July 10, 2006

wealth distribution

Heard this at a conference recently:
The top 20% of the nation's population own 85% of the nation's wealth.
The bottom 60% of the nation's population own just 4% of the nation's wealth.

It's nice to think that if you give more money to wealthy people (i.e., tax cuts for the wealthiest Americans), they will share that extra money in the form of investing in business and creating jobs. The reality, however, is that businesses in the United States are structured with the overriding purpose of returning additional wealth to investors. The rich people are investing in vehicles that are fundamentally designed to make them richer, not fundamentally designed to improve the economy. The basis for the idea that tax cuts spur economic growth is the "rising tide" theory: If rich people get richer, then poor people are getting richer, too. It simply is not working out that way in practice.

I recently also heard a financial conservative use the term "enlightened self-interest" to describe the idea that being motivated entirely by self-interest is equivalent to being enlightened. I found this hilarious because the exact opposite is true. Here's what wikipedia currently says about enlightened self-interest:

Enlightened self-interest is the ethical principle that when persons act to further the interests of others or at least the interests of the group or groups of which they belong to, that such persons ultimately serve their own self-interests. It has often been simply expressed by the belief that an individual or even a commercial entity will "do well by doing good".
My personal observation is that more people are coming to understand and embrace this idea. Invest in early childhood development because a child who comes to first grade ready to learn is more likely to end up being a college graduate and therefore a productive worker. Invest in available child care because working mothers can't work if they don't have somewhere they can keep their children safe. Invest in strong levees and disaster preparedness so we don't have to spend five times as much on disaster recovery. Invest in renewable energy and better efficiency of usage to avoid having an "oil addiction" that drags down the economy and brutalizes the environment. These are examples of enlightened self-interest.

If only those tax cuts for the rich and all the money we're spending on war were being invested in areas that qualify as enlightened self-interest... we would be on a path to becoming a truly great society.

1 comment:

bluesugarpoet said...

Why are we talking politics here when we could be talking World Cup final match?

Did ya see the infamous head butting? Of course you did. Here is my theory: Zidane, knowing that this was the last game of his professional career since he is set to "retire" from soccerdom, thought, "Gee, I've never ever been ejected for head butting a guy. I'd really like to do that once before I retire."

Not that I wanted France to win, but that move was too bad for them. France definitely dominated that game toward the end - but I have to hand it to Italy for playing the good "D." Sometimes the best offense really is a great defense.