Their cover story on Sunday — misleadingly titled, “Are the Rich Worth a Damn?” — reports breathlessly that there is this fellow named Edward Conard who believes in free-market capitalism and is willing to fill a gap in the argument we’ve been having about growing income inequality. Until now there hasn’t been anyone, or at least anyone still alive, willing to say publicly that what the U.S. needs is more inequality, not less. (Conard has even written a book about “Why Everything You’ve Been Told About the Economy Is Wrong.”)

The argument is basically Smith’s, carried to extremes: The invisible hand of free-market capitalism turns individual greed into prosperity for all. But Conard also shares Rand’s special twist of portraying the successful businessman as a hero, the Alpha Male at his finest, and everybody else as mediocre deadbeats and leeches.

He says Warren Buffett should “quit taking a victory lap” for saying that the rich should pay more taxes, because “that money is for the middle class.” Conard means, believe it or not, that the middle class is better off paying more taxes so that people like Buffett can pay less and use their superior drive and brains to finance innovation that makes everybody richer.

Necessary Distinctions

Let’s accept the thesis that people have earned their wealth if their contribution to society outweighs the contribution to their own pocketbook. This still leaves you a long way from Conard’s belief that incomes should be more unequal, not less. There is a necessary distinction between riches gained through truly productive, socially beneficial activity, and riches from activities that just enrich the actor.

The New York Times story, by Adam Davidson, concedes that many large fortunes are nothing more than what economists call “monopoly rents” such as the value of broadcast licenses given away free by the government, or ownership of land (“they’re not making any more of it,” as they say) in places where rising population makes it more valuable.

Conard clearly believes that he is in the Alpha elite that should get more money, not less. He was a partner of Mitt Romney at Bain Capital until he retired a few years ago at age 51. This makes him a counterexample to his own theory. His rapid accumulation of huge wealth (estimated in the story to be “most likely in the hundreds of millions”) did not cause him to buckle down and work even harder. It caused him to retire and follow pursuits more satisfying to him than making more money.

The theory behind free-market capitalism is undeniably true and undeniably powerful in explaining the world around us. But it explains less and less as we move up the income scale. At the tippy-top, among the really rich, it makes no sense at all.

Why do people try to maximize their incomes? The poor person wants more money in order to eat. The middle class person wants a better house or a new washing machine. Even a rich person may want an even better house or a servant to wash the clothes. But what does a really, really rich person — worth, say, “most likely in the hundreds of millions” — want that money can buy? What motivates him or her to get up and go to work every morning?

It’s not hard to come up with a few obvious psychological factors (competition, egocentrism, lack of imagination … ), but the desire for even more money to spend can’t be one of them. The more someone has benefited from free-market economics, the less the theory behind free-market economics explains her actions or justifies his remuneration.

Proper Rewards

By Conard’s reasoning, the proper measure for reward of a billionaire isn’t the value of her contribution to society. It’s how much it would take to induce him — or someone like him — to make that contribution. Facebook’s imminent IPO could leave its founder, Mark Zuckerberg, with a fortune of more than $17 billion.

Let’s accept that the existence of Facebook contributes more than $17 billion to the good of society. (Conard offers Sergei Brin of Google to make this same argument.) It doesn’t follow, as Conard seems to think, that every dollar of Zuckerberg’s $17 billion is a bargain for society, or that we should want Zuckerberg to have more money, not less.

Would Zuckerberg not have created Facebook if he only expected to make, say, $12 billion? If Zuckerberg had never been born, would no one else have come up with the idea of Facebook? Even if someone else’s Facebook would be worth less than $17 billion, it would still be worth more than nothing. And it lowers the amount Zuckerberg needs or deserves, dollar-for- dollar.

There is no evidence that remuneration at the very top of society is calculated to extract the maximum amount of entrepreneurial energy and talent at the minimum price. In fact, quite the reverse: There’s every reason to think we overpay.

Let’s even imagine that all the paper shuffling and exotic transactions that go on in American finance are productive somehow. Does it follow that we need to pay Jamie Dimon, chief executive officer of JPMorgan Chase & Co., $23 million to do whatever it is that he does?

