Every major religion calls greed a sin because it destroys societies. Contrary to what some claim, greed isn’t the engine of capitalism. Greed turns good capitalism into predatory capitalism, and any country that rewards it gets into serious trouble.
Those who succumb to the notion that “greed is good” confuse it with healthy self-interest, which stimulates a person to work hard to provide a decent living for himself and his family. Self-interest becomes greed, however, when it leads to behaviors that are exploitative, deceptive, manipulative and even fraudulent or illegal. Those are the behaviors that destroy societies.
The remarkable thing about the economic meltdown of 2008 is that obvious fraud and illegal behaviors occurred, but none of the high level Wall Street executives who caused it went to jail. They not only remain untouched for their reprehensible behaviors, but they still get to keep the massive wealth they acquired.
Two reasons none have gone to jail: first, even outrageous greed isn’t considered a crime; and second, it’s difficult to prove criminal intent, even when one makes contemptible self-interested economic decisions that harm others.
When it comes to government policy, however, it’s important to note that the destructive effects of greedy behaviors extend beyond the original perpetrators. Hedge fund managers, although they may have had nothing to do with the economic meltdown, made billions of dollars by taking advantage of it.
By selling short, they may even have aggravated it. Although there was no crime involved, they certainly benefitted from the bad economic behaviors of others.
That’s why everyone—the guilty and the innocent—who benefits from economic injustices caused by greed should be taxed more than those who were victims. I would put myself into the innocent category of greed beneficiaries.
Because of regulations that favor people like me, I legally lied on tax forms that my rental properties declined in value (depreciation), even though they increased dramatically—and I saved a bundle in tax breaks. I bought shares of Goldcorp for $10 and sold them for $20, and paid tax on only half of my profit because I “created jobs” (capital gains), although only for stock brokers.
Obviously, I’m self-interested and no saint, but at least I’m willing to admit that I have greatly benefited from economic policies that favor America’s fortunate, at the direct expense of the less fortunate. Although government can’t legislate morality, I believe it can, and morally should, tax those who benefit from immorality — especially when the immorality results in harm to others.
Our nation’s adoption of unregulated free market globalization is a classic example of the unjust government redistribution of wealth. People like me have benefitted tremendously because, like everyone else, we pay less for what we buy. However, we’re also in the class of people whose jobs and livelihoods weren’t exported to Third World countries.
People in my class are doing just fine, thank you very much, but working class Americans are losing their standard of living—their homes, their healthy diet, their quality medical care and their ability to finance their kids’ advanced education.
History tells us that when the wealth and income disparity between the rich-and-comfortable and the rest of society becomes excessive, bad things always happen, even for the rich-and-comfortable.
Through sensible regulation, our government needs to protect the uneducated, the poor, and the powerless from the greed and misbehavior of the educated, the wealthy and the powerful. And when those regulations fail or are deliberately abandoned, it needs to progressively tax those who benefitted most from their failure or absence, and use the funds to compensate those who were forced to make all the sacrifices.
Chuck Kelly lives in Burnsville and is author of The Destructive Achiever; power and ethics in the American corporation, and Farewell Fantasyland; time for political and economic reality. He can be reached at email@example.com.