Discovering Adam Smith

The Rutland Herald editorial page has managed to work itself into a lather  this lovely Labor Day weekend.  The paper's editors think rich people make too much money and it is an outrage and something ought to be done about it.  They cite the CEO of General Motors as an example and, fair enough, the stockholders and the board might have considered firing the man sometime during GM's long decline.  But that is their business.  Perhaps the Herald's editors own stock in GM and that might explain their ire over Mr. Wagoner's compensation package.  There must be some reason why they singled him out and not, say, Steve Jobs or Tiger Woods or Madonna or George Soros or any of a number of other people who made a lot of money last year and kept what the Herald would consider a parasitic proportion of it. 

The Herald's choice of GM as whipping boy this Labor Day is interesting in that if the company does fail, that will be the end, pretty much, of the United Auto Workers.  So, of course, there is legislation in Congress to bail the company out.  The number being talked about is $50 billion.  Is there any question how Senator Sanders will vote on this bill?  Meanwhile, automobiles are being made in Tennessee – at a profit – by non-union people who are being paid good wages.  Why should GM get a government bailout when it signed foolish contracts with the UAW twenty, thirty, and forty years ago?  Surely the Herald's editors will address this question in one of their upcoming editorials. 

Perhaps they will even work in Adam Smith whom they quote in support of their argument about people who make too much money.  Smith, they will learn, had interesting things to say about many things.  The Herald will, no doubt, soon be quoting him on free trade and, also, the sublime economic results that accrue to a society whose members are left free to pursue their own self-interest.

Comments

From the article:

"Sounds like Karl Marx, doesn't it: From each according to their ability, to each according to their need? Only it's that most laissez-faire of capitalists, Adam Smith, from "The Wealth of Nations," recognizing that without the state's protection, laws and structure, capitalists could not make a profit, and so when they did, they should expect to pay the state accordingly in taxes."

I suspect the Herald won't be publishing data that shows the top 5% of income earners pay over half the federal income taxes collected in the US, because that might take some of the sting out of their broadside. So yes, the wealthy are paying accordingly in taxes (in a progressive tax structure), and receiving the benefits of living in this country, just as much as are the people who pay little to no taxes. Yet the Herald thinks the shortcomings in the lower income-earners are somehow the fault of evil high-wage earners, or the wealthy.

Here's something that's not reported by the Herald: The percentage of federal income tax filers who pay no taxes. (Hint: It's around 30%). So when will the Herald write an article condemning these free riders? Where's the outrage? The Herald should be careful in cherry-picking its quotes.