Could happen - pendulums at work and the policy pendulum is certainly too far right at the moment. Most of us must live, work and play in the middle. Solving for low income would be a start for more people to make use of what's left of a capitalist system. Many low income people are quite capable of watching what the wealthy do vs what they say. Many wealthy rarely interact meaningfully with low income people outside the "help" they hire or the errant family member who happens to be in constant need. This seems to translate into prescriptive policies from either side that consistently fail to address low income. I have an adult son in the trades and another in the executive ranks of a prestigious university. The efforts the son in the trades must go to, to earn a living that provides enough for food/shelter/transportation/healthcare/etc. is exhausting. He works for rich people to survive economically. Now retired, I owned two RIAs (Registered Investment Advisory) firms, a tax practice, with a specialty in divorce financial divisions. My work experience confirms that people without enough income is a primary reason for many societal ills and eventually crappy policy.
Regarding trades careers, they seem to be a desirable choice these days. With AI on the heels of many white collar jobs, and many tradespeople making good incomes (HVAC techs, plumbers, electricians) many parents are encouraging their children to consider that path over college. What are your thoughts on that. Not only rich people need trades services.
Everyone needs a plumber, HVAC, etc. It can be a desirable choice economically. I'm showing my bias here but at least some trades people work there because they reject cubicle life and much of the lifestyle that comes with it. Anecdotally, from my sons friends/colleagues group, they aren't interested in a tract home, working for a corporation or even marrying. They express wanting to live in nature (luckily many of the rich have decided to build there), grow their own food, basically more of an analog life of work, play. So I think everyone needs trades people but you might get a different level of care from a self-employed craftsman, the owner of the franchise/company who employs tradespeople or the employee of the owner . . . Those income levels are likely to be very different too. Over time, the craftsman may enjoy good income as will the owner (sometimes the same person) but the employee may see much less unless he's a surge electrician (i.e. data center builds). The equation that might work better when low income is an issue is for the wealthy or the company owners to give up some wealth/profit to ensure low income rises. The win for the wealthy is more economically stable community neighbors in those tradespeople. How do you see it?
I know it's a different system in USA and a different mindset but interacting with poor people is not rewarding in real life and why would anybody want to. If your son is a tradesman with a skill he is not "poor" in the sense I think of. I'm a "poor" person in monetary terms but no one treats me like that so come the revolution I'll be the one they'll be stabbing in the guts or stringing up not the real rich people. Anyway this stark dichotomy of rich and poor black + white easily defined is not so. I see people (in England every day) who dress and shuffle around like derelicts but have plenty of money ,it's called disguise. In my experience interaction with "the poor people" means being asked for money or getting insulted,and that says more about me than da poor peepul I guess.
Great post, David. I think about this constantly: why aren't more moderate voices proposing reforms that preserve capitalism by restoring competition and opportunity? Complicity in capitalism’s worst excesses, or a refusal to confront the current structural failures and pursue reform, ensures that socialism is the only available remedy.
I teach film at NYU, and I hear my students' frustrations. As an elder Millennial in an industry b besieged by AI threats and merger hype, I feel them, too. Ladders have been pulled up while the cost of living keeps rising. It’s a dreadful, drowning feeling.
I still believe there's a middle path, but we will need our wealthier people to join the fight for it. Enforcing antitrust laws, holding executives criminally accountable for financial crimes, and overturning Citizens United would be meaningful steps. I'm also intrigued by Elizabeth Joyce's proposal to structure certain companies as public benefit corporations. I recently interviewed her in Underexposed about her campaign to buy Letterboxd, and the structure she proposes is compelling: early investors still get a profitable exit, but ownership gradually transitions to the employees and community who actually use and care about the platform, rather than another profit-maximizing owner, who inevitably bleeds it dry.
I usually enjoy your perspectives, but not with this essay. Too much corruption has be enabled and accepted - Politicians becoming wealthy once they are in office, the Trump Bros becoming super-wealthy due to Father’s no-bid contracts, the secret dealings with tech billionaires… so on and so on - this country is ripe for a revolution. MAGA, irresponsible republicans and the vilification of social programs has destroyed this country. The absolute power of the billionaire class is immoral and is devastating our democracy. True capitalism cannot exist amongst all this corruption.
I agree with you about Trump/MAGA. I am anything but a fan. However, I see a mirror image danger with the far left. I’m advocating neither. Reform not revolution.
So you fear the unknown but barely acknowledge the shortcomings of the Trump administration.. sounds like you are more of a fan of the current administration than you admit to.. you play on the same fears as to which led to the downfall of the Weimar Republic.. yes the NSDAP is a violent movement BUT they are pro capitalism.. who knows what danger the Socialist and Communist parties (2 distinct parties) are going to bring so let’s vote NSDAP!
Oh please, just stop. That’s not even funny, just very annoying. And talking about socialism and communism in the same sentence, let alone breath, is just plain ignorant. I live in Europe; socialism is a good deal better than the current expression of capitalism practiced in the US today.
@hb861: I’m replying to you, specifically the following part of your comment: “yes the NSDAP is a violent movement BUT they are pro capitalism.. who knows what danger the Socialist and Communist parties (2 distinct parties) are going to bring so let’s vote NSDAP!”
…or are you just being sarcastic and it’s too late here and I didn’t get it…
you do realize the NSDAP does not exist any longer? and that the Weimar Republic ended with the Adolf Hitler/NSDAP dictatorship?
I am stating that ordinary Germans were told by the NSDAP that "Socialists and Communists" were the devil and that only a party of law and order like the NSDAP could save Germany.. the same fears it seem that Trump is now using to scare voters in the US..
