Government and Wealth

For nearly a week I've been brooding over Governor Paterson's opposition to the federal government's plan to cut salaries and bonuses for executives of bailed-out companies. The Democrat opposes the idea because it will cost New York State the tax revenue that would come from its cut of the extra money the executives would have received. It has been pointed out to him by fellow Democrats that, since taxpayers would be paying those salaries via bailouts, cutting salaries and bonuses could be seen as a kind of tax cuts. But you can see why the Governor of New York might not be impressed by tax-relief spread out across the country at a loss to his own state. Other observers might argue that Paterson "sees" an essential truth that his fellow partisans miss: that the wealth-creation of the great executives fuels government itself and that anything government does to curtail that wealth-creation is done at government's own peril. But maybe our gubernatorial oracle detects a kind of paradox without recognizing it as such. He belongs to the party that is always accused of wanting to redistribute wealth unjustly, robbing from billionaire Peter to pay plebeian Paul. The implication of the charge is that government somehow impoverishes Peter and thus ultimately undermines Paul's chances for survival to the extent that Paul has come to depend on the government largess taken from Peter. The further implication is that all this activity somehow undermines Peter's power to generate wealth. But isn't Paterson telling us something else? Hasn't he implied that for the redistribution system to work, that system must place no limits on Peter's wealth, and that in reality the liberal redistributionist agenda depends on the continued existence of super-wealthy people and enterprises, and that therefore liberals are no enemies of the super-wealthy at all? Yet Republicans persist in calling liberals the enemies of wealth, while liberal Democrats are glad to play that role before the appropriate audiences. Some Republicans in their enthusiasm for the game even call Democrats socialists, but the system that Paterson has implicitly described looks anything but socialist. It looks more like a system of exploiting capitalism that still allows capitalists considerable leeway in exploiting workers. Some capitalists might resent the system, but calling it socialist only shows how spoiled they've grown in this country.

Don't even get me started on the other argument against the salary caps -- the warning that it will cause a "brain drain" as the masters of the universe seek better opportunities elsewhere. Unless they have hidden talents for acting, singing, or sports, I see little cause to worry.