A letter to Trump supporters: I immigrated from a “shithole country”. (No, really, I did). Here is how you can keep America from following in my homeland’s footsteps.
My fellow Americans,
Years ago, I immigrated to the United States from Latin America. During those years, I earned a couple of engineering degrees, I became a proud naturalized citizen (which, according to the judge who ran my naturalization ceremony, makes me “as American as George Washington”), and I currently work as an engineer at a company that is the world leader in our market. I came to the United States because I believed that the education and the jobs I could find here would be better than just about anywhere else in the world — and I was right! Like Mr. Schwarzenegger has recently said; The US is still the land of opportunity (despite the fact that it is also home to a lot of injustice that still needs to be fixed).
You may remember how, not long ago, President Trump got into trouble for referring to certain other nations as “shithole countries”. I don’t understand why the backlash; He’s right. (That was only one example of how he is literally America’s most honest president). Some countries out there really are shitholes. I come from one of them.
When people ask me what it’s like where I grew up — by which I presume they mean; how it’s different from living in the US — here’s what I tell them:
• There is no middle class. There are rich people (maybe 20% of the population) and poor people (maybe 80% of the population), basically two distinct populations that coexist uneasily, each with its own culture: There is little overlap between the rich and the poor when it comes to fashion, slang, pop culture, or life experiences and the worldviews/beliefs that they generate.
How did things get this way? There were a lot of factors, but the main one is that politicians were “persuaded” by rich people to pass laws that made them even richer, and that made most people even poorer.
There are car factories in the country where I grew up. I remember being a kid and learning that they make cars for export, and cars for the domestic market. The cars for export had nicer seats, an electronic dashboard and digital sound system, larger and more automated engines, remote-control door locks, nicer wheels, all kinds of cool features… while the cars that stayed in-country were the “budget” models with none of those extras. I remember being outraged and wondering “Why?”. I later came to understand that, because the vast majority of the population does not have much disposable income, “nice” products end up being sold to only a few rich people and to foreigners, while local stores will only feature the bare-bones least-expensive version of each product. This is true of computers, appliances, you name it.
• There is a lot of crime. This is primarily because job opportunities for the poor are limited. Of the jobs that do exist, most of them pay almost nothing. Even if almost everyone is employed, most jobs pay wages below the poverty line; There are simply not enough good jobs (i.e. jobs that pay well enough for saving money, taking classes, owning a home) for everyone who wants them. Getting a good job becomes almost like a lottery, where a lot of honest and hard-working people simply do not get the opportunity to rise above the poverty line.
Nobody wants to be a criminal. It’s not any easier than having a legitimate job. Crime means a daily life of high stress, risk, and shame. But you have to put food on the table, pay rent, and pay the bills, so… What are ya supposed to do? Unless you have relatives you can mooch off of indefinitely (and nobody wants that either), eventually you may have to choose between starving during your long job hunt, or crime.
Due to all this crime, most people have wrought-iron bars on their windows (like liquor stores do in the US) and most people have security cameras on their front doors. If you go for a walk down the street wearing expensive jewelry or carrying a large camera or a laptop, it will get stolen. Doing so is seen as even more stupid than leaving your front door or your car unlocked.
An interesting note: Most people who choose a life of crime (even in the US) either have drug-abuse problems or other mental health issues. If treatment for those were available, crime could be drastically reduced.
• People aren’t good citizens. What does that mean? This article about Brazil does a good job explaining what things are like in most of the developing world. In short: People don’t see their fellow citizens as neighbors, as someone to be kind to; Instead, there is an attitude of cut-throat competition, like animals in the wild.
Take, for example, driving: People cut each other off in traffic, double-park, block intersections… Let me put it this way: Say you’re on the highway and you intend to take a certain exit. About half a mile before your exit, you notice a line of cars barely moving on the right-most lane: Your exit is backed up. Do you (A) get in line early because you don’t want to be a jerk, or (B) try to get as far as you can on the second-right-most lane and then cut into the barely-moving line of cars at the last second to take your exit, because you don’t want to waste your time like all those “suckers” you just passed? A shithole country is one where everyone does “(B)”, where everyone drives like a jerk, where something is only wrong if you get caught, where everyone games the system with no concern for what is right.
