Steve Forbes, Idealist

In yesterday's Wall Street Journal, Steve Forbes, editor-in-chief of Forbes Magazine, gave vent to a variety of radical recommendations to Treasury Secretary John Snow, including:

• tossing out the federal tax code, and starting over with a flat tax;
• stop messing with the dollar's value; and,
• borrow vast sums of money, to allow workers to put most of their Social Security payments into private accounts.

Most remarkable was Forbes' statement that:

The dollar's value is, fundamentally, a moral one. When an individual receives a dollar for his labor, what right have politicians, central bankers, or other "we are smarter than the American people" Mandarin types to change the value of what that individual receives for his or her labor?

I love it when the rich elite spout on in faux-demagogic fashion about siding with the common man. The flat tax does not benefit the common man nearly as much as it benefits the rich. Also, capitalism gauges the value of everything by the market, including the value of the dollar: American Mandarins, ordinary Americans, foreign Mandarins, and foreigners, in general, deciding altogether. Markets aren't moral - never have been, never will be. Markets require rules, however, and moral people tend to be better at running markets, because they tend to follow rules. Moral people aren't absolutely required to run markets, though, just people who follow orders. Just ask Saddam Hussein (Oil-for-Food), or Lockheed/Martin (aerospace contracting scandals), or people in the San Fernando Valley porn industry.

Forbes does make some good observations regarding the connection between inflation and the decay of morality:

Criminologists, sociologists and economists still haven't connected the dots - it was no coincidence that the rise of inflation in the 1960s went hand in hand with economic stagnation and saw the rapid rise in social pathologies, including crime.

These professionals may not have connected the dots, but historians like Godfrey Hodgson ("America in Our Time") already have. The pathologies of the 60's didn't happen all at once either - as I recall, in the order: crime first, then inflation, and finally, stagnation. There was cause-and-effect going on that was often difficult to spot.

Also remember that when all this was going on, the Johnson Administration was waging war without raising taxes - guns and butter, the primary source of the inflation of the 60's and 70's, and the most dishonest event of the decade - very much like events of today! There are deep connections between McNamara's Whiz Kids and crime in the street, as there will be between today's Neoconservative ideologues, and the crime wave yet to come. As far as reforming Social Security, it sounds like a big Ponzi scheme to me: borrow money, skip out on the responsibility to the aged, saddle taxpayers with the debt, and keep the cash - another form of intense, ugly dishonesty, that will lead ultimately to the capitalist's bete noire: stagnation.

Republican, heal thyself.