Response to NYT on Taxes and Regulation

I wrote this originally in response to a letter from an NYT reader to their OpEd editorial by Egan on "Party of Yesterday". But NYT came back with an autoreply on their standard conditions for publication - less that 150 words (this was more like 570), and while I made a half-baked effort to edit it it meant cutting out 2/3rd of the meat and potatoes, so I found a next-best home for it as a comment on NYT's economix blog, and which I'm transplanting down here.

One of the Letters to the Editor on Egan’s “Party of yesterday” is typical of Americans attitude towards taxes, as well as regulation and anything government-done.
The writer (Cliff Johns, KY) claims “Demand for our products and services, not government programs, allowed us to create these jobs.”

I have been raised and lived all my adolescent/young adult life in India, during a period where there was a rampant black market i.e. tax-free parallel economy. Paucity of public revenues forced all then existing infrastructure to go to pot, and new ones were built on black-market cement to faulty codes bringing with it post-construction mishaps. Adulteration of everything from foods to cement along the lines of the chinese baby-food scandal, was rampant. Even an honest entrepreneur in the India of those times would have to pay “black-market” protection money to everyone up and down the line that would guarantee his company’s existence, and allow his product, compromised as it might be, to reach the hands of his consumers. Not because Indians lacked the intelligence or creativity or even honesty of Cliff Johns and the like, but because the infrastructure and the environment (labor, electricity, roads, you name it) conspired to weaken their products and their attempt to reach them to the market, and there but for the grace of God goes you Cliff Johns!

On the other hand during my lifetime here in the US I’ve seen upstart companies like Fedex, Microsoft, Walmart, incorporate, set themselves up in business, grow and themselves become the infrastructure upon which newer American ingenuity can foster and become commercially productive. Were it not for roads, rail, electricity, law enforcement, and each one’s personal integrity, this could not be. The UPS that delivers my e-bay purchase within 2 days of the click of the mouse would not reach me were it not for all these invisible layers of infrastructure, laws, regulations, public supervision, that we take for granted.

Americans, the Republicans (really or mostly), take for granted such foundations of a civil society, and at their peril. They falsely and childishly attribute all their (real or stock market) success entirely to their own smarts. We are already seeing the unravelling of civil society in the Wall Street and corporate dishonesty that has produced the bailout crisis. The illness has spread so far so deep. And I am not talking of lack of demand and economic woes, but the inability to differentiate between the private good and the good of those to whom you have a fiduciary duty whether your customer, your shareholder, your employee; I am talking of the inability to differentiate between the private good and the civic good whether it is to contribute your share of the infrastructure, environment, the parks, the very emergency funds from which the bail-outers are so wantonly dipping their hands into. This myopia was so rampant in India, but so rare in the America that I was first privileged to see. The argument that it is the “rich” that are helping create the wealth that is trickling down fails to see that it is the many hands of the middle-class that have helped build and maintain the infrastuctures that the rich have built their empires on.

It is not “giving money away” as Cliff Johns the letter-writer says - it’s just paying the piper, and when you forget to pay the piper don’t be surprised to find the music will stop.