When you’re at the airport terminal waiting for a flight to a developed country, and the gate agent announces that “We are about to start boarding…”, people form a line. However, when you’re at the terminal waiting for a flight to a developing country, and the agent says “We are about to start boarding…”, people all get up and rush the gate, forming a semicircle-shaped mob around it, everyone pushing and shoving to get as close as they can. This is the mindset you develop when you grow up in a society where systems don’t work, where the people who succeed are the people who find shortcuts and who cheat the system, and the good people who simply wait their turn are the ones who always finish last.
This kind of behavior extends to all areas of human activity. People litter on the street and on the beach and in parks, people don’t recycle, people spit on the sidewalk. Business people make no-compete back-room deals for contracts with their buddies, bribe the government to overlook illegal cost-cutting, and hire each other’s relatives. Students cheat. Permit inspectors from the city government tell you that you made a mistake in your paperwork… with the expectation that you’ll pull out your wallet and ask “Is there a way around this?”. Same thing for cops who pull you over. Everyone abuses their power because institutions and the government are generally not powerful enough to hold people accountable.
(If you know anyone from Latin America, Russia, India, Africa, southeast Asia, or anywhere else in the developing world, I would encourage you to show them the above description and ask if they’d agree. And while you’re at it… If they live in the US, ask them if they see the US becoming more and more like their homeland).
•••
What causes this ruthless competitive mentality? Why did the middle class disappear, leaving only rich people and poor people? How can we keep things in the US from getting that bad?
There are two ways to explain the cause of what academics call a “low-trust society”.
One is polarization, whether it’s liberal versus conservative, or rich versus poor. Once the population is split into groups who have few shared interests and concerns, it’s easy to see life and society as a zero-sum game where any success on “their” side means a loss for “your” side. It’s basic divide-and-conquer. The rich people hate the poor people because the poor people commit crimes, because homeless people are an eyesore, because they mooch off the taxpayers via the government, etc. And the poor people hate the rich people because, if the rich people had a conscience, they would help the poor out more. (You don’t have to be a billionaire to make a huge difference in the life of someone who can’t afford food and who never had the opportunity to get a decent job even if they’re willing to work hard).
The other way to explain the cause of the “low-trust society” is simpler: Lack of prosperity. Around the world, the richer a country is, the more people trust each other, the more they act like good citizens and considerate neighbors rather than ruthless competitors.
But actually, that’s not the whole story. Although high trust correlates well with average wealth e.g. a high GDP, it correlates even better with social equality e.g. a low Gini index. Sure, you usually get “low-trust societies” in poor countries… but even more so, and even more reliably, you always get “low-trust societies” where the rich are much much richer than the poor, where there is no middle class.
In short: When the rich hoard all the money (even if it’s all money that they earned legally and legitimately), you end up feeling like you live in a shithole country.
•••
In the US, the rich are hoarding all the money. Since the 1970s and especially since 2008, American millionaires and billionaires have been getting richer while other Americans have been getting poorer. This is a big part of what’s causing our slide into shithole-country territory.
I’m not saying that the rich did anything wrong. They wanted more money, so they invested the money they had into legal means of making more money, and they got more money. If we didn’t like it, then we could simply vote for politicians who don’t pass “rich get richer” policies, or we could simply not buy products made by companies that only maximize shareholder value; We could support companies that have stuff made in the US rather than in China or in Mexico, companies that pay their employees a living wage, etc.
Basically, we’ve (kinda) had the power all along to stop the system (laws, product selections on websites and store shelves) from becoming more “rich get richer”.
Because we did not use that power, the US is becoming a shithole country.
“But wait”, I hear you say. “The rich deserve what they got. They played a game, they played it well, they won, so why should they not get to enjoy the reward?”