Moderation should be the key. Am I angry that there are billionaires? Not really. But I'm concerned that some corporations and citizens are not paying their fair share. I also wonder whether prices are determined by those who benefit the most.
But I'm not an economist and most definitely not an accountant or politician. To be honest, I don't completely understand how we have landed in this economic time or what it will mean to our future. I'm also not sure that a majority of people fully understand it either.
What I do know is that we are being taught what to believe by sound bites, and there are relatively few of those that preach moderation, real solutions that would be fair to all.
Thanks for posting this information, David. I feel like I understand more about the situation after reading.
Yay! I wonder if there are estimates anywhere about the corporate liability if the Social Security tax was levied on higher wage earners. I'm looking forward to what you have to say about corporate tax.
I wasn't particularly concerned that there were billionaires before. But after seeing how they distort politics so many of them want to dictate how we live they are anti democratic I've become against billionaires. Note I did not say I'm against wealthy people I'm against billionaires now. I don't think they are compatible with democracy.
It's always been the case it will always be the case but it's going to an extreme. I keep remembering what was it Socrates said about the cycles of tyranny democracy oligarchy.
if more of the billionaires had been like Ted Turner, the head of Berkshire Hathaway it would have been one thing but they're political actors who because they get to order their workers about they think they should get to order all of us about.
Well Donald Trump had the right idea first time round. Invade the White House and string em all up but you won't because you're too chicken. It's too bad he's gone over to the Dark Side now. But that is the only way along with refusing to pay Tax. You did that once before after all.
“Accordingly, I see an increased risk that anti-capitalism will take hold. Inequality might then be “solved” not by raising some people up but by tearing everyone down. That would be a terrible thing.” Great observation. People think that’s what they want, but have no idea what they are asking for. We have much room for improvement, but capitalism is what has made America what it is today.. the good parts. Eschewing that will destroy ambition, the American dream. Pendulum swings will continue until we can somehow find some middle ground that works.
The pendulum will swing, but where? And by how much? It won't swing to the middle.
Economists agree that socialism is a failed experiment (one could argue that we are now one of the more socialist economies in the developed world). 60% of the Federal budget is non-discretionary entitlement spending. AND, we know that the middle class carries a bigger proportion of taxation than the top 1%. We cannot tax our way to prosperity.
While I don't see capitalism as an experiment, it definitely is pushing the limits. No entity should be worth a trillion dollars! How do we flatten the "K" without killing the free enterprise system that has brought us everything from the telephone to life-saving drugs to low-cost calories?
The astonishing thing, and a clear sign of deliberate or unconscious ignorance and misinformation, is when people act as if there was „THE" capitalism.
They don't talk about the CONTENT of economics, only the FORM.
Any question about what the "poor" or "the middle class" gain from having "economics" for its own sake, without any regard for CONTENT, is ignored.
Thus, any consideration of whether and how "economics" could or should change, if its content were to change, or if critical examination were to become the norm and enter the public consciousness, is also overlooked.
If "dependent employees" received a higher share of the profits from what they help produce, but the product itself was junk and garbage, then it would remain garbage.
And "dependent employees", supposedly "exploited" would be just as sickened by the products they produce as the "producers", the "employers."
This **actual equality** never even entered the focus of these discussions.
Rather, "movements" like "OWS" execute the very same greed they accuse the "rich" of.
Therefore, they will inevitably do NOTHING "better" if given the opportunity.
That is why all "socialism" has completely failed and is doomed to failure: as the self-proclaimed "heir of the bourgeoisie,“ „Socialism" merely copies the same garbage as ("convenient") "capitalism", only much worse, since any incentive for innovation, improvement, and achievement is eliminated - indeed even gets punished.
"Capitalism," on the other hand, doesn't make enough of the opportunities it undoubtedly possesses. There are too many beneficiaries who "earn good money" and wonder why they should change anything, why they should bother with better products, when the money keeps flowing.
Here, the intellectual poverty of those who supposedly want to achieve a "better life" meets the intellectual poverty of those who have the means to produce better things but choose not to out of laziness: another **actual equality**.
Capitalism, however, doesn't make enough of the opportunities it certainly has. we hear stances such as "It won't catch on“, "People don't want it,“ "Nobody will buy it" as „excuses", just as "the poor" and "addicts" always invent excuses for supposedly having "no chance," that "there's nothing better," and that they "only have enough money for the bare necessities“.
If you know (many) "poor," "exploited," or "underprivileged" people, however, you notice that they spend a lot of money on rubbish—such as a poor diet—even though better options would often be not just cheaper and actually less expensive; „but“ they require effort, reflection, and a heightened awareness.
In the long run, eating better doesn't just make you feel healthier; the process of developing this awareness broadens your horizons and makes life more fulfilling overall.
„But" it can lead to becoming alienated from one's "familiar environment“, viewing those around you more critically, and no longer finding the "familiar" way of life desirable.
One fears the prospect of ending up „alone".
So, one „conforms".
No "evil rich people" play a part in these processes.
The responsibility lies with each individual.
That´s the hardest part, including that it can make everything familiar seem stale, alien, and undesirable.
Yet, these are precisely the kind of irresponsible "employees" and "consumers" that most "rich people" want: they are compliant, don't think too much, and simply do "their job."
That is why „The“ Capitalism looks the way it does.
Also because "the masses“ —the „informed", "mature" "voters“, „We The People“— follow those who make false promises of "more money" but never want to discuss the actual *substance* of production or of capitalism itself. That would be framed „individualism“, never regarding that critically thinking individuals will be a benefit for all of the whole „society“.
