You Can’t Make the Government Perfect, But You Can Make It Better

It's institutions of government - not its size - that matter when it comes to how good a job the government does.

Back in my libertarian days, whenever somebody complained about government corruption or abuse of power, my stock libertarian response was always the same: “Well if we made government smaller, we wouldn’t have that problem!”

This was an apprehension that was cured by, you know, reading a few history books. Back in the 19th century, federal and state governments were far more corrupt than they are today–even though they did less! And reducing that corruption wasn’t a matter of embracing libertarian ideals. It was, instead, the embrace of the deliciously unsexy Civil Service Reform movement. And in terms of the Federal Government, much of that reduction of corruption is owed to one of our greatest Presidents – Chester A. Arthur. (A President so good even Mark Twain liked him.)

Chester A. Arthur’s story is actually quite remarkable. He was a one-time member of the Stalwart faction of the Republican Party, a group of politicians who were pretty much devoted to patronage and the spoils system when it came to divvying up power in the Federal Government. He was the one-time Port Collector of New York City, which was pretty much corruption central. But as President, he became a champion of the Pendleton Civil Service Reform Act, which marked the beginning of the end of the spoils system and patronage.

By ending spoils, creating written examinations for civil service, and other reforms, Arthur and Congress helped create a federal bureaucracy that was more efficient, more professional, and less prone to corruption. I recall studying the Federal bureaucracy as a student and one thing that does leap out is the relative paucity of corruption. Governments from other countries around the world have sent delegations to the United States to learn our institutional controls.

To be sure – there is corruption in the federal ranks. But such incidents tend to be rare, and the laws are enforced. To my knowledge, the only real breakdown of the system in recent years has been the Bush Adminstration’s terrible, terrible appointments to the Minerals Management Service, which led to jawdropping corruption so bad that the only reasonable solution was to do what the Obama Administration did — close the agency down, and replace its mission with two different agencies that are better policed.

Here’s the bottom line on this: no government is going to be perfect. At least, as long as they’re run by humans and not superintelligent computers. So there will always be abuses of power. There will always be corruption. The best we can do is to minimize that corruption by creating insitutions that make corruption less likely, and coming down with the hammer on those politicians and bureaucrats who break the law. Sometimes this will mean major changes. More often, it means minor tweaks to regulations and oversight.

I’ve cited this Jason Kuznicki essay before, but he makes a great point worth repeating:

Many of the freedoms that you value the most are easily and inexpensively stomped upon—stuff like public worship, the free press, or the right to independent political association. Arbitrary government costs less than the rule of law, if only because codifying the law and establishing the quality-control mechanisms inherent in doing the job properly can be expensive. Other things being equal, secret laws are cheaper than published ones, and the cheapest laws of all are the ones that the guard dogs make up right there on the spot.

Institutional reform, transparency, and the rule of law may not be sexy. But that’s how you fix corruption. It’s not the size of government that creates abuses of power. It’s impunity. And fixing that requires institutional reform, not ideological platitudes.

FILED UNDER: *FEATURED, Government, US Politics
Alex Knapp
About Alex Knapp
Alex Knapp is Associate Editor at Forbes for science and games. He was a longtime blogger elsewhere before joining the OTB team in June 2005 and contributed some 700 posts through January 2013. Follow him on Twitter @TheAlexKnapp.

Comments

  1. Hey Norm says:

    “…an apprehension that was cured by, you know, reading a few history books..” That is anathema to the folks who see small government as cure-all for all they fear in the modern world.
    Once you are convinced that man walked the earth with dinosaurs all hope is lost.

  2. mantis says:

    No, no, no, Alex. Government is implicitly evil, and exists only to sap the vital essences of Galtian supermen who, like Greek heroes, guide the lesser mortals among us to a paradise where a mysterious god called “the market” solves all problems and provides for everyone. Any so-called “government” that seeks to provide for the common good beyond shooting foreigners really exists only because the riff-raff are jealous of the benevolent captains of industry and want to punish them for their successes. Attempt any other explanation and you reveal yourself as a liberal, fascist, marxist nanny-stater who hates hard work, freedom, and apple pie.

  3. john personna says:

    No, no, no. If we make it better we risk people wanting more of it.

    This is why bad government is actually the best government.

  4. Some of us read the same history books and yet draw different lessons because we start with different assumptions. Is it possible to state a position without having to imply that people who think otherwise aren’t as smart, as erudite, or as good as you are?

    As Lord Acton once famously said, power corrupts, absolute power corrupts absolutely. So please put away your notion that it doesn’t matter how big the government is. That is nonsense and reveals a shocking level of either ignorance or self-blinkering about bureacratic and organizational behavior.

  5. “Government, even in its best state, is but a necessary evil; in its worst state, an intolerable one.” — Thomas Paine

    As I recall Alex, you’re rather fond of Thomas Paine, so explain again why you think the size of the evil is unimportant.

  6. Alex Knapp says:

    Charles,

    As Lord Acton once famously said, power corrupts, absolute power corrupts absolutely. So please put away your notion that it doesn’t matter how big the government is.

    That’s an empirical statement that doesn’t withstand rational scrutiny. The absolute monarchs of France had a “smaller government” than the current American one.

    That is nonsense and reveals a shocking level of either ignorance or self-blinkering about bureacratic and organizational behavior.

    I’ll take a bureaucratic government over a spoils/patronage system any day of the week and twice on Sundays.

    “Government, even in its best state, is but a necessary evil; in its worst state, an intolerable one.” — Thomas Paine

    I think that the phrase “necessary evil” is non-sensical.

  7. @Charles:

    As Lord Acton once famously said, power corrupts, absolute power corrupts absolutely. So please put away your notion that it doesn’t matter how big the government is.

    But the two issues are not the same. Bigger does not necessarily mean more power in terms of how absolute it is or isn’t. Part of Alex’s point is that the much smaller government of the mid-1800s was more corrupt because of the nature of the spoils system. The variable, therefore, is not size, but one of the institutional controls on power.

    This doesn’t make big good or bad but it points out that bigger/more capable does not automatically equal more corrupt.

    In regards to Acton’s dictum, I would note that it doesn’t say anything about size.

  8. mantis says:

    As Lord Acton once famously said, power corrupts, absolute power corrupts absolutely. So please put away your notion that it doesn’t matter how big the government is.

    That’s why we have a government that does not invest absolute power in anyone.

    Again, Libertarions; Somalia is calling! Smallest government you can find. Paradise!

  9. Also: Paine was, without a doubt, a radical on the question of necessity of government. He thought, on balance, we didn’t need government at all. Fun as that may be to consider, I find it to be a fantastical assertion.

  10. Dave Schuler says:

    The best we can do is to minimize that corruption by creating insitutions that make corruption less likely, and coming down with the hammer on those politicians and bureaucrats who break the law.

    I agree with this, Alex. It’s also why I believe in rules-based systems rather than those based on individuals. It’s why I’m wary of arguments in favor of hiring the “best and the brightest” (as I’ve seen you make on occasion), preferring instiutions i.e. rules that favor better government over individuals who will at their discretion implement better government.

