News & Views from 465 California Street

America’s False God

Clint Reilly
Dec
23
2008

By deifying the private accumulation of extraordinary wealth rather than the performance of extraordinary work, our culture worships a false god.

Wall Street has become a metaphor for a system that has forgotten basic values like sacrifice, thrift, saving for a rainy day, integrity and moderation. Unfortunately, the contributions of those ordinary Americans who work hard, raise families and play by the rules are made to seem trivial.

If we are to repair the country, that perception needs to change.

The secret to America’s success is simple: We are an egalitarian society where ideas are celebrated and equal opportunity is a protected right. Sadly, the gap between rich and poor has grown since Ronald Reagan lowered tax rates on both capital gains and personal income in the 1980’s.

We have falsely convinced ourselves that America has the world’s best standard of living. We look down our nose at countries that have higher tax rates and more comprehensive social services like universal health care. At the same time, it’s clear that neither our federal nor state governments have enough money to pay for the smaller level of services provided in the United States.

California’s projected $45 billion deficit is a prime example. The reason for chronic deficits and deficient levels of education and health services is that our tax rates are too low, particularly for the wealthy.

I recall a recent conversation with the Swedish wife of a foreign diplomat. She explained to me why philanthropy was viewed negatively in her country. “Wealthy patrons are an inadequate substitute for the concentrated action of a strong central government,” she proclaimed emphatically.

Her country demands higher tax rates, not voluntary gifts which may represent only a tiny fraction of windfall incomes. She has a point. Here in America, we have committed philanthropists like Microsoft founder Bill Gates, who have dedicated their fortunes to reforming education, eradicating disease or protecting the earth.

But we have also allowed wealthy financiers to legitimize rapacious business practices with token philanthropy. Bernard Madoff – the latest Wall Street guru to fall from grace after his indictment for stealing as much as $50 billion from unsuspecting clients – was a frequent figure on Manhattan’s black tie charity circuit.

When I was president of the board of Catholic Charities, I often wondered why I was raising private donations to cover the deficits of government-sponsored programs like Meals on Wheels for seniors, day care for children or housing programs for the homeless.

Nevertheless, many of our nation’s vital services depend heavily on private philanthropy from wealthy benefactors. Hospitals, food programs, hospices, schools and centers for the disabled are only a few of the institutions that rely on private donations to survive.

But how equitably are these services distributed across income levels, races and neighborhoods when they are dependent on one class? And aren’t private gifts only a pittance of what’s really needed?

Wouldn’t higher tax rates on these same wealthy donors generate far more money to elevate our collective standard of living?

More important to the egalitarian values inherent in our democracy, a fairer tax system would deemphasize the social importance of wealth and reemphasize the social contribution of all work to the betterment of society.

2008 will be paired in history with 1932.

We have watched our Wall Street icons stumble unceremoniously as the federal bailout ballooned to nearly $10 trillion. The pinstriped busts in the capitalist hall of fame explode with each new bankruptcy, billion-dollar government infusion and blown Ponzi scheme. The amounts are so large and the disgrace so pervasive that it is almost impossible to distinguish the thieves from the financiers.

The privileged aristocracy that now runs our nation’s financial system has lost trillions of taxpayer dollars so far. Our tax laws must promote hard work and civic responsibility, not the selfish pursuit of unlimited riches.

Comments (33)

  • A great column today; we get it in the Vacaville Reporter.
    Corporate greed has helped lead us to where we are today, but it is nothing new.
    As I reflect on the Big 3 and their efforts to fatten up on big trucks and SUVs when buyers really needed something else, I’m reminded of what auto companies did when they resumed auto production after World War 2. They built cars that had all the high-priced options and desperate buyers had to pay for this padding rather than get what they needed. For example, if you wanted a Chrysler product, you could easily buy one–it’s just that you had to take a convertible with all the bells and whistles.

    Posted by: Ray McDonald | December 23rd, 2008 at 8:39 am

  • You’re replacing one false God with another. The Utopian vision of government spending money more “fairly” is looney. Just look at the current 700 billion and the growing “bailout”. Obama is gliding in promising another Trillion!

    If you want higher tax rates I suggest you start. First please define what that magical rate is, then you hand over that percentage of your entire net worth to the government.

    Posted by: Andy | December 23rd, 2008 at 9:14 am

  • I just wanted to let you know that your column is an oasis
    of sanity in our crazy world. I am 100% in agreement with your
    views, and I like the way in which you express them.

    Please keep writing. Thanks.

