Tuesday, May 19, 2015

Dear Bill Gates: On high taxes not stopping high growth.

The "highest economic growth decade was the 1960s. Income tax rates were 90 percent."  
Bill Gates on Sunday, May 17th, 2015 in an interview on CNN's "Fareed Zakaria GPS"

In sum: While true, there's no longer any room on earth for such growth, if the growth is real. If it's not real growth, then it's just inflation, which won't help. We need to separate economic health from economic growth. Growth promises equality, but never delivers. We need to enforce fair markets and anti-trust law to head toward equality.
Could you expand on your point a little? I admittedly know little about the subject, and this seems like an interesting point.
On this, I'm echoing Dr. Herman Daly, ex-World Bank economist and co-author of the textbook Ecological Economics. His Center for the Advancement of the Steady State Economy (CASSE)'s website is a good place to start on this: steadystate.org, as are the writings of Hazel Henderson, and John Michael Greer.
Seven plus billion of us live now on our planet, depending on it for our food and more (fiber, ores, etc.) With so many of us, our dependence is degrading our earth's ability to provide 'tomorrow' what it yielded 'yesterday'. For example abusive ag.'s soil erosion degrades future crop yields. We're running out of resources, including room to pollute, while we're increasing in number of willing workers.
Those before us, in a world empty of workers but full of resources, figured ways to eliminate labor using resources and technology. Yet in today's world, full of workers but emptying of resources, we still idolize LABOR efficiency, when what suits our present circumstances is RESOURCE efficiency.
Economists among us idolize economic growth as politically-acceptable panecea for inequality. There's growth in population and per capita income growth, but there's nowhere to put any of this growth on our earth. We can't fit infinite growth on our finite earth, even per person growth in income, because if the income growth is real, it means more resources extracted and used.
Meanwhile, the effort to increase equality has been thought of as a way for the rich to acceed to the demands of poor, so it is thus a 'reason' for growth. Yet, equality has been progressively receding away over our horizon even as we clamor, through growth, toward that horizon.
So since growth doesn't fit earth today, and won't deliver equality, how do we cope with that and Piketty's insight that capital returns exceed growth rates throughout history? How do we deal with the frightening cries about poverty that stress us all? Measures of well-being in societies with great inequality are on average worse than more equal societies, according to the thoroughly researched Wilkerson and Picketts' The Spirit Level: Why greater equality makes societies stronger. Further, how do we make opportunity fairly available to each child, as demands the meritocracy that we aspire to be, and philosophically lean on as rationale?
We should, at least, drop suicidal oil exploration subsidies, for example. We should, at least, face ourselves 'at the pump' with the true pollution costs of the gasoline energy we use to eliminate labor.
We should, at least, charge 'at the pump' for the inevitable degradation of the now polluted commons we all suffer in, rich and poor alike, when we as spenders chose to eliminate labor with use of resources that pollute when used. Also, we should at least recognize that the value of market share, as distinct from pure 'economies of scale', is monopolist's money, unfairly gotten. We should, at least, extend legal protection, conveyed now in the form of ‘common carrier’ law, to small and minority retail consumers, to the wholesale markets as well, as in Maryland’s law that small hospitals can’t be paid less for the same procedure than larger hospitals are otherwise able to negotiate, with market share’s clout, when dealing with health insurance companies.
Here in Boston, this should take the wind out of the hospital ‘consolidation’ drive. It should also, in opposing fashion, squeeze the breeze on health insurance conglomeration as well. It should take the profit out of market domination by large market share buyers of small market share sellers, for example, as well as by large market share sellers squeezing small market share buyers.

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