They absolutely should get to enjoy the reward. They should be millionaires and billionaires. All I’m saying is: A system where Jeff Bezos gets 200 billion dollars for the work he did… is arguably not as good as a system where Jeff Bezos gets “only” 100 billion dollars for that work and where more Americans have good jobs, get a good education, can walk down the street without fear of getting mugged, don’t get stuff stolen from their homes, don’t have to eye fellow citizens with suspicion… and maybe even don’t go bankrupt from medical bills.
Would you rather (A) live in a country where billionaires get to continue to grow their fortunes at the same rates they do today, but where the US becomes a shithole country for 80% of Americans like you and me… or (B) live in a country where rich people continue to be rich (they just don’t become richer quite as quickly as they do now) and where there are more good jobs and lower crime rates (and probably better healthcare and education) for the other 80% of us?
•••
Please trust me on this one. I watched my homeland become a shithole country when it adopted the economic policies that the US has been adopting lately. I watched social trust decrease to the point where the population was too divided to band together around their common interests (thus allowing the rich to rig the game so that everyone else’s money flows to them, impoverishing everyone) and I’m seeing this happen here too. I’m writing this in the hopes that you’ll help put the brakes on the shit-hole-ification of America and turn things around, before the US becomes as bad as the country that I moved away from.
•••
How do we set up a system where more of the wealth ends up in the hands of more people?
Simple: More progressive taxation.
Not “more taxation”. I’m not saying the government should get any more money (especially given how unwisely they spend it).
Specifically: A higher fraction of the government’s tax income should come from rich people, and a lower fraction from poor people.
This is not unfair to rich people: The more money they make, the more money they keep. However, as they make more and more money — call it “extra” money — the higher a fraction of each incremental bit of “extra” money goes to the government. This is called the marginal tax rate. Say that I earn $100,000 this year and that you earn $11 million. Your first $100,000 are taxed at the same rate as my $100,000. Heck, your first $10 million could be taxed at the same rate as my $100,000. But that eleventh million would be taxed at a higher percentage. Even higher for the hundredth million, and higher still for the second billion.
This is how things used to be in the US from the 1950s until the early 1980s. The top marginal tax rate was 90 percent! When it comes to taxes, I literally just want to Make America Great Again.
(And before you say it; No, this does not actually cause rich people to move away).
Something else we could do is have higher taxes on dividends and capital gains, i.e. on money made from stocks. This is how most rich people make most of their money, by buying stocks and other things that then go up in value. They are only considered income when they are sold / “cashed out”, i.e. when the money is spent, so rich people only pay taxes on a small fraction of their income: They pay taxes on the money they spend, not on the money they earn.
Here is an interesting example: In 2016, Warren Buffett became richer by about $12 billion. However, the income reported on his tax return was $11.6 million, making for $1.85 million in federal income taxes — about one percent of one percent of what he earned. Yes, his capital gains were also taxed… but only at about 16%.
In short; The government gets a smaller fraction of Warren Buffett’s earnings every year than they do from you or me (or from Buffett’s own secretary and the rest of his office).
It’s this kind of tax structure that caused the extreme social inequality that led most of Latin America to become shithole countries.
•••
Probably the single most important thing that I can tell you on this topic, from having grown up in a Latin American shithole country, is to please be skeptical of laws and tax breaks and other government programs that are “good for the economy” and “good for business”. They sound like they mean “more jobs”, but the end result often ends up being “more jobs at our factories overseas” or at most “more jobs that pay poverty wages”. And they sound like they mean “cheaper products/services and higher pay for you”, but the end result often ends up being “You get paid the same or less, and products cost the same. The higher profits are pocketed by the company owners”, i.e. stockholders, i.e. rich people.
Trump’s reduction of taxes on business have actually hurt most American workers, while benefiting his rich friends. That kind of thing is what shithole country politics is all about.
