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Corporate America's 'Elite Charade' (fortune.com)
63 points by aaronbrethorst 59 days ago | hide | past | web | favorite | 31 comments

The big takeaway for me is that fundamentally tax policy needs to be redistributive. That idea has been under assault in America for decades, along with the idea of government itself, and it's been very successful. Both parties are effectively on board with that. But that is what real change would be.

It's not something small like a basic income, which has become popular for certain VCs and people in Silicon Valley to promote, but real massive and transformational programs that would actually cost those people something. Frankly I think UBI is a cynical ploy to give people some nominal amount to avert something more substantial like Medicare For All (or some other universal healthcare system).

My own politics was pretty neoliberal until a few years ago (markets, globalization, free trade!) but now I'd say I'm firmly in the Elizabeth Warren/Bernie Sanders camp. I will vote for anyone that wants universal healthcare, puts a price on carbon emissions, strengthens labor, and takes on monopoly (in the tech industry but other sectors as well).

> It's not something small like a basic income, which has become popular for certain VCs and people in Silicon Valley to promote, but real massive and transformational programs that would actually cost those people something. Frankly I think UBI is a cynical ploy to give people some nominal amount to avert something more substantial like Medicare For All (or some other universal healthcare system).

I hear this sentiment a lot from people on the left, and I don't understand it. A fairly modest UBI of $1,000 per month (the basis of Yang's campaign) for adult citizens would cost $3 trillion, which is about 14% of the US' GDP. That's a bit less than healthcare as a fraction of the nation's GDP, but it's also a historically unprecedented amount of wealth being directly redistributed. How can one seriously argue that this is not a "massive and transformational" program?

The biggest issue I have with UBI is that it's likely just going to be funded with higher income taxes, mostly coming from the middle/professional classes, rather than from the truly rich. And it is likely that a lot of the money is just going to end up in the hands of landlords or property owners. So in many ways it would actually shrink the size of the middle class

However, I do think it is a very good idea to remove welfare traps, which can instead be implemented through negative income tax brackets. Plus I believe replacing SSI with unconditional benefits would be a huge boost to the labor force as well.

This has always been my exact complaint about UBI, and nobody seems to be able to tell me why landlords (more generally, current homeowners) won’t end up with most of the money.

Think about it: $1000/month drops out of the sky on everyone. My landlord knows this, and so does every other residential landlord. What stops them from raising everyone’s rent to take up the surplus? (Ignore rent control for now, because is not common enough to matter overall.)

If you own a home, you don’t have a landlord to pay, so you keep your $1000/month. But, if you go to buy a house after UBI is instituted, I bet you would find house prices go up enough to eat a substantial portion of that $1000/month.

This is a tiny oversimplification, because I don’t think all of the price increases will go into housing, but the price of every essential good and service will increase to an equilibrium such that the net effect is that the providers of said goods and services (landlords and corporations) end up with the entire surplus.

All of this sounds like basic market economics to me, so I don’t see how you get around it without massive amounts of regulation preventing it. Yet, I don’t hear anyone talking about the regulations, just the extra $1000/month.

This is why UBI should be funded by a land-value tax.

Medicare For All would cost $32 trillion over 10 years [1].

[1] https://www.vox.com/policy-and-politics/2018/7/30/17631240/m...

Compared to the $40 Trillion we are going to spend on private insurance over 10 years that's a bargain.


I don't personally care about the cost because I think it's a moral imperative, but yes it'd actually save money if a single payer were negotiating with all the providers and drug companies.

Healthcare costs in the US are laughably high. Costs could be reduced easily by 50% and life expectancy could still go up, as many other countries show. There is no reason to spend more than 8-10% of GDP on healthcare rather than the US‘ 15.

You have to consider the net redistributive effects, not the top line number. A large amount of that spending ends up back as tax revenue because it gets taxed away from people who don't need it.

Or to put it more simply, suppose I give both a poor person and a rich person $1000, then I say later on I will see how rich you are and collect that $1000 back if you're above a certain threshold. I thus collect the $1000 back from the rich person, but the poor person keeps theirs.

In such a scenario, you wouldn't say that I redistributed $2000 worth of wealth. The net redistribution ended up being $1000.

Yang's team has studies on the precise amount of new redistribution they expect their UBI would entail, and it's considerably less than 14% of GDP. (They also project that the UBI would generate saving elsewhere, which contributes to the lower net redistribution.)

> that's a bit less than healthcare as a fraction of the nation's GDP

Let's assume you're talking about just the USA> What do you mean by "a bit"? How did you just calculate healthcare, given the massive social programs in play? $1000 is not ANYTHING near health care costs (not to mention the post-life care). The ambulance ride alone, when someone is in distress (or deceased) is $1000 today.


