Who are the makers and the takers?

Since the end of the presidential election last week, I’ve been seeing a lot of tweets and blog posts that will say something like “takers outvoted the makers”(see here, here, and here for examples).  I find the “makers and takers” narrative fascinating.  I’ve found few other narratives that so quickly and easily divides Americans and get us to hate each other. I wanted to take a closer look at the supposed logic behind it.

“Makers and Takers” is a right-wing meme.  The basic story is thus:  The economy is make up of people who make stuff and people who take stuff.  The takers take from the makers – usually using the power of government.  The story comes from Ayn Rand’s Atlas Shrugged.  But she called them producers and looters.

Unfortunately, as often as conservatives will refer to “takers” as the problem, they rarely define or identify who these nasty people we’re supposed to hate are.  Mostly, it seems to be based entirely on whether or not you pay federal income tax(payroll and other federal taxes don’t count).  That is the impression I get from Mitt Romney, Paul Ryan, and other random conservatives.  The conservative commentator, Mary Matalin, helps clarify a little more.  Old people and veterans don’t count, only people who use any anti-poverty program.

So, let’s look at two different people.  Let’s take a single parent with two children.  The parent works 2 jobs.  28 hours a week at Walmart, and another job at Home Depot working another 28 hours(give or take since schedules in retail shops tend to fluctuate).  At each job this person works hard and therefore earns above minimum wage… about $8.50.  Neither job pays benefits.  This translates to just under $2,000 a month(before payroll taxes and state income taxes).  That makes him qualified for a small amount of food stamps and for their kids to get Medicaid.  In right-wing language, this 56 hours a week worker is a “taker” and a “moocher” and a “looter”.

Let’s take another person.  Say, a former presidential candidate who made 14 million dollars last year by doing nothing.  He pays about a 15% tax rate in income taxes.  He didn’t do anything except give his money to a banker.  But since he paid income taxes, In right-wing language, that makes him a “maker” and a “producer”.

In this scenario, I question the right-wing framing of maker and taker.  Who is truly the maker, and who is the taker?  Are the minimum wage (or just above minimum wage) workers really taking?  Is that work of packing your groceries and loading the shelves that meaningless?  Is the work of giving someone else your money so important that it is the equivalent of MAKING something?

I would be tempted to reverse it and call the rich guy the “takers” and the workers (who are actually WORKING) the “makers”.  But I find this whole narrative odious and would rather see it die than co-opted.  We’re all in this together and we all have something to contribute to society.  If we think individuals are taking advantage of the system let’s deal with that.  Let’s not deal with it by demonizing the most vulnerable people in our society.

How Much Does Mitt Romney Really “Give” to Charity?

At the Vice Presidential debate, Paul Ryan tried to use Romney’s charitable donations as a defense against the 47% comments Romney made.  This defense isn’t completely isolated to this debate.  It has made its way around right-wing websitesSteve Doocy and Karl Rove even tried to use this as a point of attack.  It is true that Mitt Romney has given away 30% of his (before tax) income.  That is more than the abysmal single digits of either vice-presidential candidates.  It is even more than Obama’s nearly 15%.  But is that really giving more to charity?  It’s times like this that Democrats need to find religion.

Besides Biden’s worrisome move towards Austrian economics, here is the piece of the VP debate that stood out for me.  It came when Biden was attacking both Ryan and Romney.  His assertion that they don’t care about the poor and, in fact, blame them for the poor economy.  The Part that interests me was Paul Ryan’s defense against this attack.  (transcript courtesy of NPR)

VICE PRESIDENT BIDEN: But it shouldn’t be surprising for a guy who says 47 percent of the American people are unwilling to take responsibility for their own lives. My friend recently, in a speech in Washington, said 30% of the American people are takers. These people are my mom and dad, the people I grew up with, my neighbors. They pay more effective tax than Governor Romney pays in his federal income tax. They are elderly people who in fact are living off of Social Security. They are veterans and people fighting in Afghanistan right now who are, quote, not paying any taxes.

[snip]

REP. RYAN: This is a man who gave 30 percent of his income to charity, more than the two of us combined. Mitt Romney’s a good man. He cares about a hundred percent of Americans in this country.

(emphasis mine)

When I heard Paul Ryan’s defense it made me think of The Widow’s Offering, from The Gospel’s.  This story is told in both Mark 12:41-44 and Luke 21:1-4.  I’ll recreate Mark’s version below.

Jesus sat down opposite the place where the offerings were put and watched the crowd putting their money into the temple treasury. Many rich people threw in large amounts. But a poor widow came and put in two very small copper coins, worth only a few cents.  Calling his disciples to him, Jesus said, “Truly I tell you, this poor widow has put more into the treasury than all the others. They all gave out of their wealth; but she, out of her poverty, put in everything—all she had to live on.”