It might well reflect critically back on the „promising“ Sanders, AOCs or Mamdummies: revealing that the agitators of „The People“ don't actually want a better life for "the masses" but merely "more votes"—secured in the cheapest and most "effective" way possible, just as supposedly "greedy capitalists" try to do.
This one is important and spot on. Everything in moderation… including politicians. The DSA has taken over the Democrat party and they include Marxists and communists which is partly why Jew hate is so popular. Far right republicans are scary too.
Pretty funny, David. We both wrote about precisely the same phenomenon from different ends of the tunnel. Three days ago, I posted, Trump’s Economy: The Yellow Brick Road Over Quicksand Just as the Gilded Age spawned The Progressive Age, this incarnation will not create the anti-capitalism you discuss by the left but might deter some of the current anti-capitalism on the right. Captialism thrives on competition and Trump's economic system totally discourages that. With luck, the current inequalities will be exploited and may result in reforms that restore some balance to the system. That will actually be pro-capitalism because it will foster more competition that the system currently allows. Also...were the wealthy ever not complacent?
Our two party system has been severely injured since the Citizens United decision. Sadly, I suspect the DSA will be pulled into the money trap that rewards extremism.
The DSA is already there. They are well funded and that’s why so many of them are taking office. Meanwhile, AOC and Bernie Sanders are making speeches in around the country using a private jet.
I’m so confused. I thought you agreed with democratic socialism. I’m now in Portugal, finally receiving health care I could not afford in the US. I’m a very privileged person. I was able to move. And I’m surrounded by capitalism. (Also affordable higher education. And intact communities.)
Over a half million people in the US go bankrupt every year because of medical bills. I left to avoid this since dementia runs rampant in my family and there’s absolutely no way to afford that care at home.
I have also basically spent my entire adult life in close proximity to Bernie Sanders. I’m not sure what kind of leftist you think he is. But he’s exactly who he’s always been. Fighting for the working class with logical guardrails on capitalism to protect communities and lift people out of poverty. His tune hasn’t changed since the 1980s. Burlington was a lovely city with what he did there. A lot of affordable housing was created. National models, at one time.
I’d like to hear, exactly which policies enacted by your new mayor you oppose. Exactly what policies or taxation do you oppose put forth by any democratic socialists in any office in the USA? Or is it that you fear any discourse in this direction will open the floodgates to authoritarianism and communism? Yet so much of the western world has universal healthcare and taxation that favors maintaining public goods. Have democratic socialism. Do you honestly think moderates will fix the healthcare crisis that is destroying families and the economy? Obama tried and it wasn’t nearly enough. I now have friends in their 50s without any health insurance at all. It’s completely unfathomable to the people in my newly adopted country.
I am not against democratic socialism. I am for a much stronger social safety net. I am against the DSA, which is radical and willfully ignorant of economics. Sanders stirs up hatred for the wealthy and his proposals are unworkable. In terms of healthcare, Obamacare under Biden was a big success. Instead of building in that success, Trump has gone in the opposite direction. Next year, a lot of people are going to lose Medicaid.
Obamacare lives on. My cousin is on it and pays an exorbitant amount for limited healthcare. I’m on the Massachusetts version and I pay over 1000 a month for terrible healthcare. I never thought I’d say this, but I can’t wait till I’m 65.
I’m tempted to go off this healthcare next year and write about it. Maybe the 13,000 in savings would cover a year’s worth of healthcare. The only issue is if I have something catastrophic or just the necessary MRI. Meanwhile, our governor just raised the Massachusetts healthcare fees by 10%.
so status quo? Where has socialism failed? I am aware that Communism has failed repeatedly but socialism? It seems alive and well in Sweden, Denmark, Norway, Germany etc..
There is a wide world of options between the status quo capitalism and socialism as the DSA policies call for. The European countries you list are capitalist/democratic socialist. They have more widespread healthcare and other benefits, which the U.S. could afford as well. But we;d need more tax revenue.
Correct. We need to tax appropriately return to an era where success in business was often measured by the number of good jobs created. Jobs that supported families. I actually lived that transition away from those values. You did too. It started with Reagan, as I recall. Do you remember it? And what about Elizabeth Warren’s bill to put guardrails on private equity plundering companies. Do you support it? Did you know it’s impossible to get a timely wheelchair repair in much of the country because these DME companies have been bought up and monopolized? Also, I highly recommend Sarah Fay’s book, Pathological, for its lens on the mental health industry and its handshake with pharmaceutical industry and subsequent outrageous wealth amassed by practitioners. It makes no sense that the wealthiest nation in the world cannot provide universal healthcare when most every other developed western country does provide it. To argue otherwise is, frankly, gaslighting.
Hi David. I have only my partial perspective from across the Atlantic, but it seems to me that the DSA overtly promote a version of social democracy (which is still the current dominant paradigm in western Europe, despite decades of rightward drift). That's not Socialism as a precursor to Communism, neither of which, I agree, are desirable.
"Defund the Police" is a poorly chosen slogan for wanting to divert funding from increasingly militarised policing into more effective social programmes which reduce the conditions in which crime thrives.
I'll happily be shown to be wrong. I am merely a foreign observer with imperfect information. However at the moment I have the impression some of your thinking is as stuck in the US political and social paradigm as 8 am in mine.
Hi David. I just did. They freely scatter the word "socialism" about and talk about "replacing" capitalism, yes, but their agenda still seems to the right of the left wing of the UK Labour party. They'd be pretty mainstream in any European democracy. I suppose that's what I mean about our differing paradigms. However that's not to say I believe that DSA are approaching their aims in the most productive way. See my comment on "defunding" the police.
