“…you’d be quite wrong, as is the quote, with respect to most conservatives…”

Just to let you know, though, I take no offense. If I can’t continue in my beliefs when people knock them, then they don’t mean much and they aren’t very deeply held.

I am just beginning, but will finish at a later time.

Most conservatives are enamored with the Victorian idea of the “deserving” poor, and blanche at the thought that, somewhere, somehow, a person they wouldn’t consider deserving will get a dollar of government aid. Amazingly, they don’t blanche nearly as much when fat profits go to defense contractors and government funds are wasted on what Time magazine in its famous series called corporate welfare. But let one unwed mother get a dime, and they’re on her like Neiman-Marcus on Sarah Palin.

As far as the current credit crisis, I agree that there’s enough blame to go around. Conservatives still remind me of that old segregationist James Eastland, Senator for Life for Mississippi. Lyndon Johnson once opined that if a huge flood came up on the Mississippi River and destroyed half of his state, Eastland would blame it on the [blacks], assisted by the Communists.

When the mortgage crisis first began, I said to myself, they’ll find a way to blame this on the Democrats, even though the Republicans have been in power for eight years. I couldn’t personally think of a way to shift the blame, but then again I guess I’m not smart enough to be a conservative. Then they trotted out the Community Reinvestment Act, and I laid on the floor and laughed. I spent a good chunk of my time in the late ’90s and early ’00s practicing bankruptcy law. During that time, mortgages grew like weeds. They’d make a mortgage to a customer. They’d then make a second mortgage on the same property. Then came the 125% loans, that is, loans valued at not just 100% of the value of a house (which is itself 30% too high for my taste), but up to 125% of that value.

These were insane lending practices, and I can’t imagine that any reasonable reading of the Community Reinvestment Act required banks to act this way. Very few of my bankruptcy clients were members of minority groups, and even fewer lived in neighborhoods that would have been targeted by the Community Reinvestment Act.

So, when these banks, nearly all of whom have engaged in blatant red-lining of minority neighborhoods for the last hundred years, needed something to blame their own bad lending practices on, what did they seize? Yep, the one law out there that suggested that loans should be made in poor black neighborhoods as well as rich white ones. But most of the problems that I saw were with loans in middle to upper class white neighborhoods, not loans in the ghetto.

The next big disaster in banking is going to be the losses that lenders suffer when all those people they issued credit cards to, but shouldn’t have, suddenly stop paying their bills. This has begun a bit, but hasn’t fully hit yet. But it will. Cause here’s the kind of things they do: I had a client, who worked as a waittress. She had a gambling problem. That would be bad enough, but she also had some credit cards. And she found out that when she took those credit cards to the gambling boats that patrol the Ohio River, they would swipe her credit card, issue her a thousand dollars worth of chips, and charge her $1,100 for the experience. And give her a free beer. They called this a “comcheck,” and it was well known to the credit card issuer as a loan made to buy gambling chips. The casino boats starting using wireless card swiping machines so that a person could gamble with borrowed money without leaving the gaming tables even long enough to swipe the card. The waittress would bring the free beer along with the receipt.

When she filed bankruptcy (duh), the credit card company had the nerve to file an action suggesting that the debt to them not be discharged. You can imagine the fun I had with that. They brought a truth in lending statement into court that said that, when you added in all the up front charges and whatnot, her effective annual interest rate was 44%. And that was their calculation, not mine. I don’t know how they had the nerve to come into court, and trust me, after the bankruptcy judge got done with them (I hardly had to say a word), I don’t think they wanted to come back any more.

So, when I know that the same banks who make mortgage loans also act in this manner, it’s awfully hard for me to swallow the whole Reinvestment Act defense, though I admit it was a good try, and more creative than the normal conservative accusations. Now, having said that, predatory lending practices don’t force people to borrow money they can’t repay. That is ultimately a mistake made by the individual. Now, people like Dave Ramsey are out there suggesting that maybe credit cards and easy credit aren’t a good idea, and that your grandmother was right all along when she told you to stay out of debt. I like Ramsey a lot, and you can imagine what it takes for me to say something good about a Republican evangelical Christian. I hope his message takes hold and we are able to solve the problem from the bottom up, but the banks and lenders have to take their share of the responsibility, too.