    I also think that it’s why we should be concerned about the trend of the last two administrations in particular to concentrate excessive power in the hands of appointed offcials. So, for example, the waivers handed out to states, companies, and other organizations under the ACA concern me. Clearly, in a reductio ad absurdum if every state, company, or organization is granted a waiver the law (or a portion of the law) becomes effectively null and void. If the waivers are not rule-based or the terms under which they’re granted are not subject to scrutiny, how can we ensure they’re not a vehicle for corruption or inherently corrupt? I think we should be concerned about the tack that education and financial reform have taken for just those reasons.

  11. Alex Knapp says:

    Dave – I agree with you on pretty much all points.

    It’s why I’m wary of arguments in favor of hiring the “best and the brightest” (as I’ve seen you make on occasion), preferring instiutions i.e. rules that favor better government over individuals who will at their discretion implement better government.

    To clarify, because I think this is a reference to my post on public sector salaries, I do think that compensation and incentives in government need to be geared towards a level that generally competent people are drawn to government. I also think they need to be geared in such a way as to minimize corruption. I’m concerned that low-paying public sector jobs create an incentive to kickbacks, etc.

    I believe you made a similar point in talking about aligning incentives in the SEC and related agencies so that regulators have an incentive to regulate.

  12. I am slightly afraid that I might be misunderstood here.

    What I mean is that in practice, individual liberty is not entirely or even primarily a function of the size of government. This does not, however, preclude a large government from infringing on liberty. Particularly when it grows very large, a government cannot help but trample on liberty, because it is confiscating so much in taxes that the citizens’ menu of choices will shrink.

    Do I think some of that is happening today? Absolutely. Do I think it’s the only thing that matters, or just the biggest thing going right now? Not even close.

  13. ponce says:

    81% of Americans think the rich should pay higher taxes, but our politicians gave them a tax cut.

  14. Dave Schuler says:

    I also think they need to be geared in such a way as to minimize corruption.

    There is no such level. The nature of avarice is that it is not self-limiting. We can’t afford to pay every clerk at the DMV $100 million a year but even if we did it wouldn’t deter somebody who was sufficiently motivated by money that they absolutely, positively wouldn’t take a bribe if it were offered (which is what you get when you offer salaries that are high enough). I have very nearly the opposite view. I think we should be defining the qualifications we demand, offering the lowest wage we can, and watching the till very closely. If we don’t get enough people to apply with the qualifications we need, up the ante.

    Changing the the strategy of compensation to incentivize the activities you want (as I’ve suggested for the SEC) is different than simply paying higher salaries, regardless of qualifications, experience, or output.

  15. Alex Knapp says:

    Dave,

    I have very nearly the opposite view. I think we should be defining the qualifications we demand, offering the lowest wage we can, and watching the till very closely. If we don’t get enough people to apply with the qualifications we need, up the ante.

    I don’t think our goals or methods are contradictory here. Obviously, the lowest wage possible that doesn’t invite an intolerable level of incompetence or corruption is ideal.

  16. sam says:

    @Dave

    “Clearly, in a reductio ad absurdum if every state, company, or organization is granted a waiver the law (or a portion of the law) becomes effectively null and void. ”

    The waivers to the ACA are only for one year and are provided for in the law itself. Or have I misunderstood you?

  17. sam says:

    @Jason

    “This does not, however, preclude a large government from infringing on liberty. Particularly when it grows very large, a government cannot help but trample on liberty, because it is confiscating so much in taxes that the citizens’ menu of choices will shrink.”

    Wouldn’t that depend on the scheme of taxation? One can make the, utilitarian, argument that by taxing heavily those few, few relative to the rest, at the top of the income distribution, and taxing very lightly, if at all, those at the other end, we shrink the menu of choices for those at the top, but augment the menu for those at the bottom. And since there are far more at the lower end than at the top end, the overall quantum of liberty is increased (or certainly not diminished).

  18. john personna says:

    What we see in discussion, is that any flaw outside government is answered with a hypothetical one, which might have occurred, had goverment been larger or regulation more thorough.

    You can’t answer that with logic, they are already making it up.

    We cannot, say, come up with an improved mortgage framework, because scary stories have already been told.

  19. Dave Schuler says:

    The waivers to the ACA are only for one year and are provided for in the law itself.

    That doesn’t affect my critique.

    I’m not singling out healthcare reform here. I’m pointing out that ANY law that provides an appointed offficial with the discretion to ignore it (for however long a period) is problematic.

  20. mantis says:

    That doesn’t affect my critique.

    Seriously?

    I’m pointing out that ANY law that provides an appointed offficial with the discretion to ignore it (for however long a period) is problematic.

    Isn’t there a difference between “ignoring a law” and being granted a limited, temporary waiver from regulatory compliance for one year?

  21. JKB says:

    Well, you completely missed the problem with government. Corruption, at least on the personal level, in our government is reasonably contained. However, the greatest evil mankind has ever imposed upon himself is bureaucracy. It is sadly a necessary evil as the bureaucracy turns the hot air expounded by the politicians into actions good or bad.

    Thousands of bureaucrats making professional decisions within their framework which on the whole work against the people. Worse still, bureaucrats are theoretically, not permitted to act without enabling legislation. That Congress and, to an extent, the other branches have given to vague enabling to the Agencies is our sad fate. However, the bureaucrat, empowered with unchecked regulatory power, has sought to deny private citizens their freedom, which is that they may do anything not specifically prohibited. This freedom, however, is seriously threatened by the power of the bureaucrat to retroactively ban through interpretation something previously not prohibited and punish those acted upon their freedom.

    It is the bureaucracy, the 4th branch of government, that must be reined in. That Congress reacts as if they are powerless to stop the bureaucrats that were enabled by their predecessors is our sad state of affairs. EPA overreaching, no need for hearings or hand wringing, Congress may at their discretion, refine the EPA’s enabling legislations to stop their abuses. Legislation writ by man is not handed down from God and therefore can be refined, revoked, repealed or reconciled.

    It is time, that we as citizens no longer accept some vague lament by our elected representatives about some action taken by the bureaucrats. It is time we hold the President and the Congress responsible to take action to end these overreaches. If they are unable, then we have lost the Republic and it is time for a call to arms to overthrow our technocrat oppressors.

  22. mantis says:

    However, the bureaucrat, empowered with unchecked regulatory power,

    Which bureaucrat is that, exactly?

  23. mantis says:

    Oh, and don’t think we didn’t notice your post ends, all too commonly, with a call for violence.

  24. Hey Norm says:

    Back to the big/small government canard. Just once I’d like to see a tea bagger argue for effective government.

  25. jwest says:

    JKB,

    Well said. Bureaucrats can take the most well meaning legislation and turn it into an oppressive program with blinding efficiency. The more government grows, the farther results depart from expectations.

  26. Alex Knapp says:

    JKB,

    However, the greatest evil mankind has ever imposed upon himself is bureaucracy.

    I can think of a few things far more evil. Lots of things, in fact. Rape. Murder, Genocide. Wars of conquest. Torture. Slavery.

    Thousands of bureaucrats making professional decisions within their framework which on the whole work against the people.

    Do you have any evidence to support this supposition?