A pretty standard interpretation, and the one I learned in Catechism, was that it is not size or amount that we offer, but the amount of the personal sacrifice that makes one righteous.  In Luke’s version he comments on the offering of the wealthy that they “made offerings from their surplus wealth”.  In other words, their donation didn’t represent any real sacrifice on their part.

Democrats should make this argument the next time someone brings up the difference in charitable giving between Romney and Obama.  It is hard to compare the amount of sacrifice(even using percentages) when one makes 20 times as much as the other.  Is 2 million really a noble sacrifice when one still brings home 9 or 10 million?

This isn’t a call for higher taxes, just a critique of a shaky defense when one is being pummeled for not demonstrating a concern for the poor.  Democrats can continue their attack on Romney’s despite his charitable giving.  Democrats can compare charity with sacrifice.  This can be done with secular language as well as religious – as The Widow’s tale demonstrates.

The connection between charity and sacrifice is not unusual in Catholic Social doctrine.  Some of the most powerful homily’s I’ve heard have been calls for Charity.  One was a personal story a priest relayed.  When he was in New York he once ordered a sandwich from a deli.  The deli had mistakenly put mustard on it which he hated.  He was already out of the shop and headed for the subway before he realized it after taking a bite.  Instead of throwing away the sandwich he decided to give it to a homeless person by the subway entrance.  At first he felt good about literally “feeding the hungry”.  That was until he saw what happened next.  The homeless person stood up, walked a few yards to another homeless person, tore the sandwich in two, and gave the other half to his friend.  The priest felt humbled.  Here he was feeling good for giving a sandwich that he was going to throw away anyway, and yet this homeless man just gave away what might end up being his last meal of the day.  One donation was a whole sandwich and the other was only half a sandwich, but which was a greater sacrifice?

If Mitt Romney feels no pain or sacrifice in what he gives, how does that differ from the Priest’s sandwich that he wasn’t going to eat?  I’m not saying that there aren’t admirable things one can say about someone who donates a lot to charity.  However, when one make a lot of money for doing nothing at the same time one is trying to destroy retirement and healthcare for the poor?  Well, hiding behind your charitable donations is no defense.

MMT Has a Long Way to Go

At the recent VP debate, I watched two gentlemen blame each other’s “spending” for causing the recession.  This does not bode well for MMT or reality entering our politics.  Up until now, I thought there was hope for Democrats.  But after watching the VP debate, if they all start following Biden’s lead it’ll mean they are moving further away from the reality instead of closer.

As you or anyone who has read an MMT book like the Seven Deadly Innocent Frauds knows, budget deficits and debt are not real problems.  Recessions cause deficits, not the other way around.  But, listen look at this art of the exchange (courtesy of abcnews)  that illustrates what  I’m talking about:

BIDEN: And, by the way, they talk about this Great Recession if it fell out of the sky, like, “Oh, my goodness, where did it come from?” It came from this man voting to put two wars on a credit card, to at the same time put a prescription drug benefit on the credit card, a trillion-dollar tax cut for the very wealthy. I was there. I voted against them. I said, no, we can’t afford that.

And now, all of a sudden, these guys are so seized with the concern about the debt that they created.

RADDATZ: Congressman Ryan?

RYAN: Let’s not forget that they came in with one-party control. When Barack Obama was elected, his party controlled everything. They had the ability to do everything of their choosing. And look at where we are right now.

They passed the stimulus. The idea that we could borrow $831 billion, spend it on all of these special interest groups, and that it would work out just fine, that unemployment would never get to 8 percent — it went up above 8 percent for 43 months. They said that, right now, if we just passed this stimulus, the economy would grow at 4 percent. It’s growing at 1.3.

For that last 4 years Republicans would attack Democrats and the Administration for debt and deficits. Democrats would counter with two wars, and the other things republicans deficit spent money on before the recession.  The implication was that Republicans were hypocrites for only caring about deficits when Democrats were spending on things Republicans didn’t like.  From a MMT perspective it wasn’t a harmful counter-argument.

Unfortunately, the above statement by Biden implies that the Republican spending was the cause of the current recession.  That is a very destructive narrative.  First of all, the absurdity for implying that I am out of a job now, because the government bought a tank 10 years ago.  The second is that it reinforces the conventional wisdom that budged deficits are bad in of themselves.  Also, it reinforces the false idea that debt denominated in a Sovereign currency can cause any crisis.

I was hoping to convince Democrats of the truth.  That debt and deficits don’t really matter(at least not in the way they think).  Instead they appear to be moving closer to the Austrian school and the idea that sovereign debt causes recessions – instead of the other way around.  I hope Biden’s logic doesn’t catch on with the rest of the party.