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If I were a Lefty Strongman

by Christopher Chantrill
March 12, 2013 at 12:00 am

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WELL, WELL, Mr. President. it looks like “another fine mess you’ve got us into” with the sequester squib. Not that I’m complaining, not a bit. Your government by phony crisis does wonders for the revenue at my usgovernmentspending.com.

But now your chubby partner Ollie in your lefty Laurel and Hardy act is dead.

I read the more-in-sorrow-than-in-anger obits on the Bolivarian Ollie Chavez. According to Megan McArdle in The Daily Beast, Chavez’s record on poverty wasn’t so special. In the last ten years the poverty rate in Peru went from 55% to 28%. But in chavismo Venezuela, it went from 49% to just under 30%. Not so great, even with all the free oil money.

But the Chavez obits got me to thinking. If I were a lefty strongman, how would I help the poor?

The big problem for the poor, in Venezuela as in the United States, is that it doesn’t pay to work in the formal economy. Maybe they get a bunch of free stuff, but in the formal economy every dollar earned is taxed to the hilt. In the US a welfare recipient that starts to work faces effective tax rates in excess of 50 percent, and sometimes more than 100 percent. Look at Secretary of Public Welfare Gary Alexander’s slideshow on welfare(pdf) in Pennsylvania to experience the dizzying injustice of the welfare marginal taxes game. Also here.

So before I killed all the lawyers, I would abolish taxes on work for the poor. No payroll taxes, no unemployment taxes, no disability taxes. So it wouldn’t make any difference if a poor person worked in the formal sector or “off the books.”

Second, I would abolish compulsory education and child labor laws. If 80 percent of kids graduating from New York City public schools are illiterate, then what’s the point of public education except as a free baby-sitting service? But if the kiddies are out working (maybe at the same place as Mom) then who needs babysitting?

But how will the kids learn? MIT sent a bunch of tablet computers to an illiterate Ethiopian village a while back and here is what happened, according to Nicholas Negroponte.

“I thought the kids would play with the boxes. Within four minutes, one kid not only opened the box, found the on-off switch... powered it up. Within five days, they were using 47 apps per child, per day. Within two weeks, they were singing ABC songs in the village, and within five months, they had hacked Android [to enable the tablet camera],” Negroponte said.

Once those kids have computer skills, why not put them to work to help their parents? I’ve talked to a Mexican who sold chiclets on the street as a child. He didn’t think it was humiliating. He was proud to help feed his family. Maybe a few greedy employers will train their kids up into valuable skilled employees.

Third, health care? I think there’s a good argument for the government to fund basic public health, including vaccination, clean water, emergency and neo-natal.

Where would I get the money for health care? I would tax anyone that has tenure. I mean anyone not working on an “employment at will” basis. If you have tenure, and cannot be fired tomorrow, then you are part of the problem and you must pay a 10% tax on your wages, or contribute 10% to a charity that relieves the poor or contribute volunteer labor to a welfare charity worth 10% of your wages. In addition, if you are in line for a defined benefit pension, then you pay an additional 10%. Call it the Bureaucrat Tax, because goodies like tenure and defined benefit are monopolistic privileges that place enormous costs on other people.

But I realize that this is all fantasy. Clear away the clutter of social programs and social barriers? Give up on government education? Penalize people for demanding security in their work, all the seniority rules, layoff protection, guaranteed pensions? That’s going against the impossible dream that everyone wants, from the poor in Venezuela to the government employee in the US. It’s the guild mentality, that “the individual guild member must obtain the traditional standard of life and be made secure in it,” in the words of Max Weber.

Capitalism says: give up that dog-in-a-manger guild mentality and I will cover you with riches. But most people choose to hang on like grim death to their paltry privileges. That’s what union members do when they rail against “give-backs” as their ailing employer goes down for the count. That’s what the Greeks and the Portuguese are rioting about. People like that end up losing everything.

I guess I’m just not cut out to be a lefty strongman.

Christopher Chantrill blogs at www.roadtothemiddleclass.com.

Buy his Road to the Middle Class.

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presented by Christopher Chantrill

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