Exposed: The Tragic Plight of the Children of Wealthy People
Earlier this week, Newt Gingrich dropped by my show to promote his new book, Beyond Biden: Rebuilding the America We Love.
We talked about how terrible it is when people get “free money” from the government, how it destroys individual initiative and turns otherwise productive people into lazy whiners.
Thom: “You have, throughout the years that you were in congress, repeatedly pointed out that it’s destructive to people to give them free money, whether it’s free housing or free food or, you know, any kind of welfare payments generally, particularly over a long period of time and particularly enough money that they never have to work again. Please correct me if I’m mischaracterizing your position?”
Newt: “Yeah, it’s actually a paraphrase of Franklin Delano Roosevelt’s 1935 State of the Union speech when Roosevelt says welfare ultimately undermines and debilitates the entire society and that we should be very careful not to create a system of permanent welfare. So in that sense I’m quoting the greatest Democratic president of the 20th century who understood culturally that if you create a dependency class that it is very, very dangerous and it’s very bad for the people who end up on welfare.”
Thom: “Would it be even worse if those people who are now damaged and lazy as a consequence of getting free money had considerable power in society as well? I mean, therefore, shouldn’t we tax inheritances at 100 percent so that we don’t create a whole class of trust fund babies who now not only are damaged and lazy but also have considerable political power because of their wealth?”
Newt: “Well… I mean… I… I find your premise fascinating. Why do you think it’s your right to say to a parent or a grandparent who’s worked their whole lifetime, ‘We’re not going to take care of your family we’re going to take all of your money away for the government?’”
Thom: “Because you just told me that it would be a bad thing to do to our children.”
Newt: “Well, uh, but I also think it’s a very bad thing to have government think that it’s their money that they didn’t earn the money, uh, the government, I mean…”
Thom: “So you’re saying that government money makes people lazy but daddy’s money doesn’t?”
Newt: “I think that it depends on how smart daddy is and I know a lot of successful people who put their kids on allowances and make them work for it. I don’t, I don’t, you know, but, but I’m also raising a deeper point which is, why do you think it’s your money? Why do you think it’s your right to say to a parent or a grandparent, ‘I’m taking away your lifetime’s work because I have moral superior judgment to you and I’m going to save your child because I’m going to intervene and rip off all of your money?’”
Thom: “Well it’s simply the same money isn’t it? Is it not the same thing as saying, ‘No I’m not going to help you out with food or housing or other things, or even disaster relief, because it’s going to make you lazy and crazy?”
Newt: “Well, that’s the reason, I mean, you jump wildly…” From there he went into an extended discourse about how fully he supported disaster relief for New Orleans after Hurricane Katrina.
Jumping wildly or not, Republicans have a problem here. For forty years, since Ronald Reagan began attacking the estate tax (which is now so full of loopholes it’s largely meaningless), they’ve argued that giving free, unearned money to wealthy white kids after their parents die is a vital part of The American Way.
Billionaire heirs even reportedly hired Frank Luntz to change the language around the Estate Tax and he recommended that Republicans start calling it the “Death Tax,” although it’s actually a tax on unearned income, not on dead people (who can’t be taxed because they’re dead).
At the same time that they’re pushing this line — that free money is a good thing for the children of wealthy white billionaires — Republicans also argue that giving free money to poor people or minorities is a terrible social ill that damages those young people for life.
Saint Ronnie Reagan used to tell voters in the South about how upsetting it is when standing at the check-out line in a supermarket watching “some strapping young buck ahead of you buy a T-bone steak” presumably with food stamps while “you were waiting in line to buy hamburger.” Reagan loved that line and repeated it as often as he did his story about the Black “Welfare Queen” who no newspaper was ever able to find.
While no reasonable person is suggesting the extreme, confiscatory Estate Tax example I ran by Newt, the truth is almost certainly somewhere in the middle. Giving people the means to be totally indolent for the rest of their lives, whether from inheritance or unlimited government welfare, often turns out badly: just look at all the ne’er-do-wells produced by dynastic families.
On the other hand, giving people enough money or resources to meet their basic needs in life — the bottom two-thirds of the pyramid of Maslow’s hierarchy of human needs — gives them a launching pad from which they can become their very best. Just ask any middle-class parents who paid for their kid’s college or helped them buy their first house.
It’s time for us to put aside rhetorical arguments and get serious about this issue.
The experience of every other advanced democracy in the world demonstrates that society needs a basic foundation that includes free healthcare and college, decent wages, minimum standards of housing and access to food, and assistance with raising children.
In that context, “welfare” programs should be available to people who can’t work or are experiencing a temporary crisis, but much of what we call “welfare” today in America is just the foundational responsibility of government to its citizens.
The Republican failure to understand the difference between “a basic floor for society” and what they call “welfare” is the real problem here.
Instead of constantly reaching down to pull up those among us who have fallen through the cracks, let’s seal up the cracks and provide a solid floor for all Americans.
Similarly, when people receive vast sums of money that they didn’t earn or work for in any way — money that was simply a result of them having been a member of the lucky sperm club — society has every right to tax that money at least as enthusiastically as it taxes money that people earn by the sweat of their brow or through actively making investments.
If we want to avoid the tragic plight of the children of wealthy people, and also produce a society that works as well as those democracies that have a higher quality of life than America, it’s time for an honest discussion about unearned income.