Greetings and Salutations;

It is odd and interesting, how comments one makes on Social Media come back to haunt us sometimes, months or years after they were posted. The old saying is “The Internet never forgets. This has been proven true time and time again! About a year ago, a Frenchman posted a question about American Political factions….and I spoke to it…. Here is the original question and my response.

EB: Hello Dudes. What mean socialism in USA ? a sort of Communism ? We have an another meaning in France . [1y]

Dave Mundt: EB: Not so much communism, it is Democratic Socialism. Its focus is to ensure that ALL Americans have an equal chance at a good life. This includes a Universal living wage, universal healthcare, better quality schools, and taxing the people that can both afford it without noticing the difference (and who mostly use all the loopholes built into the tax code to avoid paying taxes at all. (1y)

And here, a year later, someone found this post of mine, and felt moved to comment on it. I thought his observation was an interesting starting point for another (long overdue) blog essay, so, dove into it.

Dave Mundt: CP: I hear you, but, history shows us that is not a likely path that would be followed. THis table gives tax rates from 2021 to 1862. Note that as recently as 1985 the top tax rate was 50%. In 1970, the top tax rate was 70%. Only a few years earlier, in 1962, the top tax rate was 90%. In spite of these tax rates, we have seen continual, huge growth in commercial and industrial enterprises; We have seen at least some improvements in the financial situation of most Americans; We had amazing science programs funded by public and private funds; and the number of millionaires has grown steadily. [On the down side, this growth has increased the wealth gap to a huge amount, and, has eroded the Middle Class down to a shadow of its former self. This is bringing us a boat-load of OTHER problems that will require attention sooner than later]

It is my observation that people will continue to acquire money, no matter how much they have, or how much they have to pay in taxes. In modern days, I point out the billionaires, such as Elon Musk, Bill Gates, and the like. In spite of having such wealth that they can throw money away as if it was used toilet paper, they continue to acquire more and more wealth. Some, I will say, have reached a level of mindfulness that they are using a goodly chunk of their assets to quietly fund projects that help many of the more economically challenged folks (Bill Gates, for example). Others use their amazing wealth for recreational purposes that benefit almost no one (Elon Musk, for example, with his rocket trip to near space). In times past, though, some of these ultra rich had a much more progressive attitude towards their wealth. Look, for example, at the Robber Barons of the 1800s and early 1900s. Henry Ford paid the workers at his factory far more than they could get anywhere else. A couple of reasons for this were that he knew that someone had to buy his cars…and if the many people he employed were not paid enough to buy a car, that was the loss of a HUGE market. Also, he understood that the least costly way to run a business is to build a competent team that was loyal to the company. Continual turnover because of poor wages was a terrible expense, because hiring new people, and getting them trained ate a lot of time (impacting productivity), cost significant amounts of money (because, again, productivity would slump because the new workers did not know how to do the job), and workers that hated the company can cause productivity to grind to a halt. He took these actions in spite of the fact that they certainly cut down on his personal fortune by a fair chunk of cash.

As another example, Andrew Carnegie took the millions he retained, built and supplied books for, thousands of libraries and Universities around the country. Why did he do this? A major reason was that he understood that a well educated working class cut costs by huge amounts, when bringing in workers and training them. Also, he realized that a well educated population could find creative solutions to problems in his manufacturing process that could eliminate the roadblocks and jump productivity.

When I discuss the issue of amazing wealth with people, one of the questions I always ask is this: “how much money does a person NEED?” In both the cases I laid out above, it is likely that these owners (and the thousands of other “Captains of Industry” flourishing in America who made similar decisions) ended up with some percentage LESS money in their bank account than they might have. Yet, in spite of this, they lived lives of privilege, and luxury that would amaze us, even today. As a continuation of my original question…I go on to make this point, and ask another question: “Let us say that tax rates are high enough that, for example, a billionaire is forced to purchase a yacht that is 200 feet long, instead of 250 feet long. Or, can only purchase 10 opulant houses in different areas of the world, instead of 15 houses. Are these limitations truly causing their lives to be unpleasant?” My immediate reaction is “no, because, I find it difficult, at the very least, to believe that their life would be BETTER if they could have the 15 houses, or bigger boat” They may WANT a larger boat, or more houses, but do they NEED them?

One of the first lessons I recall my parents teaching me was that there are “Wants” and “Needs” that we will have in our lives. They taught me that not only is the gap between them fairly large, but, when push comes to shove, “Wants” are a luxury that we likely will not miss if they are not part of our life. However, if our “Needs” are not met, it can have serious consequences for our lives.

However, over the past half century or so, I believe the difference between the two concepts has been lost. The roots of this evolution of language and attitude were planted in the social upheaval caused by the Hippies in the 1960s. The two concepts flew closer when, in 1986, during a commencement address at the University of California, Berkeley School of Business, given by Ivan Boesky, he commented on the beneficial side of greed. Considering that subsequently, he went to prison for insider trading, perhaps the wrong lesson came from his remarks. Today, alas, too many people do not seem to understand that there is a difference between the concepts of “Want” and “Need” ..leading us to the situation where if a person WANTS something, then, by definition they NEED that thing. This change in attitude has brought society to the point where many Americans are drowning in debt, because they WANTED something, and got it…without considering if they NEEDED that thing. This same problem has affected the richest of the rich in America also. Harking back to my earlier examples…too many of the very rich believe that because they WANT that bigger boat, or those 15 mansions, they, by definition, NEED these things. It even affects their fortune building. Because they WANT to have the label of the richest person in the world, they mistake that for NEEDING to be the richest person in the world. What, I wonder does having that title actually bring to their life? Does it mean they are better people? Do they get joy from it? I submit that the title changes nothing except that they may see their name in the media a few times…and even that will vanish at the drop of a hat.

