Thursday, July 3, 2008

Kinnaman: The "takings coalition"

The 'takings coalition'
By Matt Kinnaman
Thursday, July 3

Contemporary American liberalism, despite its patina of peace, love, and joy, embodies the politics of envy. It stakes a claim to the property of others. It builds bureaucracies, devises redistributionist schemes, and reinforces hierarchies to enforce egalitarian outcomes.

Grover Norquist, author and small government pioneer, points to liberalism's love of confiscating from others through taxation what the Left wants to use for its own ends. Norquist calls the various subgroups of liberalism the "takings coalition."

Examples abound in liberalism's ceaseless calls to raise taxes on the "rich," to punish the "windfall profits" of selected industries, and to attack mega-pay packages for corporate executives through litigation and prosecution.

Former U.S. Senator Phil Graham's post-Senate career is brokering big Wall Street deals which sometimes create sky-high executive payouts, an activity even more diabolical to liberals than standing on the Senate floor pushing tax cuts, as Graham once did with gusto.

In a Wall Street Journal interview with Stephen Moore, Graham elucidated fat-cat paydays as follows: "It's simple. In economics, we define labor exploitation as paying people less than their marginal value product. I recently told (the former CEO of AT&T, Ed Whitacre, who retired with a $158 million pay package) that he was probably the most exploited worker in American history because he took Southwestern Bell, which was the smallest of the former Bell companies, and he turned it into the dominant phone company on earth. His severance package should have been billions."

Phil Graham continued, "When we were all hunters and gatherers, and you were better with a bow and arrow than I was, there were limits on how much more game you could kill than me. Today, CEO decisions about whether to acquire or not acquire a company, to shut down one part of the company or not shut it down, get into a market, get out of a market, where those decisions mean billions of dollars, is it surprising that people are willing to pay tremendous amounts of money for people who make those decisions right?"

This is where liberals explode with righteous indignation, refusing the possibility that 1,000-fold differences in pay can ever be justified. Phil Graham, who has seen both politics and commerce at closer range than most, says the point is not pay differences, but economic growth: "Look, if a man in one lifetime is responsible for creating 100 real jobs, permanent jobs, then he's done more than most do-gooders have ever achieved."

But what about the gut-level sense that it's just not right for one worker to get $158 million while another worker gets $50,000, or even much less? University of Rochester economist Michael Rizzo illuminates the situation this way: "I always like to focus on the fact that prior to the Industrial Revolution, the entire world was poor. The marvels of capitalism do not lie in the fact that it is a system to serve the desires of the rich (it does), but the fact that it brings goods to the masses that were prior to capitalism unimaginable. If you take workers from 1850 and introduce them to Bill Gates, they would be most amazed with his air conditioning, his car, his aspirin, his TV, and the hot water heater in his house, not his 65 billion dollars."

American jurist Robert Bork describes the basic contradiction of liberalism, in which egalitarianism makes headway through "coerced equality: quotas, affirmative action, income redistribution through progressive taxation for some, entitlement programs for others, and the tyranny of political correctness spreading through universities, primary and secondary schools, government, and even the private sector."

Bork writes that Kurt Vonnegut "saw the trend and envisioned the day when Americans would achieve perfect equality: persons of superior intelligence required to wear mental handicap radios that emit a sharp noise every twenty seconds to keep them from taking unfair advantage of their brains, persons of superior strength or grace burdened with weights, those of uncommon beauty forced to wear masks. Why not?"

Into this scenario fits liberalism's confused version of injustice: An individual who makes billions of dollars by creating jobs that others voluntarily fill to make products that still others voluntarily purchase in a cascade of value enriching every measurable area of life for everyone involved.

Conservatives celebrate Bill Gates and Ed Whitacre because their millions and billions of dollars indicate the abundance of opportunity awaiting everyone, of which they are spectacular examples. Liberalism, meanwhile, preaches imposed fairness while forging policy chains that shackle success.

Which side are you on?

Matt Kinnaman’s “Getting it Right” column appears every Thursday in the North Adams Transcript