Maybe Dimon is uniquely talented and simply would not do it for less. But maybe he would settle for $10 million if pushed to the wall. Or perhaps someone just as good, or almost as good, would do the job for a lower price? This doesn’t mean that Dimon should be fired and replaced. But it does mean that he doesn’t need to be paid more, or even as much.

Conard’s argument justifying inequality is just a fleshed- out version of his former colleague Mitt Romney’s campaign stump speech about how he can save the country as a businessman. Romney might have preferred not to have his old buddy Conard spelling out the case for income inequality in quite so much brutal detail. I, on the other hand, think that the more of Romney’s friends there are publishing books and appearing in magazine articles trying to make the case for more inequality in the next few months, the better.

In fact, Romney himself should start arguing explicitly for greater inequality. It would be the result of his announced economic policies in any event. But I suppose that’s too much to hope for.

®2012 BLOOMBERG L.P. ALL RIGHTS RESERVED.

Mitt Romney didn’t exactly fire Ric Grenell, who is gay, as his foreign policy spokesman. But when the religious right got wind of Grenell’s hiring, his job started to shrink.

Grenell was told to sit in on conference calls with reporters and not say anything, which is tantamount to firing him. He was told to be silent not merely on gay issues. He was told not to talk about anything, even foreign policy. A spokesman who is not allowed to speak — even internally — doesn’t have much of a job. So Grenell quit, three weeks after he was hired.

For Romney, this is the first big flub of the general election campaign. Until now, his smooth-running machine was one of the more impressive things about his candidacy. It made you think that maybe, as a businessman, he really could bring some efficiency to the White House, if not to the government as a whole.

Besides being offensive, however, this episode is remarkably inept. Grenell apparently was completely open about his sexuality. Why did Romney appoint him in the first place if he was going to hang the guy out to dry as soon as there was any criticism? (And there never was much.) If you’re going to be a bigot, at least be smart about it.

Although, as a weak-kneed liberal, I hate to talk like this, this episode does make you wonder about Romney’s guts. He portrays himself (and probably thinks of himself) as a hard- nosed businessman, ready to make the tough decisions that professional politicians won’t. Romney has even defended his famous flip-flops in these terms. “In the private sector,” he says, “if you don’t change your view when the facts change, well, you’ll get fired for being stubborn and stupid.”

I don’t know about that. You see a lot of stubbornness and stupidity in stories about business, but not so much about business executives getting fired for it.

Romney seems obsessed with firing people. In January, you may recall, he committed a gaffe by saying he enjoyed doing it. He seems to consider it as evidence of a backbone and a tough hide. He also likes to say that if you want this or that undesirable quality in your president, “I’m not your man.” This also is supposed to signal toughness, as well as independence of thought.

Better evidence would have been telling the people who complained about his hiring of a gay man as an adviser where they could put their objections. And has he stopped to ask himself how he will manage to fill a Romney administration if he excludes all gay men (and women?) from the candidate pool?

Romney is right of course that there’s nothing wrong with changing your mind. But you should (a) be prepared to admit it and (b) be prepared to explain it.

In his most famous flip-flop, about health care, Romney has tried, instead, to have it both ways. He has never renounced his Massachusetts health-care plan, with its individual mandate almost identical to the one in President Barack Obama’s. He just says that he will veto Obamacare on Day One of his administration, because the individual mandate is so awful.

Nor has he explained his change of mind on abortion or gay rights, on which he once said he would be a better advocate than Ted Kennedy.

Many moderates and independents may still believe that at heart Romney is a moderate Republican who fortunately has no principles and will say whatever it takes to win. Actually, citizens of all stripes across the country more or less believe that Romney’s been faking who he is, but it’s moderates he must now convince that he’s been lying like mad for the past year.

He’s going to need a few really top-notch spin doctors to perform this operation successfully. Too bad for him that he just drove a good one away.

(Michael Kinsley is a Bloomberg View columnist. The opinions expressed are his own.)

Read more opinion online from Bloomberg View.