    Worse still, bureaucrats are theoretically, not permitted to act without enabling legislation.

    And they don’t, as a general rule.

    However, the bureaucrat, empowered with unchecked regulatory power,

    Unchecked? Their power is checked by Congressional oversight. By legislation — specifically, enabling legislation and the Administrative Procedures Act. They can be checked by Executive Order. They can be checked by the courts….

    However, the bureaucrat, …, has sought to deny private citizens their freedom, which is that they may do anything not specifically prohibited.

    (Citation needed)

    This freedom, however, is seriously threatened by the power of the bureaucrat to retroactively ban through interpretation something previously not prohibited and punish those acted upon their freedom.

    (Citation needed)

    That Congress reacts as if they are powerless to stop the bureaucrats that were enabled by their predecessors is our sad state of affairs. EPA overreaching, no need for hearings or hand wringing, Congress may at their discretion, refine the EPA’s enabling legislations to stop their abuses. Legislation writ by man is not handed down from God and therefore can be refined, revoked, repealed or reconciled.

    (a) I’m not sure what you’re referring to vis a vis the EPA, but if your referencing their new mandate to regulate carbon dioxide emissions, the federal courts determined that they were well within the boundaries of the Clear Air Acts, which is why they denied a stay requested by industry. (Frankly, I fail to see what right industry has to poison my lungs, but apparently a lot of people think they do….)

    (b) If Congress can limit the powers of agencies, then agencies don’t have unchecked power.

    If they are unable, then we have lost the Republic and it is time for a call to arms to overthrow our technocrat oppressors.

    You have already admitted that they are able to restrict the activity of civil servants. Just because elected officials enact policies you don’t like is no excuse for the treasonous violence that you are calling for.

  27. Alex Knapp says:

    jwest,

    Bureaucrats can take the most well meaning legislation and turn it into an oppressive program with blinding efficiency.

    Such as…. ?

  28. mantis says:

    I’m not sure what you’re referring to vis a vis the EPA, but if your referencing their new mandate to regulate carbon dioxide emissions, the federal courts determined that they were well within the boundaries of the Clear Air Acts, which is why they denied a stay requested by industry. (Frankly, I fail to see what right industry has to poison my lungs, but apparently a lot of people think they do….)

    For wingnuts, death is always preferable to imaginary tyranny.

  29. At least, as long as they’re run by humans and not superintelligent computers.

    Oh, there will still be corruption. The superintelligent computers will just scapegoat it all on the humans in order to distract everyone from our crippling lugnut shortage.

  30. reid says:

    I’m afraid to ask what a roving gang of bureaucrats did to JKB when he was a child…. Counseling might help.

  31. wr says:

    Mantis — For wingnuts, IMAGINARY death is always preferable to imaginary tyranny.

  32. mantis says:

    For wingnuts, IMAGINARY death is always preferable to imaginary tyranny.

    True, in their imaginary armed battles against bureaucrats and teachers unions, but the more the right succeeds in preventing/eliminating regulations put in place to prevent industry from poisoning us all to save money, the more real martyrs for the cause against imaginary tyranny there will be.

  33. ponce — news flash, the rich are paying higher taxes — even after the tax cut. Duh.

    mantis — try, please, to distinguish between libertarianism and anarchy. It’s not that hard. Or maybe it is for you.

    Alex, et al, I don’t see how you can allow government to get ever bigger without it necessarily becoming more powerful, hence the aphorism by Lord Acton. The counter arguments offered with respect to the French monarchy are red herrings. A government doesn’t have to be large to be tyrannical in nature, but I would argue that your going to struggle mightily to avoid the tyranny if you allow it to just keep getting bigger and bigger. The dynamics of the bureacracies themselves are being given short shrift here, as they are in the discussions of the public employee unions, but I digress. People are people whether they work in the public or private sector. There is nothing about working for the government that makes you a better person or inherently more efficient. In fact, most anecdotal evidence is to the contrary.

    Dr. Taylor , I have expressed some reservations about Thomas Paine before but IIRC, Alex had him as one of his top two FF.

    Alex, Congressional oversight. Snort. That’s a good one. How many czars do we have now?

  34. mantis says:

    mantis — try, please, to distinguish between libertarianism and anarchy. It’s not that hard.

    Ok. Libertarians are more condescending than anarchists. I can’t find any other differences.

  35. mantis says:

    A government doesn’t have to be large to be tyrannical in nature

    And a larger government is not by definition tyrannical. That, of course, was Alex’s point. Guess you missed it.

  36. Alex Knapp says:

    @Charles –

    A government doesn’t have to be large to be tyrannical in nature, but I would argue that your going to struggle mightily to avoid the tyranny if you allow it to just keep getting bigger and bigger.

    I don’t disagree with this — which is why instutitions, checks and balances, and the rule of law are important to avoid tyranny and corruption as noted above. But the American government was plenty small and still managed the spoils system. And the American government was plenty small when it committed genocide against the American native peoples.

    The dynamics of the bureacracies themselves are being given short shrift here, as they are in the discussions of the public employee unions, but I digress. People are people whether they work in the public or private sector. There is nothing about working for the government that makes you a better person or inherently more efficient. In fact, most anecdotal evidence is to the contrary.

    Perhaps you don’t work in the corporate world on a day-to-day basis, but I do, and let me tell you — government ain’t got nothing on the private sector when it comes to inefficient bureaucracy.

    Dr. Taylor , I have expressed some reservations about Thomas Paine before but IIRC, Alex had him as one of his top two FF.

    Thomas Paine is one of my favorite Founding Fathers, but that doesn’t mean I agree with everything he said.

    Alex, Congressional oversight. Snort. That’s a good one. How many czars do we have now?

    I’m not sure what the relationship is between the two concepts, but to answer the latter question — fewer than there were five years ago.

  37. wr says:

    Charles Austin — You seem to be operating under the illusion that citing a literary quotation will either end an argument or convince anyone of anything. We all know the Acton quote, and we have read the Thatcher one you love so much about a thousand times, most of those in your posts. And yet I, at least, remain unconvinced. You might try to actually bring in some evidence or examples, rather than falling back on aphorisms.

  38. mannning says:

    While the size of government does not necessarily correlate with the size of the corruption problem, the bigger the government the greater the tax load on the citizenry. The question is then are we getting real value for our tax dollars in a fair manner across the board, or are we being conned into a significant redistribution of wealth by the government, which I believe is outright theft.

    This is one of the stated goals of the current administration; to tax the rich heavily and redistribute the proceeds, and not tax perhaps 40-60% of the citizens. In my opinion, all of us should pay taxes at some rate, perhaps by one of the so-called flat or fair tax proposals that tax consumption and not earnings. (Yes, this would require an amendment to the Constitution to rid ourselves of the income tax.)

    Paying a share of the tax burden is the act of a stakeholder in the nation, as opposed to a freeloader on the system, and far from reducing freedoms, it strengthens our collective freedoms immeasurably. The old dictum still holds: “There is no such thing as a free lunch,” which this and other administrations seem to have ignored deliberately, while increasing the indebtedness of the nation by trillions.

