Joe the Plumber=Koolaid Drinker

Like millions of Americans, I watched the last presidential debate with much interest, especially the discussion revolving around taxes and “Joe the plumber”.   Joe the plumber, you may recall, was the plumber who challenged Obama about the fact that he’d be unfairly burdened with his proposed tax increases if he bought his boss’s plumbing business.  As it turns out, our friend Joe is an unlicensed plumber who makes about $ 40,000 and is not remotely close to being in position to buy a plumbing business or any other business for that matter.  Based on his income, Joe actually stands to be the beneficiary of Obama’s proposed tax cuts.  Given this, one has to wonder why Joe has his economic interests aligned to areas that don’t affect him.
 
There are many Joe’s out there who seem to imagine themselves as the targets of “liberal” tax increases and the beneficiaries of “conservative” tax cuts when nothing is further from the truth.  I’m constantly amazed how people are convinced that their economic interests are aligned with those who are far wealthier.   For example, some of the Bush tax cuts revolved around cutting taxes on investment income and the elimination of estate (death) taxes.  Both of these cuts tended to benefit the upper income groups that accumulate the sort of wealth that these sorts of taxes apply to.  People like Joe just don’t benefit from these kinds tax cuts because they generally don’t accumulate that sort of wealth. 
 
The main argument about tax cuts that come from conservative circles is based on so called supply side economic theory which came to the fore during the Reagan administration.  This theory says that tax cuts actually result in more tax revenues going into the government’s coffers while supposedly leaving the beneficiaries of those cuts free to invest the savings and create jobs.  Well, if that’s the case, where are the jobs?  Why does it seem as if more of them have been shipped overseas? 
 
The fact of the matter is this: supply side economics has achieved nothing other than create yawning budget deficits and an increased national debt.  It has not created jobs nor has it supported development in the real economy.  The tax savings that Bush & Co. have passed out have been pocketed and not recycled in any meaningful way.  What we’ve been left with crumbling home prices, 401k’s  and bloated debt burdens as a substitute for real jobs and incomes.
 
I wonder if Joe realizes that medium family income here in the US has grown on average less than 1% a year over the last 40 years and that’s where his struggle really lies.  Does he realize that the income of those at the top grew exponentially over that same period of time?  How do you get by with only a 1% raise a year?  Well, if your raise was that paltry and your mailbox was constantly stuffed with credit card solicitations and mortgage refinance offers, you might have been tempted to close the gap with debt.  If Joe really knew what his problem was, he’d be on the front lines of those pushing for equitable tax policies and income distribution.
 
I’m first and foremost a businessman and making money is definitely my thing, but I’m a “capitalist lite” and don’t subscribe to the view that unbridled greed is a good thing.    I generally think that income redistribution schemes to address Joe’s problems of lagging income tend to be short lived, but I recognize that a sustainable economic situation can’t be had if a nation’s income and wealth distribution is such that the nation’s richest 5% hold over half of the nation’s wealth.   All that tends to do is broaden economic disruptions when the wealthy have a problem as they’re having now.  It really can’t be disputed that  it’s really the problems of the wealthy that are creating the wide economic disruptions we’ve having now.  They were the one’s who created the opaque mortgage securities that were sold around the globe and then sought relief from the taxpayer and the Federal Reserve when that blew up in their faces.  They’re the one’s who are responsible for the credit crunch as they refuse to lend money until they clean themselves up with our tax money.  Basically, we have a system of where profits are private while losses are social and to be shared by everyone. This is all due to the concentration of wealth (and power) in the hands of a few.
 
You’d think that Joe would be upset about that and the impact on his taxes because this directly affects him, but instead he’s concerned about a proposed tax increase that won’t affect him at all.   That’s either an indictment on the nation’s educational system or a testament to the efficacy with which conservatives pass out the koolaid.

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