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Home Publications Blogs Beat the Press Robert Samuelson Says We Should Seize Bill Gates' Software Copyrights

Robert Samuelson Says We Should Seize Bill Gates' Software Copyrights

Monday, 09 December 2013 05:38

In his column today he noted the need to seize Bill Gates property, telling readers:

"Copyrights were once thought to be legally and politically impregnable."

Okay, we know Robert Samuelson would never advocate policies that hurt the rich. He actually said "pension benefits were once thought to be legally and politically impregnable," as he celebrated pension cuts in Rhode Island and Illinois, along with the prospect of further cuts in Detroit and Chicago.

There is no doubt what is going on here, Samuelson tells us in his sentence:

"We are locked in a generational war, which will get worse before it gets better."

Samuelson is saying this in the context of a country that has seen the most massive upward redistribution of income in the history of the world over the last three decades, with the richest one percent of the population getting close to half of the income gains over this period. But Samuelson doesn't want people to pay attention to all the money going upwards, he wants them to focus on the money going to seniors, even when it means seizing their property.

The pensions, whose cuts Samuelson celebrates, are part of workers' pay. They already put in the time expecting that the government would follow through on its part of the deal. From a legal or ethical standpoint it is difficult to see a better argument for taking away workers' pensions than taking away Microsoft's claim to a copyright on Windows. Hey, it would be unfortunate, but if we're really broke, maybe the money going to Microsoft in licensing fees should be going instead to the government. After all, much of the system was developed with public funding anyhow.

The crassness of Samuelson's effort to pit young against old, while concealing the role of the rich, should be apparent to all readers. He gives us the usual story:

"The elderly’s interests are running roughshod over other national concerns. Social Security, Medicare and Medicaid — programs heavily for the retired — dominate the budget, accounting for about 44 percent of spending, and have been largely excluded from deficit-reduction measures."

Of course people paid for their Social Security and Medicare benefits. Social Security is a pension and insurance system run through the government. The elderly are entitled to these benefits in the same way that rich bondholders are entitled to millions of dollars of interest payments on their bonds. They paid for them. 

The cost of Medicare does somewhat exceed the taxes that people pay into the program, but that is because we pay more than twice as much per person for our health care as people in other wealthy countries. This isn't due to better care. This is due to the fact that we pay twice as much for our doctors, drugs, and medical equipment as people in other wealthy countries. This is another case where the story should be class war, but Samuelson turns reality on its head to make it generational war.

He even gets the story of Obamacare wrong, telling readers that the young may take up the charge in beating up seniors:

"One reason is the Affordable Care Act. Among other things, Obamacare expands the young’s compulsory subsidization of older Americans (in this case, those not yet 65). Under the law, some of the young will pay artificially high insurance premiums to cover the medical expenses of older and sicker Americans."

Actually, the subsidy is running from the healthy to the less healthy. A healthy 55 year-old will pay a far larger amount to subsidize the less healthy than a healthy 25 year-old, since their premium will be on average three times as high. In fact, since a healthy 55 year-old is far less likely to qualify for a subsidy than a healthy 25 year-old, the size of the subsidy will be even larger. 

Of course this pattern of subsidy from the healthy to the less healthy was not created by Obamacare. It already existed in the employer-provided insurance market where the vast majority of the working age population gets its coverage. The cost of health insurance premiums is effectively deducted from workers' wages. Healthy workers face the same deduction from their wages as less healthy workers. Obamacare simply is applying the same system to the much smaller market for individual insurance. It might have been useful to point this out, but that would not advance Samuelson's generational war agenda.

In reality, the wellbeing of the young will depend far more on the extent to which the upward redistribution of income continues in the decades ahead. If workers get their share of the economic growth projected for the next three decades the gains will be an order of magnitude greater than any conceivable tax increases associated with Social Security and Medicare. And if we stop the pilfering by the rich in the health care industry, public sector health care programs will be easily affordable even with the aging of the population.

And the needless losses in potential output we are experiencing now (@ $1 trillion a year, according to the Congressional Budget Office), because deficit hawks like Samuelson insist that we can't use the government to boost demand and create jobs, are disproportionately born by the young. They are seeing the largest hit in the form of reduced employment and lower wages for those who do have jobs. If we had the political will to get the unemployment rate back down to the 4.0 percent rate we had in 2000, the benefits to the young would swamp any potential gains that they could have from stealing their parents' pensions or Social Security. 



The Samuelson piece is somewhat misleading in its use of a study from the Center for Retirement Research at Boston College. It told readers:

"A study of 173 cities by the Center for Retirement Research at Boston College found pension costs averaged 7.9 percent of tax revenues, but those of many cities were much higher: 17 percent in Chicago, 15 percent in Springfield, Mass., and 12.9 percent in New York."

These figures are based on the contributions that would be required to make the funds fully funded, not the contributions currently being made. In a city like Chicago, which has a large shortfall as a result of more than a decade of underfunding, there is a large difference between these two numbers.