    There does exist massive corruption in the government today in Medicare, a situation that I can attest to personally by the billing and review systems between Medicare, hospitals, the insurance companies and the individual–me and family members– now in seven different cases in four different hospitals. I doubt that ObamaC will correct these problems.

    To my knowledge, no one has proposed to undertake a deep and thorough non-partisan review of all government agencies, bureaus, commissions, committees, boards, and the like, of which there are at least 1700 or more, in order to reduce functional duplications, reduce staff and budgets, or eliminate a sgnificant number of these perennial hobby-horse dollar holes, perhaps with savings in the billions of dollars. (Go to LSU.com to see the official listing of government entities.)

    Many of these organizations follow the “grow or die rule” that says they must increase their role, mission, staff and budget each year (or try to!).There should be a commission established along the lines of the BRAC commission that takes a multi-year look at this drag on the budget, and forces non-political reductions of much of the nonsense, and perhaps not a little bit of corruption as well.

  39. Alex Knapp says:

    manning –

    This is one of the stated goals of the current administration; to tax the rich heavily and redistribute the proceeds, and not tax perhaps 40-60% of the citizens.

    Please tell me where President Obama said this so I can read it for myself.

    In my opinion, all of us should pay taxes at some rate

    That is the current situation.

    Paying a share of the tax burden is the act of a stakeholder in the nation, as opposed to a freeloader on the system, and far from reducing freedoms, it strengthens our collective freedoms immeasurably.

    I agree! Which is why I opposed extending the Bush tax cuts.

    There does exist massive corruption in the government today in Medicare, a situation that I can attest to personally by the billing and review systems between Medicare, hospitals, the insurance companies and the individual–me and family members– now in seven different cases in four different hospitals. I doubt that ObamaC will correct these problems.

    Actually, the PPACA provides for mandatory electronic recordkeeping and tougher Medicare auditing standards, both of which should help reduce the incidence of fraud.

    To my knowledge, no one has proposed to undertake a deep and thorough non-partisan review of all government agencies, bureaus, commissions, committees, boards, and the like, of which there are at least 1700 or more, in order to reduce functional duplications, reduce staff and budgets, or eliminate a sgnificant number of these perennial hobby-horse dollar holes, perhaps with savings in the billions of dollars.

    The Congressional Budget Office has. It was released last week.

    Many of these organizations follow the “grow or die rule” that says they must increase their role, mission, staff and budget each year (or try to!).

    (Citation needed)

    There should be a commission established along the lines of the BRAC commission that takes a multi-year look at this drag on the budget, and forces non-political reductions of much of the nonsense, and perhaps not a little bit of corruption as well.

    This was part of the mandate of the Bowles-Simpson Commission, but the GOP largely rejected the plans involved there.

  40. rj says:

    This is one of the stated goals of the current administration; to tax the rich heavily and redistribute the proceeds, and not tax perhaps 40-60% of the citizens.

    Making a statement like this should automatically eject the writer from serious discussion. He’s talking about the fact that through dedcuctions, credits and other parts of the tax code, many people pay no income tax.

    Do YOU pay only income tax? No payroll tax? No sales tax? No tariffs on your shoes? No property tax, explicitly or implicitly as a renter? Effective total tax rates down the income scale show that we have one of the least progressive taxation of any developed nation.

  41. tom p says:

    sigh… you can not counter-act stupidity with facts. Why do you bother?????

  42. Matt B says:

    @Dave S … dude, you are such a Weberian.

    And in theory, bureaucratization/rationalization are very useful tools — one that I don’t think we can live without. But at the same time, I think the dream of the “office” versus the “individual” is exactly where the Weberian model tends to breakdown and end up far closer to the writings of Robert Jackall (“Moral Mazes” in particular reflects a lot of my experiences working for almost a decade with a once major American corporation).

    The big difficulty we face, which JKB illustrates, is that we’ve reached a point where the world is significantly complex and interrelated enough that we cannot function without bureaucracies. And I think part of the problem is a conscious/unconscious rejection of this claim (especially by those of the libertarian persuasion).

    And in this respect, it’s all about maintaining some level of control. So we have the tension that we *want* to make spending more efficient, but we never want to cede local or individual power. The net result are redundant systems. And those redundant systems typically increase tax burdens.

    As far as salaries, going back to Dave’s point, I wish we could hit reset buttons on a lot of salaries.

    Top of that list, btw, is CEO compensation. I challenge anyone to make the argument that the talent of modern CEO’s has increased (over the years) to the degree that it in anyway matches a relative growth in skills by these individuals (and… btw, in my previous life I got to spend a good amount of time with Division heads, Corporate Presidents, and a variety of “CxO” level people… so this isn’t a “I hate corporations argument”). Unfortunately, the flip side to the its all about the “office” argument, is that it’s very hard to remove things like compensation from a given office, unless the cut is done across the board.

  43. tom p says:

    and I feel the need to point out that Europeans are doing just fine (including my in-laws who were nothing other than regular folk… My father in-law was a fisherman, his wife an extremely intelligent woman (never got past the 4th grade) who cleaned houses and worked the markets to maximize her husbands catch.

  44. Wiley Stoner says:

    Anyone who made the statement you made in the headline is one who does not understand government. either historically or in a contemporary sense. Alex your ignorance of statements and goals of this President and his administration in no way removes them. Why would anyone here wish to edify you? I heard the son of a bitch say it. I trush you are not calling me a liar.

  45. mantis says:

    I trush you are not calling me a liar.

    You’re a liar. Trush it.

  46. sam says:

    @Manning

    “The question is then are we getting real value for our tax dollars in a fair manner across the board, or are we being conned into a significant redistribution of wealth by the government, which I believe is outright theft.”

    When 20% of the population has 93% of the wealth, which way is the redistribution running? See, Redistribution from the Feds? Not Really

  47. wr says:

    Sam — If the top 1% own less than 100% of the nation’s wealth, then to a libertarian that’s theft.

  48. steve says:

    Grrr, dont any of you have jobs? I always come in late. Anyway, a big part of the problem here is defining what we mean by big government. If you look at non-defense discretionary spending, what most people talk about when they say government, it has stayed fairly constant, as a percentage of GDP, for a long time. The actual number of federal employees has hardly changed in 50 years (growth has been taking place at the state and local level). What is really growing out of control is entitlement spending, and that is mostly health care spending. Fire the bureaucrats and replace them with a few Watsons and you still have us increasing our debt.

    Steve

  49. mantis says:

    If the top 1% own less than 100% of the nation’s wealth

    Just because their superawesomeness is so valuable to humanity and the country that they deserve all the wealth! The other 640 million or so of us do very little of value, you know. We are like ants to these magnificent titans.

  50. mannning says:

    @AK

    You Tube Obama Bombshell Redistribution of Wealth audio uncovered.

    The end point, in Obama’s own voice, is how to achieve it, not whether.

    Listen for yourself. He muted this idea as his campaign went along recognizing that it would lose him votes. His chat with Joe, where he used “Spreading the wealth around” was muted also from that point on.

    Currently, perhaps 40% of the working citizens are exempted from income taxes, which in Obama’s later plans would grow to 60% if he gets his way. In any event his budget ( Obama’s Budget) recently submitted had substantial increases for higher income people. Tax the rich and redistribute it as I said.