    Sincerely,

    Avinash

    Posted by: Avinash | December 23rd, 2008 at 9:32 am

  • Dear Clint,

    What makes you think replacing a self-made privileged aristocracy with a corruptible elected one is a solution?

    You seem to echo the old time-honored tax and spend tradition that essentially says it is ok to be mediocre and miserable as long as everybody else is too.

    Well, I believe in the goodness in man and see private philanthropy as a virtue preferable to forced giving. I argued with a Democrat about greedy Republicans (though I have no party affiliation) during the Katrina disaster I had made a large donation and asked him if he had given anything. His answer: I pay taxes.

    So, Clint, I believe you are clearly barking up the wrong socialist tree here. America is made up of refugees from that system, pioneers who take risks and reap rewards made this country great, not lemmings collecting crumbs from a, hopefully, benevolent government.

    That said, I agree our tax system is way out of whack and ready for the trash heap. It is fundamentally flawed in that it punishes work and rewards consumption when it should be the other way round. Under our current system workers are taxed at least twice: 1) When they buy their goods and services the price they pay include the tax costs of the seller/provider passed along and 2) when their income is taxed. I am not even talking about the third and fourth level, such as sales taxes, fees etc.

    The good news is, there is a solution: The FairTax – I invite you to seriously examine the concept and details with an open mind to see its validity and true fairness.

    Political interests like to dismiss it as not progressive. Well, what you expect from those whose axe would be gored, they’d defend their turf with any means. The fact, upon sober examination, is that it is more progressive than any other solution. Most notably it fixes the fundamental flaw by not punishing work and productivity, i.e. not taxing wages or income.

    Merry Christmas,

    Erich

    Posted by: Erich | December 23rd, 2008 at 10:06 am

  • How do we change our culture of greed? At times, it seems rotten to the core. The rich get richer, the poor get poorer and less educated, money is envied and worshiped by both and the cycle continues.

    What is the practical solution to breaking that cycle?

    You always hear that Americans want nothing more than for their kids to have it better than they did. We want to give them advantages we never had ourselves. And while I believe that this is a laudable goal and an important one, look at how distorted it has become: parents work themselves ragged to provide material comfort to their families – iPods, cell phones, cars and homes that are beyond their own means. Unfortunately, they’re never home to be with their kids, or to enjoy watching them grow up, or to share memorable experiences with them. And they’re not there to TEACH them what’s important in life.

    So what do we get? More consumers. More money/material worship. More debt.

    I think about my parents now in their late 70′s. They worked hard at blue-collar jobs, but they also spent plenty of time with all of us kids. We ate dinner together at the table – every night. We took vacations. We had barbecues in the park. We played catch and tag in the yard together. They came to all of our school plays and sporting events. No, we didn’t have a fancy car, we hardly ever ate at restaurants and we didn’t live in a mansion, but doctors still made house calls, my parents were able to spend time with us and we were all able to go to college.

    If you ask me, I think America has gone backward in the most destructive way…

    Gareth

    Posted by: Gareth Okenfeld | December 23rd, 2008 at 10:20 am

  • May I suggest if you would like to pay more taxes feel free to. My self I am tried of paying for Nancys new jet ( $300,000 per trip to D.C.) and the welfare mother with 9 kids by 9 different husbands before she’s 25 years of age. I am very tried of working and playing by the rules. I then see people that have never worked in there life having there every need taken care of. Our tax laws only promote more of a communist type of nation.

    - Accounts Receivable Tax Building Permit Tax
    - CDL license Tax Cigarette Tax
    - Corporate Income Tax Dog License Tax
    - Federal Income Tax Federal Unemployment Tax (FUTA)
    - Fishing License Tax Food License Tax,
    - Fuel permit tax gallon Gasoline Tax(42 cents per
    - Hunting License Tax &n bsp; Inheritance Tax
    - Interest expense Inventory tax
    - IRS Interest Charges IRS Penalties (tax on top of tax)
    - Liquor Tax Luxury Taxes
    - Marriage License Tax Medicare Tax
    - Property Tax Real Estate Tax
    - Service charge taxes Social Security Tax
    - Road usage taxes Sales Tax
    - Recreational Vehicle Tax School Tax
    - State Income Tax State Unemployment Tax (SUTA)
    - Telephone federal excise tax
    - Telephone federal universal service fee tax
    - Telephone federal, state and local surcharge taxes
    - Telephone minimum usage surcharge tax
    - Telephone recurring and non-recurring charges tax
    - Telephone state and local tax
    - Telephone usage charge tax< /B>
    - Utility Taxes Vehicle License Registration
    - Tax
    - Vehicle Sales Tax Watercraft registration Tax
    - Well Permit Tax Workers Compensation Tax

    COMMENTS: Not one of these taxes existed 100 years ago and our nation
    was the most prosperous in the world, had absolutely no national debt, had
    the largest middle class in the world and Mom stayed home to raise the kids.