I did not suggest that any increase in taxes is a redistribution of income. That is oversimplifying what I said. I am speaking of an “artificial” redistribution. Taxes meant to pay for defense or infrastructure or things of that type, are used for the benefit of all (although we can argue about how much money goes to contractors in the defense budget). Redistribution of wealth is exactly what the words mean; taking money from one person’s pocket and putting into someone else’s by the means of a social or welfare program.

Also:

Social Security is a larger chunk of the budget than Defense and Medicare and Medicaid are only slightly lower, although not by much. The revised numbers for the federal budget for the 2009 fiscal year show that defense spending is 20.5% of the federal budget, while Social Security is 20.8% and “M&M” is 20.1%. With our aging population, the numbers on SS and M&M will only grow larger. If I recall correctly, one of Ted Koppel’s Nightline shows gave an estimate that our average tax rate would have to reach the 60%+ range if we were to keep those programs as they are.

My question again is how much is too much? If we follow the line of thinking I see in your comments, my friends, we might as well just hand over our entire paychecks to the IRS and let them do as they may. Of course, I’m sure a couple of you would agree with that line of thinking.

Before you all think I am an ogre who just wants to do away with the poor, let me assure you this is not the case. I just think we’ve put ourselves into a situation from which we cannot pull out, starting with the “New Deal,” which I see as a major step towards socialism in this country. I see a lot of good thinking in each of your posts; I just think we come at our way of thinking about these things from a different perspective. Caleb speaks about how Henry Ford paid his workers enough so they could actually buy what they made. That is not “artificial” redistribution of wealth, that is a business owner CHOOSING to pay his workers higher wages, as do companies like Microsoft and Google. Most of Bill Gates Wealth has come from owning stock in his own company, not from large salaries and bonuses which take money from the pockets of his workers. THIS IS WHAT I AM TALKING ABOUT! That is not artificial. That is not government forcing the issue.

Perplexed makes the point that “wealthy business men and women gave tremendously to charities and they play a large role in hospitals, libraries and schools, they were a major part of the art movement in America. We need them again. I can remember as a child having an orchestra play at our school, their visit was paid for anonymously. It had an effect on me I cannot explain, but it made me more aware.”

This, again, is not the government taking control of our money and doing what they thing is correct. If anything, at least these two examples prove my point.

I saw the same thing in high school. Frank may well remember the pathetically ugly uniforms (home made by some of the band moms) that we wore in the high school marching band up until 1984. As much work as the moms put into them, they were very pathetic in comparison to the other bands’ uniforms at competitions. During that year, our band gained the attention of a Mr. John Dean, if I remember the name correctly, who had been the director of a now defunct drum and bugle corp. He just happened to have 120 uniforms to donate, so we got them. They were so much better than what we had, but it wasn’t a gov’t program that made it possible, it was the donation of a man who had the way and means to do so.

All of this might sound sort of weird when I tell you that I work for WaMu. I’m not even sure I will have a job as of the first of December, as we were bought out by Chase and I’m in competition with their loan officers for a limited number of jobs. I could very much blame Kerry Killinger and those who drove the company into the ground. I can also see that the subprime mortgage crisis was very much a government problem, starting with the Community Reinvestment Act, which forced lenders to make loans to those who could not afford them. I also think that the ways that most of the lenders came up with to lend to the “underprivileged” were very suspect and adding that to the ridiculous bonuses they were paid didn’t help the situation, so there is plenty of blame to go around. But it all stemmed from trying to ARTIFICIALLY create home owners out of those who would not have qualified under normal circumstances.

Now, after all of that, it really comes down to one thing for me. AGENCY. We were placed on this planet by a God who gave us agency; the chance to think and act for ourselves. That includes how we act towards our fellow man. I believe it is our right to choose for ourselves how we will treat those around us and if we simply allow the government to make those choices for us then how is that agency?

You want to see a welfare system that works. Check out the one we have in our church. All of the funds are voluntary fast offerings from church members. Tithing money is not used for this program. Local stakes (dioceses) are responsible for their own areas. If they fall short, they can reach into the general fast offering funds of the church, but most stakes in the US are self sufficient. In our particular stake, we have a program called “Hearts for the Holidays,” totally separate from our fast offering program, where members of the stake who can donate so that no child goes without for Christmas. Last year in a stake population of just over 5000 over 100 families were helped at Christmas and there were “non-LDS” families that benefitted also. We included all that wanted and needed to participate. Voluntary works for social programs! I’ve seen it happen. I just think we’ve gotten very lazy and it’s just easier to let the government take care of it.