®2012 BLOOMBERG L.P. ALL RIGHTS RESERVED.

One is the last gasp of Interstate 90 as it finishes its journey from Boston to the Puget Sound. The other is State Route 520 or “the 520,” as it’s known.

Which bridge to take from where, at what time, using which entrances and exits, has long been a major preoccupation of Seattleites and a frequent icebreaker with strangers. Making the wrong choice can cost you an hour or more sitting in traffic. Everyone has a pet strategy. (“What I like to do is get off at Montlake and then dismantle the car and carry the pieces up to U-Village, where I can reassemble it and proceed up 15th Street. … But you’ve gotta be on the road by 3 a.m. or you’re going to get trapped.”)

All of this changed, though, in December, when the state began collecting tolls on the 520 bridge. It’s not cheap: as much as $5 each way at rush hour. There’s already a price increase in the works for this summer. The I-90 bridge remains free.

Technologically, the system is a marvel. There are no toll booths. Indeed, there is no sign at all that this is a toll road except for actual signs that say so. The toll is collected in myriad ways. You can sign up for an account and get a little coded sticker for your windshield. Or you can wait until they bill you, using your license plate to track you down. Apparently, it works. Unless your commute is between 11 p.m. and 5 a.m., in which case it’s free, you can’t escape.

Except, of course, by taking I-90. That — no surprise — is what has happened. Now the I-90 bridge is more jammed than ever, but if you have $7 to $10 a day to pay for the privilege, you can sail on the 520 at any time.

Economists love this kind of thing. The money raised will be used to rebuild the bridge. Thus this cost will be paid by those who actually use the bridge, in direct proportion to how much they use it, rather than sticking it to the general taxpayer. The market will sort out those who value their time at more than $10 per commute from those who do not and give both drivers what they prefer.

And of course, it’s good for the environment: Some people will reject both the toll and the increased congestion on the free bridge, and use public transit or work from home.

Governments around the world are trying variations on this approach. In London, there’s a daily fee for every car driven into the center of town. In Barcelona, there’s a tunnel that speeds you past the worst congestion, if you’re willing to pay. It’s not a terrible idea. Unlike taxes, these fees are tied to a particular benefit, which makes them easier to swallow. So does the fact that they are voluntary.

In Seattle, since the toll was imposed, traffic on the toll bridge has dropped about 40 percent, while traffic on the free bridge has risen 10 percent. Overall traffic from the east side to and from the city has dropped about 6 percent.

Does this constitute success? That depends on your definition of success. As with the cigarette tax, the more effective a fee is in changing undesired behavior, the less money it brings in. Toll revenue from the 520 bridge is supposed to raise about $1 billion of the $4 billion-plus cost of the new bridge.

But the big problem with the new toll is that it is another small chipping way of our shared life as citizens, and another area where money makes the difference. It used to be that no matter how rich you were, there were some things you could not buy your way out of. Rush-hour congestion was one of them. The law, in its majesty, allowed rich and poor alike to get stuck in traffic. I once heard Steve Ballmer, chief executive of Microsoft and worth many billions of dollars, talking about his strategy for outfoxing the dread 520. (I tried it. It didn’t work.)

As explained by philosopher Michael Walzer, and somewhat more entertainingly by my friend Mickey Kaus, there are two ways to deal with wealth and income inequality (if it bothers you, that is). One is to reduce it, through the tax system. The other is to make money less important. Create national parks, open to everybody. Restore universal military service. And so on.

By this way of thinking, the two bridges side-by-side, one costly to use and one free, constitute a small step backward, toward making money more important. You might say: Wait a minute. What if there already was a toll on both bridges, and it was lifted on one so that people willing to put up with crowds could go across free? That wouldn’t seem iniquitous, would it? But it’s the same thing, really.

And I would say, Great point! Let’s continue this discussion over a drink downtown. And you would look at your watch and say, It’s too late. We’ll never make it across the bridge before dinnertime.

(Michael Kinsley is a Bloomberg View columnist. The opinions expressed are his own.)

Read more opinion online from Bloomberg View.

