Archive for the ‘David Gergen’ category

The Politics of Money

February 10, 2015

Last evening, David Gergen spoke at the Philadelphia Speakers Series. Gergen is currently a Harvard professor and CNN commentator, and joins the speakers circuit as a paid raconteur. His talk was entertaining as well as informative.

Gergen recounted his years with President Nixon, Reagan, the Bushes, and Clinton.  He pointed out how much things have changed since the post World War II era statesmen. In short, Gergen felt the current crop of national leaders fall far short of their post WWII predecessors. Hmmm.

It was, however, Gergen’s answer to a question which has stuck in my mind.

When asked about tax reform, he said, as if quoting from a “Big Money playbook”, the next President would have to deal with the growing income inequality. (So far, so good). Gergen then went on to say that President Obama’s proposal to increase taxes on capital gains was a mistake. “Taxing the rich to give more to the poor”, or “putting a ceiling on top earners while trying to push up the bottom” would not work.

Gergen felt that by “growing the entire American economy” both the rich and the less rich could gain more wealth. In other words, a stronger American economy sets the table so every one wins. Hmmm.

I do not doubt Gergen may feel that. And for sure, this approach could work and did work in the 50’s and 60’s. The problem that Gergen (and a host of other GOP playbook carriers) fail to recognize is that since the 70’s the average worker has seen stagnate wages while the top earners have experienced a 400+% increase in income.

Saying this differently, during the period from 1975 or so until 2015, economic productivity increases have gone entirely into the pockets of the already wealthy. Why should anyone think that in 2016, productivity increases will begin to flow to the average worker?

Words like “taxing the rich to give to the poor” are specifically chosen to inflame American sensibilities and values. Shouldn’t we reap what we sow?

Life has become much more complicated than the days of the American frontier. Increasing the capital gains tax to levels seem only 25 years ago is hardly threatening the livelihoods of the wealthy.  And on what basis is it unfair?

Also, President Obama’s proposal related to funding the massive infrastructure crisis facing the country. While I would support a gas tax increase in preference, increasing capital gains tax is just a worthy.

No one enjoys riding on pothole cratered roads.   The major beneficiary of infrastructure repair are businesses and their owners. Hmmm.

David Gergen is not a candidate for office this year or in 2016. Never the less, I am sure we are going to hear the same phrases and wrongheaded arguments during the Presidential primaries and campaign.