an easy example:  North Korea v. South Korea.  They both started from the same point.  One went with a capitalist system, one communist.  One is wealthy and starvation rare, the other millions of people starve every few years.  China was dirt poor, dropped communism and it's on its way to being wealthy.  Russia.  The Eastern Block.  West vs. East Germany.  The common denominator is communism goes away, the standard of living rises.

If you think the scope of poverty in the United States is in any way comparable to what I am referencing, then you are sorely misinformed.   I can't even find "starvation" on the list of causes of Death in the United States.  776 died from accidental firearms discharge... but starvation didn't make the list.   I'd have to say the number of people actually starving to death in the US is a pittance.

Tens of millions starved in the Soviet Union.  Perhaps hundreds of millions in the "great leap forward" of communist China.  North Korea had several million starve as recently as 1995.  

The reason I single out the economic system is because it has served as a universal truth.  Communist countries become poorer.  Poor economics leads to the issues most people think of as social causes.   When a major disaster hits an post-industrial nation hundreds or thousands die... when it strikes an impoverished nation millions can die. Like it or not, capitalism has saved more lives than anything else ever conceived.

Certainly every person in the United States has benefited.  Our poorest members of society are better off than the average person in rural China (all 700,000,000 of them).  To pretend capitalism doesn't benefit the "regular people" is a ridiculous statement.  We're poor if we don't a room for each member of the family, a car for each adult, cable TV,  an Ipod, an Xbox, and whatever else we "need."  Poor in the United States is such a relative term it almost makes me sick.

A "poor" person in the US can get health care, housing, education, food, transportation, daycare, and spending money just by signing up.  A far higher standard of living than most (85%) people in the world.   To starve in the United States you have to ignore food stamps, avoid food banks, stay away from homeless shelters, and shun all help offered to you.  I'm talking about countries that economically can not get food for their people.

Should we be satisfied with our standard of living?  No.  We should never be satisfied. But clearly we haven't left the "average person" by the wayside when our poor lives better than most people in the world.

And no, I'm not arguing for a totally laissez fair approach.  Proper government intervention to correct market imperfections and to intervene in society to provide the highest possibility to success is required.   Certainly the European system has things we can study and adopt - just as they will be studying and adopting things from the US as they are getting hit worse by the financial crisis (hard to fund socialist programs without economic engines).

[Cats Cats Cats]

quote:Originally posted by we vs us

quote:Originally posted by guido911

quote:Originally posted by cannon_fodder

Good poor person:  guy working 2 part time jobs to feed his family because his career path evaporated.

Bad poor person:  guy who screws off his entire life and gets arrested several times and relies on section 8, medicare, medicaid, food stamps and welfare to take care of his family (which is larger than the working mans family).
- - -

Both the "bad" people are in essence stealing from society.  

Well that's just racist, or something...[]

Wow.  That wasn't about race at all.  

Kinda sad that poverty = race to you.

Actually, his comment was not at all racist.  The fact that you infer race from generic comments would be attributed stereotypes to a race.  Which could be considered racist.

[nathanm]

quote:Originally posted by cannon_fodder

Double standard?

Here is an easy example:  North Korea v. South Korea.  They both started from the same point.  One went with a capitalist system, one communist.  One is wealthy and starvation rare, the other millions of people starve every few years.  China was dirt poor, dropped communism and it's on its way to being wealthy.  Russia.  The Eastern Block.  West vs. East Germany.  The common denominator is communism goes away, the standard of living rises.

If you think the scope of poverty in the United States is in any way comparable to what I am referencing, then you are sorely misinformed.   I can't even find "starvation" on the list of causes of Death in the United States.  776 died from accidental firearms discharge... but starvation didn't make the list.   I'd have to say the number of people actually starving to death in the US is a pittance.

Tens of millions starved in the Soviet Union.  Perhaps hundreds of millions in the "great leap forward" of communist China.  North Korea had several million starve as recently as 1995.  

The reason I single out the economic system is because it has served as a universal truth.  Communist countries become poorer.  Poor economics leads to the issues most people think of as social causes.   When a major disaster hits an post-industrial nation hundreds or thousands die... when it strikes an impoverished nation millions can die. Like it or not, capitalism has saved more lives than anything else ever conceived.

Certainly every person in the United States has benefited.  Our poorest members of society are better off than the average person in rural China (all 700,000,000 of them).  To pretend capitalism doesn't benefit the "regular people" is a ridiculous statement.  We're poor if we don't a room for each member of the family, a car for each adult, cable TV,  an Ipod, an Xbox, and whatever else we "need."  Poor in the United States is such a relative term it almost makes me sick.

Capitalism benefits the regular people precisely because of the regulations we have placed upon it and the social safety net we have enacted. Capitalism didn't do that. Our dabbling with socialism did that. At the start of the industrial age, we were closer to today's China than today's South Korea.

And while people in this country don't die directly from not eating, they do die from malnourishment, and there are plenty of people going hungry tonight. Granted, it's not anywhere near on the same scale as most of the third world (communist or not, the distinction is irrelevant, plenty of folks in nominally capitalist nations are starving), but it's there.

And China? That's an excellent example of capitalism leaving most of the country behind, especially now with the shuttering of so many factories leaving so many workers out on the street with nothing. Even in the good times the rural population was destitute.

What separates the nations you speak of from the extreme third world poverty in Cuba and North Korea (although much more so in North Korea, Cubans are far better off, though not well off by any stretch) is a strong social safety net.

Cubans do better than North Koreans because of the social safety net they have. If we hadn't cut off Cuba 40 years ago, even if they were still communist, they'd be far better off than they are today. We were their largest trading partner, after all.

It's not as cut and dried as we like to think. Capitalism definitely works better for controlling most of the means of production, but it requires strong controls to get us where we are today. While we have loosened them somewhat, our bootstrapping ourselves out of extreme poverty happened back when there was a lot more regulation. (Obviously some folks made it good much sooner, by and large those that controlled factories, mines, and whatever else)

There are things, like roads, and I'd even go so far as to say electrical distribution and other last mile services (water, and so on) that make just as much sense being government owned as privately owned. Not that we should be buying up electric companies, but there are plenty of places that have and seem to do fine.

The electric companies aren't doing a great job of upgrading transmission capacity, that's for sure. Of course, the state of oklahoma does a worse job than most of maintaining the roads, so that argument cuts both ways, although my opinion is that the citizenry of the state has more to do with that than anything else. Nowhere else have I heard the argument that "the news media is making up the problems with the roads" when a road bond issue is up for a vote.

(I really need to refine my writing skills)