®2012 BLOOMBERG L.P. ALL RIGHTS RESERVED.

Mitt Romney didn’t exactly fire Ric Grenell, who is gay, as his foreign policy spokesman. But when the religious right got wind of Grenell’s hiring, his job started to shrink.

Grenell was told to sit in on conference calls with reporters and not say anything, which is tantamount to firing him. He was told to be silent not merely on gay issues. He was told not to talk about anything, even foreign policy. A spokesman who is not allowed to speak — even internally — doesn’t have much of a job. So Grenell quit, three weeks after he was hired.

For Romney, this is the first big flub of the general election campaign. Until now, his smooth-running machine was one of the more impressive things about his candidacy. It made you think that maybe, as a businessman, he really could bring some efficiency to the White House, if not to the government as a whole.

Besides being offensive, however, this episode is remarkably inept. Grenell apparently was completely open about his sexuality. Why did Romney appoint him in the first place if he was going to hang the guy out to dry as soon as there was any criticism? (And there never was much.) If you’re going to be a bigot, at least be smart about it.

Although, as a weak-kneed liberal, I hate to talk like this, this episode does make you wonder about Romney’s guts. He portrays himself (and probably thinks of himself) as a hard- nosed businessman, ready to make the tough decisions that professional politicians won’t. Romney has even defended his famous flip-flops in these terms. “In the private sector,” he says, “if you don’t change your view when the facts change, well, you’ll get fired for being stubborn and stupid.”

I don’t know about that. You see a lot of stubbornness and stupidity in stories about business, but not so much about business executives getting fired for it.

Romney seems obsessed with firing people. In January, you may recall, he committed a gaffe by saying he enjoyed doing it. He seems to consider it as evidence of a backbone and a tough hide. He also likes to say that if you want this or that undesirable quality in your president, “I’m not your man.” This also is supposed to signal toughness, as well as independence of thought.

Better evidence would have been telling the people who complained about his hiring of a gay man as an adviser where they could put their objections. And has he stopped to ask himself how he will manage to fill a Romney administration if he excludes all gay men (and women?) from the candidate pool?

Romney is right of course that there’s nothing wrong with changing your mind. But you should (a) be prepared to admit it and (b) be prepared to explain it.

In his most famous flip-flop, about health care, Romney has tried, instead, to have it both ways. He has never renounced his Massachusetts health-care plan, with its individual mandate almost identical to the one in President Barack Obama’s. He just says that he will veto Obamacare on Day One of his administration, because the individual mandate is so awful.

Nor has he explained his change of mind on abortion or gay rights, on which he once said he would be a better advocate than Ted Kennedy.

Many moderates and independents may still believe that at heart Romney is a moderate Republican who fortunately has no principles and will say whatever it takes to win. Actually, citizens of all stripes across the country more or less believe that Romney’s been faking who he is, but it’s moderates he must now convince that he’s been lying like mad for the past year.

He’s going to need a few really top-notch spin doctors to perform this operation successfully. Too bad for him that he just drove a good one away.

(Michael Kinsley is a Bloomberg View columnist. The opinions expressed are his own.)

Read more opinion online from Bloomberg View.

.®2012 BLOOMBERG L.P. ALL RIGHTS RESERVED.

The busiest subway stop in downtown Washington was until recently festooned with green banners and billboards warning of a terrible danger. One of America’s great national symbols is under attack: the dollar bill.

A few unpatriotic senators want to phase out the dollar bill and replace it with a dollar coin. Several previous attempts to do this have foundered on people’s fondness forpaper money.

Under “About Us,” the website says it is just a group of“like-minded individuals, businesses, and organizations seeking to ensure that the citizens of the United States maintain the ability to choose their preferred currency.” A sample list of members is not enlightening: It includes the Auto Dealers Association of Alabama, Muddy’s Laundromat and Sophia’s House of Pancakes.

What moved this disparate group to take up the cause of saving the dollar bill? Tom Ferguson, “a currency expert and spokesman for Americans for George,” wrote in the Capitol Hill newspaper Roll Call that “America has faced great challenges in recent years” and therefore “we must strive to maintain the principles and practices that make us Americans.” So “it is exactly for this reason we must defend one of the most enduring American symbols — the dollar bill.”