This is counter-intuitive, but it really is true, if you watch how things are playing out in America right now (and how things have been playing out in Latin America for decades): Lowering taxes on businesses (and on capital gains) does not lower prices or unemployment, it just makes rich people get richer and poor people get poorer.
(If anything, unemployment was lower back when taxes on rich people were higher!)
The same is true of the minimum wage: Rich people say that a higher minimum wage would cause higher unemployment, but this is not true: A higher minimum wage would allow more low-income people to have more money, so more people would buy more things, increasing revenue and boosting the economy for everyone (and even reduce government spending on social programs such as food stamps, Medicaid, and housing vouchers). However, a higher minimum wage would lower corporate profits and make shareholders (i.e. rich people) richer more slowly. So rich people have persuaded politicians to stop increasing the minimum wage, for decades. If the minimum wage had kept pace with corporate profits since the 1970s, it would be $19 per hour.
These “good for the economy” / “good for business” policies can and do cause economic metrics like GDP go up. However, the lives of most of the population get worse. When Bill Gates gets richer by a few billion dollars, it is true that “Now, people in Seattle have a few more thousand dollars each, on average”… but that is meaningless. Just because the super-rich got richer, the average wealth of the population tells you nothing about whether the lives of 99% of people got any better. Maybe Bill’s barista gets a higher tip that day… but, let’s face it; Probably not.
The multi-trillion-dollar tax cuts and loans given out by the US federal government over the past few years, supposedly to “help the economy”, just caused rich people to get richer, and forced the average American worker to foot the bill. That is how we move towards becoming a shithole country.
•••
I hate to say this, but…
… the way to implement the kind of taxation that actually helps American workers to make more money and keeps the rich from vacuuming up all the money… the way to keep the US middle class strong, to make the US continue to be the home to hundreds of millions of people who all (or almost all) have enough disposable income to buy stuff i.e. to support our many industries, so that the US can continue to be the land of opportunity and unparalleled prosperity and huge markets for new businesses and products and services and inventions…
… The way to get back to that strong middle class that “powers” America… is to vote for Democrats.
I know! I know! You’ll respond by saying that Trump is good for the economy, has created many jobs, and was behind huge tax cuts. All those things are true.
But those things don’t help you and me. They just help millionaires. Let me explain.
The tax cuts just went to people who own businesses. “Helping the economy” just means that their profits went up, not that anyone’s pay went up. And sure, unemployment went down, but (A) this is because many unemployed people stopped looking for work, and (B) an increasing fraction of jobs only pay poverty wages.
Meanwhile, Democrats are talking about exactly the things that I mentioned earlier, a system that puts more of the financial burden of the government on rich people, which gives everyone else much more money that then gets actually spent into the economy (and ultimately lowers government spending on social programs): higher marginal tax rates, higher tax on dividends and capital gains, higher minimum wage, etc.
Democrats understand that what made America great, especially from 1945 to 1980, was a large middle class where millions of people have enough disposable income to go shopping, buy a house, get a better education, and even have one parent stay at home if they so choose.
Republicans, on the other hand, only ever pass laws that make millionaires richer and make everyone else poorer.
If you’d like, you can vote to strengthen the Second Amendment, make it harder for women to get safe abortions, and so on. That is your right. But you should know that doing so will (A) mean less pay for you and for everyone else in your community except the richest few, (B) not actually strengthen the second amendment or make it harder for women to get abortions and so on (if you look at the statistics and at current Republicans’ track records), and (C) cause the US to become more like a Latin American shithole country.
You’re probably thinking “But if we create a system that helps those who are unable to work, the system will be abused by some people who are just unwilling to work”. And that is true. Some moochers would get more than they deserve.
However: We face a choice between “Some moochers get more than they deserve” and “Some people, who would work hard if given the opportunity (and maybe already do work hard), they can’t save for retirement or for a better life… and then die of preventable/treatable causes”.
Would you really rather have innocent people die, and have hard-working people stuck in poverty, than have a moocher be fed? That’s really your preference? If so, I’m afraid your choice will cause the downfall of the American empire.