  51. mannning says:

    @sam

    That 20% of the population controls 93% of the wealth may well be so. I would bet that of the 20%, many of them, perhaps a quarter, are widows in Florida or somewhere. So what?

    This does not, however, give anyone the right to redistribution of their wealth by arbitrary legal maneuvers or legislation. Why would anyone think of such a thing? Theft, raw theft by the government, is certainly not in our Constitution, but it is in the mind of Obama, and seemingly leftists everywhere. It is the old wealth envy problem in disguise. Or perhaps the equalization of income that socialists of all stripes seem to desire.

    The 80% have or will have their opportunities to grow out of their current level of income, and in fact many, if not most, will do so, barring the current depression of jobs. There is data to support this fact. Tracking income categories and not individual’s incomes is a flaw that is repeated all too often to buttress the leftist belief in persistent poverity of the same people in the selfsame category. I would cite Thomas Sowell for my paraphrase of this statement.

  52. mannning says:

    Wealth is not a zero sum game. It can be created by anyone with a modicum of spunk.

  53. Drew says:

    “The best we can do is to minimize that corruption by creating insitutions that make corruption less likely, and coming down with the hammer on those politicians and bureaucrats who break the law. Sometimes this will mean major changes. More often, it means minor tweaks to regulations and oversight.”

    Sing along…………”I like dreaming……….”

  54. Alex, I worked in the corporate world for twenty years — interfacing with the government for all of it. Your anecdotal evidence against mine, doubt many minds will be convinced either way. I walked away from it to be an entrepreneur. At least private bureacracies, or at least the companies they purportedly support, face competition and can actually fail or be displaced. Public bureaucracies, not so much.

  55. An Interested Party says:

    Is it possible to state a position without having to imply that people who think otherwise aren’t as smart, as erudite, or as good as you are?

    Is it possible to state a position without having to imply that people who think otherwise aren’t statist socialists who aren’t as smart as you when it comes to private enterprise and the alleged free market?

    So please put away your notion that it doesn’t matter how big the government is. That is nonsense and reveals a shocking level of either ignorance or self-blinkering about bureacratic and organizational behavior.

    It might help your argument if you followed your own advice from above…

  56. anjin-san says:

    > However, the greatest evil mankind has ever imposed upon himself is bureaucracy.

    Is this the stupidest statement in the history of OTB?

    Yea, bureaucracy is far worst then say, war, slavery, death camps…

    Oh, wait, JKB pays taxes, so he IS a slave. I guess he knows what’s what.

    > then we have lost the Republic

    Oh, Lord, another Beck sock puppet. Could anything possibly be more pathetic? Did you enjoy your daily dose of snake oil today? Dude, this stuff is just embarrassing….

  57. anjin-san says:

    > absolute power corrupts absolutely

    Which is why the Founding Fathers wisely built checks and balances into the system. Of course, “conservatives” stood on their chairs and applauded wildly while Bush and Cheney eroded those, but the damage is now done, and our country will probably always be less free than it once was as a result.

    But don’t worry about that. Just keep telling each other how you are “great Americans”…

  58. sam says:

    @Manning

    This does not, however, give anyone the right to redistribution of their wealth by arbitrary legal maneuvers or legislation. Why would anyone think of such a thing? Theft, raw theft by the government, is certainly not in our Constitution, but it is in the mind of Obama, and seemingly leftists everywhere. It is the old wealth envy problem in disguise. Or perhaps the equalization of income that socialists of all stripes seem to desire.

    I don’t think I’ve ever seen more rightwing shibboleths packed into one short paragraph. Well done, sir, well done.

    Of course, it’s all nonsense.

  59. john personna says:

    There are two threads, one here and one at The Glittering Eye, which really converge to the same conservative sentiment.

    You can dress it up with smarter words or leave it with the simpler ones, it comes out the same. Basically, a certain segment of conservatives (and/or libertarians) see the problems in our society, but they are ideologically blocked from any forward motion. It is an article of faith that any government solution will be worse. Therefore, any incremental change toward solution will really be an incremental change toward greater ruin.

    As I say above, you can’t answer that with logic, they are already making it up. They are scared by their own hypotheticals. Those of us who would like to see a little incremental change, and the attempt at improvement, can only hope that this sad, wizened, demographic isn’t too large. That not everybody is ready to lie down in the dirt and say “this is as good as it gets.”

    The really sad thing (as I might have mentioned above) is that theirs is not a winner’s argument. It isn’t triumphant. They aren’t saying everything is running on all cylinders and the American system is working better than any other. It’s Eeyore for President.

  60. Trying to have reasonable discussions with anonymous posters is clearly futile.

  61. john personna says:

    No Charles.

    It’s quite possible when you have ideas that stand on their own two legs.

    When you have that, it doesn’t matter who typed the message.

  62. steve says:

    “Currently, perhaps 40% of the working citizens are exempted from income taxes, ”

    Federal revenue is not coming pretty equally from payroll and income taxes. State and local taxes are slightly regressive. If you are going to put most of the income in the hands of the wealthy, they are going to have to pay most of the taxes. Not sure how you plan to get around that.

    Steve

  63. mannning says:

    @sam

    So you do believe in taking the wealth away from those that have accumulated it? So you do believe in leveling of incomes, and capping of compensation? By the reference I cited, it is clear that Obama does indeed believe in these things; he is just slowed down a bit by the realities of governing, but he and his czar of salaries will get there if he can.

    I witnessed first hand the leftist push to level incomes in Europe, and that idea is very much alive and kicking here today. It took the ten largest corporations in Holland to threaten officially in writing to the government and the unions to move out of Holland and take their jobs with them to quell the leftist unions from their quest to have the janitors make at least a third of what the CEO’s make. I don’t remember all of the corporations, but Philips, where I was, was one of them, and as a senior member of the staff, I was shown the letter.

    If you think these ideas are nonsense you must live on top of a mountain somewhere. They are real, have been tried, are being worked on here, and are an integral part of the leftwing mantra. If you want to disavow these concepts, please do so here and now!

  64. wr says:

    Manning — Why, precisely, is it so terrible to pay CEOs three times what a janitor makes? You seem to be claiming some high moral argument here, but you are simply asserting as fact that it’s good for the rich to take all the money. So please explain to me why it is morally abhorrent to you that an executive is only paid three times what the guy with the broom makes.

  65. Rob in CT says:

    The wealthy benefit more than anyone else from societal stability and the rule of law (and therefore have the most to lose from an erosion of those things). That’s one justification for progressive taxation. Another is the concept of relative pain/harm. One guy makes $20k. Another makes $200k. A flat 20% tax rate would result in $4k taken from the 1st guy and $40k taken from the second. $4 to someone with $20 is worth more than $40 to someone with $200.

    It’s also important to recognize the difference between a marginal rate of, say, 39.6% (what the highest bracket would have reverted to had the Bush tax cuts been allowed to expire) and leveling of incomes/capping compensation. And that’s before discussing the various deductions built into the tax code, some of which disproportionately benefit wealthier folks (see also: capital gains taxation, estate tax…), thus turning what is theoretically a strongly progressive income tax into a pretty weakly progressive one.

