This is exactly what's wrong with our discourse. Farmers have gotten their torches and pitchforks out after reading a misrepresented, snippet on Twitter. When in fact, the answer was actually very enlightening wrt some of Bloomberg's pertinent views.
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Ewen Hollingsworth: Ewen Hollingsworth, doing my MBA here. Mr. Bloomberg, Trump got in on a great sense of inequality, not just in the United States but across the world. There’s been a divide, and there’s an increasing divide, between the haves and the have-nots. What do you think business leaders — what’s their responsibility to addressing that divide and uniting, perhaps, the central America [read: ‘Middle America’] and the coasts?
Mike Bloomberg: Well, number one, I question whether you’re right. We have, in the last four decades, cut poverty in half in the world, if you measure poverty by people who go to bed without a roof over their head, a meal in their stomach and [who] can’t read. So society is making some progress. Life expectancy is going up, we’re [inaudible] cure more diseases, and we’re about to eradicate — thanks to [Bill] Gates and a little bit of money from us — eradicate polio. So we’re doing some things to help.
Number two, the bottom 20% is a lot better off than the bottom 20% in the past. The bottom 20% in America — the bottom 20% in New York City, 80% have cars, 30% have two cars, virtually everybody has a cellphone, they all have 72-inch TV screens and sort of thing. So there is some of this, so you’ve got to be careful in this. And, incidentally, before we address the basic issue, if you measure poverty by the top 1% versus the bottom 20%, you get very different numbers than if you measure it by the two to 20% down from the top here, and the bottom 20%. Because of very low interest rates, you have inflated values of fixed assets, which are almost always owned by the very wealthy, and so, they’ve shot up — maybe it’s the top 5% — but if you adjusted for that, it’s not as disparate as you would think. So that’s what the real world is.
We have a problem of income inequality, nevertheless. I would argue what’s more important is we have educational inequality. There was a story on the front page of the FT [Financial Times] today, I think it was, that said there’s nobody from the poor districts of London that comes to this great school, one of the great universities of the whole world, and zero from poor neighborhoods, at least I assume the statistics are right and they didn’t just cherry-pick one neighborhood. So that is more important than net worth because that says what the future is going to be for the young people.
Having said all of that, you can fix the inequality. You take money from the rich and you give it to the poor. We’ve always done that, we have a tax system, generally, around the world, that is graduated at the top end, progressive tax system, takes more money from the rich per capita and redistributes it. Tuition in a university, in America certainly, is a Robin Hood plan. You want — the kids are always on the wrong side of that, they always want lower tuition, no you don’t, you want to raise tuition in the university, as high as you can, so the wealthy will contribute more money, and then use the extra money to subsidize those kids who have no money. If you reduce the amount of money you take in from the rich, it’s the poor that get hurt, not helped. So some of these things are a little bit counterintuitive. But you take the money from the rich, you give it to the poor, you do it for altruistic reasons, you do it because you don’t want the poor on your doorstep and there are a variety of things.
But I think what you’ve got to understand is the people who are getting the subsidy want the dignity of a job. They want the dignity of being responsible for their family and being able to take care of it. And that’s the conundrum we’re going to have here because technology is reducing the ability to give them the jobs. We just — more and more, if you think about it, the agrarian society lasted 3,000 years, and we could teach processes. I could teach anybody — even people in this room, no offense intended — to be a farmer. It’s a [process]. You dig a hole, you put a seed in, you put dirt on top, add water, up comes the corn. You could learn that. Then you have 300 years of the industrial society. You put the piece of metal on the lathe, you turn the crank in the direction of the arrow and you can have a job. And we created a lot of jobs. [At] one point, 98% of the world worked in agriculture, today it’s 2%, in the United States.
