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Tuesday, March 25, 2014

Stick with what you know, you know?

George Packer listens to Bush II's tax guru, Larry Lindsey, explain the world to a congressional committee:
Lindsey’s argument was this: income inequality has risen under every President since Nixon; it rose most dramatically under Clinton. Neither party has been able to solve this problem, so our expectations should be very modest. In spite of large government transfers from the rich to the poor since the nineteen-sixties, and in spite of the rich paying a higher proportion of total income taxes now than they did in 1980, inequality keeps going up. The reason, Lindsey concluded, is the decline in “middle-aged labor-force participation,” especially among men, in the past few years. In other words, lots of people in their thirties, forties, and early fifties have chosen to stop working. In Lindsey’s blunt phrase—which he subsequently denied using—they have chosen not to be self-reliant. They have dropped out of the workforce because tax rates are onerous and government benefits are attractive; they have less incentive to work than to be unemployed. This, the former President’s adviser suggested, is the main cause of inequality: more and more formerly employed people just don’t want to work. It was an updated version of Ronald Reagan’s freeloading welfare queens—only now they’re white and middle class. 
As for solutions, Lindsey said that nothing the government is trying has worked. He kept urging “modesty” on the senators, which began to sound like “Don’t do anything.” But he had one idea, which he presented as if it had never been tried before: tax cuts for the rich.

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