Dear Eliza, as a Brit with an interest in US politics I found myself bewildered by this article for exactly the reasons you formidably expound. Thank you 😊
When you write ". . .the excesses of capitalism. . ." you sound like Bernie Sanders or Elizabeth Warren calling for people to "pay their fair share" of taxes. So I will ask: what is an excess of capitalism? Similarly, what is a fair share of taxes? And no, I don't think a fair share is reduced by personal charity.
I don't ask this to be snarky -- if we don't (or won't) define what is excessive or fair, we are not communicating, we are polemicizing. Which is precisely what Sanders or Warren are intending. But for you, who intend to communicate, to do this is to invite challenge.
In 2025, the federal govt. collected about $5.25 trillion in taxes and spent $7 trillion. That's a $1.75 trillion deficit, or 6% of GDP of $30 trillion. We should be collecting perhaps a third more in taxes and using that to run a more sustainable deficit and provide for a better social safety net. Tax increases of that magnitude would have to be very broad based and phased in. I think "fair share" is an irrelevant budgetary concept.
Because our Congress authorized more in spending than was collected in taxes, you say, we need to increase our taxes. Does this sound like an incentive for the Congress to continue to spend more than is taken in? Especially given their proclivity to promise stuff to people who might vote for them? Stuff that costs money?
That sounds like a backward way to budget, even more so now that we see large sums of money being laundered through NGOs for personal benefit. I think you have the proper way to go about this backward if you want to cut the debt: spend less, especially on fraud.
As for your proposal that tax increases should be broad based, that's not the message coming from the people who want to tax billionaires. They're going for an "us-them" approach that relies on class envy. IOW, they're coming for you, not me.
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Yes, "fair share" is an irrelevant budgetary (and social) concept. Don't tell me -- I don't use it as a tool to shame voters. Tell the people who call for it.
Despite not being a Christian believer, whenever the subjects of taxation or fairness come up I am reminded of the parable of the widow's mite (Mark 12 41-44; Luke 21 1-4). For me, it sums up the entire argument. Tax policy requires constant readjustment depending on the circumstances. We could do worse than adjust it in light of those verses.
Our current federal tax system is progressive. Top 10% pay 72% of the taxes on 48% of income. Bottom 50% pay 3% on 12% of the income. I have no problem with taxes being raised and with the progression being accentuated.
Hi David. You've kicked a hornet's nest, I see, lol. What do you think about a sales tax when transacting stock? I came across this idea recently and it seems to be a fair inquiry. And I think when people say the rich are not paying taxes, they mean not paying taxes on non-income/wage assets in a fair or similar manner that wage earners must pay...off the top of their paychecks. Thank you.
I think making all income taxed the same makes sense and also lifting the SS tax cap on wages. I don’t like imposing a tax on transacting stock because then people would find ways around it and anything significant would lead companies and investors to seek overseas listings. Income tax 85% of revenues comes from income and payroll taxes. That’s where the money is.
Fair share could very simply mean taxing all forms income at the same marginal rates. Rich people pay SS tax on a small share of their income, regular people pay SS tax on 100% of their income. Rich people pay capital gains and dividends tax at a 20% maximum rate. Regular people who work for their income pay tax at a 37% maximum rate. You are taxed almost half as much making your money from owning things as you are making money from productive work. And the step-up in basis for heirs means those cap gains are NEVER taxed. People can argue about how progressive the brackets should be, but it would clearly be fair to simply have every recipient who receives money/property from any source in any form to have it taxed at the marginal rates as everyone else. There's no justification for privileging capital gains or labor income. The top 0.1% often pay a lower tax rate than the top 1%, 10%, or 20%, that is obviously not "fair" when they own 10X the amount of assets. And people act as if income tax is all that matters...payroll tax is a full third of all federal tax receipts, and rich people pay less of that than poor people.
We seem to have strayed from the "excesses of capitalism" theme to "how should we tax wealth?" My fault -- I should not have introduced the "fair share" concept into the discussion.
To very briefly address the taxation issue, keep in mind that in addition to generating government revenue, taxes are normative. That is, they influence behavior. Just look at the demographics of migration in and out of New York and California.
So there is indeed a justification for different levels of taxation if you want to stimulate economic growth and development with private capital.
The enlightened wealthy realize there's a problem. There's not enough Warren Buffetts or Mark Cubans and too many Musks and Zuckerbergs. As noted in other comments, the lower demographic rungs (growing up there and attending to their health for 30 years-I know something about that environment) have some role in the current state of the union. I would propose strict campaign limits and an end to gerrymandering as a start. Addressing the poor quality of health care and public education would be next in line but, as both require drastic changes in the culture and infrastructure of the country, those are much harder tasks. Income redistribution by tax code would not solve much in comparison to the above.
Follow Adam Smith on taxes. And realize it's 99.998% vs tippy top .002%.
Could happen - pendulums at work and the policy pendulum is certainly too far right at the moment. Most of us must live, work and play in the middle. Solving for low income would be a start for more people to make use of what's left of a capitalist system. Many low income people are quite capable of watching what the wealthy do vs what they say. Many wealthy rarely interact meaningfully with low income people outside the "help" they hire or the errant family member who happens to be in constant need. This seems to translate into prescriptive policies from either side that consistently fail to address low income. I have an adult son in the trades and another in the executive ranks of a prestigious university. The efforts the son in the trades must go to, to earn a living that provides enough for food/shelter/transportation/healthcare/etc. is exhausting. He works for rich people to survive economically. Now retired, I owned two RIAs (Registered Investment Advisory) firms, a tax practice, with a specialty in divorce financial divisions. My work experience confirms that people without enough income is a primary reason for many societal ills and eventually crappy policy.
Regarding trades careers, they seem to be a desirable choice these days. With AI on the heels of many white collar jobs, and many tradespeople making good incomes (HVAC techs, plumbers, electricians) many parents are encouraging their children to consider that path over college. What are your thoughts on that. Not only rich people need trades services.
