Leftism Distilled

Some revealing comments from Matthew Yglesias:

As I’ve been emphasizing, if you earn over $250,000 a year, you’re earning more than the vast majority of Americans. And you’re also earning about five times what the average household takes home. At the same time, if you earn $250,000 then anyone who makes over $1.25 million is earning five times what you make. And in a very large country with an extremely large degree of “right tail” inequality, you can be in this weird position of being quite rich while at the same time there are lots of people who are orders of magnitude richer than you are. People who you might well run into at your college reunion, and who might send their kids to the same summer camp as your kids. It’s potentially a potent ground for fostering class resentment and progressive tax policy.

[...]

You couldn’t raise a ton of additional revenue that way, since you’re not talking about a very large quantity of people, and you would have some supply-side impact on earnings...but you could get some revenue that could be spent on useful programs. And soaking the very rich would have some direct benefits for the not-quite-as-rich in terms of reducing the price of luxury goods and letting them do better in pure status competition.

It won't raise a ton of additional revenue, and it would reduce economic activity at a time where we desperately need all the economic activity we can get, but hey, at least it fosters class resentment. And that, apparently, is what really matters.

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I think you misread what

I think you misread what Matthew is arguing.

Inequality among rich => class resentment => political opportunity for more tax brackets with higher marginal rates => some, but not a ton of, additional revenue.

I doubt he sees class resentment itself as a good thing.

Maybe worse

I followed Brandon's link to see if his citation was selective in order to make Yglesias look bad, but in context I think the full blog post is actually worse than Brandon's citation. First paragraph:

I got a chance to meet Matt Miller the other day and talk to him a bit about his neat new book The Tyranny of Dead Ideas. One thing we talked about was the possibility of mobilizing class resentment among what you might call the lower upper class.

To me, Yglesias sounds downright excited about class resentment.

It's not the excerpt I think

It's not the excerpt I think is misleading, but Brandon's comment:

It [more tax brackets with higher rates at higher income levels] won't raise a ton of additional revenue, and it would reduce economic activity at a time where we desperately need all the economic activity we can get, but hey, at least it fosters class resentment. And that, apparently, is what really matters.

But it seems Matthew only thinks class resentment is good only insofar as it helps achieve his redistributionist goals by making higher tax on the super-rich politically feasible. Brandon's comment seems to suggest that Matthew gives class conflict inherent value, and more tax brackets would help foster such resentment.

Matthew: resentment => tax the super-rich (yay!)
Brandon's strawman: tax the super-rich => resentment (yay!)

I still find the suggestion Matthew does make fairly repugnant, by the way.

Not a bad thing

I doubt he sees class resentment itself as a good thing.

I doubt he sees it as an especially bad thing. After all, making use of bad sentiments is a liberal no-no, whatever your ends. That's what the outrage about the "southern strategy" is about - that people like Ronald Reagan supposedly used anti-black racism to win elections. Yglesias has himself written about the southern strategy.

The underlying critique of the southern strategy is, "if a sentiment bad, one may not use it for political gain", from which we can deduce, "if one may use a sentiment, then it's not bad." Since Yglesias advocates using class resentment, he must not consider it bad.

I'm not sure. He definitely

I'm not sure. He definitely seems to see it as a politically useful sentiment, and doesn't object too strongly to it. I doubt he's explicitly thought about it with relation to the southern strategy. People always use double standards - he probably just thinks the goal is worthy and isn't too worried about the sentiments used to bring it about.

What could possibly be wrong with it?

From his point of view, what could possibly be wrong with class resentment? After all, he advocates taking money away from the super-rich. It makes perfect sense, then, that he be comfortable with resentment of the super-rich for having that money. What is that resentment but the emotional aspect of the very action which he advocates? Resentment that someone has X is in perfect harmony with advocacy that X be taken away from them.

The rich and the super-rich

I'm reminded of this.

magnitudes

$1.25 million a year is pocket change to the people who make $250 million a year which is pocket change to the people making $25 billion a year.

Boeing lost money last year. Anyone notice that Boeing's CEO is being paid more than the company lost?

We are told that we need rich people because rich people buy lots of stuff. No one ever says what the rich people buy. For example, what does the guy with $25 billion buy that the guy with only $2.5 billion or only $250 million can't afford?

