Washington Post's Ahrens Worries About 'Super-Rich' Success
The rich are getting so rich, theyâ€™re â€śsuper-richâ€ť and tax hikes are just the kryptonite government needs to bring them down to Earth. At least thatâ€™s the viewpoint of two liberal policy advocates The Washington Postâ€™s Frank Ahrens highlighted in a September 22 story on the Forbes 400.
â€śFor the first time, all 400 Gotbucks on the Forbes tally are billionaires, from Gates (worth $53 billion) down to the bottom, Los Angeles semiconductor magnate Sehat Sutardja ($1 billion),â€ť Ahrens observed, later calling them â€śeye-popping numbers that show the speed with which wealth is gained.â€ť
Such â€śeye-poppingâ€ť wealth is a good thing, a Forbes magazine editor told Ahrens, because it indicates economic growth and progress. But thatâ€™s not what Ahrens was driving at with his story â€śThe Super-Rich Get Richer: Forbes 400 Are all Billionaires.â€ť
No, Ahrens found the increase â€“ from 13 billionaires among the nationâ€™s 400 richest Americans to all 400 in only 24 yearsâ€™ time â€“ to be cause for concern.
â€śThe enormous sums spur the natural question,â€ť he insisted, though not explaining why one should naturally be concerned with wealthy people becoming wealthier. â€śIs it good, bad or neither that wealth is accumulating so fast that numbers begin to lose their meaning?â€ť he pondered.
For answers, he turned to, among others, â€śDean Baker, a macroeconomist at the Center for Economic and Policy Research in Washingtonâ€ť and former Clinton administration economist Lawrence Katz.
Ahrens left out CEPRâ€™s liberal leanings, including its support of a â€świndfall profitâ€ť tax on oil as well as Katzâ€™s ties to the liberal administration.
â€śI think itâ€™s very bad,â€ť Baker insisted. â€śIf these people pull away so much wealth,â€ť he asserted, â€śthat means everyone else has less.â€ť Of course, plenty of economists could have told Ahrens that his zero-sum logic is faulty. Just because one person gains doesnâ€™t mean another somewhere loses.
By â€śeveryone,â€ť Baker could mean the federal government, Ahrens suggested, arguing that the Forbes 400 benefit from tax cuts at the expense of the government. â€śTodayâ€™s marginal tax rate for the richest Americans is 35 percent, down from more than 60 percent 25 years ago,â€ť the Post reporter noted.
â€śWe could do a lot more with the tax system,â€ť Harvard economist and former Clinton Labor Department official Katz told Ahrens, â€śto help out those who are less fortunate.â€ť
While Ahrens did add that Katz â€śis of mixed mindâ€ť about growing wealth, pointing to â€śthe possibility of great philanthropy,â€ť the Post reporter left out any rebuttal from economists who would vehemently disagree with Baker and Katz, such as Russell Roberts, an economist at George Mason University.
In a September 22 blog posting at cafehayek.com, Roberts lambasted Baker for â€śan impressive cheap trickâ€ť of â€śignoring the role of inflation in artificially creating billionaires.â€ť Whatâ€™s more, Roberts added, the co-founders of Google, both of whom are in the Forbes 400, â€ścreated wealth, they didnâ€™t take it from othersâ€ť by â€ścreating something new that people valued.â€ť
â€śWe pay nothing directly for Google and we Google users are better off along with [Google founders] Brin and Page,â€ť Roberts argued, adding that a mere 10 years ago, before the phenomenal success of their startup company, â€śBrin and Page werenâ€™t in the top 1%â€ť of income earners.