Lloyd Blankfein, CEO of Goldman Sachs, famously said in 2009 that Goldman is doing "God's work", which prompted me to quip that God had tasked Goldman Sachs with the job of vacuuming up all the loose money flying around the world so the rest of us can stop obsessing about it and pay attention to what really matters.
Money does matter though. You don't need to be rich to be happy and too much wealth may even interfere with happiness, but as Thomas Piketty has argued persuasively, extreme concentration of wealth has contorted politics and society in the past and likely will in the future.
Give Blankfein credit for understanding the risk of rising concentration of wealth. He has been saying for some time now that unchecked free market forces will lead to destabilizing wealth inequality and dysfunctional government. Of course sabotaging the government is precisely the goal of the lunatic right wing who seek to establish their own government-free zones, be they floating islands as proposed by The Seasteading Institute or Nevada rancher Cliven Bundy's vigilante mob.
Blankfein agrees that some form of wealth redistribution is necessary. He has said that the country is good at creating wealth but not good at distributing it. He gets mealy-mouthed, though, when it comes to how to achieve this goal. Blankfein suggests that a growing economy, like a rising tide, will raise all boats, but if Thomas Piketty's "r > g" theory is correct, growth only makes wealth inequality worse over time. Piketty's theory suggests that taxes of 1% of net worth per year are needed for the growth in wealth to not exceed the growth of the economy.
Perhaps in his heart of hearts Blankfein knows that taxes are the only way to redistribute wealth but doesn't dare say it. The hatred that the wealthy harbor against paying taxes is so extreme that it approaches something like religious fervor. He might not last for five minutes as CEO of Goldman Sachs if he so much as breathed support for taxes. The company would risk becoming a leper in the eyes of their customers and he himself might not be invited to any more parties, ever.
Blankfein is right to be worried about what will happen as the concentration of wealth continues unabated. It augurs ill for the country, for his children, and for pretty much everything he cares about and believes in. But he needs to take the next step and lend his support to a sensible tax policy. He should at least get behind the "Buffet Rule", Warren Buffet's proposal for a 30% tax on income over $1 million. There's no doubt though that it would take a bit of courage. The blow-back would be fierce.
No comments:
Post a Comment