In 1967, Detroit’s riots came to our neighborhood and our dry cleaner was burned to the ground. The National Guard was called in, and peace was quickly restored. Mom found a good job with a trucking company and was able to adequately care for our family on a union wage fought for by the Teamsters in an environment supported by the National Labor Relations Act of 1935.
I went to college with the help of Pell Grants and government loans. Twenty years ago I met Claiborne Pell and was able to thank the former Democratic senator from Rhode Island for introducing the Higher Education Act of 1965, which allowed me to go to college.
My business has been made possible by the Investment Company Act of 1940 and the Investment Advisers Act of 1940. These laws created practices and transparency that enabled a financial services industry to emerge. After the stock market collapse of 1929, the public rightly did not trust Wall Street and needed assurances that the industry would operate within a reliable set of rules.
Nothing in terms of “regulations” or “business uncertainty” has stopped me from investing capital for a return. In fact, the stability that government involvement brought to the capital markets over the past three years, evidenced by a 100 percent increase in the Standard and Poor’s 500-stock index since March 2009, probably enabled my business to survive. The federal government’s back-stopping of money market funds in the fall of 2008 ended, effectively in one day, what was turning into a 1930s-style bank run.
Of course, I worked hard. As a boy I delivered newspapers and cut grass. In high school I was a short-order cook, landscaper and factory worker. I entered the financial services industry in 1986, and in 1992 I struck out on my own with a new baby and little savings. I learned what a panic attack was, for sure.
I did work harder, and perhaps more imaginatively, than many colleagues. But does that mean I built it myself? Does it diminish my success to be grateful for the public investments that so clearly contributed to my success? Every successful person knows, and will admit if he is honest, that luck played a role in his good fortune.
The countries that spend the least on government as a percentage of their economy (gross domestic product) are countries with little business success. Haiti, Bangladesh and Afghanistan spend 16, 13 and 9 percent of their GDP, respectively. Our federal government has spent around 20 percent of GDP since World War II. Europe typically spends slightly over 50 percent, so we’re a long way off even after factoring in an additional 15 percent for state and local government spending.
To be clear, I’m not suggesting that the United States pursue a European economic model. My story, in fact, probably would not have happened in most European countries.
I’m a businessman with little patience for waste, fraud and abuse. On a daily basis I ask, “What’s the return?” No common-sensical person wants capital to be poorly allocated. This country needs long-term entitlement reform, and we have to more evenly match spending to revenue.
Last year I paid 22.6 percent in federal taxes after all the special deductions afforded me. That’s a pretty darn low effective rate by historical standards, and it’s low for all I receive from this country. My business depends on a country that continues to make savvy investments in its infrastructure, in its oversight of industry and in its people. Those public investments are instrumental to private market growth.
I’m proud of my accomplishments and of my grandparents’ decision to immigrate to America. My success, however, is the result of many factors, and remaining conscious of and grateful for those contributions seems the decent thing to do. Also, how can I not support the next generation of working-class kids who dream of moving into America’s middle and upper class?
Let us have a real debate about the costs and benefits of government spending programs. The attitude that smugly denigrates the public sphere while applauding the private one is misguided.