Everyone needs a plumber, HVAC, etc. It can be a desirable choice economically. I'm showing my bias here but at least some trades people work there because they reject cubicle life and much of the lifestyle that comes with it. Anecdotally, from my sons friends/colleagues group, they aren't interested in a tract home, working for a corporation or even marrying. They express wanting to live in nature (luckily many of the rich have decided to build there), grow their own food, basically more of an analog life of work, play. So I think everyone needs trades people but you might get a different level of care from a self-employed craftsman, the owner of the franchise/company who employs tradespeople or the employee of the owner . . . Those income levels are likely to be very different too. Over time, the craftsman may enjoy good income as will the owner (sometimes the same person) but the employee may see much less unless he's a surge electrician (i.e. data center builds). The equation that might work better when low income is an issue is for the wealthy or the company owners to give up some wealth/profit to ensure low income rises. The win for the wealthy is more economically stable community neighbors in those tradespeople. How do you see it?
All good points.
I know it's a different system in USA and a different mindset but interacting with poor people is not rewarding in real life and why would anybody want to. If your son is a tradesman with a skill he is not "poor" in the sense I think of. I'm a "poor" person in monetary terms but no one treats me like that so come the revolution I'll be the one they'll be stabbing in the guts or stringing up not the real rich people. Anyway this stark dichotomy of rich and poor black + white easily defined is not so. I see people (in England every day) who dress and shuffle around like derelicts but have plenty of money ,it's called disguise. In my experience interaction with "the poor people" means being asked for money or getting insulted,and that says more about me than da poor peepul I guess.
“I fear that our current gilded age will end not by reform but by ill-considered, radical policies that severely harm our economy”
As opposed to the current administration’s ill-considered, radical policies?
I'm arguing against all extremes. I am with Aristotle.
Great post, David. I think about this constantly: why aren't more moderate voices proposing reforms that preserve capitalism by restoring competition and opportunity? Complicity in capitalism’s worst excesses, or a refusal to confront the current structural failures and pursue reform, ensures that socialism is the only available remedy.
I teach film at NYU, and I hear my students' frustrations. As an elder Millennial in an industry b besieged by AI threats and merger hype, I feel them, too. Ladders have been pulled up while the cost of living keeps rising. It’s a dreadful, drowning feeling.
I still believe there's a middle path, but we will need our wealthier people to join the fight for it. Enforcing antitrust laws, holding executives criminally accountable for financial crimes, and overturning Citizens United would be meaningful steps. I'm also intrigued by Elizabeth Joyce's proposal to structure certain companies as public benefit corporations. I recently interviewed her in Underexposed about her campaign to buy Letterboxd, and the structure she proposes is compelling: early investors still get a profitable exit, but ownership gradually transitions to the employees and community who actually use and care about the platform, rather than another profit-maximizing owner, who inevitably bleeds it dry.
Yes and holding politicians for financial crimes too. Glad the Stop Insider Trading Act passed. Interesting to see who voted against it.
Bet they're all still doing it though.
I usually enjoy your perspectives, but not with this essay. Too much corruption has be enabled and accepted - Politicians becoming wealthy once they are in office, the Trump Bros becoming super-wealthy due to Father’s no-bid contracts, the secret dealings with tech billionaires… so on and so on - this country is ripe for a revolution. MAGA, irresponsible republicans and the vilification of social programs has destroyed this country. The absolute power of the billionaire class is immoral and is devastating our democracy. True capitalism cannot exist amongst all this corruption.
I agree with you about Trump/MAGA. I am anything but a fan. However, I see a mirror image danger with the far left. I’m advocating neither. Reform not revolution.
So you fear the unknown but barely acknowledge the shortcomings of the Trump administration.. sounds like you are more of a fan of the current administration than you admit to.. you play on the same fears as to which led to the downfall of the Weimar Republic.. yes the NSDAP is a violent movement BUT they are pro capitalism.. who knows what danger the Socialist and Communist parties (2 distinct parties) are going to bring so let’s vote NSDAP!
I revile MAGA and what it stands for.
Oh please, just stop. That’s not even funny, just very annoying. And talking about socialism and communism in the same sentence, let alone breath, is just plain ignorant. I live in Europe; socialism is a good deal better than the current expression of capitalism practiced in the US today.
Who are you replying to?
@hb861: I’m replying to you, specifically the following part of your comment: “yes the NSDAP is a violent movement BUT they are pro capitalism.. who knows what danger the Socialist and Communist parties (2 distinct parties) are going to bring so let’s vote NSDAP!”
…or are you just being sarcastic and it’s too late here and I didn’t get it…
you do realize the NSDAP does not exist any longer? and that the Weimar Republic ended with the Adolf Hitler/NSDAP dictatorship?
I am stating that ordinary Germans were told by the NSDAP that "Socialists and Communists" were the devil and that only a party of law and order like the NSDAP could save Germany.. the same fears it seem that Trump is now using to scare voters in the US..
Obviously; I’m Jewish, live in Germany, and due to circumstances beyond my control, in Dachau of all places.
Moderation should be the key. Am I angry that there are billionaires? Not really. But I'm concerned that some corporations and citizens are not paying their fair share. I also wonder whether prices are determined by those who benefit the most.
But I'm not an economist and most definitely not an accountant or politician. To be honest, I don't completely understand how we have landed in this economic time or what it will mean to our future. I'm also not sure that a majority of people fully understand it either.
What I do know is that we are being taught what to believe by sound bites, and there are relatively few of those that preach moderation, real solutions that would be fair to all.
