Makers and Takers

In a blog post for the Huffington Post, Lynne Parramore  refers to a forthcoming book by Rana Foorohar, Makers and Takers: the Rise of American Finance and the Fall of American Business.  The usual dichotomy goes something like this:  the wealthy top 1% are the makers who invest their capital into innovative products and jobs, the bottom 47% of the population are the takers, particularly of government benefits.  I have to admit, there are "takers" in the sense that Romney, Ryan, and others disparaged.  One need only hang out in the conservative backwaters of rural America to see them taking government benefits and then disparage, without irony, the government giving them the benefits and their inner city "welfare queen" counterparts.  And yes, the "system" itself maintains this sort of "taker," insofar as those "on the dole," in world without viable means of social mobility, seem to form a more or less permanent, generationally-stable "underclass."  These "takers" are "hopeless" in almost every sense of the word, they themselves are without hope, and there is not much hope for them or the coming generation.

Individually, they get very little, barely enough to survive, and if the declining life expectancy figures are any indicator, not enough to survive for long.  The real "takers," however, are those identified by Foorohar.  In Parramore's words, they are:

the denizens of plush Wall Street offices, and they have pretty much absconded with the American dream. Despite the remarkable ability of financiers to hide behind complexity and dodge the spotlight of the media, the regulators and the law, Americans are copping onto the breadth and depth of the swindle. They have just about had it—which is why voters have been flocking in droves to the fiery Bernie Sanders, who wants to jail financial crooks and end too-big-to-fail, and to Wall Street heckler Donald Trump, who describes hedge fund managers as worthless moneymen who “get away with murder“ and gleefully trashes uber-bankers like Jamie Dimon. 

I fully understand the argument that we SHOULD support the more pragmatic approach advocated by those at the center of the political spectrum.   As I have said several times, I am a pragmatist who believes, or WANTS very badly to believe, that immediate problems can be solved if those charged with solving them would approach the problem with some rigor, some attention to verifiable data, some ability to admit that a favored approach didn't work as well as expected.  I cannot bring myself to support a Trump, for all the standard reasons -- his incipient racism, misogyny, xenophobia, messianic ego, et cetera.  I would no more put his finger on the button than I would Sarah Palin's.  On the other side, of course, there is Bernie Sanders.  I fully understand the fears put forward by the Council of Economic Advisors who "have worked to make the Democratic Party the party of evidence-based economic policy" that Sanders himself is engaging in voodoo economics -- that his policy proposals are either unrealistic, or rest on unrealistic expectations.  It's pie in the sky.


Nevertheless, I think Parramore is correct -- at least one American has just about had it.  If one wants to understand the populist "rage," the push for "outsiders" to the political process, it's not just one's sense of being bamboozled, but a desire for simple and comprehensible solutions.   Parramore touches on something important when she mentions "the remarkable ability of financiers to hide behind complexity."  The big banks are not only too big to fail, they are too complex to understand. If you want some modest sense of the complexity, read Gabriel Zucman's article "Taxing across Borders: Tracking Personal Wealth and Corporate Profits."  It was published in the Journal of Economic Perspectives, and gives, well, a perspective on the globalization of capital and "tax avoidance" of the sort railed against by Sanders.  If one wants to develop "evidence-based economic policy" Zucman outlines the sort of evidence one should have at hand, but the offshore tax avoidance is too complex for easy understanding, and might well be too complex for any understanding. If he is correct, it represents approximately $124 billion dollars in lost revenue to the US coffers.  As Max Ehrenfreud points out in the Post, one can buy at least one or two slices of pie in the sky with that.