We are told that we need

We are told that we need rich people because rich people buy lots of stuff.

Maybe we shouldn't evaluate the merit of letting rich people keep their property only with respect to how useful they are to the rest of us. Just a thought.

Backwards

You have that backwards. They produce lots of stuff. No one would hire them if they produced less than they got. Except if they work through government to get those riches, or just steal them.

And also

What Brad said.

And also...

We are told that we need rich people because rich people buy lots of stuff.

That's only part of it. We also need rich people because we need to allow people to get rich (so they have an incentive to be productive), and the only way to allow people to get rich is to tolerate rich people.

No one ever says what the rich people buy.

Sure they do. Among other things, rich people buy capital.

For example, what does the guy with $25 billion buy that the guy with only $2.5 billion or only $250 million can't afford?

He buys $25 billion of capital.

I don't think he buys $25 billion of capital

I think he sets up a tax exempt charity and, whatever the purpose of his charity, he appoints board members who support his politics. While 10% of the income from his charity's capital is used to help poor people, the 90% is reinvested in companies that specialize in ripping off the working class. Sort of like how some people claim Bill Gates' charity operates.

Second, the US, where 10% of the people own 90% of the assets how can 1% of the people NOT end up owning 99% of the assets? We a situation where 90% of the people who own the 10% spend 90% of their annual increase to stay alive while the 10% who own 90% spend 90% of THEIR annual increase buying up the remaining 10%.

The Bible tells a story about Joseph in Egypt. He has a dream about 7 years of double sized crops followed by 7 years of drought. He convinces the king to tax half the produce during the first 7 years. Then comes the 7 bad years. Joseph, in the king's name, sells the starving people the grain he confiscated in the prior 7 years. When they run out of gold and portable assets, he trades them food for farm land. When the drought breaks the King owns all the land (that the priests don't own) and the population are all tenant farmers to the king.

This illustrates the sort of economic system in place in the US. The 90% who are mostly wage owners pay an 8% or so payroll tax plus an income tax on their net earnings. The 10% who own the 90% pay 15% capital gains tax on their SPENDING, not their annual increase. Why? They only cash in the holdings that they want to spend. This process is slower than that of the King of Egypt but the result is just as sure.

Ignorant Americans think it is normal for the working class to live in a 3000 st ft house, to buy a new car every 5 years and have 3 weeks paid vacation. For the first 6000 year of human history it was normal for the working people to live hand to mouth on the edge of poverty, of starvation. The western part of the world is reverting to the norm under which most of Asia and Africa has been living all along.

...because of government intervention

Yes, the western part of the world is reverting to that "barely surviving" norm of the rest of the world. And why is that? Because governments are interfering with the ability of the free market to produce the wealth that has made our elevated standard of living possible.

Your parable of Joseph and the Pharaoh is a good example of this. Rather than spreading the word about an upcoming famine and leaving it up to the farmers to determine how best to prepare, the government keeps them in the dark and steals half their produce, then sells back what it stole from them, until it bankrupts the very people who were responsible for producing it in the first place.

In the same way, we have government regulations that mandate that investors make risky investments that would not have been made in a free market, and when those risky investments come crashing down, the government buys up the companies that failed due to government interference, and tops it off by castigating the victims for obeying the government rules and regulations that caused their failure in the first place.

In reality, the economic system we have in place in the US is one in which those with political pull use the government to keep down those who don't. It's been this way since Abe Lincoln's day, at the very least. When you investigate every monopoly, every bank failure, every economic crisis, you'll ALWAYS find the hand of government behind it, either creating the problem directly, or stirring the pot that produced it, either as part of the empire-building of some government agency, or as a payoff to someone with influence in the capital.

Resentment of the rich is merely another tool in the arsenal of those who want expanded government power. Whether it is seen as a good of itself, or as a means to an end, it still ends up producing the same results: increased government power, decreased freedom, and more human misery.

Isn't Matthew Yglesias the

Isn't Matthew Yglesias the same guy who said that rules like Davis-Bacon are ultimately good because, even though they are wasteful and we get less for our money than we would otherwise, the waste goes to unions, and unions vote Democrat, and Democrats vote for more pork projects? I suppose one poorly founded rationalization is as good as any other.