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June 2012

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Writing the Book on Wealth Inequality

Remember the movie Wall Street and Gordon Gekko, the guy who said, "Greed is good"?

After eight years in jail for insider trading and securities fraud, Gekko, played again by Oscar winner Michael Douglas, was portrayed as a different, more unselfish man in the sequel "Money Never Sleeps."

We all need some good fiction, especially in today's frightening times. But, here in the real world, no jail sentences have been meted out to the true Gekkos — the bankers and others who crashed the U.S. economy.

A new book, "Unintended Consequences: Why Everything You've Been Told about the Economy is Wrong" by Edward Conard says that income inequality is actually a good thing.

Conard, a former Bain Capital business associate, friend and leading campaign contributor to Mitt Romney, the Republican frontrunner for president, says society would lose out if the superrich had to pay more taxes because investment by the billionaires is the way average people get access to low-cost, high-quality items — from cheaper food to iPads and major technological tools like Google.

We have no quarrel with the notion that investment by wealthy people can benefit workers and lead to important technological improvements, although we would like to see more investment in rebuilding our nation's infrastructure, as International Secretary-Treasurer Chilia writes below.

But Conard, who retired at age 51 with hundreds of millions of dollars in the bank, doesn't want to discuss the fact that too many wealthy investors have gone offshore to increase their profits, eroding the tax base that supports our communities and the workers who are left unemployed.

The coming election is truly about big ideas. And, however, you cut it, Edward Conard's and Mitt Romney's ideas are out of the mainstream of U.S. history. Republican and Democratic presidents from Theodore Roosevelt to Dwight Eisenhower to John F. Kennedy have all recognized that if prosperity is not shared, if wealth is monopolized at the top, our economy will suffer. Greed is not good.


Also: Chilia: Taking the High Road on Infrastructure Read Chilia's Column

Edwin D. Hill

Edwin D. Hill
International President