    Posted by: Marty W | December 23rd, 2008 at 10:52 am

  • I think we’re all just spitting mad about the proliferation of those 9-child, 9-husband 25-year-olds who seem to be ruining everything for the rest of us. Really, lets round up all of those hyper-breeding miscreants and teach them a thing or two about responsibility! Who’s with me!?

    And boy, I sure do see where you’re coming from about people who “have never worked a day in their life” having their “every need taken care of.” Man, I never would have gone to school if I had known how awesome it was to bunk down in a homeless shelter with 200 other people who have also learned how to game the system!

    Your argument about taxes and Mom staying at home to raise the kids is especially spot-on! Thank God she didn’t have the onerous burden of having to go vote for elected officials back then! Back to the kitchen with you Mom, deciding the fate of the country is man’s work! Your job is to whip up a nice batch of cookies. Or a pie.

    And don’t listen to the haters who tell you that 100 years ago the country was reeling from the excesses of robber barons and greedy financiers who exacerbated the yawning gap between the rich and the poor through their shady profiteering. That’s probably just something the 1908 liberal media made up, along with the “fact” that America didn’t boast the world’s largest middle class until after WWII.

    God save us from becoming a “communist-type of nation”!!! Let the roads, airports, schools and hospitals build themselves.

    Oh, and homeless people — does the government also pay for the billiards tables you all seem to have in your cardboard boxes? Those are NICE.

    Posted by: Ivan Drago | December 23rd, 2008 at 11:31 am

  • You are absolutely right about how this country has gotten off the main track of hard work, save for a rainy day, cash, not credit, etc. I, and my wife (who was born and raised in Ireland), feel very strongly the same way as you.

    Just right here in Larkspur, our local school district is constantly hitting the taxpayers up for money. They only know to throw money at a problem instead of cutting back and show some restraint. We live in a very affluent community, so in turn, we see 16 to 18 year olds driving up in brand new imported S.U.V.s’ and imported sports cars. What kind of values are they being taught?

    When my oldest turned 13, I purchased a year old Nissan Sentra, drove it for three years (I was in street sales), and then handed over to him. He drove it through his first two years of college, and then gave it up to his sister who drove it for another five years. We ended up donating the vehicle to the Make-A-Wish Foundation and got a $3200.00 tax deduction.

    Both of our children have wonderful values, work hard, and are, I proudly say, very successful. I could go on and on, but you get my thinking.

    Clint, just keep on writing those columns. They’re insightful and well written. I look forward to reading them.

    Jack S.

    Posted by: Jack | December 23rd, 2008 at 12:03 pm

  • A note to everyone in the comments section throwing a tantrum about taxes:

    TOUGH.

    Taxes are the price we pay to live in a prosperous, civil society.

    Do you want an army to defend you? Pay your taxes.

    Do you like driving on roads? Taxes pay for them. They also pay to keep criminals off the street. They also pay for schools that, in theory, educate our population and keep our economy strong and our society civil. Oh, and when your house catches on fire, the firefighter that shows up will be paid with your tax dollars.

    Like your cheap crap imported from China? Well, your taxes pay to dredge and maintain our shipping lanes so you can get all the cheap stuff you want.

    It’s peculiar that the same people who preach about working hard for what they earn and not wanting to subsidize “lazy people” through taxes seem to expect everything for free!

    Posted by: Saleema | December 23rd, 2008 at 12:20 pm

  • thanks for jotting it down and advancing the ball. Our obsession with material wealth and the association of wealth with success is a disease infecting virtually every aspect of our society. I’m all for individual achievement and motivation, but jesus freakin christo, when is enough enough?

    Is it O.K. in the name of individualism to accumulate empire? aggregate power and influence? usurp institutions and processes? exploit your neighbor?

    When did Caveat Emptor and “Greed is Good” become our national credo?

    Posted by: Richard W. | December 23rd, 2008 at 12:28 pm

  • it seems like we should focus on optimizing tax revenue.

    here is something to think about:

    Q: Lets say that you can make $100,000 and the government will tax it at 0%. How much will the government get?

    A: ZERO.

    Q: Lets say that you can make $100,000 and the government will tax it at 100%. How much will the government get?