Despite this completely nonsensical explanation, questions remain. When did the dollar bill become a great patriotic symbol? Who is paying for this patriotic campaign to save it (because I doubt that Muddy’s Laundromat can foot the bill)? What is their real motive, whoever they are? What is the likelihood that Congress — Congress! Which cannot agree about anything — will take up an issue that is on no one’s front burner and vote against the supposed wishes of 97 percent of the American people? If you correctly answer, “slight,” why the urgency?

What’s going on here is very familiar in Washington. Some lobbying or public-relations firm convinces some fool of a client that action on some issue is urgent urgent urgent. The client panics and starts writing checks.

We often deplore the deplorable influence of corporate money in Washington. But often the corporations that pay former high officials and other big shots to con politicians and the public are themselves being conned. It’s less like bribery and more like a protection racket. This one is especially bizarre because electronic payments are quickly replacing both coins and bills. Talk about fighting the last war.

Usually the name of a group gives you a hint about its purpose, if not its identity. If it calls itself Americans United for Responsible Tiddlywinks Regulation, it is against Tiddlywinks regulation. If it’s the National Coalition of Mothers for Broccoli, the “mothers” are probably mothers of broccoli farmers.

And so on. But “Americans for George” could be anyone. It turns out, however, that the answer is refreshingly straightforward.

Mother Jones reports that the main backer of Americans for George is Crane, the fancy stationery company, which also makes the paper used for dollar bills. The main backers of the dollar coin are copper mining companies.

The pro-coin lobby has its own front group, sensibly called the Dollar Coin Alliance, which touts the billions of dollars to be saved by switching to coins from bills. The Obama administration has canceled a program to do just that. The Dollar Coin Alliance says, “This decision makes no cents!” Har-de-har-har.

So how does a patriotic American decide which lobby to believe? You might start by asking, Which one is more obviously trying to buffalo me? Clearly that is the Billsters (let’s call them) with their ludicrous attempt to create patriotic sentiment around the dollar bill. Then you might ask, Which side has hiredFrank Luntz? Once again, it’s the dollar bill people.

If Luntz is on one side, you probably want to be on the other. Luntz’s specialty is to determine which specific words resonate most negatively on any issue, then to promote use of them. His biggest triumph was rechristening the estate tax as the “death tax.” His eerie slogan — actually printed on his firm’s stationery — is, “It’s not what you say. It’s what they hear.”

“The results are clear and definitive,” Luntz tells the paper money lobby. “Americans prefer paper money to coins.” Some“key takeaways”: “The dollar bill represents ‘America’ to 47% of voters; 66% believe eliminating the dollar bill erodes our national character; 49% of Americans associate dollar coins with Europeans, not Americans.”

Sixty-four percent of Americans oppose switching to a dollar coin and gradually phasing out the paper dollar. “The federal government shouldn’t tell me what money I can and cannot use. This is about personal freedom and personal choice. Americans should have the right to use the kind of money they want to use. Period.” This man is still fuming about the office vending machine because it won’t accept euros. According to Luntz, 68 percent of Americans agree with this bit of ignorant confusion.

If I thought Americans were as gullible as Luntz apparently does, I would be very depressed. But I suspect these ridiculous poll results — dollar coins are European? The dollar bill“represents America,” whatever that means? — are more the result of Americans’ willingness to express an opinion about anything, when asked by a pollster.

The dollar bill people may be right about public opinion, but the coin people are right about coins. Americans don’t want to admit to themselves how much our currency has eroded. A dollar today buys what a quarter would have bought in 1976.

Yet again, we learn that while Americans claim to yearn for change, change is actually the last thing they want.

But stare decisis is not a hard-and-fast rule. There have been some famous changes of heart and/or mind, such as Brown v. Board of Education (1954), which reversed Plessy v. Ferguson (1896) and declared racial segregation unconstitutional. Then there’s Lawrence v. Texas (2003), which overturned Bowers v. Hardwick (1986) and invalidated laws against homosexual sodomy. It is generally considered that in both of these cases, the court got it right the second time.