Comments (10)Add Comment
written by JDM, December 09, 2013 6:05
Guys like Samuelson are big on the idea of breaking contracts involving other people's pensions. Why do I suspect they would less than sanguine about someone breaking a contracts with them?
written by watermelonpunch, December 09, 2013 6:58

Seems to me they're biting off their noses to spite their faces. Contract breaking of this nature with pensions would seem to be likely to lead eventually to popular support of a more robust expanded Social Security system.

Anyway... yet another case where it is again ignored, the fact that young people eventually get old, and that old people often have family members in the younger generations who will be responsible for them, should civilization let the elders down.

The only people who could be buying into this generational war, for real, are young people whose parents are already dead, and who also plan to die themselves before retirement age.
How big is that demographic?
It's not just Samuelson
written by ifthethunderdontgetya™³²®©, December 09, 2013 7:31
This is the view of our Beltway press as a whole...Fred Hiatt, and most of the rest of them.

They are nothing more than Versailles courtiers serving the nation's plutocracy while masquerading as journalists.
Robert Samuelson Says We Should Seize Bill Gates' Condoms
written by Last Mover, December 09, 2013 8:14

Why not? Bill Gates held a contest for $100k to whomever could develop a condom that doesn't interfere with sexual pleasure, which gives new meaning to:
"Copyrights were once thought to be legally and politically impregnable."

The new condoms will emerge from pure economic monopoly rent provided by Bill Gates, who decided to give it all away after realizing that running a foundation is much more fun than running a company.

Why not take the condoms away in the name of a contrived generational war? If the younger generation learns to have more sex for pleasure and less sex for reproduction, there will be less of them to take on the economic predators of the older generation who are wiping them out.

However, seniors should be required to use the new condoms of course, lest the pregnation of the economic future with contamination be destroyed by sexually active seniors spreading STDs (Sexually Transmitted Debt), wildly oblivious to overspending on pensions, SS, Medicare and Medicaid.
written by skeptonomist, December 09, 2013 9:05
The old and the disabled subsist on the production of the young and able. This is a kind of redistribution, but there is just no way around it, unless people are made to work until the day of death. If there is to be retirement, then young people will have to work for the benefit of the elderly, period. Money does not itself produce or do work, something which Samuelson may not be aware of. There are different ways of arranging the money flow to give purchasing power to the elderly and disabled - different kinds of saving versus direct transfer - and this affects the amount of capital for investment and who has control of it. As Dean says, Samuelson and the WaPo favor arrangements that lead to maximum capital accumulation in the financial industries as well as maximum handling by markets, stockbrokers and financial advisors, as opposed to control of capital and investment by the government. Samuelson and the WaPo continually try to twist this to intergenerational conflict, probably unconsciously since they don't really understand what is going on, but what is really at stake is control of capital and investment.
written by In Hell's Kitchen (NYC), December 09, 2013 9:30
Samuelson is now regularly putting out such screeds...in his 11/4/2013 screed of the, essentially, the same content I left a comment:

"Yeah ! Stop coddling the elderly ! the 1% need to capture more income and wealth than they already do ! Put the elderly on the Comet train and send them through the Winston Tunnel !

There's few "sure things" left for the 99%...one of them is Samuelson grifting for the 1%...YEAH !
Always on Cue
written by Ron Alley, December 09, 2013 12:04
When you look at the Times, you see a piece by Martin Feldman (sometimes characterized a "reasonable conservative") advocating cutting Social Security and Medicare. Why are Republicans so good at getting the same message out at the same time?
Many of the commenters on the Washington Post site take Samuelson to task
written by John Wright, December 09, 2013 10:05
One should give some credit to the Washington Post, they allowed readers comments to this column: here's one.

12/9/2013 7:42 PM PST
What about a conflict of classes, between the very rich, for whom Robert Samuelson advocates, and the rest of us. It is the the 1% who now recieve 25% of national income and the top .01 receiving almost 10% of national income. Most working class young people have parents and grandparents. If one takes away social security and medicare, who will these people look to for support but their children! Columns like this are why no one in their right mind should subscribe to the Washington Post."

Samuelson is aware he is in a dying industry and is probably contemplating retirement. He does not want to work in one of his new boss's Amazon shipping centers to make ends meet, so he will write columns that please his employers.

I suspect he, or other Washington Post employees read "Beat the Press" and actually do understand what Dean Baker writes about the Post.

But their paychecks and livelihood depend on producing a certain product.

Samuelson could advocate for a progressive elderly wealth tax to help the youth. This could be based on net worth, not income, so the wealthy elderly would be less able to hand large inheritances to their families. This way the elderly poor could receive undiminished Social Security and Medicare and the youth would receive a shared inheritance from the well off elderly.

This money could even go into the Social Security trust fund.

The young do have a complaint...
written by delphi_ote, December 10, 2013 8:40
The elderly consistently vote for candidates that support policies that pundits like Samuelson advocate. After robbing the elderly blind, the parasites are looking for fresh victims.
@ John Wright
written by ethan, December 10, 2013 12:00
I have long advocated for a 100% federal estate tax above some amount. 1 million per legatee, 10 million, 100,000. Take your pick. Why should we encourage the young to be idle, knowing they will inherit vast wealth? Let them get off their butts and build their own fortunes.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.