Must-Read Column by Russ Roberts on Elizabeth Warren
Economist and Econtalk host Russ Roberts has written a wonderful column in today's WSJ responding to Elizabeth Warren's rant on the need to tax the rich.
The whole thing is worth reading. He eloquently takes down many of her more egregious arguments in clear and compelling language.
But the point he makes at the conclusion of the column is particularly insightful.
When the super-rich pay such a large share of the tax burden, the interests of the political class and of the wealthiest Americans coincide in a particularly creepy way. The politicians want the rich to thrive—they're the cash cow they milk via taxes. When the top 1% is the source of almost 30% of all your revenue, you have an incentive to take really good care of those people. That helps politicians of both parties convince themselves that coddling Wall Street is good for Main Street.
We as conservatives talk about the incentive effects of high tax rates all of the time, but usually from the perspective of the taxpayer, in that high tax rates provide a disincentive to work, save and invest.
Professor Roberts goes one step further and points out that high marginal tax rates also have incentive effects on the political class. In other words, the more politicians tax the super rich, the more they will use the levers of government to protect them from losses, funnel them favors, and subsidize their profits.
A brilliant insight in my opinion. He concludes:
The symbiotic relationship between politicians and the super-rich is destructive of democracy and our economy. Let's not make it worse. To close our deficit, let's spend less rather than tax anyone more.
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Comments :
Re: Must-Read Column by Russ Roberts on Elizabeth Warren
Wow, what a great point Russ Roberts makes! I agree that it's a must-read column. Too bad it's behind a paywall.
I also like this part:
Jul '11
Re: Must-Read Column by Russ Roberts on Elizabeth Warren
Great! A new way to think of the Rich….. They’re basically the tax collectors for the political class. As long as the political class collects it only from them, the rest of us give the political class a pass….”not my problem” says Rascal Six-pack….and so the argument really is about whether or not the rich are paying up sufficiently to earn the protection the political class has provided.
Let’s put it into the terms of a single industry. You’ve got Johns, whores, pimps and cops. The cops are now complaining that their take is insufficient for the protection they provide to the pimps who are getting rich on the efforts of the whores. The Johns don’t care one way or the other, until they find that the product is overpriced. When he finds he’s paying too much; and that he's being exploited along with the whore, only then does the john complain. The cops demand "fairness" and take more from the pimps.
The cops and pimps get rich; the whores get screwed and the Johns fund the whole thing.
Sounds like our Government to me.
Jul '10
Re: Must-Read Column by Russ Roberts on Elizabeth Warren
As Thomas Sowell has pointed out, you can't tax the rich.
Feb '11
Re: Must-Read Column by Russ Roberts on Elizabeth Warren
Fantastic.
Reminds of this joke.
Sep '10
Re: Must-Read Column by Russ Roberts on Elizabeth Warren
Russ Roberts is exactly right and he's able to deliver it with so much less vitrol than I or many others ever could. Elizabeth Warren is the very definition of the Nanny state.
Aug '11
Re: Must-Read Column by Russ Roberts on Elizabeth Warren
Todd, you had me at Russ Roberts. I love Econ Talk. It's a shame the article is behind a pay-wall, since I can't read the whole thing. From the quotes I've gleaned, I think Russ Roberts makes an excellent point about the "rich" and the gov't's interactions.
Listening to Econ Talk, Russ Roberts is a big fan of what he calls "the bootlegers and the Baptist" dichotomy, which basically says in any major gov't initiative, you will have the Baptist-- people who really want to "help the poor," but you will also have the bootleggers-- who want to use a law to hurt their opponents and gain favors.
Thomas Sowell makes a point in his book Knowledge and Decisions that gov't actors' goals become skewed to staying in power when they get into power, and that the amount of knowledge they acquire to make the decisions they make is actually dictated by these constraints. I'm making his point very broadly, but Knowledge and Decisions is probably Mr Sowell's best book.
May '11
Re: Must-Read Column by Russ Roberts on Elizabeth Warren
The quote button doesn't work on an IPad but Alan Dana's link has improved my bookmark list. All of my bookmarks seem like political jokes but that one is actually funny.
Dec '10
Re: Must-Read Column by Russ Roberts on Elizabeth Warren
This article is also over at Hoover's Daily Report for those without a WSJ subscription.
May '10
Re: Must-Read Column by Russ Roberts on Elizabeth Warren
Thanks for the link to the article, Mike. It is so well-reasoned and gentle on Ms. Warren that I took a big chance and forwarded it to an old and dear friend whose politics are the polar opposite of mine. As a result we are estranged, and I miss my friend regardless of his politics. I peek at his facebook posts (he's an Elizabeth Warren champion) but never do I respond. Why bother, we won't change our views. But, my buddy posted a challenge: rebut Warren. So, maybe this will be an in...
Mar '11
Re: Must-Read Column by Russ Roberts on Elizabeth Warren
"Professor Roberts goes one step further and points out that high marginal tax rates also have incentive effects on the political class. In other words, the more politicians tax the super rich, the more they will use the levers of government to protect them from losses, funnel them favors, and subsidize their profits".
Ms Roberts Progressivism goes one step further. The Progressive movement originated with leading super rich singling out politicians who would do their bidding in exchange for political contributions. Sometimes the favors are in the form of aiding the Super Rich, sometimes as with Elizabeth Robers the favor is in the form of handicapping the rivals to the super rich -- the guys and gals who show promise of growing up to challenge the super rich.
The question addressed to all inquiring reporters is this: who are the major contributors backing Ms Roberts? They are the ones who are "too big to fail," who are getting stimulous money and who are moving their factories off shore. They are the ones who have us chasing our tails with questions debating non-essential issues while angling to get another RINO nominated as the Republican candidate for president.