UBI is idiotic, but healthcare costs are horrific.

UBI is not going to solve the structural issues. Rising tides lift all boats: all of sudden, rents and other services will rise to suck up that $1000 per month UBI. UBI is good, when structural issues are resolved: limited supply of housing, etc.

I went opposite direction from you, as far as my own opinion.

What makes things affordable is the price of those things.

And I cannot see how any of the 'XYZ-for-all' makes the price affordable.

In fact, I do not know of any policy except this concept of 'fair competition', that makes price for something, affordable.

In my view, western countries such as US, UK have not been practicing competition in health care, financial service, technology -- for a very long time.

The competition is, instead, of who has better lawyers and better 'hooks' to political establishment.

So it is breaking those 'unfair competition' practices, that will make prices for many services, more affordable.

That in, turn, should allow people to save, hedge against risks more efficiently, and therefore, take more risks in the type of business opportunities that they venture to explore.

And that would drive progress

>I will vote for anyone that wants universal healthcare, puts a price on carbon emissions, strengthens labor, and takes on monopoly (in the tech industry but other sectors as well).

It's interesting to see people with seemingly like-minded intentions come to such different conclusions.

Afaik all the sectors with the most government intervention are the ones plagued by monopolies, stifled innovation, cronyism (even cap n trade has rewarded polluters).

However, I think you are misinformed if you believe those candidates will set a market price on carbon. They want command and control solutions.

The US has one of the most progressive tax systems in the world already. There is no system that is more re-distributive.

If you mean the state should be larger...great...but that is something totally different. That would require significantly less redistribution, raising taxes on the middle class, and bringing people who pay no income tax into the system (this is usually a significant minority ~30%+ in progressive tax systems).

Also, the content of your post is essentially: "I want free things, and I want [group I dislike] to pay for it". Trumpish.

The reality is that universal healthcare or infrastructure spending doesn't actually need to be "paid for". The negative yields on sovereign debt all over the world and with no inflation in sight shows us that the world has been overly pursuing austerity. Rich economies like Germany and the Netherlands that are obsessed with running fiscal surpluses have held back growth EU-wide. MMTers have been saying this for years but even "mainstream" economists like Larry Summers are coming around to the view that fiscal spending needs to go up [1].

Deficits and the debt aren't the reason why tax policy needs to be more redistributive. It's to actually do something about wealth inequality which is ultimately corrosive to democracy. Having New Zealand citizenship or a hideout in Big Sur won't save you if we run the current regime to its logical conclusion.

[1] https://twitter.com/LHSummers/status/1164490326549118976

It's got nothing to do with wanting free things - the argument is that massive wealth disparities are bad for democracy and thus redistribution is necessary.

Some years back, I talked with someone who had research funding from the Gates Foundation. The were almost apologetic about it. It seems they felt compromised; that they were serving as cover and cog for a patent generation scheme.

So if the video's argument vis Google doesn't resonate, perhaps that's a simpler example. It's a reoccurring critique of GF in global public health, especially when it's working with Intellectual Ventures, that... it has a strong preference for approaches that generate patents, and profit large incumbents, over approaches without those properties.

In contrasting Tesla vs old-auto engineering culture, someone described an old-auto engineering design career/car decision matrix. If something is good for both career and car, great, do it. If bad and good, drop it. If good and bad, pursue it anyway. So regards engineering social change, it would seem unsurprising to find a variety of engineering cultures present, perhaps with a variety of properties.

His talk at Google was great: https://www.youtube.com/watch?v=d_zt3kGW1NM

great talk.. !!

Aren’t we seeing how this is already backfiring in some ways? I think Google is a good example. This is a company that seemed to stoke socially progressive ideals among employees and then created this environment where employees are protesting the company’s involvement with the military, more conservative employees accusing the company of bias, the company now saying political discussion is frowned upon at work, etc.

Because it's all sophistry. The elite or corporations have no ideology or principles with which they are operating. They are machines that will say anything anyone wants to hear to make more money. And then they will stop saying it once it no longer works. Same goes with the freedom of speech rhetoric when it was found what it actually means, the elites agreed to put a kibosh on it even if the government can't.

Another thing I hate is all these places asking for additional money to give to charity. So they can engage in corporate giving. If they are so interested in corporate giving why don't they give from their profits?

Why not move social policy to the states? Scotus justices have said that, and that's what the constitution directs.

Let people have real democracy, and get what they vote for and experiment with what works and not. Move with your feet if you have to.

The whole world doesn't need to be united under the same social policy. People are also very bad at figuring things out without experimentation.

America as an organization exists to leech money from poor and middle class people, from medical costs for people with crappy insurance to traffic fines concentrated in poor areas.

Double irony: this article appears in Fortune magazine.

