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A Conversation With David Cay Johnston (Part 1 of 4 part series) By: Jonathan Bille  |
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 I recently had the pleasure of speaking with David Cay Johnston, author of “Free Lunch, How The Wealthiest Americans Enrich Themselves At Government Expense (And Stick You with the Bill). On the day that I spoke with Mr. Johnston he was in a mood that I would best describe as, on fire. In order to share that conversation, I am presenting it here, unedited so that the reader can benefit from it as I have.
Why did you write “Free Lunch?”
DCJ: “Yeah, okay. It’s one thing to give money to people who are poor, elderly or in someway unable to sustain themselves. Where is the moral argument to enrich Donald Trump or Warren Buffet with your tax dollars?
It is one thing to take from those who are better off to give to those with less – Since we live in a country where politicians proclaim their religiosity whether they are Christians, Jews, or Muslims – All the way through religious text the idea of taking from those with less and giving to those with more is denounced as evil, and yet these people are enacting laws that do this!
In the early 1980s when I was at the LA Times, I started writing about very wealthy people playing games with the States. The Keck Telescope brothers, the Hiltons and others – this led to an interest in income taxes.
When I came to the NY Times in 1995 the editor who brought me in wanted to do a running investigation on how the tax system actually operated as opposed to what the politicians say. I had no idea what we would find – but what I showed in my previous book, “Perfectly Legal” is that we put a whole bunch of changes in the tax law since 1983 that cause people who are middle and upper middle class to subsidize the super rich.
There were over 100 published reviews of that book, many of them by eminent experts on tax law, accounting and government finance and economics. Nobody disputed what I reported. The worst review I got of the book was by a law school professor who said, ‘We already know this already.’ Well Yeah, if you’re a law professor you know this but the public didn’t know it, and I assure you that many people find it jarring and find it very hard to believe, but the evidence is in the Government data.
As I went around the country lecturing and doing speaking engagements about that book, as I did for four years, people kept saying to me, ‘Well you turn on the TV and the nightly news tells you that the economy is doing so well, and the President is saying that the economy is doing so well, and the newspapers say the economy is doing so well, so what’s wrong with me? How come I’m not doing so well? What’s going on here?’
And I thought – that’s a really good question – and so I started to look at – where did all the money go?
If we’re more than twice as wealthy as we were in 1980 in real terms, and the economy is putting out two thirds more per person in real terms than it did in 1980, shouldn’t we all be just flush? And what the heck happened? Where did all the money go?
What the data – the Government data showed – and the industry data showed is that it’s all going right to the top, and the bottom ninety percent have been treading water since 1980 – (we had a brief period in the late 90s up to 2000 when incomes rose, but now their back down) and the growth is going on at the very top.
Those numbers in the very late chapters of “Free Lunch” – I do a ratio of, for every dollar of additional income going to the bottom ninety percent, here’s how much went to the top – and I think I do one percent and one hundredth of one percent – and one of the ratios goes something like $36.00: $400.00, I don’t remember the exact number, you can look it up in the back of the book under, “Not Since Hoover” – but you just look at the changes in these time periods of, I think it was 1955 – 1975 – but this last time period you look at those numbers and go ‘My God’ this is so far off the chart, and at the same time, we have under the guise of deregulation, separated risk from responsibility.
And so John Snow can run a railroad where he is told again and again and again, ‘This is a dangerous Railroad, people are being hurt, people are dying, and people will.” And he says, ‘Keep cutting spending.” So finally we get this one lone woman, who destroys her life for ten years to make this happen. Think about the awful pain her and her children went through to pursue the truth about this matter. And we get the story about CSX – and we get judges saying this is borderline criminal behavior, and it turns out that you and I as taxpayers pay the bill – this is outrageous!
And listen, a very important point, I have no aversions to wealth. The various people who take a knee jerk reaction to this book say, ‘Well this guy hates rich people.’ I don’t hate rich people – listen – when I started out; my Dad was one hundred percent disabled veteran. When I started out I wasn’t desperately poor, not getting enough food to eat poor, but pretty close. We certainly started out in the lower rungs. And since I have had years where I have been in the top one percent of income. Not many, but a couple – and I have no aversion to wealth, -- but you know what, make your own money! Do not get the Government to pass a law that reaches into my pocket and takes money out of it to maker you rich – that is thievery!
And our Government officials do not know what they have done! When I interview Senators and Congressmen and I bring up some of these questions, they are like, ‘What are you talking about?’ They don’t know what they have done! Now I don’t expect every member of Congress to be a scholar or a PHD economist, but they are all operating from these talking points, and who ultimately are the producers of the talking points? They are the rich people who are benefiting form this system.
(Part 2 Continued Next Week)
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