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How the rich got away with it

According to British psychologist and author Adam Phillips, “getting away with it” was first used by Aldous Huxley in his 1923 novel Antic Hay. In Huxley’s postwar ethos, getting away with it is what smart, literary-educated people do to make a living, for example, in modern advertising and propaganda. The novel’s main character is “open and honest in the service of duplicity; he uses science to persuade and mislead”.

In the past three decades, the 1% top earners in the US achieved a remarkable success in getting away with several things, including paying lower taxes than they should. Donald Trump’s tax reform is only the last example of that successful discourse by the ultra-rich and their poorer, but still very affluent fellow travelers.

Sure enough, cocktails, lobbying and campaign finance are core-tasks in the getting-away-with-it-while-rich agenda. But let’s think about the agenda’s discourse and its building-blocks.

Histories of Low Taxes and its Discourse

Let’s take Jesus’ famous remark about taxes: “Render unto Caesar the things that are Caesar’s, and unto God the things that are God’s” (Mathew 22:15-22; Mark 12:13-17; Luke 20:20-26). It has been read as an unambiguous command for Christians to obey secular authorities and pay their taxes, but also, according to Mennonite and American Quakers, as a parable encouraging tax resistance.

Tax-resistance “littérateurs” include Henry David Thoreau and Leo Tolstoy, who didn’t object to all taxes but specifically to those aimed to fund wars and military spending.

Scientific getting-away-with-it-while-rich discourses are associated with neoclassical economics, and this is the part where the so-called Laffer curve appears in the film

According to legend, the Laffer curve was first drawn over a napkin, in a restaurant in Washington DC, circa 1974. At one end of the table was obscure professor Arthur Laffer; in the other, let’s call them Dick and Donald, two young Republicans with White House clearance.

Professor Laffer draw his curve to illustrate the trade-off between taxation, government revenue, and economic growth. Too much taxation increases government revenue but alienates the rich.  They end up moving their assets to other, rich-friendly countries. Private investment falls, as well as job creation, spending and growth.

On the contrary, if government lowers taxes, there will be a short-term increase in fiscal deficit. But hey, here comes the offset. The rich will bring their money back, invest more in local, job-creating ventures and business. Growth will pick up and, bingo, fiscal revenue will actually increase.

Dick and Donald were more than pleased, to the point of becoming the first evangelists of the Laffer-curve credo. They were invited to leave the White House in 1976 by Jimmy Carter only to come back with Ronald Reagan in 1980. And they bought Professor Laffer from Pepperdine University, a Christian Malibu-based research institution, as a member of the President’s economic advisory team. The Laffer curve was in full-swing as official US fiscal policy.

Dick and Donald left for the private sector during the Clinton years, but came back again in 2001, this time with a vengeance, with a larger Laffer-curve to swallow the fiscal surplus and transform it into a gargantuan fiscal deficit.

The US deficit is another “getting-away-with-it” boon, especially for the financial sector, because it nurtures an ever-growing supply of US debt. Treasury bond bonanzas fuel the demand for US dollars by foreign institutional investors. Which in turn allows the US citizens to travel and to buy foreign stuff (for further information see the US Debt clock)

The Code-words of Getting-Away-With-It

So, this is how supply-side economics and tax-reform became code-words to conceal the getting-away-with-it discourse by which the rich got richer. It has worked for them, because lower taxes meant less government spending in anything but weapons (another get-away-with it boondoggle to transfer government funds to U.S. manufacturers), which therefore translated into more inequality.

Each successive economic downturn has had dire consequences for those not included in the “getting-away-with-it” political alliance. Recessions are not to be confronted now with fiscal policy, but with monetary policy, which further helps the rich in their successful getting-away-with-it strategy.

One may ask why progressive politics never translated into a progressive taxation discourse, but that is another story.


1 thought on “How the rich got away with it”

  1. Thank you for this insightful piece! I look forward to a sequel on why progressive politics never translated into a progressive taxation discourse—And how it MUST if we are ever to stop the gap between rich and poor from growing. It’s not that hard to imagine—- We all invest in the public good, and we all benefit.

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