    If wealth in US society was not as ridiculously skewed to a tiny % of the population and, further, this issue had not been getting worse and worse over the course of my lifetime, I would be far less interested in making taxation more progressive in nature. This does NOT mean that my goal is income equality. I would like to see equality of opportunity, but even that is impossible to fully realize (though I think we could try harder than we do). Equality of opportunity, if it existed, would end any desire on my part to redistribute wealth. I would still desire a basic social safety net to provide for folks who failed (via their own choices, bad luck or both), but a flat income tax would be fine by me in this hypothetical society. It’s just that our actual society isn’t like that. It’s not even close.

    Of course, equality of opportunity is also a non-starter for the hardcore righty/libertarian. Why? Because it requires a strong estate tax.

  66. Rob in CT says:

    I can’t view youtube videos at the moment, but…

    http://voices.washingtonpost.com/fact-checker/2008/10/obamas_redistribution_bombshel.html

    Quoted from the above article:

    The Facts
    “Obama Bombshell Audio Uncovered. He wants to Radically Reinterpret the Constitution to Redistribute Wealth!!” runs the YouTube headline from the conservative video blog Naked Emperor News. “This video exposes the radical beneath the rhetoric.”

    On closer inspection, the “bombshell audio” turns out to be a rather wonkish, somewhat impenetrable, discussion of the Supreme Court under Earl Warren. Obama, then a University of Chicago law professor and Illinois state senator, argued that the courts have traditionally been reluctant to get involved in income distribution questions. He suggested that the civil rights movement had made a mistake in expecting too much from the courts — and that such issues were better decided by the legislative branch of government.

    You can read the entire transcript of the interview here, courtesy of Fox News, but here is the passage in which Obama explains that courts are “not very good” at redistributing wealth:

    Maybe I am showing my bias here as a legislator as well as a law professor, but you know I am not optimistic about bringing about major redistributive change through the courts. You know the institution just isn’t structured that way…. Any of the three of us sitting here could come up with a rationale for bringing about economic change through the courts. I think that, as a practical matter, that our institutions are just poorly equipped to do it.

    In other words, Obama says pretty much the opposite of what the McCain camp says he said. Contrary to the spin put on his remarks by McCain economics adviser Douglas Holtz-Eakin, he does not express “regret” that the Supreme Court has not been more “radical.” Nor does he describe the Court’s refusal to take up economic redistribution questions as a “tragedy.” He uses the word “tragedy” to refer not to the Supreme Court, but to the civil rights movement:

    One of the tragedies of the civil rights movement was that the civil rights movement became so court focused, I think, there was a tendency to lose track of the political and organizing activities on the ground that are able to bring about the coalitions of power through which you bring about redistributive change.

    Holtz-Eakin “read a different interview to the one I heard,” said Dennis Hutchinson, a University of Chicago law professor who joined Obama in the panel discussion. “Obama said that redistribution of wealth issues need to be decided by legislatures, not by the courts. That is what a progressive income tax is all about.”

    While there are sharp differences between the two candidates on economic issues, they both favor a progressive income tax system in which people with high incomes are taxed at a higher rate than people with low incomes.

    So, to the claim that Obama wants to redistribute: yes, it’s clear that he is supportive of that, via legislation. Of course, from this the fevered nightmares of the wingnut conjures the idea that Obama believes in leveling of incomes, and capping of compensation. No, he favors a tax code that is more progressive than the one we have today (though he also ended up cutting a deal that extended the Bush tax cuts, so obviously it’s not even close to his top priority).

    Ahh! Run! Scary Socialism!

  67. Drew says:

    “It is an article of faith that any government solution will be worse.”

    That’s overstated, and a cheap attempt to invalidate opposition to government solutions. The empirical evidence on government intervention isn’t scant, and not inspiring.

    War on Poverty? Agricultural subsidy? Energy policy? Pensons? Schools? Health Care?

    Not a robust resume, to be kind. With so many claiming that the defense budget is 20% – 50% bloated, who in their right mind considers government to be an attractive option for other activities?

  68. Drew says:

    Also……..

    I have to confess, having read the body of commentary on this thread, I’m convinced. All we need is good government and we’ll be in clover.

    By the way, did I ever tell you guys about how I should have won the US Open Golf Championship? If I had’t three putted #5, blocked it OB on #9, overcorrected and snap hooked it on #11, chunked it in the water on #15 and lipped out on #18 I’d have won!!

    Strangely, the marshall just looked at me coldly and said ” very interesting, Drew, but as an empirical fact your card says 82, you finished 137th and here’s your check for $50 bucks………..take your hypothetical perfect round on to the next tournament down the road.”

    But seein’s how we can now have hypothetical perfect anything I’m going back to get my damned trophy. Shinin’ up the trophy case as we speak…………..

  69. john personna says:

    Of course it’s cheap, but it is also real. Look at people (including you) try to hold the line against the very idea of improvement.

    (It is not whether you can win the US Open, it is about whether you can improve at all.)

  70. mannning says:

    @ Alex

    “The Congressional Budget Office has. It was released last week.”

    I searched the CBO website and could not find this report. Please provide a URL if you have one.

  71. sam says:

    @mannning says:

    Wednesday, March 9, 2011 at 11:41

    @sam

    So you do believe in taking the wealth away from those that have accumulated it? So you do believe in leveling of incomes, and capping of compensation?

    Yes, no, and no. And don’t be simple-minded. Yes, I’m in favor of a progressive tax code. No, I don’t believe in leveling of incomes — I can’t imagine how we would do that. No, I’m not in favor of capping compensation (well, maybe for banker-hedge fund honchos-sociatel rapists).

  72. mannning says:

    @wr

    In my career, I have been next to many CEO’s or Directors as thay are called in Europe, and reported directly to several for periods up to years. I witnessed first hand many decisions that either made lots of money with products or were bombs, with the dollar amounts being in the many millions. The final say was with the CEO’s in each instance, at least up to some huge dollar amount, which would then involve the Board quite often, in a share the risk approach.

    The CEO’s job was on the line for these decisions and one too many bombs usually meant the highway for him. He was responsible for an organization of thousands of people from upper management, through middle management to the workers, and for the health of that organization to the Board, and especially the stockholders.

    This job requires very broad knowledge of the market place, the competition, the product lines, the new developments, the managers and the workers and their good-keeping, how to build an effective team, a commanding presence, earned respect of his team, keeping up on technological developments, financial matters, and knowing the long-term customers that need to be coddled. The job, for most CEO men I knew, was not an 8 hour proposition, but usually a 24/7 intense effort with very little time out for play or family, and lots of time away on travel.

    The janitor sweeps up, takes out the trash, stores his tools and goes home every night 8/5, with no bulging briefcase to work through somehow before the next day, or on the plane to a meeting. His responsibility is minimal—clean floors and trash cans.

    So, in terms of, knowledge needed, training needed, experience needed, temperament needed, responsibility shouldered, leadership given, time on the job, time away from home, and risk-taking that has to be done personally, the successful CEO earns far, far more for the company and in keeping thousands employed and paid for years than does the janitor, and so he should be compensated far, far more in my opinion for his efforts. Which, I might observe, is the usual case in industry for all of these reasons and more.

