Some Entitlements in Need of Reform
Wednesday, January 30th, 2013By Michael Kaufman
I am always amazed when I hear some millionaire or billionaire (or their spokespeople in Congress or Fox News or talk radio) proclaim, “We’re broke!” According to them, our government no longer has the means to continue safety net programs such as Social Security, Medicare and Medicaid.
They themselves are not broke, of course. They’re doing just fine. And if you ask them, everyone in this country is pretty well off too, so we don’t really need the safety net anymore. They’re just symptoms of the “nanny state” anyway and that’s what’s wrong with this country by golly: all those people looking for handouts (you know, like retirees, veterans and disabled folks). You’ve probably heard statements of this sort (either on Fox News or on The Daily Show when Jon Stewart shows clips of the dumb things they say on Fox News): “Poor people never had it so good as they have it now in the U.S. They have refrigerators, air conditioners and television sets. How bad off can they be?”
The Wall Street Journal published an article recently that even tried to make the case that the “middle class” in this country has not been harmed by the fact that real wages (adjusted for cost of living changes) have not gone up in decades as wealth has ballooned for a small percentage of people at the top of the economic ladder. According to the writer, wages aren’t a good measure anymore because of all the advances that have taken place that make life better for us all, as in healthcare, for example. (I’m not making this up.)
Another article in the WSJ a while back suggested that income disparity is good for everybody. The writer used Michael Jordan as an example. See, when Jordan was leading the Chicago Bulls to championships, his mediocre teammates got paid better, the arena was packed, which meant more people were hired to prepare and serve food and show people to their seats. Talk about a win-win. But a two-hour drive from Chicago would have taken the author to Freeport, Ill., and the shut down Sensata plant. Sensata, which manufactures sensor parts for the auto industry, is owned by Bain Capital, the private equity company founded by Mitt Romney. Despite a profitable 2011 Sensata laid off all the workers in Freeport last year and moved manufacturing to China—but not before forcing the American workers to train their replacements. Ironically, the plant was shut down the day before Election Day.
As described by Dave Johnson of the Campaign for America’s Future, “Bain’s business model is to purchase companies using ‘leveraged buyouts’ that borrow huge sums using the purchased company’s own assets as collateral, uses the borrowed money to immediately pay itself, then cuts costs by doing things like sending jobs to China, cutting wages and manipulating tax rules to cut taxes owed, along with standard big-business practices like consolidating business units, taking advantage of economies of scale not available to smaller competitors, squeezing distribution channels for price cuts, and other practices that bring competitive advantages.”
Bain is “entitled” to do this under the current laws of the United State of America. I think it’s about time we had some entitlement reform to stop this kind of thing from happening. If a U.S.-based company making good profits in this country wants to move to China, it should be allowed to do so only after providing extended health benefits and severance packages to each and every person who will lose a job as a reult of the move–or not be permitted to move at all.
Another entitlement in need of reform is the one that permits the underachieving or none-too-bright sons and daughters of wealthy people to attend great colleges and universities simply because a relative went there before. These “legacy students” are taking up space that might otherwise be given to hard-working students who have earned admission but whose families cannot afford the steep cost of sending them to a place like Yale or Harvard, for example. A worthy reform might be to require those who can readily afford it to pay for the education of one of those deserving people in addition to that of their own family member. The deserving individual would be selected at random from a pool of worthy candidates regardless of their race, creed or color. All they would have in common is that their families can’t afford to send them to the school. This would avoid the usual complaints about “reverse discrimination” that accompany affirmative action measures, while still advancing the goals because a disproportionate percentage of minority community members will be represented.
Why is someone who inherits a large piece of land “entitled” to sell it to developers for commercial use? Why is the concept of “private property” more important than preservation of the earth and the health of its inhabitants? Now there is some fertile ground for entitlement reform. Feel free to add your own. And for goodness sakes, let’s not allow them to take away the safety net: Hands off Social Security, Medicare and Medicaid!
Michael can be reached at michael@zestoforange.com.