In an August op-ed entitled “What is the stock market telling us?” in the Washington Post, Liaquat Ahamed writes:
When the stock market zigs and zags its way to a 12 percent loss in three weeks, wiping out $2.5 trillion in wealth, it is clearly sending a message. But what, exactly, is the market telling us? The most obvious answer is that it is simply agreeing with Standard & Poor’s, which in its Aug. 5 decision to downgrade U.S. government debt from a AAA rating to AA+ decried Washington’s “political brinksmanship” and said that the recent debt deal “falls short” of what is needed to bring U.S. finances under control. The implication of such an answer is clear: To turn things around, the administration and Congress will have to act more vigorously on the deficit, either by raising taxes or cutting spending.
Ahamed, who was awarded the 2010 Pulitzer Prize for History for his book Lords of Finance: The Bankers Who Broke the World, then goes on to provide an articulate and, I believe, thoughtful analysis of why he thinks austere spending cuts, given the precarious state of the moribund economic recovery, is not only inadvisable but could potentially push us back into the throes of another recession.
What Ahamed conspicuously fails to do, however, is discuss the former of the two options he claims government must earnestly consider if it’s to help the stock market—and, more important, ordinary Americans—regain their faith is the financial system: tax hikes.
Taxes, it seems, have become a topic about which the vast majority of Americans—in red states and blue states alike—refuse to speak of, the very thought of a shortfall in businesses’ bottom lines or workers’ bi-weekly paychecks arousing in them an incomparable sense of dread on the one hand and antipathy on the other.
Indeed, it appears the very suggestion of shared sacrifice, though undoubtedly a founding principle upon which our nation was based—as evidenced by the many ordinary and extraordinary Americans who stood together, fought together and ultimately died together on battlegrounds too numerous to mention in order to secure our nation’s freedom from British rule—has become antiquated.
That’s why I was heartened to learn that in Florida last month, an informal South Florida Sun-Sentinel poll asking the question “Would you take a pay cut to save co-workers’ jobs?” found that, of 1,373 total respondents, almost half (46%) said, “Yes. It’s the right thing to do.” Surprisingly, only 13% of respondents said, “No. People need to stand on their own merit.”
Courtesy of Sun-Sentinel
At a time when seemingly everyone appears to accept at face value the Darwinian rugged individualism of an undoubtedly mythic Wild, Wild West that posits that those who can’t survive by their own devices alone must somehow be deserving of the misfortunes that befall them, I was taken aback by the striking sense of oneness exhibited by those who responded to the poll.
Despite the fact that the article, by Sun-Sentinel reporter Marcia Pounds, goes on to detail the unenviable tribulations of municipal workers forced to take a pay cut—”For me, it’s going to be devastating,” one gentleman comments—respondents still overwhelmingly chose to put the well-being of their co-workers above their own self-interests.
While gratifying, however, the article and poll left me with a gnawing question: What’s stopping the American people by and large from making the same sacrifice?
While the present debate facing our nation seems to consist of an increasingly vitriolic back and forth surrounding who should have their taxes raised—Should it be the well-to-do? Should it be the middle-class?—I’d like to suggest for a moment that we consider the one option that has been sorely missing from the debate, the same option missing from Ahamed’s op-ed in the Post.
We should raise taxes on everyone.
Why? Perhaps we should ask the 46% of respondents who took the Sun-Sentinel poll and declared, in no uncertain terms, that shared sacrifice was, quite simply, “the right thing to do.”
“There is no overnight solution,” New York City Mayor Michael Bloomberg said in his weekly radio address on Friday, referring to the present state of the economy. “The only way you solve this problem is that everybody pays a little more and everybody gets a little less.”
I agree. And I think the founding fathers would as well.