Perhaps I am a simpleton, but I believe that in these arguments too many get caught up in details, which are necessary, but that those details forget the core values that were used to form this country in the first place and moving away from those values will lead us to be exactly what our forefathers fought to get away from.

Well, this is already too long…perhaps more later.

In my law practice, I represented a lot of rich businessmen and entrepreneurs, as do most corporate lawyers. And one thing that any experienced corporate lawyer will tell you is that getting rich in America is entirely a matter of luck. You can say all you want to that Bill Gates was a hardworking software designer and Warren Buffet was a hardworking investment anaylist, but there are plenty of people far more talented at software design than Gates and far better business analysts than Buffet who are flat broke because the stars didn’t line up for their deals like they did for Gates and Buffet.

I had a political science professor in college who taught, as part of our political economics class, that the American dream is actually a pipe dream, because we have designed our economy to favor the lottery winners and keep the lottery losers in their place. As UKLutheran says, the vast majority of people do far better in European-style socialist systems than they ever would in the United States.

David, you suggest that any increase in taxes is a redistribution of income. I disagree. Most government payments go to or for the benefit of wealthy people. Think about it. What do we spend money on? The biggest single expenditure is the military. Now I suppose you could construe those payments as going to all the foot soldiers out there, but in fact most of the real money is made by defense contractors, who, if they aren’t rich to begin with, soon get that way.

The next biggest expenditure is social security. It is supposed to be a pay as you go system, but isn’t exactly working that way. It is hardly income redistribution, given that there is a rather low cap on the amount of income that is taxed under the system.

Another huge segment of government spending, more state and local than federal, is the criminal justice system. Kentucky counties are going bankrupt because they can’t afford to pay to house all the inmates in their jails. Is this income redistribution? Perhaps, because prisons have become profit centers in America, extracting money from the families of inmates for all manner of things, all at inflated prices. But, like the military, it’s reverse income redistribution, taking money from poor people and giving it to big business. And, again, the entire purpose of the criminal justice system is to protect private property, the thing that conservatives seem to worship above all. David, if it weren’t for the government, people would come and steal all your stuff. Is protecting your stuff income redistribution?

Another big government expenditure, one that a lot of people don’t discuss, because it’s largely hidden, is business regulation. Is paying the relatively high salaries of all the government employees (many of them lawyers) who make up the Securities and Exchange Commission, the Interstate Commerce Commission, the Federal Reserve, the FDIC, and every other watchdog agency income redistribution? These people regulate the process that helps private property produce returns on someone’s investment in it. Poor people generally don’t have a lot of business before the SEC. These are social programs to protect the rich. And I’m not saying they’re wrong; I don’t want to go back to pre-SEC days, but let’s recognize what they are.

Finally, there really are some social programs financed by government, though it is not as large a percentage of government spending as most people think. Why do we pay out benefits to poor people? We do it for the same reason the Romans gave the masses bread and circus: To keep them, once again, from stealing your stuff, David. We are unwilling to pay the social cost of educating the masses and providing them with decent jobs. So, we throw them a bone of welfare and other benefits to bribe them not to steal your stuff.

Is this income redistribution? No, it’s just property insurance. The famous economist John Forbes Nash, the subject of the movie A Beautiful Mind, became famous (before he became doubly famous for going crazy) for doing economic research that proved that the when you lift up each segment of the economy, when you help poor people as well as rich people with social programs, everyone benefits. That crusty old industrialist Henry Ford knew as early as 1909 that if he paid his workers enough to actually buy a Model T, his sales would skyrocket. And they did.

But today employers don’t think that way, at least the less successful ones. Do you think that Microsoft pays anyone minimum wage? I doubt it. I suspect that the person sweeping the floor at their offices gets a living wage. But let the government threaten to increase the minimum wage and every unprofitable business in the world screams and cries that they can’t stay in business and pay people a living wage. Well, the conservatives love to talk about competence and responsibility: How about some accounting for competence and responsibility among employers? I would think if social justice means anything, it means paying the workman his due. But they don’t see it that way.

So, David, I suspect that there is some income redistribution in government today, but unfortunately most of it goes the wrong way.

Here is my rather inadequate reply.

