Here's how we end poverty:
Step one, abolish the minimum wage.
Step two, establish a maximum wage.
See, I think we've been trying to climb the wrong end of this rope. The problem is not so much that the poor have less money than they need. The problem is that the rich have more than they can spend. If a guy is worth ten million dollars, he's already got more than he can spend. If he makes two million more, then he takes that money out of the economy and locks it up in an account somewhere so it earns interest which he also can't spend.
If you took that same two million and gave a hundred bucks to twenty thousand minimum wage workers that two million would be fueling the economy by nine p.m. Friday evening.
Trouble is the rich are not going to hand out that kind of cash in that kind of way. They got rich by holding on to their money, by spending the least to retain their workers, not by outspending their competitors for labor.
So my proposal is that we establish a maximum wage of a quarter million a year. In 2002 there were about a million Americans making more than that, so I think we can vote the measure past them.
I do not propose that the government take all their compensation over and above the quarter mil. I do suggest that this is the maximum they can accumulate. So it will be legal for your company to pay you a million a year, but the law would require you to spend three quarters of it by December 31. Now we're talking some serious trickling down.
The trouble with money is that it doesn't rot.
If you have a garden, at harvest time you can eat until you're fat, and the rest you have to sell or give away or trade. The point of the comparison is that you either make some use of your harvest or its potential vanishes. You might can some, you might freeze some, but hoarding your produce, making it rare, keeping it out of the hands of others, gives you very little advantage. It does not multiply by just sitting there the way money does.
It is the notion of spoilage that drives the trickle-down economy of the summer garden. You might as well unload it because you can't eat it all before it spoils. The result is that you get all you get fed, your family gets fed, your neighbors get fed and so on, depending on how talented and ambitious a gardener you are.
Working against us is the human desire to accumulate. People, especially rich people, want an open ended scoring system. Fine. I think this will work for those folks. For the purposes of Forbes magazine, the CEO of Wal-Mart can still rack up sixty million bucks and play golf in a foursome of similarly compensated genius businessmen. Come December there's just the matter of $59,750,000. The government doesn't confiscate it, but he has to convert it to something non-liquid.
Suppose its Christmas time and poor old Bill Gates is still twenty million over the line. Everybody he knows has already maxed their income, spent lavishly for Christmas, dropped piles of cash on charities both worthy and unworthy, and tipped like a drunken shriner all year.
In desperation, Bill gives a milliion dollar Christmas bonus to each of his twenty groundskeepers. All of a sudden those groundskeepers have a problem they've never had before. They've each got a week to spend or give away $750,000 dollars. Now that's trickling down like you mean it.
There is something in our capitalist prerogative that recoils at the notion of the central government lopping off our salary at a designated level and dragging the head back to the treasury in Washington. It would seem like a disincentive, a cap not so much on our salaries as on our aspirations. So we don't do that. If you can't find a home for your money, the government does not confiscate it. The overage simply disappears like Cinderella's ball gown or spoils like the extra tomatoes of the most talented gardener in town.
I know what you're thinking. How do you keep people from cheating? Rich Guy pays Pool Boy a hundred thousand on December 31 on the condition that he kick back ninety thousand on January 1, giving Rich Guy an extra year to control that money. On the one hand, schemes like this would be really easy to trace and prosecute. On the other hand, even this represents considerable trickleage.
I want to emphasize this is not a cap on personal wealth. There are a lot of ways to measure wealth. This is a cap on the rate at which a citizen is allowed to accumulate liquid assets. It would be the role of the government to define what assets are liquid. Stocks, bonds and cash would definitely be liquid. Debt would have to be liquid, otherwise people would borrow money in December and pay it off in January, ducking under the deadline. Some kinds of real estate might be liquid and some might not. Raw land might be considered liquid whereas improved land or agricultural land might not. What about commodities? Oil, coal, rice, cattle, contracts for the above? What about precious metals? What about works of art, coin collections, beanie babies?
Therein lies the fatal flaw in this plan. Something will be found that can be designated as a nonliquid asset which Rich Guy will buy on New Years' Eve and sell on New Years' Day. I just don't see any way around this one.
For a while there I thought we could have turned every Christmas into a giant Kwakiutl Potlatch. Oh, well. It was a nice little fantasy while it lasted.