Inequality & Inequality


Lately there is a lot of talk about inequality and every politician (Democrat & Republican) and their mothers seem to be jumping up and down crowing about this and what programs they support to better this situation.

While the acrimony on if we should raise the minimum wage, behavior of Walmart, Amazon and Boeing towards unions will go on. I believe the smart people on both sides are seeing some of the truths and they both don’t like what they see.

a) Huge corporate subsidies — may it be food subsidies going to ADM and Cargill or the military / security industrial complex that wants us to be perennially at war may it be someone in the middle east or drugs

b) Huge entitlement programs like food stamps and long, long, long term unemployment benefits — without which many people will go hungry daily and become homeless

Basically between the big corporations and helping the very poor, somewhere we have lost what America was supposed to be about — self-reliance, self-sustenance and equal opportunity to all to pull themselves by the bootstraps.

(Please be aware I am not demonizing or criticizing the poor or folks who are on food stamps, I am certain almost all of them would rather not be in that position)

We have gotten here by pursuing policies over the last 30 — 40 years where we have underinvested in human capital, human ingenuity and talent. Most states total spend more money on prisons than on schools. So let’s be clear this problem is going to take a generation to resolve. Most of these debates end up at the door step of taxes and tax rates.

Here is a solution:

  1. Let’s agree not to make any changes to the income / personal taxes for the next 20 years — after all we are all going to file our returns in 3 months and we have come to live with whatever our tax rate is going to be in 2013, why muck around with it? Just live with it. (either hold your nose and pay or smile and pay, depending on where you stand politically). But for heaven’s sake let’s not re-litigate the Kennedy tax cuts, the Clinton tax increases (social security), Bush tax cuts and Obamacare taxes.
  2. Let’s focus immediately on the spending on the industrial scale subsidies to large corporations and tax loopholes to the corporations (and corporations are not human beings)
  3. Let’s not reduce food stamps and life sustenance welfare (I want no one going hungry or homeless), but let’s start getting a little smart about long long employment insurance, lets make it for example a sliding scale over time so people are incentivized to look harder for jobs
  4. Let’s reform Social Security and Medicare / Medicaid i.e. means testing — your benefits should be on a sliding scale, if you have a high net worth lets reduce or zero your benefits, the lord knows the top 5 — 10% or even 20% of net worth folks don’t need social security
  5. Let’s invest in education, skills training — now there are many ways to do this public — private partnerships, charter schools, public schools and community colleges — sure there will be fights over role of the government and there are no perfect solutions but let’s become results based, lets try different models on a city basis, state basis and copy what works and forget the approaches that don’t work.

Human capital is a terrible thing to waste, we need to nurture every child and adult to help them access every tool available to reach their potential.