    A: ZERO because no one works for free.

    This should tell you that your focus should be on optimizing tax REVENUE by optimizing tax rates. Will increasing taxes bring more revenue or less? Will decreasing tax rates net higher tax revenue or less? The answer is not always as simple as it seems. The government took in more tax revenue in 2007 then any other year in our history by the way.

    Posted by: Lucius | December 23rd, 2008 at 12:30 pm

  • We need to learn to appreciate each other instead of placing barriers in our relationships. Barriers like:

    Movies
    Video games
    Text messaging
    Time online

    Families and neighbors have replaced interpersonal interactions with media diversions.

    This trend is disrupting our sense of interrelatedness.

    Posted by: War on Error | December 23rd, 2008 at 12:31 pm

  • Yes, the focus needs to be on taxation because there IS such a thing as too much money, and there IS such a thing as getting too rich too quickly. we used to be able to calmly and widely talk about this back in Great Depression I.

    This what’s been driving the increasingly jackpot-seeking management since Reagan dropped the top end taxes, similar to what happened in the 20′s when the same bright idea was tried.

    We regulate business because business is run by humans who have very very different timescales than our institutions do.

    In all the civilized countries, just as in America in the 1950′s and the 19-teens, people worked very diligently under 90% tax rates. They did not stay home.

    They do continue to WORK, but what they stop doing is GAMBLING. Gambling with their businesses, gambling with other peoples’ money and livelihoods.

    They still work. They built us into the superpower under 70-95% top taxation.

    It’s been tried twice, proven it works both times, and both times we cut it back severely we got recession and probably depression both times.

    Posted by: gooserock | December 23rd, 2008 at 12:43 pm

  • Clint, your article is right on!!!

    Certainly the issues you described are caused by the change in ethics from the people that I knew when I was in the workplace. I have to admit, I suspect that the change to a lower level of ethics was happening 20 to 30 years ago but just not as visible. The problem has to do with us, the constituents of our elected officials. We allow them to do nothing and still get re elected.

    Look at our local federal elected officials. Zoe Lofgren, Barbara Boxer and Diane Feinstein. Nothing, there is nothing there. They make a public statement saying what they think we want to hear and do nothing.
    As for the citizenry, we continue to reelect them and and hardly make any noise when things happen like the banks refusing to disclose where the “Bailout” money went. We and our officials should be up in arms, but nothing!!!!!Where is the public outrage????

    Mr. Obama has a chance to show some leadership in demanding accountability and taking action (unpleasant as it might be) if the answers aren’t fourth coming. Will he or can he??

    The bottom line is us, the parents of our children and our ability or inability to teach responsibility, and reasonable ethics in these leaders to be. You can see what we have now and there is plenty of room for improvement.

    Thanks for your article and keep up the good work.

    Hunt

    Posted by: Hunt | December 23rd, 2008 at 2:14 pm

  • Personally, being unemployed has helped me get my priorities straight. While collecting unemployment has cut our family income greatly, we have been able to save money just by keeping an eye on the bottom line. A lot more Starbucks are going to close if others do the same…

    Strangely, having a reason to say no to unnecessary expenditures makes life easier – you start to lose that consumption-driven need for stuff.

    Posted by: Czar | December 23rd, 2008 at 2:17 pm

  • I think the problem is with the concept of “your” money.

    The word “your” is in quotes, because I want to highlight a certain way of looking at personal income– namely, as the portion of gross economic production that is allocated to a private individual.

    I’m sure that people making high incomes are smart and talented, possess valuable skills, and work very hard. Nonetheless, the connection between their high incomes and the amount of wealth they personally produce, or substantially facilitate the production of, is variable and often distinctly tenuous. What we can say for sure, however, is that they have all managed to get themselves into a social position that allows them to claim a fat stream of the total national (or global) income as “theirs”.

    Note the two key phrases “social position” and “total national income”. The wealth available to be allocated to individuals as personal income is produced through the effective operation of a massive, complex engine called society. No individual– no matter how young, healthy, strong, smart, or plucky– could, acting alone, produce even a fraction of the wealth that is represented by the average personal income today. Obviously, this is even more true of high personal incomes. So it is to the advantage of us all to make sure that our society/engine is in fact operating effectively.

    That’s what taxes do, or should do– they are a primary mechanism by which we can maintain and improve the society/engine on which we all depend for our survival and well-being. It makes moral sense that everyone should contribute to this effort, so everyone is taxed in one way or another. But it also makes moral sense (and common sense) that much of the wealth needed for this purpose must come from places where there is surplus wealth, and that is why the wealthy need to contribute a greater share via the mechanism of higher marginal tax rates.

