More on "The Big Lie"

A Facebook "Friend" of mine recently received a comment from a "Friend" of hers to the effect that "Government does not create wealth." This fellow is either naive or cynical. To wit:

1. In the 19th century, when private capital was insufficient on its own to build the American railroad system, Congress voted to give vast tracks of federal lands to the railroad companies to facilitate their enterprises. Did Uncle Sam not create wealth when it did that? (Indeed, until very recently the Reading COmpany, successor to the Reading Railroad of Monopoly fame, survived as a real estate firm, still profiting from the land grants it got more than a century ago from the federal government.)

2. When the private sector was unable to climb out of the Great Depression, it was Uncle Sam once again, using the device of deficit spending, who put people back to work. In the process many lasting public works were created across the continent. Workers got money to spend, getting private industry and commerce moving again. Didn't government create wealth where there was only poverty?

3. And what of defense spending? Rocketry, atomic energy, the Internet, satellites, etc., etc. --- numerous technological advances the R&D for which was funded by the federal government, then made available to the private sector. Was this not wealth creation?

4. When the NIH or NSF gives a grant to scientists at a university, and these scientists invent and patent something, which then is licensed to a start-up company in the private sector, is this not wealth creation by the government?

The other half of the Big Lie is that private capital is helping the average American. Private capital, in addition to avoiding taxes so far as possible, has been sending American jobs offshore since the Sixties. My eyes were opened at a black tie dinner at the Franklin Institute sometime in the 1980s. The dinner was to honor the Tuttlemans, who had donated the money for the Tuttleman Theatre at the Institute. One dignitary present saluted the Tuttlemans, noting their "wisdom" in moving their clothing factories to Asia, thus preserving and enhancing their personal fortune, thereby enabling the donation.

I was reminded of this speech this morning, as I listened to NPR on the radio. I learned that the pending budget deal in Washington will include no new taxes... the GOP and its powerbase win again. I also caught an item about the Carnegie Foundation celebrating it's 100th anniversary. The plug quoted a platitude from Andrew Carnegie... something about doing good for mankind. And I am amazed that, like the Tuttlemans, Andrew Carnegie left a fortune to hep mankind in general, while as a businessman it never seemed to occur to him to do anything decent for his own workers.

My reference is in particular to the Homestead Strike, when Frick, his generalisimo, imported scab labor and Pinkerton thugs to battle the striking union workers. Dozens died and hundreds were injured in the ensuing pitched battle between strikers and strike breakers. Meanwhile, according to Historian Barbara Tuchman, Mr. Carnegie was fishing for salmon at his private castle in Scotland.

The recent Great Recession was in no small measure the result of phony wealth being fabricated by the hustlers on Wall Street, who did indeed take home real wealth of their own in the form of unearned bonuses, that continue down to the present day. It took the government to bail them out, and still they gorge themselves at the trough. Is this wealth creation? Many a jobless American must be wondering where her/his share is.

So, if I am right about The Big Lie --- and I think I am --- why do so many Americans believe it? One reason is what Marshall McLuhan observed some 40 years ago: we Americans see life through a rear view mirror. McLuhan claimed in the sixties that we were living in Bonanzaland. I don't think much has changed in 4 decades. We see ourselves as rugged individuals. A survey of the younger generation across nearly 20 developed countries, conducted by an international organization last year found that the one attribute in which American kids lead the world is "self esteem." I'm sure Andrew Carnegie and the Tuttlemans believed they earned and deserved every dime they acquired. Luck, of course, had nothing to do with it. Nor did the work of their minions... these folks were the beneficiaries of the entrepreneurs' genius and largesse. And each of us has the same chance to achieve similar rewards for our efforts. And if we do, then the government has no right to a penny of our wealth... even if our education was funded by federal grants and loans; even if our company was started on the basis of a patent resulting from government-funded research; even if our company's cars and trucks travel on government funded highways and streets; even if our marketing plan relies on the internet and satellite communications initially developed by the government; even if our bottom line is helped because our employees get Obamacare. No, it's all about us... our rugged individualism.

And that the Biggest Lie of them all.