There is a lot in your comments about legalized theft and undelegated powers, yet these terms are always directed towards the government services for the poor.

I have a wonderful book on my bookshelf called “and the poor get welfare” by Warren Copeland. It breaks down various positions and perspectives, from libertarian to Marxist, and analyzes them theologically. One thing that i have taken away from my reading, and the social ethics course I read it in, is that whereas there is much lamenting about welfare programs and the subsidizing of the poor, we almost never talk about the way in which the poor subsidize the wealthy and the middle class.

(let me offer one basic, limited example… you build a new house in a new subdivision on the edge of a city. No taxes have yet been paid on this new property, yet already the government needs to provide sewer lines, police protection, new schools, etc. etc. all of which comes from tax money from existing (and often poorer) homes in the city. Many government loan programs are in effect massive drains of wealth and capital out of the urban areas and into the suburbs, in effect a huge subsidy to the middle class at expense of the poor)

That would be the beginning of my response: that the wealthy pay more in taxes because they use more services. The poor get welfare, the wealthy get government contracts, cheap highways, subsidized infrastructure, etc. Neither Bill Gates nor Warren Buffet “earned” their money in a bubble, completely unaided by some form of government subsidy.

People are enraged at the thought of socialized medicine, which would have a net gain for everyone in society, yet don’t appear to oppose government bailout of banks and corporations. How is one more legitimate than the other, in your worldview?

Speaking of redistributing wealth: there has been a huge transfer, often aided by government, to the wealthy. Look at the earnings of the top 5%, and compare them to the middle class and working poor. One question I would pose to you is whether or not you are concerned about the massive concentration of wealth in the hands of the few.

And I would challenge the notion that we exist solely as autonomous individuals in this society… in contrast, I would argue for a social contract approach: we each have rights, and responsibilities, in this country. Paying taxes and into social security aren’t “legalized theft,” they are the costs of citizenship and payment for services rendered.

In that sense, because you live in this country, taxes are no more voluntary than obeying the law. Why should Bill Gates, whose millions rest largely on vigorous enforcement of rather new (and very industry-friendly) intellectual property laws, not also have to pay the cost of that enforcement? Benefiting from government is free, but paying for it should be voluntary?

As to the idea that we live in a meritocracy and all people can just “pull themselves up,” I must protest. I give enormous credit to those who succeed despite difficult odds, but recognize that their are enormous structural impediments to people’s progress. It is not an even playing field, and no one on account of his or her birth should be condemned to live in poverty. There are millions of people who work hard, and still don’t succeed.

On the other hand, the second richest man on earth is Swedish and he managed to build a hugely successful corporation in a “socialist nation,” and a child born in the Nordic nations has greater chances for upward mobility than a child born in the US. Maybe “democratic socialism” rewards hard work better than laissez-faire capitalism?

I should also go as far as Caleb and say that I do consider myself a democratic socialist.

Furthermore it’s not at all clear that the scope of government responsibility should remain constant when the world changes so much. When we expand public services into areas that were not practical or perhaps even possible 220 years ago, we are not betraying the principles of the founders. Instead we are taking a government born in the 18th century and adapting it to the 21st. Adams and Franklin would be surprised to see the state of the American experiment today, but they might be well pleased by many aspects of it.

Don’t tell me that our congress doesn’t waste millions of dollars per year on pet projects that should never be the destination of our tax dollars. Why is that so hard to see? What would happen if we ran our homes like they run our countries finances? As for Wall Street,you’re right. Greed has hurt many. However bad it is, it is not the first time it has happened and it won’t be the last, but Obama has not solutions that are going to change human nature. If you’re waiting for that, have fun. It’ll be a long wait.

We’ve become totally inverted in this country from how it was founded. Citizens gave power to representatives of states, which states gave power to a federal republic. It didn’t happen the other way around and to think it did or does is to totally revise the history of the formation of this country.

Exactly what is the “respected part” of the wealthy? Who determines that? I’m not wealthy by any stretch, and yet I don’t expect Warren Buffet or Bill Gates to provide for me. If they choose to give abundantly, as these two have, then great for them. But how far do we go? Show me somewhere in the constitution where it is mandated that the wealthy must pay for the poor. Do I think people should give….YES! But if it is not out of their free will and choice then it is nothing but legalized theft. And I really don’t care if Buffet voted for Obama. His wealth does not make him right on how government should work. That’s not his specialty.