While the article was addressing more than just elite philanthropy, it was one of the issues touched upon here and this post is highly relevant reading every time criticism of billionaire philanthropy comes up:


This article reminded me of Napoleon, who was a smarter and wiser man than most anglophones give him credit for;

> There is no such thing as an absolute despotism; it is only relative. A man cannot wholly free himself from obligation to his fellows. A sultan who cut off heads from caprice, would quickly lose his own in the same way. Excesses tend to check themselves by reason of their own violence. What the ocean gains in one place it loses in another.

The part that sticks out for me is, "A man cannot wholly free himself from obligation to his fellows." It's a simple statement, a simpler lesson, but a profound statement that we've forgotten. Society wouldn't exist if it weren't for the consent of those around us. Society wouldn't exist without the agreement of those with us. Society is in its essence a bond and a privilege - it gives us the permission to do more and ask for more by the virtue of its existence. We have mutually agreed to not rape and kill each other for scraps, but to let each other do their own thing unless it hurts others (or abrogates their contract with one another).

That's why taxes exist. For me, they're the subscription fee for civilization. There has never been a civilization that hasn't had some form of governemnt. There has never been a civilization that has acted and organized purely on "self interest." Someone has to dig the ditches, run the sewer lines, lay the roads, and stop people with a crowbar from coming into your house and killing you in your bed. Someone has to pay the fee that allows the contract to exist.

Each time this covenant has been breached, it has been met with a short and bloody end. No despot has ever been absolute. Stalin couldn't get out of bed without fearing a gun to his head - https://en.wikipedia.org/wiki/Sergey_Kirov#Assassination_and... . Pol Pot might have met an ignominious end - https://www.theguardian.com/world/1999/jan/21/cambodia https://web.archive.org/web/20110918095455/http://articles.c... . And Hitler died alone after putting a gun to his head.

If they couldn't rid themselves of their obligations, how can we?

It's because everyone has bought the doctrine of the invisible hand and self-interest, as a panacea of all that ails everything. While yes these tools do exist, they must be balanced with your obligations to others, else society becomes unhinged. And we're seeing that today.


> Adam Smith, the father of modern economics, is often cited as arguing for the "invisible hand" and free markets: firms, in the pursuit of profits, are led, as if by an invisible hand, to do what is best for the world. But unlike his followers, Adam Smith was aware of some of the limitations of free markets, and research since then has further clarified why free markets, by themselves, often do not lead to what is best. As I put it in my new book, Making Globalization Work, the reason that the invisible hand often seems invisible is that it is often not there. Whenever there are "externalities"—where the actions of an individual have impacts on others for which they do not pay, or for which they are not compensated—markets will not work well. Some of the important instances have long understood environmental externalities. Markets, by themselves, produce too much pollution. Markets, by themselves, also produce too little basic research. (The government was responsible for financing most of the important scientific breakthroughs, including the internet and the first telegraph line, and many bio-tech advances.) But recent research has shown that these externalities are pervasive, whenever there is imperfect information or imperfect risk markets—that is always. Government plays an important role in banking and securities regulation, and a host of other areas: some regulation is required to make markets work. Government is needed, almost all would agree, at a minimum to enforce contracts and property rights. The real debate today is about finding the right balance between the market and government (and the third "sector" – governmental non-profit organizations.) Both are needed. They can each complement each other. This balance differs from time to time and place to place.[22]

Historical note: it has always been true that the rulers have an obligation to the ruled. A fact often totally forgotten these days.

Even kings and queens that subscribed to the notion of divine right, recognised that they had an obligation to the people they ruled over.

This exchange of power was often codified. The relationship wasn't one group of people ruling with an iron fist over another. If you were a serf, you had to provide labour but you received rights and benefits in exchange.

That system often broke down in periods of population growth (a common example is vagrancy laws in the late 16th century) but even there was an established right to riot and dissent as a way of pressing claims.

It was only during the Cold War that we really saw this understanding of dictatorship/monarchy/whatever completely break down (imo, there are a ton of books on the above i.e. Polyani but I am speculating now) as dictators were able to maintain power through their allegiance to the US/Soviet power (and changes in technology made this easier too).

And, of course, our notions of community/society have totally changed too. Substantial reductions in economic and physical uncertainty has made most people unwilling to live in a system in which another person has dominion over you.

But this doesn't change the fact that this is why these systems existed in the first place. And, in most cases, people who have tried to rise up and create systems in which the bottom class rise up and have found themselves crushed under the weight of the obligations they are forced to assume (they do not disappear, risk has to be assumed by someone).

> Even kings and queens that subscribed to the notion of divine right, recognised that they had an obligation to the people they ruled over.

"Divine right of kings" is the fig leaf. The "obligation" comes not from the divine, but from the threat of pitchforks and torches.

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