Now comes the information economy. And the information economy is fundamentally different because it’s built around replacing people with technology, and the skill sets that you have to learn are how to think and analyze. And that is a whole degree level different. You have to have a different skill set, you have to have a lot more gray matter. It’s not clear that teachers can teach or the students can learn. So the challenge for society is to find jobs for these people — who we can take care of giving them a roof over their head and a meal in their stomach, and a cellphone and a car and that sort of thing. But the thing that’s the most important, that will stop them from setting up the guillotines some day, is the dignity of a job. And nobody’s yet come up with a simple solution, in this day and age, to how we create jobs, particularly for people already out of school.
I can tell you how to fix the school system so that the kids come out with better skills, more ability to appreciate life and to work collaboratively and collectively and read the instruction manual and follow orders. But it’s very hard to figure out where the jobs they’re going to get will come from, and for those that are already out in the work force, to get them back into the system and teach them new skill sets, is almost impossible. It’s very very hard to do and nobody’s really shown they could it. There’s individual cases where you can retrain them, I don’t want to overstate it. But the coal miner I talked about in West Virginia is not going to move, and his family, out to California where the solar jobs are, and even if he got there he’s not going to get those jobs. Nobody’s going to hire an older person. It’s fascinating to me — older people are always willing to hire younger people; younger people are not willing to hire older people. I think it’s just they’re afraid of older people that may have skill sets they don’t have, and you know, they make fun of them, they say they’re not able to change and think — none of those things are true, there are plenty of older people who are really smart and really can do new things if you gave them the opportunity. But there’s a discrimination from young managers to hire older people. It’s reasonably well documented I think, and certainly observable.
So your basic premise is, it’s not that bad, it’s better than it was before, but it’s a big problem and the problem is not the redistribution of wealth, it is the job where you’re going every day. And you say ‘What’s business’s responsibility?’ It’s not business’s job. Business’s job is to take the investors’ money and to maximize the money by creating products that the public wants and are willing to pay for. And you can’t say to them they should go and create jobs deliberately. You can have a tax policy that encourages that, and that’s one of the things you should do, and then use the collective wisdom of all of the heads of companies, to create small pockets, and it adds up to a lot of jobs.
That’s what I would do right away. Your taxes are lower the more people you hire, and higher the fewer people you hire. And let capitalism work, because government’s not going to be able to solve the problem directly. But short of that, who’s going to create the jobs? Well if it’s not industry, there’s only one group left to do it. And so the next time you want more efficient government, think twice. I’m not so sure you do want more efficient government. Back in the ’30s, we created an inefficient government. We put people to work building infrastructure we needed. They weren’t maybe the — you could have had other people do it more efficiently but we wanted to create jobs and we did, and it took us — World War II was really what took us out of the Depression, but it got us through the Depression. And maybe that is the answer, that we’re going to say ‘government’s got to create no-show jobs,’ or jobs that you have to show but that aren’t needed. We can pass a law that says you’ve got to move all the paper from the left to the right side of the building every day, and back again. Okay. And then the government are going to hire people to do it. But it’s better than people being out on the streets, desperate for a job, not being able to find it, [destabilizing] society.”
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Agree or disagree, the actual transcript is insightful. For example, it seems he's concerned about jobs, and the dignity of jobs, as a means to promote stability and to keep people from "setting up the guillotines some day". That seems like a reoccurring concern in his answer, which is understandable, given his position. But to everyone else, is that the low bar we are setting? Shouldn't /wouldn't a lot of people be happy if they had a construction job building roads and bridges?
Similarly(and we've discussed this before), he mentions infrastructure, as an inefficient jobs program that helped get us out of the Great Depression, then says, "WWII was really what got us out of the Great Depression", but economically speaking, WWII was a huge "inefficient" government jobs program. I don't think he's thought that through.
Earlier, I found myself defending Bernie against intellectually dishonest attacks about socialism. I defended Trump's decision to kill Soleimani, and gave him credit for the way that situation turned out. Now, I'm defending Bloomberg, who is accused of belittling farmers...and I'm a farmer.
I have to admit there is irony in a bunch of ignorant farmers being upset about Bloomberg calling them ignorant, when in fact, he didn't. But I guess I just did.