I think our founding fathers and most of our forefathers would be ashamed at how dependent a majority of this country’s citizens have become on our country to take care of them, or in the mentality of others that it should.

I attended a symposium some years back where the keynote speaker was our former church president, Gordon B. Hinckley. I wish I would have written it down, but from memory he said something like this. “It is quite the comparison to see our country with its graduated and complex tax system and a budget they can’t seem to balance. Compare that to a church that asks, but does not require, that it’s members give 10% of their income. Which of the two is better off financially?”

No, I do not. I regard the last 8 years as an extension of what has been going on for quite some time. President Bush is no more a conservative than was President Clinton. I just find see that it is moving further and further towards socialism in this country, if we’re not pretty much there already.

Jose,

Nice job in taking President Benson’s comment in that paragraph completely out of context! If you took the time to read the whole essay, which can be readily found online, you’d see that he is addressing “social planning” in the economic, not moral, sense. If you read the whole thing, you’d also find this, ” As an Independent American for constitutional government I declare that: I believe that no people can maintain freedom unless their political institutions are founded upon faith in God and belief in the existence of moral law.

It’s easy to take something out of context and turn it around because you think you’ve found something to “jump on.” It’s a little more difficult to get to the full context of what that person is actually saying and then see if your beliefs agree or disagree.

At least Caleb can come out and say that he is a socialist. While I disagree wholeheartedly in that form of government, I can at least respect his honesty in declaring his belief. I have to take exception, Caleb, to your comment about President-elect Obama’s programs not redistributing wealthy. He has plainly stated that he wants to raise taxes on the wealthy. For what will those taxes be used? The answer has to be more social programs, which by any real definition is a redistribution of wealth.

Man, how can one reconcile Prophet Benson’s strong words with Proposition 8? After robbing people of the equal legal rights to liberty and the pursuit of happiness, we ought not to niggle about making rich folks pay proportionally more for the common good.

First, despite what the conservatives want to say, nothing in Obama’s programs would redistribute wealth. As a socialist, I wish that weren’t the case, but it unfortunately is. I’m a proponent of Huey Long’s “Share the Wealth” program, but probably the only one left.

Second, we had the type of government that Grover Cleveland advocated, well, during Grover Cleveland’s presidency, and for forty years thereafter, until the New Deal. The reason that we changed forms of government was because the old form wasn’t working anymore. I can’t imagine that a form of government that didn’t work once would work again. It’s interesting that the Republicans didn’t take over our national government again until the 1950s, when a generation of people had forgotten the depression and the misery of laissez faire government, and another generation had been distracted by World War II. It’s easy to suggest that the old days were good when you don’t remember them, or the downside of them.

I’d just as soon not go back to that misery. But that’s just me.

“A category of government activity which, today, not only requires the closest scrutiny, but which also poses a grave danger to our continued freedom, is the activity NOT within the proper sphere of government. No one has the authority to grant such powers, as welfare programs, schemes for redistributing the wealth, and activities which coerce people into acting in accordance with a prescribed code of social planning.

There is one simple test.

Do I as an individual have a right to use force upon my neighbor to accomplish this goal? If I do have such a right, then I may delegate that power to my government to exercise on my behalf. If I do not have that right as an individual, then I cannot delegate it to government, and I cannot ask my government to perform the act for me. (Emphasis added)

To be sure, there are times when this principle of the proper role of government is most annoying and inconvenient. If I could only FORCE the ignorant to provide for themselves, or the selfish to be generous with their wealth! But if we permit government to manufacture its own authority out of thin air, and to create self-proclaimed powers not delegated to it by the people, then the creature exceeds the creator and becomes master. Beyond that point, where shall the line be drawn? Who is to say “this far, but no farther?” What clear PRINCIPLE will stay the hand of government from reaching farther and yet farther into our daily lives? We shouldn’t forget the wise words of President Grover Cleveland that “… though the people support the Government the Government should not support the people.” (P.P.N.S., p.345.) We should also remember, as Frederic Bastiat reminded us, that “Nothing can enter the public treasury for the benefit of one citizen or one class unless other citizens and other classes have been forced to send it in.” (The Law, p. 30; P.P.N.S., p. 350.).”

-Ezra Taft Benson, “The Proper Role of Government,” 1975.