Thanks for posting this information, David. I feel like I understand more about the situation after reading.
Thanks Mimi.
I need to understand corporate taxation better. Off to do some research.
Yay! I wonder if there are estimates anywhere about the corporate liability if the Social Security tax was levied on higher wage earners. I'm looking forward to what you have to say about corporate tax.
I wasn't particularly concerned that there were billionaires before. But after seeing how they distort politics so many of them want to dictate how we live they are anti democratic I've become against billionaires. Note I did not say I'm against wealthy people I'm against billionaires now. I don't think they are compatible with democracy.
Hard to argue that the wealthy have a disproportionate influence on politics. Although perhaps that has always been the case.
It's always been the case it will always be the case but it's going to an extreme. I keep remembering what was it Socrates said about the cycles of tyranny democracy oligarchy.
if more of the billionaires had been like Ted Turner, the head of Berkshire Hathaway it would have been one thing but they're political actors who because they get to order their workers about they think they should get to order all of us about.
Well Donald Trump had the right idea first time round. Invade the White House and string em all up but you won't because you're too chicken. It's too bad he's gone over to the Dark Side now. But that is the only way along with refusing to pay Tax. You did that once before after all.
“Accordingly, I see an increased risk that anti-capitalism will take hold. Inequality might then be “solved” not by raising some people up but by tearing everyone down. That would be a terrible thing.” Great observation. People think that’s what they want, but have no idea what they are asking for. We have much room for improvement, but capitalism is what has made America what it is today.. the good parts. Eschewing that will destroy ambition, the American dream. Pendulum swings will continue until we can somehow find some middle ground that works.
If the current system does not work then it deserves to be torn down perhaps.
The pendulum will swing, but where? And by how much? It won't swing to the middle.
Economists agree that socialism is a failed experiment (one could argue that we are now one of the more socialist economies in the developed world). 60% of the Federal budget is non-discretionary entitlement spending. AND, we know that the middle class carries a bigger proportion of taxation than the top 1%. We cannot tax our way to prosperity.
While I don't see capitalism as an experiment, it definitely is pushing the limits. No entity should be worth a trillion dollars! How do we flatten the "K" without killing the free enterprise system that has brought us everything from the telephone to life-saving drugs to low-cost calories?
All good questions. Thanks for the comment.
The astonishing thing, and a clear sign of deliberate or unconscious ignorance and misinformation, is when people act as if there was „THE" capitalism.
They don't talk about the CONTENT of economics, only the FORM.
Any question about what the "poor" or "the middle class" gain from having "economics" for its own sake, without any regard for CONTENT, is ignored.
Thus, any consideration of whether and how "economics" could or should change, if its content were to change, or if critical examination were to become the norm and enter the public consciousness, is also overlooked.
If "dependent employees" received a higher share of the profits from what they help produce, but the product itself was junk and garbage, then it would remain garbage.
And "dependent employees", supposedly "exploited" would be just as sickened by the products they produce as the "producers", the "employers."
This **actual equality** never even entered the focus of these discussions.
Rather, "movements" like "OWS" execute the very same greed they accuse the "rich" of.
Therefore, they will inevitably do NOTHING "better" if given the opportunity.
That is why all "socialism" has completely failed and is doomed to failure: as the self-proclaimed "heir of the bourgeoisie,“ „Socialism" merely copies the same garbage as ("convenient") "capitalism", only much worse, since any incentive for innovation, improvement, and achievement is eliminated - indeed even gets punished.
"Capitalism," on the other hand, doesn't make enough of the opportunities it undoubtedly possesses. There are too many beneficiaries who "earn good money" and wonder why they should change anything, why they should bother with better products, when the money keeps flowing.
Here, the intellectual poverty of those who supposedly want to achieve a "better life" meets the intellectual poverty of those who have the means to produce better things but choose not to out of laziness: another **actual equality**.
Capitalism, however, doesn't make enough of the opportunities it certainly has. we hear stances such as "It won't catch on“, "People don't want it,“ "Nobody will buy it" as „excuses", just as "the poor" and "addicts" always invent excuses for supposedly having "no chance," that "there's nothing better," and that they "only have enough money for the bare necessities“.
If you know (many) "poor," "exploited," or "underprivileged" people, however, you notice that they spend a lot of money on rubbish—such as a poor diet—even though better options would often be not just cheaper and actually less expensive; „but“ they require effort, reflection, and a heightened awareness.
In the long run, eating better doesn't just make you feel healthier; the process of developing this awareness broadens your horizons and makes life more fulfilling overall.
„But" it can lead to becoming alienated from one's "familiar environment“, viewing those around you more critically, and no longer finding the "familiar" way of life desirable.
One fears the prospect of ending up „alone".
So, one „conforms".
No "evil rich people" play a part in these processes.
The responsibility lies with each individual.
That´s the hardest part, including that it can make everything familiar seem stale, alien, and undesirable.
Yet, these are precisely the kind of irresponsible "employees" and "consumers" that most "rich people" want: they are compliant, don't think too much, and simply do "their job."
That is why „The“ Capitalism looks the way it does.
Also because "the masses“ —the „informed", "mature" "voters“, „We The People“— follow those who make false promises of "more money" but never want to discuss the actual *substance* of production or of capitalism itself. That would be framed „individualism“, never regarding that critically thinking individuals will be a benefit for all of the whole „society“.
It might well reflect critically back on the „promising“ Sanders, AOCs or Mamdummies: revealing that the agitators of „The People“ don't actually want a better life for "the masses" but merely "more votes"—secured in the cheapest and most "effective" way possible, just as supposedly "greedy capitalists" try to do.
can you have AI summarize that?
Sorry, No, I don´t do/use AI.