    Posted by: DBunn | December 23rd, 2008 at 2:18 pm

  • I’ve never engaged in unnecessary expenditures or worshiped money. Oh I have wasted money on magazines and little things, but no big things. I never bought the message that money was more important that people, spirit, and community. I was taught to be gracious about any gift, even if I hated it. And I never went into debt but always maintained a small savings account for emergencies (hot water heater, unexpected vet bill, sudden trip to hometown, etc) and it got my into the habit of always having access to a little money, so there is no way I would never get myself into these $8,000 or $68,000 credit card debts. To me, owing that much money on top of a mortgage is pure fiscally reckless insanity.

    Even the attorney I work for was talking today about cutting out his cable service, some of the mobile phones he has and similar savings. He doesn’t think this economy will recover for quite some time and it will be much worse before it improves. We agreed that now that the Federal rate it at zero, hyperinflation is the next bad thing the government will create to do to us.

    Posted by: silverbird | December 23rd, 2008 at 2:25 pm

  • Hello Mr. Reilly, I enjoyed the perspectives you offered on the
    declining state of America.

    For quite some time I’ve pondered various thoughts on this subject as
    well and although I don’t agree with more taxes (will save opinion for another time) under the guise of egalitarianism is missing the point.

    To think that all we have to do is tax the rich more is tantamount to
    the “Subjects” ordering the “King” to give them more paid vacation days or something. Americans are consumers. We produce very little everyday household products. I can remember as a child of 8 siblings, we’d tease and taunt the one who bought a toy made in Japan. There used to be pride and a feeling of “quality” in American made products.

    I’m a 5o’s plus black American man who’s grandfather never bought a
    nail. He’d find, straighten and reuse nails for all projects. This is the stock which I came. I’ll buy a car or trucks and keep it for 18 years if I can get parts I’ll keep it longer. This is what the old America stood for, quality products that lasted a long time and you could buy new parts for.

    Most electronic items today cost more to repair than their original purchase. That’s just not an efficient system to live under. My point? we now live under a system that promotes mediocrity and laziness. How are higher taxes going to evoke quality products and strong work ethics?

    I believe if you give people an opportunity to produce and buy quality products at a fair price, that more people will work, take pride in their lives and support the system that provides that life style. Our present system garners cheap products with short term life spans and everybody’s looking to get as much free stuff from the fledgling government handouts due to the lack of available manufacturing jobs.

    If you buy into the theory that “what goes around, comes around” the only solution is to alter the out-put. A King is not interested in an empowered populous. It is only through the efforts of the “boot-strappers” like me will America bounce back to a powerhouse rather than consumers of other countries cast offs.

    I’ve had my say, thanks for listening.

    Posted by: M.S.F. | December 23rd, 2008 at 2:40 pm

  • I like the funny self-reflection of ourselves as a people, poster “War on Error”. That was and is, the correct war. I am always amazed by the level of smarts, sarcasm, and “caring frustration” in the responses here. But please, let’s not fret too much.

    THIS IS STILL THE RICHEST NATION ON THE FACE OF THE PLANET.

    WE HAVE ONE OF THE HIGHEST STANDARDS OF LIVING AND THIS RE-AWAKENING MIGHT BE THE CATALYST FOR WORKING TOGETHER TOWARDS A HIGHER QUALITY OF LIFE FOR ALL. Do we really need more of this material stuff, we have too much already. Plus, it’s working on relationships with family, people, and our surroundings (i.e.Environment) that often truly enriches life, in my humble opinion.

    I think we as a nation just regressed with some bad policies over the last 8-9 years with one piece of legislation that shouldn’t have happened. The modification of the Glass-Steagall Act of 1933 known as The Gramm-Leach-Bliley Financial Services Modernization Act of November 12, 1999.

    Posted by: Don Nguyen | December 23rd, 2008 at 5:12 pm

  • 28 years…

    It started with Prop 13 in California.

    Then came Ronnie. The Cowboy ridin’ in from the West…

    Then the cold war ended and everyone thought it was a referendum on social welfare. No, it was Soviet Communism. Big difference.

    By this time the low-tax, trickle-down culture of “owning” and “having” was so entrenched that not even Bill Clinton dared to deviate far from it. He was the “New Democrat” after all. Still, he gave us a surplus and was pragmatic.

