Recently, I finished reading David Cay Johnston's "Free Lunch," a powerful expose of how a small group of mostly wealthy individuals and, in some instances, their corporate enterprises, have milked the nation for their own gain. It took me some time to read the book because I could handle only one or two chapters at a time. It would have been far more pleasant had I found a book that persuaded me that my carping about how Congress does business was off the mark. Instead, I discovered even more reasons to understand my distaste for the modern American political process and the greed of those hardly in need.
Johnston answers a question that touches the core of what this nation should be about. How can it be, that in a nation as economically successful as ours has been, so many people are jobless, facing foreclosure and bankruptcy, lacking quality health care, and struggling to make ends meet? The answer lies in wealth and income distribution, which in recent years has tilted increasingly in favor of a very few at the expense of the great many.
Centuries ago, nobility enriched themselves through the use of serfs, slaves, and indentured servants. These workers put more into the economy than they withdrew, permitting the wealthy to accumulate more than they contributed. Though present-day America, and most other places, does not countenance outright slavery and servitude in a physical sense, Johnston demonstrates how, and this is my articulation, not his, economic slavery runs rampant.
It's worse than corporate executives pulling down compensation that is hundreds and thousands of times what the rank-and-file earn, despite the impossibility of an executive contributing hundreds or thousands of times more genuine value than does an ordinary worker. It's worse than the obvious biases in the tax system that favor the wealthy at the expense of the middle class, and, to a lesser extent, the working poor.
What has been transpiring behind closed doors, in corporate boardrooms and during high-end restaurant meals, in politicians' offices and on junkets to here and there is infuriating. Early in the book, Johnston describes how lobbyists persuade governments, or more accurately, legislators and agency bureaucrats, to tilt the marketplace in favor of their clients. The so-called free market isn't free, not only because government is reluctant to enact and enforce laws that protect the market, but also because government interferes with the market in ways that benefit a select few.
Some of the abuse is wrapped up in federal, state, and local tax systems. There are taxes imposed on the public that fund business enterprises that profit one or two or a few owners. There are taxes that go uncollected because enforcement is ignored, though excuse after excuse is paraded forth when and if the discrepancies are noted publicly.
Johnston does more than provide a list of abuses, abuses that range from subsidies for elite golf courses to fraudulent stock options, from corrupted deregulation to the sale of taxpayer-financed public assets like turnpikes and sewer plants to manipulation of the electricity market, and from government-assisted oligopolies to lying about the cost of the Medicare prescription drug legislation. Johnston presents these machinations not as would a lawyer using technical language and obscure references, but through stories. Where he can, he reveals what was happening behind the headlines unbeknownst to all but the few who were directing the efforts and the few who had no choice but to go along for the ride. One does not need to be a lawyer, an accountant, an actuary, or a private investigator to learn from Johnston's account of what went wrong. This book not only is an interesting read, a powerful indictment, and an understandable explanation, it also should be required reading during this election year.
Johnston's book was published late last year, which suggests it went to print no later than last fall. When the book appeared, the subprime mortgage crisis had yet to crescendo into the catastrophe it has become, gasoline prices were yet to explode upwards, and the other economic problems of recent months had yet to surface. Johnston, though, provides the explanation for how the economy has become such a mess. It's a wonder that the charade lasted this long. Unless the underlying causes of current economic woes are identified, understood, and eliminated, all of the stimulus payments, gasoline tax holidays, and other superficial distractions will do nothing to prevent America from back-sliding into a medieval system of economic nobles and economic serfs, or worse. One supposes that medieval serfs knew that they were being mistreated and understood why. One wonders whether most Americans understand why their economic situations are so shaky at best. The sad news is that it will take much more than reform of the federal tax system to fix things. The worst news is that much of what is proposed as reform is more of the charade.
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