If you refuse to help the unfortunate “because some of them might not deserve it”… then you probably should not call yourself a Christian. But you certainly would make a good politician in a shithole country.
•••
I’m not promoting socialism. I’m not saying we should steal from the rich to give to the poor. This is not about wealth redistribution, Robin Hood politics, or raiding the public treasury… let alone communist principles like planned economies and state-owned corporations.
As someone from Latin America, who watched not only the decay of deregulated super-capitalist countries like Argentina and Chile and Mexico (and hyperinflation in Bolivia and Brazil) but also the collapse of communist countries like Cuba and Venezuela… let me tell you something about socialism, and how it really works in the modern world, when you look at what has been tried in a variety of countries, not just one or two.
Imagine a spectrum that goes from fully-communist on the left, to fully-deregulated laissez-faire free-market capitalism on the right. On the left end, you have a planned economy, state-owned companies, etc. On the right end, you have most of Latin America other than Cuba and Venezuela. The US is pretty much just right of the middle: A capitalist system (e.g. privately-owned companies, the government does not tell them what to make or what services to provide, big companies get tax breaks and laws written in their favor) with some regulation (e.g. laws about safety) and many socialist elements (public schools, highways and bridges, sewage, the police, fire departments, Social Security, Medicare, NASA, bank insurance, FEMA, subsidies for farmers, even the US military and VA benefits, and emergency relief grants in the wake of natural disasters and the COVID pandemic… are all things that the government pays for with money from taxpayers, so that every single person on US soil can benefit. They are all examples of socialism).
Some countries, like the Scandinavian nations (Sweden, Norway, Finland, Denmark) and Canada, are a little more socialist than the US. Some countries, like (say) Greece, are a little less socialist and more free-market capitalist. The further you move to the right, the more the government tries extra hard to stay out of the way of the most profitable corporations, e.g. by being less strict when it comes to laws about pollution, safety, etc., and by spending less on social programs like public schools, infrastructure, public health, and disaster relief.
Since the 1970s, the US has been sliding towards the right on this graph. From the 1930s to the 1970s, Americans knew that the way to prevent another Great Depression is to be about as socialist as Canada and Scandinavia are now. But starting around 1979, rich people started effectively paying politicians — and schmoozing with judges, and using television and talk radio to convince everyone else— to move the US to the right, in the direction of Latin America. Rich people did this so they would become richer (and also, if you believe the conspiracy theories, to undermine democracy, i.e. so that “the masses” would have less political power). We need to stop this.
•••
One last point: You probably don’t really appreciate how rich the rich are. You think you do, but I bet you don’t.
I would strongly recommend that you watch videos like this and this, just to see how the wealth distribution in the US is actually vastly different from what most people think.
If you don’t have six minutes to spare, then, ok, here are some bullet points.
- If you had $10 million, and you expect to live another 50 years, that’s the same as getting to spend $200,000 a year while doing zero work.
- A billionaire is someone who could lose 99% of their money and still have $10 million left over. With a billion dollars, you could do zero work and spend $55,000 per day for 50 years.
- Jeff Bezos makes about $150,000 per minute. In 15 minutes, he earns as much as the average American does over an entire career. If he spent $1.3 million on something, this would have the same impact on his finances as the average American spending one dollar.
- The richest 400 Americans have more wealth than the poorest 150 million Americans combined. In other words: The Forbes 400 have more wealth than half of all Americans.
- The top 1% of Americans own about 40% of the wealth (i.e. almost half of all the money in the US). The top 20% own 93% of the wealth. So the bottom 80% (i.e. most Americans) only share 7% of the wealth between them.
- The top 1% of Americans own 50% of stocks. The bottom 50% of Americans own practically none. So, again, laws that are “good for business” and “good for the economy” and “helping the stock market” only really help the top 1%.
- This has been getting worse. In 1976, the top 1% took home a total of 9% of the income in the US… but now, they take home 24% of all the income. So their share has almost tripled.