    This is not to say that the wages of a janitor should be minimum–he, too deserves a living, but he is simply not in the same league as any CEO.

    Somehow this question strikes me as silly. We readily accept that ball players and entertainers can command truly huge salaries for being good players or actors and amusing us for a few hours. Their supporting crew gets nowhere near what the stars get. But turn to industry and suddenly the stars of the game there are not favored with the same acceptance of their even lesser salaries in most cases, and a more broadly intensive job.

    Would you want the batboy to be paid 1/3rd of what A–Rod gets? Why?

  73. mannning says:

    @sam

    So do you also believe in a confiscatory death tax to ensure an ever lessening inheritance for a family over the years?

  74. mannning says:

    @wr

    You misread my post.

  75. john personna says:

    mannning, are you a fan at all of Adam Smith? Do you accept at all that we were at one time ruled by the Folly of Princes?

    Then be aware that the “confiscatory death tax” is what defeated feudalism. There were still peasants in Europe a few generations ago. It wasn’t the titles that made it stick. It was that they could hand down land without loss at each generation. Our grand(to the Nth)parents fled to this country because open land and a lack of land-barons meant opportunity and progress.

    Argentina took the other path, dividing the wilderness into vast ranches handed down to a privileged few. Nice for the few, but not so much for the rest, or for economic progress in general.

  76. Gosh, now that there’s no more land does that mean theres no more opportunity? Or might it be soething a little different when it comes to defining opportunity?

  77. Drew says:

    “Of course it’s cheap, but it is also real. Look at people (including you) try to hold the line against the very idea of improvement.”

    No, just cheap. You may have different goals and objectives. But I prefer not to beat my head against the wall in perpetuity…in private business you go broke fast….however, admittedly, with the power to tax and the put the “full faith and credit” (snicker) behind borrowing government can go broke more slowly while waiting for said improvement. As I age my eyes may be getting worse, but they see no improvement on the horizon. And I recall how Waiting for Godot turned out.

    “It is not whether you can win the US Open, it is about whether you can improve at all.”

    Heh. Government needs new sticks, balls, caddies, swing coach………. Right now its “Tin Cup,” they’re hitting shot after shot into the water……..and there are only two holes left…….

  78. mannning says:

    @Rob

    Thanks for the derogatory label; I won’t bother to return the favor. So here is the situation:
    1. Obama is all in favor of redistribution of wealth, and the only thing is how to do it. He wants legislation of some sort. The most likely route is through new tax legislation, but this has hit a snag since the Republican takeover of the House.
    2. Obama has already started the salary capping process through his salary czar, and it would not be politically prudent for him to proceed any faster in this time frame. Hitting the very high salary people has support from some rather misguided souls.
    3. Obama has very close connections with the union movement, which is where the idea of leveling originates. Obviously there are several ways to go here, with the czar crunching down from the top and the unions ratcheting salary demands upwards from the bottom. This too, has to wait for the right time. Not now! The economy and the political scene won’t take it yet, but it is a logical part of the redistribution of wealth that Obama is enamored of.
    Operating on a single interview, and without probing the current situation any deeper, Mr. Rob comes up with a definitive view of Obama’s mindset on integral parts of the redistribution of wealth approach which has been tried a number of times by leftist unions. I do hope he is right and I am wrong, but the solid evidence will not appear until after 2012 if Obama wins.

    @JP
    This is 2011, not the feudal era. The death tax is not doing a very good job of preventing wealth accumulation by inheritance, since these hundreds of zillionaires we have hire experts to hide their wealth around the globe and the very size of their wealth makes them rather proof against economic disasters. So the wealthy will ever be with us, Father, Son, And Grandsons galore.

    The very idea of robbing a dead man of part of his accumulated wealth for the state is morally repugnant to me. The state and others that might benefit have no more right to the money than the heirs in the will; in fact far, far less. The man earned his money, or inherited it himself, and he should be able to disperse all of it as he wishes. Cleaning out this death tax will not be easy, especially when blatant envy of wealth plays a dominant role in the thinking of those in favor of this tax and of redistribution in general…like Obama and other misguided souls.

  79. sam says:

    mannning says:
    Wednesday, March 9, 2011 at 16:37

    @sam

    So do you also believe in a confiscatory death tax to ensure an ever lessening inheritance for a family over the years?

    I haven’t made up my mind on that yet.

  80. john personna says:

    “The very idea of robbing a dead man of part of his accumulated wealth for the state is morally repugnant to me.”

    You can’t scare me with your emotional verbiage.

    The idea that America should be a “everyone starts equal” country is very strong to me. It is very different from the socialist/Marxist idea that “everyone ends equal.”

    You go beyond that, don’t want people to even start, to enter this big game of life with similar odds.

    You may think it’s not about princes, but it is. Princes in the modern sense.

  81. Rob in CT says:

    Manning,

    Your charge was that Obama is in favor of capping salaries/leveling income. When I pointed out that this is not happening and there is little evidence that President Obama wants this, your comeback is ah! Not YET! But he wants it. It’s a bit odd, considering that he had a significant majority of Dems in the House and ~59 senators (briefly, 60) and yet somehow failed to acheive… any of this. The best you’ve got is the “pay czar” limiting executive compensation… at five companies one the dole (AIG, GM, GMAC, Chrysler, Chrysler Financial). This is not capping salaries in the private sector. This is saying that if you come to Uncle Sammy hat in hand, your uncle may want a say in your bonus. Don’t like it? No problem, don’t run your company into the ground (or, if you do, don’t go begging for a bailout).

    Thus, I don’t find the evidence in favor of your psychoanalysis of Obama compelling.

    I think that Obama has a pretty run-of-the-mill American Liberal viewpoint, and is in favor of some redistribution of wealth, primarily via the progressive income tax code. SHOCKING!

    Apparently, you cannot imagine a spectrum of opinions on this. One is either a communist or a capitalist, and there is no room for a mixture. One who is generally in favor of markets, but also believes in market failure and thinks this justifies governmental action is, therefore, a scary socialist.

  82. Rob in CT says:

    By the way, I think it’s a bit odd to call the estate tax robbery of the dead. The dead are dead, they cannot be robbed. To the extent someone is being “robbed” it’s the heir(s).

    The current setup is suboptimal, to me. I’d tax inheritances, not estates. The goal of my preferred system would be to encourage the distribution of the estate – not to raise a bunch of money for the government. I’d be quite happy if the government ended up taking $0. A huge estate distributed amongst a large number of heirs & charities – fine by me. Excellent, even. The issue at hand is preventing the concentration of great wealth in the hands of a tiny fraction of the population. Money, in case you haven’t noticed, is power.

    Anyone interested in a meritocratic society should be concerned about inherited wealth.

  83. Rob in CT says:

    One final comment, Mr. Manning:

    “Operating on a single interview, and without probing the current situation any deeper, Mr. Rob comes up with a definitive view of Obama’s mindset ”

    No. You asserted something. As backup, you cited a video. Then, when I argued that it doesn’t say what you seem to think it says, you now assert that this is my sole basis for rejecting your view. This is incorrect. I was merely responding to your outlandish claims, and evaluating the evidence you submitted as backup.