    Then came he-who-must-not-be-named and then a year later came 9/11 and the response was “go shopping!!” Eight years of massive deregulation in the name of the “Shock Doctrine”

    Then the subprime mortgage mess. Why? Because after all, owning a HOUSE is the American Dream(TM), right? You’re nobody unless you own a HOUSE, right???

    Now in 2008, look what we have wrought. We have to pay the bill. Party’s over. Not fun.

    First we have to get to people to unlearn on a massive scale the idea that social welfare is not “socialism”. The 2008 McCain campaign was a last desperate attempt to live in the past to milk this bankrupt (literally and morally) ideology. It is SO ingrained it might take years just to get people to “get it”. There was a way we did business prior to 1980. It worked. It’s time to go back there again.

    Enough is enough.

    Posted by: Terebithia | December 23rd, 2008 at 8:59 pm

  • I knew somebody would bring up Prop 13.

    Posted by: Andy | December 24th, 2008 at 8:29 am

  • Your weekly column in the Mercury News always inspires me.
    Your latest column on wealth accumulation vs. doing good work was
    especially well done, and struck a nerve. I retired from high tech
    at age 56, and have been teaching in the public schools for the past
    seven years.

    Keep up the wonderful work!

    Posted by: J.Harris | December 24th, 2008 at 9:08 am

  • California’s deficit is not because the tax rates on the wealthy are too low, the deficit is because we have out-of-control spending by the democrats in Sacramento. We don’t have a revenue problem, we have a spending problem. The wealthy in this state pay most of the income taxes. Check that out with the Franchise Tax Board and you will see that 90% of the taxes in this state are paid by the wealthy. One of the reasons for the deficit is the taxable income on the wealthy is based on capital gains and dividend income on stocks. Since the decline in the stock market state income has decreased because stock values have decreased. The democrats in this state want to drive out the wealthy to other states with their high tax rates. You don’t punish wealthy income producers who provide the jobs and services for this state. You don’t get the results you want when you PUNISH ACHIEVEMENT!

    The Swedish wife of the foreign diplomat doesn’t have an understanding of our country and charitable giving and how much it helps people. A strong central government will NEVER be able to replace what charitable giving does for the poor and needy. Charities must watch every penny to see that they are spent properly and they do a better job spending it wisely. Charities and churches were the fabric of this country that served the poor before the government got in the business of redistribution of wealth to benefit the poor. The government is never accountable for how it spends the taxpayers money. Its not their money and therefore don’t have the incentive to spend it wisely.

    You may not believe it but this country is the most generous on earth. We feed, clothe and send money to almost every country on earth, even North Korea who can’t feed itself. I don’t know of any country than ours that gives as much to other nations. With a regards to giving as a percentage of wealth, the middle and lower-income people give much more than the wealthy in this country. There are many wealthy people who give to charity and many don’t give a dime. We have spent over a trillion dollars since the War On Poverty began with Lyndon Johnson in 1965. We have approximately the same amount of poor people that we did then. Where did that money all go that was spent to lift up the poor?

    If money is all it takes to lift up the poor why doesn’t public housing do a better job of helping poor people lift themselves out of poverty? The message that is sent to public housing residents is “here you go poor person” we don’t expect you to do anything thing with your lives except live here 50 years. What kind of message is that? There is no expectation of people in public housing projects to better themselves. I think that private charities probably reach as many people as there are out there who have a need. I think charities do a good job of reaching the needy. No, higher tax rates forced on wealthy individuals will not reach the people who need them. The government does a good job of confiscating wealth and transferring it through distribution but the government does not do a good job of getting help to the needy because of bureaucracy and red tape. Most of it is swallowed up before it reaches the needy. The wealthy will move out of high-tax states to avoid taxation. Who wouldn’t? Yes, unfortunately we worship extraordinarily wealth rather than hard work. If you want to talk about a system that rewards hard work how about a flat-tax system that doesn’t punish achievers? I’m not talking about the wealth on Wall Street that was made through greed and bad choices that caused investors to lose life savings. You do talk out of both sides of your mouth, though. On one hand, you think we should have higher tax rates so more money will go to the poor, on the other hand you think we should have a more egalitarian and fairer tax system. A flat tax would not punish achievers and the rich would pay the same amount in a percentage. Of course, Congress would never go for that. We cannot continue the same old manta “tax the rich” because nobody buys that lame old line anymore. The rich in this country pay 90% of the taxes already. The people at the bottom don’t pay anything. Unfortunately, these bailouts will not ultimately help the country. FDR prolonged the depression with his tax policies. Throwing money at the problem will only prolong the pain. With regards to Ponzi schemes, they ultimately fall apart. If you think the Ponzi scheme with Madoff if bad, just wait until the Ponzi scheme called Social Security starts to fall part, and it will eventually because there are only 2-3 workers per recipient and young people will not tolerate paying 50% Social Security tax rates. Government created the rules for Social Security and can change the rules at any time. My wealth and prosperity is not through the government. The less people are dependent on the government for prosperity the better off they will be. The government can “create” prosperity and can take it away also.