I was being sarcastic
I thinkith tooo late. In the words of Gordon Gekko. Greed is Good.
I wonder if a flat tax would encourage more savings and be an ultimate plus for the economy?
I always liked that idea.
IRS costs us (the dept.; out of pocket expenses; lost time) around $600Bn a year. That's a lot of savings!
Yes!!
This one is important and spot on. Everything in moderation… including politicians. The DSA has taken over the Democrat party and they include Marxists and communists which is partly why Jew hate is so popular. Far right republicans are scary too.
Time to make breakfast.
MAGA includes fascists which is why antisemitism is so popular.
Pretty funny, David. We both wrote about precisely the same phenomenon from different ends of the tunnel. Three days ago, I posted, Trump’s Economy: The Yellow Brick Road Over Quicksand Just as the Gilded Age spawned The Progressive Age, this incarnation will not create the anti-capitalism you discuss by the left but might deter some of the current anti-capitalism on the right. Captialism thrives on competition and Trump's economic system totally discourages that. With luck, the current inequalities will be exploited and may result in reforms that restore some balance to the system. That will actually be pro-capitalism because it will foster more competition that the system currently allows. Also...were the wealthy ever not complacent?
Our two party system has been severely injured since the Citizens United decision. Sadly, I suspect the DSA will be pulled into the money trap that rewards extremism.
The DSA is already there. They are well funded and that’s why so many of them are taking office. Meanwhile, AOC and Bernie Sanders are making speeches in around the country using a private jet.
Yeah, hope wears thin on all sides.
I’m so confused. I thought you agreed with democratic socialism. I’m now in Portugal, finally receiving health care I could not afford in the US. I’m a very privileged person. I was able to move. And I’m surrounded by capitalism. (Also affordable higher education. And intact communities.)
Over a half million people in the US go bankrupt every year because of medical bills. I left to avoid this since dementia runs rampant in my family and there’s absolutely no way to afford that care at home.
I have also basically spent my entire adult life in close proximity to Bernie Sanders. I’m not sure what kind of leftist you think he is. But he’s exactly who he’s always been. Fighting for the working class with logical guardrails on capitalism to protect communities and lift people out of poverty. His tune hasn’t changed since the 1980s. Burlington was a lovely city with what he did there. A lot of affordable housing was created. National models, at one time.
I’d like to hear, exactly which policies enacted by your new mayor you oppose. Exactly what policies or taxation do you oppose put forth by any democratic socialists in any office in the USA? Or is it that you fear any discourse in this direction will open the floodgates to authoritarianism and communism? Yet so much of the western world has universal healthcare and taxation that favors maintaining public goods. Have democratic socialism. Do you honestly think moderates will fix the healthcare crisis that is destroying families and the economy? Obama tried and it wasn’t nearly enough. I now have friends in their 50s without any health insurance at all. It’s completely unfathomable to the people in my newly adopted country.
I am not against democratic socialism. I am for a much stronger social safety net. I am against the DSA, which is radical and willfully ignorant of economics. Sanders stirs up hatred for the wealthy and his proposals are unworkable. In terms of healthcare, Obamacare under Biden was a big success. Instead of building in that success, Trump has gone in the opposite direction. Next year, a lot of people are going to lose Medicaid.
Obamacare lives on. My cousin is on it and pays an exorbitant amount for limited healthcare. I’m on the Massachusetts version and I pay over 1000 a month for terrible healthcare. I never thought I’d say this, but I can’t wait till I’m 65.
I’m tempted to go off this healthcare next year and write about it. Maybe the 13,000 in savings would cover a year’s worth of healthcare. The only issue is if I have something catastrophic or just the necessary MRI. Meanwhile, our governor just raised the Massachusetts healthcare fees by 10%.
That will work until you have a catastrophic health problem. Which is just about any problem in the US healthcare system.
Exactly what policies are you against? Exactly what makes the DSA radical?
The DSA wants Socialism with a capital S. It has never worked and would lead to shared misery.
The DSA also wants to defund the police. I think that’s a radical policy.
Medicare for All sounds great until you start to think about how it would be paid for and what the reactions of the medical community would be, etc.
so status quo? Where has socialism failed? I am aware that Communism has failed repeatedly but socialism? It seems alive and well in Sweden, Denmark, Norway, Germany etc..
There is a wide world of options between the status quo capitalism and socialism as the DSA policies call for. The European countries you list are capitalist/democratic socialist. They have more widespread healthcare and other benefits, which the U.S. could afford as well. But we;d need more tax revenue.
Correct. We need to tax appropriately return to an era where success in business was often measured by the number of good jobs created. Jobs that supported families. I actually lived that transition away from those values. You did too. It started with Reagan, as I recall. Do you remember it? And what about Elizabeth Warren’s bill to put guardrails on private equity plundering companies. Do you support it? Did you know it’s impossible to get a timely wheelchair repair in much of the country because these DME companies have been bought up and monopolized? Also, I highly recommend Sarah Fay’s book, Pathological, for its lens on the mental health industry and its handshake with pharmaceutical industry and subsequent outrageous wealth amassed by practitioners. It makes no sense that the wealthiest nation in the world cannot provide universal healthcare when most every other developed western country does provide it. To argue otherwise is, frankly, gaslighting.
Hi David. I have only my partial perspective from across the Atlantic, but it seems to me that the DSA overtly promote a version of social democracy (which is still the current dominant paradigm in western Europe, despite decades of rightward drift). That's not Socialism as a precursor to Communism, neither of which, I agree, are desirable.
"Defund the Police" is a poorly chosen slogan for wanting to divert funding from increasingly militarised policing into more effective social programmes which reduce the conditions in which crime thrives.
