Bernie Madoff deprived the super-wealthy of $50 billion, without resorting to the Estate Tax (a/k/a the Paris Hilton Tax) or armed robbery.
According to Republican economic theory, we should be throwing roses at his feet.
By fleecing the wise uber-wealthy folks of some $50 billion, he had provided a supply-side burst of incentive to those fine people to regain their former wealth. Those captains of industry are now incented to the tune of $50 billion, just to get back to where they thought they were a couple weeks ago. Better yet, he accomplished his gift of incentive without spending the money on wasteful government programs such as school lunches or welfare that simply disincentivize the poor. And BEST yet, he did it in a fashion that owes its existence to the under-regulated market the the Republicans have made a fetish of.
The bedrock of Republican “Economic Theory” is that incentives for the super-wealthy are critical. The wealthy – not lazy unionized workers, pampered teachers in our schools, or grossly inefficient government civil servants – are the supermen who, with their finely attuned, market-sensitive, invisibly guided wise hands are the ones must be allowed to keep their billions and billions of dollars, so that they remain incentivized to create more wealth. Taxing the wealthy hurts us all, they claim, because the wealthy will no longer feel the incentive to work, and we will all suffer in their absence.
The timing could not have been better, either. With Obama’s election, rightwingers were beginning to darkly (inappropriate pun intended) mutter about the “John Galt Option” or “Going John Galt
“, in a reference to a character in a very bad novel who withdraws his productive force from the economy when the unproductive “looters” seek to tax his fortune. Rightwingers were threatening to slow down their productivity in the prospect of having to pay for the war they supported.
Dr. Helen, in a pre-Madoff meditation on the possiblity of an Obama administration, sets out the thought process that motivates those who would imitate John Galt:
Perhaps the partisian politics we are dealing with now is really just a struggle between those of us who believe in productivity, personal responsibility, and keeping government interference to a minimum, and those who believe in the socialistic policies of taking from others, using the government as a watchdog, and rewarding those who overspend, underwork, or are just plain unproductive.
Obama talks about taking from those who are productive and redistributing to those who are not — or who are not as successful. If success and productivity is to be punished, why bother? Perhaps it is time for those of us who make the money and pay the taxes to take it easy, live on less and let the looters of the world find their own way.
If Republican incentive-based economic theory is valid, then Bernie Madoff was the right man at the right time to boldly create incentive in an economy that was going to hibernate until a new administration of deregulation, no watchdogs and deficit spending could reverse Obama’s plans. Instead, thanks to the heroic Bernie Madoff, the John Galts of this world are waking up to find themselves in a $50 billion hole in an economy that needs more of their “wise” investments. They now have the incentive to rejoin the economy.