What are some of the effects on society of this erosion of meaning I have been discussing? I submit there are several, all of which are negative forces that stress our ability as a society to move in a positive direction, and, create a world for our citizens that is truly a good place for them to live.

1. As I mentioned before, too many Americans end up with possessions that are useless to them, and add huge amounts to their debt load, because they do not understand or support our two concepts. One of my habits is to tour through local thrift shops off and on. It is amazing to me to see the very expensive items that have been donated…items that have obviously NEVER been touched after they were purchased. I have found a number of books, for example, that still had uncut pages, and might well have been unopened before I got them.
2. The tendency of the very rich to hoard wealth takes it out of circulation, meaning that it can no longer boost the fortunes of citizens. I read an analysis some time ago, I believe in Forbes, but it could have been another money-oriented magazine, that made the point that the average dollar passes through 10 hands when it is spent. Each time that dollar changes hands it tends to improve the life it touches.
3. Hoarding wealth is responsible for today’s huge wealth gap in America. As of 2018, according to this report from Pew Research, The wealth gap between the poorest Americans and the wealthiest Americans was over 500%. In comparison, by the by, the wealth gap of the Robber Barons was in the vicinity of 70%. Why is this bad? A couple of things spring to mind. First off, when the Middle Class (who is losing ground badly) sees the Upper economic class making gains by leaps and bounds, it generates frustration, resentment, and anger in the Middle economic class. Secondly, it can cause a drop in productivity that hurts everyone.
4. Another issue with conspicuous consumption as practiced by the very wealthy is it causes more and more people to look at the money being spend, and ask themselves the question “How would that money have changed the life of the economically challenged in America?” A perfect example of this is Elon Musk’s recent rocket ride to the edge of space. That little trip likely cost a billion dollars or more. What did it produce? Some photo-ops for a few, very rich folks. Would that money have been a better investment if it had been used to provide low-cost housing; food support; lowered health care costs and the like for the majority of citizens? I submit that it would have done far more good by being used that way, instead of for a joyride by a guy with more money than sense.
5. The “Greed is good” attitude has radically altered American business..and not in good ways. It is, I believe, part of the abysmally poor compensation that most American workers receive. Again, if the money were to be used to add to the worker’s paycheck, it would have far more positive impact than it does sitting in a Swiss bank somewhere.
6. As a part of the previous point, the role of the worker in business has been changed radically. A few decades ago, a highly skilled worker was considered to be a huge asset to a company, and as such, the company would take steps to make sure they were well compensated, and had perks. Now, alas, in most places, management looks upon the workers as a liability and cost to the company. They tend to be more likely to mistreat their employees, and, almost to a one, look at them as standard cogs in the machine of business. As a standard cog, if it has problems it can be pulled from its position, and replaced with a new cog, in very short order. Management has little or no clue about how a given worker understands their job, and the surrounding hubbub and chaos that is typical of a business. This often means that they lose out on hearing changes that could make their company far more efficient and productive. It also means that swapping cogs out does not restore productivity immediately, but, rather it causes more chaos, confusion, and a huge loss in productivity for some time until that new worker gets up to speed.

Taking all these factors into consideration, what changes would I suggest to improve the situation?

1. Management should get its mindset about employees back to a more positive place. Treat them as people…not cogs…and remember that without them, there is NO money coming in.
2. Society should address the wealth gap, more than likely through increased tax rates on the very rich, and a revamping of the tax code to remove the special loopholes that various industries have bribed politicians to include.
3. We, as a society, should work to help build the Middle economic class back up to strong levels. When one looks at America’s history, it is clear that the times of the greatest productivity and advances came when the Middle Class was very strong.
4. A stronger Middle class would also strengthen the economy…creating a much more healthy flow of capital through it. That should be promoted and encouraged through attitude and legislation.
5. As a part of improving society, and helping the Middle and Lower economic classes thrive and improve, Universal Health care should be implemented post haste. After all, out of the 34 most industrialized countries in the world, all but one have implemented Universal Health care, and found it to be a great benefit to society in general, both from an economic and access standpoint. Do I need to spell out what that ONE hold-out is?
6. A program of a Universal, Basic Income should be implemented and written into law. This has many benefits and almost no down-sides. A UBI would, for example, remove food and shelter insecurity from most, if not all, Americans. It would cut the ties of fear that keep workers at a company that is exploiting them…giving them the freedom to not only move to a different job, with no serious consequences, but, would allow them the option of working fewer hours, in order to get the education necessary to move up the employment ladder.

Now, I am sure that there will be a subset of citizens who abuse these changes. However, I do not see that as a deal-breaker, for these reasons:
a) The number of people that would do this is a small percentage of the total population of the country. MOST people derive great benefits in holding down a job that provides a feeling of usefulness, and satisfaction…and will tend to seek out those jobs.
b) My wife worked for Department of Human Services for 30 years. She saw a wide variety of people getting aid. A significant number of those were working poor, or kept from working because of the very real pressures of poverty. If these folks are given the opportunity to lift themselves up, they WILL do this..and become productive members of society.

Be Safe. Wear your mask, get vaccinated, wash hands well, and social distance!

God help Us All!

Bee Man Dave