I'll happily be shown to be wrong. I am merely a foreign observer with imperfect information. However at the moment I have the impression some of your thinking is as stuck in the US political and social paradigm as 8 am in mine.
Just go on their website and you'll see that they mean Socialism with a capital S. Very different than the European model.
Hi David. I just did. They freely scatter the word "socialism" about and talk about "replacing" capitalism, yes, but their agenda still seems to the right of the left wing of the UK Labour party. They'd be pretty mainstream in any European democracy. I suppose that's what I mean about our differing paradigms. However that's not to say I believe that DSA are approaching their aims in the most productive way. See my comment on "defunding" the police.
Dear Eliza, as a Brit with an interest in US politics I found myself bewildered by this article for exactly the reasons you formidably expound. Thank you 😊
Is Wall Street necessary? Or is its original benefit — growing businesses — now outweighed by the harm it does to the majority of citizens?
When you write ". . .the excesses of capitalism. . ." you sound like Bernie Sanders or Elizabeth Warren calling for people to "pay their fair share" of taxes. So I will ask: what is an excess of capitalism? Similarly, what is a fair share of taxes? And no, I don't think a fair share is reduced by personal charity.
I don't ask this to be snarky -- if we don't (or won't) define what is excessive or fair, we are not communicating, we are polemicizing. Which is precisely what Sanders or Warren are intending. But for you, who intend to communicate, to do this is to invite challenge.
The gauntlet is down.
In 2025, the federal govt. collected about $5.25 trillion in taxes and spent $7 trillion. That's a $1.75 trillion deficit, or 6% of GDP of $30 trillion. We should be collecting perhaps a third more in taxes and using that to run a more sustainable deficit and provide for a better social safety net. Tax increases of that magnitude would have to be very broad based and phased in. I think "fair share" is an irrelevant budgetary concept.
Because our Congress authorized more in spending than was collected in taxes, you say, we need to increase our taxes. Does this sound like an incentive for the Congress to continue to spend more than is taken in? Especially given their proclivity to promise stuff to people who might vote for them? Stuff that costs money?
That sounds like a backward way to budget, even more so now that we see large sums of money being laundered through NGOs for personal benefit. I think you have the proper way to go about this backward if you want to cut the debt: spend less, especially on fraud.
As for your proposal that tax increases should be broad based, that's not the message coming from the people who want to tax billionaires. They're going for an "us-them" approach that relies on class envy. IOW, they're coming for you, not me.
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Yes, "fair share" is an irrelevant budgetary (and social) concept. Don't tell me -- I don't use it as a tool to shame voters. Tell the people who call for it.
Despite not being a Christian believer, whenever the subjects of taxation or fairness come up I am reminded of the parable of the widow's mite (Mark 12 41-44; Luke 21 1-4). For me, it sums up the entire argument. Tax policy requires constant readjustment depending on the circumstances. We could do worse than adjust it in light of those verses.
Our current federal tax system is progressive. Top 10% pay 72% of the taxes on 48% of income. Bottom 50% pay 3% on 12% of the income. I have no problem with taxes being raised and with the progression being accentuated.
The parable is a great one.
Hi David. You've kicked a hornet's nest, I see, lol. What do you think about a sales tax when transacting stock? I came across this idea recently and it seems to be a fair inquiry. And I think when people say the rich are not paying taxes, they mean not paying taxes on non-income/wage assets in a fair or similar manner that wage earners must pay...off the top of their paychecks. Thank you.
I think making all income taxed the same makes sense and also lifting the SS tax cap on wages. I don’t like imposing a tax on transacting stock because then people would find ways around it and anything significant would lead companies and investors to seek overseas listings. Income tax 85% of revenues comes from income and payroll taxes. That’s where the money is.
Fair share could very simply mean taxing all forms income at the same marginal rates. Rich people pay SS tax on a small share of their income, regular people pay SS tax on 100% of their income. Rich people pay capital gains and dividends tax at a 20% maximum rate. Regular people who work for their income pay tax at a 37% maximum rate. You are taxed almost half as much making your money from owning things as you are making money from productive work. And the step-up in basis for heirs means those cap gains are NEVER taxed. People can argue about how progressive the brackets should be, but it would clearly be fair to simply have every recipient who receives money/property from any source in any form to have it taxed at the marginal rates as everyone else. There's no justification for privileging capital gains or labor income. The top 0.1% often pay a lower tax rate than the top 1%, 10%, or 20%, that is obviously not "fair" when they own 10X the amount of assets. And people act as if income tax is all that matters...payroll tax is a full third of all federal tax receipts, and rich people pay less of that than poor people.
Agree about making all income taxed the same and also uncapping SS tax. Also paying cap. gains at the estate level vs. the step-up.
We seem to have strayed from the "excesses of capitalism" theme to "how should we tax wealth?" My fault -- I should not have introduced the "fair share" concept into the discussion.
To very briefly address the taxation issue, keep in mind that in addition to generating government revenue, taxes are normative. That is, they influence behavior. Just look at the demographics of migration in and out of New York and California.
So there is indeed a justification for different levels of taxation if you want to stimulate economic growth and development with private capital.
The enlightened wealthy realize there's a problem. There's not enough Warren Buffetts or Mark Cubans and too many Musks and Zuckerbergs. As noted in other comments, the lower demographic rungs (growing up there and attending to their health for 30 years-I know something about that environment) have some role in the current state of the union. I would propose strict campaign limits and an end to gerrymandering as a start. Addressing the poor quality of health care and public education would be next in line but, as both require drastic changes in the culture and infrastructure of the country, those are much harder tasks. Income redistribution by tax code would not solve much in comparison to the above.