    R. Turner

    Posted by: R.Turner | December 24th, 2008 at 9:10 am

  • The problem with you so called “Achievers” is you think you deserve all the rewards while riding on the backs of the real Hero’s ” The Worker”. Your perfectly content with 30 yrs. of Reagan’s “Trickle Down Theory”. Just wondering if the Trickle is before or after you Achievers take your Multi Million dollar bonuses? Seems to me the Trickle turned out to be more like a Slow Drip. Also having the same amount of poor people as we had in 1965 is money well spent given the fact that we have roughly 100,000,000 million more people in the US to date. Come on if you want to continue to reap the benefits of a lopsided society where the “Under-Achieving” masses struggle to merely survive while you self adorned “Hard-Working-Achievers” wallow in your glorious self deserving wealth, then its time to pay the piper. Their are some who would give almost anything to see another 30 yrs of the big Lie continue.

    Posted by: Bob Snider | December 24th, 2008 at 3:18 pm

  • I appreciate your column. You selected “America’s False Gods” to be a provocative title. But, I would include the False Myths you also outline. Please keep challenging the false myths “…Perception[s] need to change.” These sentiments you expressed are rarely made by any in political leadership of either major party. And also not by the major press. The false myths are perptuated because it still serves the interests of the priveleged – Greed. So, our culture values continue that being rich means you are morally better than the poor, so you deserve to keep all your wealth, especially from the gov’mnt. You owe nobody else anything. Government = always bad. VS. If you are poor it’s your own fault for not working hard. And if you’re poor nobody owes you anything. So, don’t expect anything you don’t deserve it. Poor = always bad.

    Posted by: R. Bateman | December 25th, 2008 at 10:19 pm

  • Well said, my sentiments exactly.

    Keep writing.

    Sal L.

    Posted by: Sal | December 26th, 2008 at 1:02 pm

  • I look forward to Tuesdays, and your insightful column.

    I am wondering about your thoughts on the recent bailouts, my feeling
    is that Reagan has won! With no accountability provided by the banks
    nor the government, isn’t this classic “supply side” economics, just
    another cover for “trickle down”?

    Brent C.

    Posted by: Brent | December 27th, 2008 at 3:19 pm

  • Mr. Reilly,
    It is wonderful that your perspectives are widely published. They are a refreshing balance to the biased and superficial editorials and columns that predominate the press these days.

    I generally agree with you, but have a concern about one element in the America’s False God column. Not that what you say about private philanthropy being a pittance and not being equitable isn’t true, but I worry that it will discourage people from donating time and wealth to assist programs that are partially funded by government.
    Even if we had the best government in the history of the world, there would still be a need for and value to private philanthropy. It complements the best that government might do because it can be more flexible, focused, nimble and efficient, and will be less influenced by partisan and political goals.Yes, there will be some crooks and incompetents, but we shouldn’t let imperfect trump good.

    Also, there is another old truism that “people don’t give till it hurts; they give till it feels good.” Voluntary donations to a cause they deem worthy will do more to strengthen our social fabric than an equal amount of tax funding for worthy purposes.

    So please continue to give your time and money to worthy causes,even those it seems should be funded by the government. Encourage others to do so generously, and continue speak out and work to maintain incentives for private donations (e.g. an estate tax with a large exemption) This is completely consistent with the “deification” of extraordinary good work in lieu of accumulation of wealth.

    Best wishes.

    A. Dreshfield

    Posted by: Dresh | December 28th, 2008 at 4:27 pm

  • Clint,

    Your recent, above titled column was provocative. It was puzzling as well. You write “…….the contributions of those ordinary Americans who work hard, raise families and play by the rules are made to seem trivial.” Who makes this seem trivial?

    You comment about the widening gap between rich and poor since Reagan lowered taxes in the ’80′s. Do you have any facts to back this up? This sounds to me like the classic divide and conquer strategy of stirring up class envy and resentment. Many in the media do it well. There’s a fellow who works as a senior economist at the Federal Reserve named Terry Fitzgerald and given his position and employer I think we both can agree he’s credible. Here’s a recent quote from him: “median household income for most household types increased by 44 to 62% from 1976 to 2006. And per-person income surged 80%.” As for the widening inequality gap you write about, the Census Bureau’s Gini ratio is the accepted measure and it shows virtually no change in inequality from 2000 to 2007. What sources are you using to cite this inequality gap?

