Story originally printed in the Tomah Journal or online at www.tomahjournal.com
Published - Sunday, July 27, 2008
Column: Nation of whiners? Phil Gramm more right than he knows
Is America a nation of whiners?
Phil Gramm said so, and it ended his status as an “official” economic advisor to John McCain’s presidential campaign. But is he right? Absolutely -- even more than Gramm himself would dare admit.
Gramm, in the most politically incorrect manner, challenged the notion that Americans are economically deprived. While America does have pockets of genuine economic deprivation, by most objective standards, Gramm has a legitimate point. Take, for example, me. Thirty-five years ago, I lived in a five-person household with 1,300 square feet of living space. The house had one bathroom. It had no air conditioning. The family owned one car and one black-and-white television set that received four channels on a clear day. The family didn’t own a dishwasher or clothes dryer, and nobody in the family owned a cell phone.
Today, I live in a two-person household with 1,800 square feet of living space. The house has two bathrooms. It has air conditioning. The family owns two automobiles and a color television set hooked up to a subscription cable service that delivers 70 channels. The household has a dishwasher and a clothes dryer. Both family members carry cell phones. We also own a computer that delivers something called the Internet.
Census data show that my situation isn’t unique. The percentage of people who own automobiles (or multiple automobiles), homes, television sets, etc., are at all-time highs. Most people of my generation have more stuff and enjoy a higher standard of living than they did 25, 30 or 35 years ago. The standard may vary from year to year -- a family can buy a lot more stuff when gas is $1.50 per gallon than when it’s $4, but consumers are still tossing around lots of discretionary income. If you don’t believe it, check how many people pay $40 to enter Camp Randall for the next University of Wisconsin football game.
But whining extends to another issue: taxation. If liberals claim that free trade, skyrocketing health care costs, excessive CEO pay and concentration of private power compromises our ability to consume, conservatives blame it on taxes. A typical expression of this idea is found on a website called “Homeland Stupidity” with a column titled “Why you’re always broke: 40% of your money goes to taxes.”
The headline is misleading in three respects. First, the total federal, state and local tax burden is actually 37.6 percent. Second, not everybody pays 37.6 percent; the effectively progressive nature of the federal income tax ensures affluent people pay a higher percentage while poor people pay considerably less. Third, a significant chunk of taxation pays for services we would need to purchase privately. Roads, sewers, trash collection, security (including national defense and homeland security), etc. are things we’ll all pay for one way or another. It’s not even clear whether the private sector can do these things any cheaper. The privatization of Medicare, student loans and the military have been expensive boondoggles.
Regardless of how one views the nation’s tax burden, it still hasn’t prevented consumers from supersizing their houses, supersizing their automobiles, supersizing their entertainment choices and, of course, supersizing their meals. America’s tax policy may have many consequences, but blunting our ability to consume hasn’t been one of them.
Do Americans have some reasons to complain? Of course. We have reason to complain when an arrogant and incompetent President squanders $10 billion a week on a pre-emptive war that was waged under false pretenses. We have reason to complain when CEOs grab 8- and 9-figure salaries that represent less the value they add to their companies than their unfettered access to the corporate cookie jar. We have reason to complain about a private-sector health care bureaucracy that gobbles up 31 cents of every health care dollar. We have reason to complain about “free” trade agreements that are actually thick volumes describing things that nations are prohibited from doing, such as protecting labor rights and the environment.
But despite everything described above, most Americans (myself included) still live some of the most opulent lifestyles the world has ever known. If you’re reading this article, you’re likely among the world’s elite when it comes to consuming natural resources for your comfort, convenience and entertainment. Neither the free market nor the tax man is pushing the vast majority of Americans anywhere near destitution.
Buck up, Phil Gramm. You’re more right than you even know.
Steve Rundio is the Perspective Page Editor of Tomah Newspapers.
All stories copyright 2006 Tomah Journal and other attributed sources.