    There’s a word for what you did there. It’s called projection.

  84. mannning says:

    @ROB

    You missed the point once again. The basic Obama position is that redistribution of wealth is just fine and dandy, and this he in effect stated in the interview. That he also mused about the methods of collecting such “excess money” is secondary. He wound up preferring legislation to accomplish redistribution. This is simply the fact.

    That he acted to limit salaries of any employee at all is evidence of capping, whether the firms also received handouts or not. Capping is capping! That is also fact, and that he exercised his power of money and office to force such salary caps is further proof of his intent. So is the persistent chatter coming out of DC from progressive sources that remuneration of all execs should be capped because such excess is unfair.

    We shall see whether his union buddies begin a salary squeeze after the election to couple with the further extension of capping to effect his redistribution goals.

    There is a word for your replies also. It is called spin to favor Obama, and to disguise or downplay his direct interference in the free market.

    Carping over robbing the dead vs robbing the heirs is rather picky; the meaning is quite clear either way. The government comes around practically to the funeral parlor to get its cut. They must read the obits and salivate.

    A man with just one heir and a very large estate should be able to transfer it all, every penney, to that one heir. We have some 1,200 or so billionaires and a gunney sack full of multimillionaires in the US, and it is a good bet that quite a few of them will leave their wealth to their spouse. The government should not take a slice.

    Fear of concentration of wealth in a few hands is obviously misguided, since we already have so much wealth in so few hands, and there is just about nothing that can be done about it. It is persisting and will continue to persist in a free market. As I said earlier, this wealth will be largely but perhaps not completely out of reach for the government given the available legal methods for protecting wealth being employed. That is, short of outright confiscation of funds and assets, which is rather a bad do. I suggest that the death tax is virtually useless against high wealth and immoral to boot.

  85. wr says:

    So Manning, in your world view, CEOs deserve to be paid thousands of times what their employees make and it is immoral to tax them on it. Meanwhile, I suppose, it’s fine to make up for that loss of government income by heavily taxing the janitors, because they are not as important as the offspring of billionaires.

    Your love for monarchy is sort of touching, but hugely destructive to the American ideal.

  86. mannning says:

    @wr

    Please do not put words I didn’t say into your screeds. I have said nothing about ordinary taxation of salaries, nor did I say a thing about CEO’s not paying a tax, except that I believe in the fair tax idea. And, I said nothing about taxing janitors more to make up any difference. You are being far too provocative and dishonest in your response. What I said was immoral in my opinion was the death tax.

    Where did I say thousands of times? I didn’t. I said “far, far more”, which does not establish any amount or multiplier such as you stated. You obviously have an agenda that omits knowledge of salary structures and compensations that are quite common in industry today.

    With this kind of deliberate, snide and dishonest misstatements in your comments, I shall not respond to you any further. Bye bye WR.

  87. mannning says:

    @JP

    “The idea that America should be a “everyone starts equal” country is very strong to me. It is very different from the socialist/Marxist idea that “everyone ends equal.””

    What you mean is that all wealth of a generation must be confiscated so that all of the next generation starts from zero, or else that the confiscated money is to be divided fairly between the total population of 300 million souls, which would be a pittence.per person. Or did you have some other idea of how this generation’s wealth is to be shared? You would impovrish your own children for this equal start idea? What do you really mean by “equal” and how is it to be achieved? I start from the real situation that exists right now. Where do you start from?
    Seems quite unreal to me. If I inherit a factory that employs a thousand workers, must I turn it over to the government so that I will be equally poor as the rest of the then unemployed from my factory? What total nonsense.

  88. mannning says:

    I should have said “should I sell the factory and turn the proceeds over to the government.” But then someone then owns the factory and is ahead of the game of equals. Such an ideal is completely infeasible.

  89. Rob in CT says:

    Manning:

    The Obama Administration appears to have capped FIVE salaries – CEO’s of companies that were bailed out on the public’s dime. You see this as the first step down a slippery slope to wage caps. I think that’s ridiculous. Time will tell, I guess. I’m amused at the power you seem to think unions wield. Unions have been in decline for some time. The GOP and the Dems are both far more connected to Wall St. than Unions.

    I know that Obama is in favor of some redistribution of wealth – I’ve said so, repeatedly. That wasn’t the claim you made that I countered. You talked about wage caps. As for redistribution, the obvious questions are how much and by what mechanisms. “Some” redistribution of wealth is the status quo. We’ve had more or less in the past. My educated guess is that Obama, like many liberals, would liked to go back to Clinton-era tax rates. Maybe Reagan-era rates. Neither of which is outrageous in the context of our history. Neither of which demonstrates a desire to force income equality on Americans. There is a huge, gaping chasm between wanting the federal income tax code to be slightly more progressive and wage capping (let alone wage levelling).

    I find this:

    “Fear of concentration of wealth in a few hands is obviously misguided, since we already have so much wealth in so few hands, and there is just about nothing that can be done about it”

    to be ridiculous. It’s obviously misguided to worry about something that clearly exists and (allegedly, according to someone who admittedly does not want to solve it) cannot be solved? How does that follow?

  90. Rob in CT says:

    It’s true, of course, that perfect equality of opportunity is an impossible ideal. Most ideals are.

    I would simply prefer we tried a bit harder. I’m not under the illusion that one can create utopia.

  91. mannning says:

    @ROB
    “It’s obviously misguided to worry about something that clearly exists and (allegedly, according to someone who admittedly does not want to solve it) cannot be solved? How does that follow?”

    My belief is that the set of all –illionaires, either separately or in some collusion or other, together with their legislative inroads, will defend their hordes in every way they possibly can, either legally or even illegally, and will ensure passage of their horde to the next generations as best they can. So my conjecture is that we will not be able to defeat this transfer of wealth to any great degree ever, especially not by the death tax, and that we will have a large set of –illionaires from now to…maybe eternity.

    One threat these wealthy individuals have is to move their operations out of the country to a country that has a much better tax situation for them, thus damaging our nation’s economy directly. This was the case I mentioned earlier about Holland. This, I feel, is likely to happen as corporations and companies become ever more international in scope and ever less wedded to the idea of an American base that taxes them severely. I do believe that large corporation’s loyalty to the US is that fragile when it is the bottom line that becomes too threatened by deep incursions of progressive taxes. They have shown their loyalties by shifting much of their manufacturing away from US high wages and union clout, to lesser nations around the world, thus contributing heavily to the job shortage here.

    Perhaps there will be family defections and the rise and fall of some fortunes, but the net sum of concentrated wealth will continue to exist, and even grow in size, I believe. Whether I want or don’t want to solve this has no bearing on my conclusions, since I am not one of the –illionaires, I am not employed at all, and the further existence of the –illionaire set is up to them, not me, or thee either, and they do have the power to do a lot.!

  92. mannning says:

    GAO report number GAO-11-441T

    I suggest that anyone interested in understanding at least some of the more well-known instances of government duplication and overlap should go to the GAO site and read the report referenced.