March 03, 2014
Brooks tells us that people who are unhappy about the enormous upward redistribution of the last three decades are guilty of the sin of envy. Let’s try an alternative hypothesis, large segments of the public are angry because the wealthy are rigging the rules so that an ever larger share of the pie gets redistributed to their pockets.
There are a large number of well-documented ways in which they have engineered this heist. For example, they have too big to fail insurance that transfers tens of billions of dollars each year into the pockets of the CEOs and shareholders of the country’s largest banks. They also managed to secure near tax-free status for the financial industry, which puts tens of billions more into the pockets of the big actors there. And they have constructed a tax code chock-full of shelters that allow pension fund managers like Mitt Romney to get incredibly rich by buying up new companies and teaching them the game.
They have created longer and stronger government-granted patent monopolies that redistribute hundreds of billions annually from the general public to pharmaceutical companies, tech companies, and patent lawyers. They have put in place a corporate governance structure under which CEOs essentially pay off corporate directors to look the other way as they pilfer their companies. And they have maintained protectionist barriers that allow doctors and other highly paid professionals to earn far more than their counterparts in other wealthy countries.
Many folks think these economic distortions that slow growth while making the rich richer at the expense of everyone else are bad policy. But Brooks wants us to think that efforts to eliminate these distortions are simply envy that must be held in check.
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