    Your comment about California’s massive deficit is a real doozy. The reason for chronic deficits and deficient levels of education and health services is too-low taxes? Seriously? Any facts to back this up? Do you think years of overspending, led by a union-owned Legislature and unwise ballot initiatives had anything to do with it? California currently has the 3rd highest unemployment rate in the U.S. And you’d like to raise our state taxes. Great. Whenever I hear or read someone say our taxes are too low I always want to ask them: why don’t you then send in extra money to the government? I mean, if you think our state taxes are too low why don’t you voluntarily send in extra money to Sacramento? Just enclose an explanatory note and I’m sure they’d cash your check. Might I suggest you read a little about our President-elect’s choice as chairwoman of the Council of Economic Advisors, Christina Romer? Ms. Romer has written about the dangers of higher taxation. She has written “tax increases are highly contractionary” and “tax increases have a large negative effect on investment, which is followed by a large and highly significant rise in the unemployment rate”. Clint, the facts are clear: tax increases decimate jobs and tax cuts encourage investment, which in turn expands employment. But you think our taxes are too low.

    Re. your observations on philanthropy, had I had the same conversation with the Swedish wife of that foreign diplomat that you did here’s what I would have told her: With all due respect ma’am, according to estimates made by the American Association of Fundraising Counsel Trust for Philanthropy, Americans contributed more than $240 bil lion to charity in 2003. That’s about 2.2 % of the gross domestic product. My guess is these are much larger numbers than exist in Sweden.

    You write Clint that philanthropy in the U.S. is “dependent on one class”. Really? Any facts to back this up? You mean to say the lower and middle class do not give to charity?

    Finally, you write that “a fairer tax system would deemphasize the social importance of wealth and reemphasize the contribution of all work to the betterment of society”. Simply a stunning statement!

    I’m thankful for many things, one of which is that Clint Reilly does not set economic policy in our country.

    moster

    Posted by: Moster | December 29th, 2008 at 9:39 am

  • I related to your editorial of Dec.23 , writing to
    governor, Ca. newspapers, & several Ca. legislators without
    response. So I’m inviting you to tell me why I am just stupid.
    People have money in investments making very little. With a feeling
    of patriotism and investment, why can’t the state make legal for
    taxpayers, businesses, corporations to add to their April taxes any
    amount they want to be repaid by partial deductions from tax returns
    in the three to ten years following; for example, give $1000 extra,
    deduct from your taxes 20% of your “loan” amount for(1000 is
    difficult) next six years (approx 3% compounded interest to the
    taxpayer). A simple line after the “tax due” on the return, plus a
    choice of where the money should go (schools, medical , etc., not
    general fund)
    I cannot believe I am the only one in the state willing to loan.

    This would be a guaranteed investment to loaners (investors).

    Posted by: R.Craig | December 29th, 2008 at 9:40 am

  • Dear Mr. Reilly–I read your column in the Marin Independent Journal and found it right on target. It is tragic that the “privileged aristocracy” of which you speak has now harmed the economy of the world with its greed and careless disregard for anyone except themselves.
    I come from New England where greed was not “fashionable” during the time I was growing up, and the virtues of frugality were heavily inculcated into all of us. But all that has changed within the past twenty years. I will look into your website, though I would hope at some time to hear you speak in person. And I hope that this harsh drop in many individual’s net worth might wake them up. When I speak of raising taxes and “paying for what we are using,” I am afraid that most people I encounter are horrified. Some of those will no doubt be losing their houses!

    Thank you for your common sense and sophisticated approach to what this country needs in order to mend.

    Sincerely,

    Juliette
    San Rafael, CA

    Posted by: Juliette | December 29th, 2008 at 9:41 am

  • Your weekly column in the Mercury News always inspires me.
    Your latest column on wealth accumulation vs. doing good work was
    especially well done, and struck a nerve. I retired from high tech
    at age 56, and have been teaching in the public schools for the past
    seven years.

    Keep up the wonderful work!

    Posted by: J.Harris | December 29th, 2008 at 9:53 am

  • Thanks for being a clear voice that can articulate simply
    an insight into many of the challenges we face together as a country.
    Thank you for your Patriotism and speaking truth to power.

    Posted by: Danforth | December 30th, 2008 at 10:57 am

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