Meanwhile…
- 40% of Americans struggle to pay for groceries, and 57% of Americans have less than $1000 saved up. In fact, 17% of Americans cannot pay all of their monthly bills, and nearly half of Americans would not be able to cover an unexpected $400 expense with cash… and that was before COVID.
- About 14 million children in the US literally do not get enough to eat. Do they deserve this?
- Countless Americans — even those with insurance — cannot afford medical care. Literally a million people per month are driven to poverty by medical bills. (Again, that’s before COVID). Because of how difficult it is to afford healthcare in the US, especially for the half of the population with a low income, all kinds of treatable diseases get worse from neglect, and many grow into deadly — and preventable — advanced stages.
- Homeless people die in the streets every day in the US. Even if they are to blame for their homelessness (which is debatable at best), should it be a death sentence? For anyone?
If the four points above do not scream “shithole country”, I don’t know what does.
For a few people to have so much money, in a country where people literally starve to death and die of preventable and treatable diseases… means that we could change our system in a way that makes life vastly better for millions of people, and pay for it by taxing just a few obscenely rich people who (let’s be honest) wouldn’t even notice because they’d still be making millions and billions per year, more money than they could possibly spend if they tried.
I’ll repeat something I wrote earlier: A system where Jeff Bezos gets 200 billion dollars for the work he did… is arguably not as good as a system where Jeff Bezos gets “only” 100 billion dollars for that work and where more Americans have good jobs, get a good education, can walk down the street without fear of getting mugged, don’t get stuff stolen from their homes, don’t have to eye fellow citizens with suspicion… and maybe even don’t go bankrupt from medical bills.
Taxing the rich a little more would not make the US be like Venezuela or the USSR. It would simply make the US be like what it was from 1945 to the 1970s. (It would also mean lower taxes for people who make less than $500K a year). So, can we please actually make America great again?
•••
To summarize:
The economic policies promoted by the GOP cause the rich to get richer and the poor to get poorer, which leads to the “no middle class” and “more crime” problems that define life in a shithole country.
A feeling that society is more competitive and uncaring (By the way, it does not need to be this way) leads to the “people not being good citizens” low-trust mindset that is ubiquitous in shithole countries, where strangers are seen as probable enemies, never to be trusted. (In a truly prosperous economy, with a large and vibrant middle class, you could trust strangers! … as was the case in the US, decades ago). This is caused by extreme inequality.
Trump and his supporters in congress — and the GOP’s myth of “trickle-down economics”, of helping “businesses and the economy” (which means only helping rich people at the expense of average people, like I explained above) — have been dragging the US into shithole-country territory since the 1970s. If you’d like it to stop, then please do not vote for the GOP again, at least when it comes to the Federal government in 2020.
The way to not become a shithole country is to change the tax structure so as to force the richest Americans to pay a little more to fund government-run programs like the police and the military — by increasing taxes on dividends and capital gains, increasing the marginal tax rate for high-earning people, and increasing corporate taxes —and also to demand a higher minimum wage, and to be a good citizen (i.e. not see your neighbor as a dangerous competitor for limited resources). This would also lower taxes on everyone who make less than $500K a year, and would reduce government spending.
This would bring the US tax system — and the flow of money between the richest Americans, the poorest Americans, the US government, and corporations — back to the balance that the US enjoyed in the 1950s and ‘60s. It will ensure that a large fractions of Americans have disposable income, which is the engine that drives American prosperity. (If you only follow one link in this entire article, make it this one). Strengthening the middle class like this would actually make America great again.
Please do not let Trump’s approach to government keep going any longer. Republicans will not stop the US from becoming a shithole country, but Democrats will try. At least when it comes to the Federal government, please consider voting for Democrats in 2020. The alternative is watching the US continue to move deeper into shithole-country territory.
Trust me. I’ve seen it happen multiple times in Latin America (and I ran away to the US!), I’m watching the same thing happen again up here, and I beg you to please help me turn it around.
Thank you for your time.
Sincerely,
- an immigrant from a Latin American shithole country