If the court ultimately rules that President Barack Obama’s health-care reform law is unconstitutional, it will be a reversal even bigger than Brown and Lawrence. And there will be no comforting consensus that the court has finally got it right.
Ever since Wickard v. Filburn (1942), with only a couple of minor exceptions, the courts have upheld the use of federal power under the Commerce Clause, which gives the federal government the authority to “regulate commerce.” Even the 1964 Civil Rights Act is considered constitutional as a regulation of commerce.

Now, maybe the court has been wrong all this time. Maybe the federal government’s authority under the Commerce Clause is much narrower. Maybe that authority doesn’t extend to requiring individual citizens to have health insurance or pay a fine. But if so, it is not only the future of Obamacare that will suddenly be shaky. Every piece of legislation for about the last 70 years that rested on the Commerce Clause will suddenly be up for grabs. This includes the Civil Rights Act. It includes laws protecting the environment and consumers.

Basically anything the government does that has ever been justified by the Commerce Clause will be open to challenge. For the sake of their own sanity and summer recesses, the justices ought to proceed cautiously.

Conservatives also ought to pause and consider all the lectures they have delivered over the past half-century about the need for judicial restraint. Whether authorized under the Commerce Clause or not, all of these laws — including Obamacare — were enacted by the democratically elected institutions of government. For the Supreme Court to call them all into question would be a power grab far beyond anything the court has attempted during the long era of conservative griping on this point.

Whenever liberals argue stare decisis, conservatives understandably get suspicious. In theory, it’s a pretty conservative doctrine. It says, things as they are should stay as they are. In practice, conservatives complain, it works like a ratchet: Liberals, when they’re in control, invent new rights, and then conservatives, under stare decisis, are supposed to do nothing about them when their turn comes. But the fact that courts have been upholding legislation under the Commerce Clause for seven decades with virtually no debate does make it seem unlikely that the whole thing has been a giant constitutional misunderstanding.
In 1993, the first year of the Clinton administration, Hillary Clinton was assigned by her husband, Bill, to design a health-care reform plan. The centerpiece of the plan she came up with was an employer mandate. That is, there was a requirement that employers provide health insurance to their employees or pay a fine.

The opposition to Hillarycare from Republicans was ferocious, just like their opposition to Obamacare more recently — and in the Clinton case, the opposition was successful. They threw everything they had at her. They got a judge to rule (later reversed) that her plan was illegal because it had been partly designed in private meetings.

One argument they did not make was that Hillarycare exceeded the government’s powers under the Commerce Clause of the Constitution. (Search the New York Times for all of 1993 and 1994. There is just one buried and dismissive reference to the possibility of a Commerce Clause challenge in an article about half a dozen possible legal strategies for challenging Hillarycare.) Is it possible that requiring people to buy their own insurance is unconstitutional but requiring owners of companies to buy other people’s insurance for them would have been perfectly OK?

During the decades it took for the court to come to its senses about segregation and sexual privacy, there were always lots of people on both sides of the arguments. By contrast, as Dahlia Lithwick points out in Slate, the notion that health-care reform with an individual mandate might be unconstitutional was virtually never heard of until the bill passed and the Vast Right-Wing Conspiracy went to work. Professor Randy Barnett, the intellectual father of the Commerce Clause argument, didn’t really start churning out scholarship on the subject until 2011. During the whole debate over Obamacare, it seems, nobody noticed that it was unconstitutional. Now every conservative politician and pundit finds it not just unconstitutional but obviously so.

It was during the Hillarycare debate that Stuart Butler of the conservative Heritage Foundation first proposed a health- care plan based on the individual mandate. Butler says today: “I’ve altered my views on many things. The individual mandate in health care is one of them.” There’s no stare decisis at the Heritage Foundation, apparently.
(Michael Kinsley is a Bloomberg View columnist. The opinions expressed are his own.)
Read more opinion online from Bloomberg View.