Michael Abraham
My wife got an 8-page letter yesterday from David Koch. My first thought was, “He doesn’t know my wife very well.” But then I read it to get a fuller understanding of what Mr. Koch was really up to.
David and his brother Charles are two of the richest men in the world, heads of Koch Industries, a vast conglomerate of petroleum, chemical, ranching, finance, distribution, transportation, and other ventures. The brothers are worth $60 billion each, and are avowed libertarians. The letter is a window into the curious minds of libertarians.
It begins with the most appealing image, one of “freedom and opportunity for ordinary people,” extolling the virtues of Ronald Reagan and Britain’s Margaret Thatcher.
The essential theme of the letter, which was accompanied by a donation form and self-addressed pre-paid envelope, is that the heavy hand of the government is the primary obstacle “ordinary people” face in achieving prosperity.
As far as I can tell, however, nothing can be further from the truth.
Here’s a brief summary of Koch’s points:
• There is a dangerous tidal wave of socialism sweeping the nation.
• Growing numbers of citizens are increasingly ready to throw away freedoms and systems that have lifted them and more generations of Americans to a high standard of living, relying on a highly centralized government in control of the economy and effectively their lives.
• We are rapidly becoming a two-tiered society where the well-connected thrive and everyone else falls behind.
Speaking of Reagan, he produced one of the most politically potent expressions of the 20th Century, “Government is not the solution to our problem; government is the problem.”
This emboldened a political movement, which the Koch brothers are perpetuating, that government is the enemy of the people.
Its offshoot is the notion that when taxes on the rich go up, job creation goes down. This idea is an article of faith for all libertarians, most Republicans and even some Democrats. Facts tell a different story.
During and after World War II, we had the highest marginal tax rates on rich people in our nation’s history. This correlates with the era of our nation’s greatest SHARED prosperity. When I was a child, our federal government used that funding to build an Interstate highway system, send a man to the moon and fight a foreign war AT THE SAME TIME.
Reagan was a proponent of supply-side or “trickle down” economics: when rich people are allowed to keep more of their money, they’ll feed it back into the economy “raising all boats.”
Bluntly, this doesn’t happen. Never has, never will. Here’s how things really work, plainly and simply: neither rich people nor businesses of any size create jobs.
Consumers create demand and thus jobs, and they do so when they have money to spend.
From the end of WWII, productivity was tightly tied to rising wages. That pairing ceased exactly when Reagan slashed taxes on the wealthy and on corporations, at which point productivity has continued a steady rise, but wages became flat, and have stayed that way.
When the rich are taxed heavily and government invests in things that benefit us all, not only do we get the tangible thing the government bought, but we also get the benefit from the spending done by the people who were paid to do the work. For example, when the government buys a highway, we all get the use of that highway, but also the highway worker has money to spend, creating demand for housing, food, clothing, and all consumer goods.
The recent embodiment of Koch-think is the Trump/Republican tax cuts, which disproportionately benefit the wealthy. Many CEOs have readily admitted that they’ve used that windfall not to enrich their workers, but in stock buy-backs, enriching their shareholders. For most of us, our tax breaks have already been swallowed up in higher gasoline prices.
So Koch was right on this: we are rapidly becoming a two-tiered society where the well connected thrive and everyone else falls farther behind. But it’s because of too little government, not of too much.
The Kochs are already fabulously rich and they know the libertarian way will make them more so, broadening the income gap. Conversely the democratic socialist agenda of government sponsored health care, transportation, education, and other services help lift ordinary people into real, lasting prosperity.
Too many “ordinary” people will believe Koch’s nonsense, buy into the libertarian model and send money to support Koch and his fellow billionaires, perpetuating a system that makes “ordinary” people poorer.
I’ll close with this thought. The informal Yiddish language, rather than having a dictionary, uses stories to illustrate the meaning of words.
A billion is a thousand million. Chutzpah is when the Koch brothers, who between them have the wealth of 120,000 millionaires, think nothing of asking my wife, and thousands more “ordinary Americans,” for $25, $35, or $50 contributions, largely to enrich themselves.
Michael Abraham is a businessman and author. He was raised in Christiansburg and lives in Blacksburg.
