They were sitting at a corner table in New York’s famed Le Bernardin restaurant. The billionaire’s protective detail occupied two additional tables a respectable distance away.
“Unfortunately, the world can be a dangerous place,” he replied, lowering his glass back to the table.
The reporter still had many more questions she wanted to ask him and she wasted no time. Picking up her pad and pencil, she said, “That’s a perfect place for us to pick back up. Let’s talk about the world as you see it, or more precisely how you’d like to see it.”
“I’d like to see us all get along.”
“Meaning?”
“Meaning, we’re all citizens of the world. What happens in one nation can affect another and because of that, we need a better collaborative decision-making process. It must be something that allows for more intelligent decisions to be made and for those decisions to be made faster, with less bickering and foot-dragging. We share a planet where a volcano that erupts in Iceland can disrupt flights in Europe. An earthquake and tsunami that sweep Japan can destroy nuclear reactors, causing radiation to drift across the Pacific to the U.S. These are all things of collective interest and affect more than just one nation, agreed?”
Julia nodded.
“Where these items of collective interest exist, where multiple nations have skin in the game, as it were, it is my opinion that the only way to get the right things done is by subordinating state sovereignty in favor of international law.”
“And for international organizations as well?”
Standing smiled. “Yes, in fact I just came from a reception at the U.N. You see, it’s all about clarity of purpose. If we can come together with a shared set of values and a shared sense of purpose, we can make the world a much better place.
“Let’s take economics, for instance, a subject I know you and I are both interested in. We cannot continue the failed economic policies of the last thirty years. Our planet is dying and we have more people than ever before in poverty. The only way to bring about reform is for the pendulum to swing from the market toward the state.”
Julia looked up from her pad. “But hasn’t the free market actually lifted hundreds of millions of people out of poverty?”
Standing shook his head. “The capitalistic system is morally bankrupt.”
“What about India and China? Average incomes there have skyrocketed over the last thirty years.”
“I’m glad you mentioned China. China is a perfect example of what state-run capitalism can achieve. It proves that capitalism doesn’t require democracy. In fact, it operates better without it. And as far as India is concerned, it is home to a third of the poorest people on the planet. I’d think twice about using India as an example of the benefits of capitalism.”
“So we should ignore that the 1980s and 1990s, often known as the new golden age of capitalism, saw the proportion of the world’s population living on a dollar a day or less drop so dramatically that it was enough to offset rising populations in developing countries?” she asked.
“Not at all,” replied Standing. “Life has, in fact, gotten better for people around the world. That is thanks to globalization. But quality of life is nowhere near as good as it should be. The planet is possessed of abundant resources and wealth, yet-”
“Yet you think that wealth should be spread around, correct?”
“I think that if it is in our power to make the lives of our fellow human beings better, we should do everything we can to make that happen.”
“Would that include transferring America’s wealth, let’s say, to citizens in poorer nations?”
Standing laughed. “What wealth? America is bankrupt. In fact, if we had a global reset, America would be much better off.”
“Better off how?”
He thought about it for a moment and then said, “This is oversimplifying it, but picture a homeowners’ association somewhere in America. Let’s say there are fifty homes. The spectrum of the owners’ indebtedness will run from no debt and healthy bank balances to one, maybe two families who are hanging on by their fingernails, not sure how they’ll afford their next bag of groceries, much less their next mortgage payment.”
Julia looked at him. “You’re saying the family who has worked hard, paid off their mortgage, and has saved their money should bail out the family who can’t afford their house, much less groceries?”
“It’s not that simple,” cautioned Standing. “What happens if the poor family defaults on their mortgage?”
“Why don’t we examine why they can’t afford their house and groceries? Did they bite off more than they could chew?”
“Who knows? Maybe Mom and Dad just had a run of bad luck. Maybe they both got laid off. That these people have financial problems doesn’t mean they deserve them.”
“I’m not saying they do, but-”
“Answer my question,” said Standing. “What happens if this family goes under and defaults on their mortgage?”
“I assume they’ll be foreclosed on and eventually evicted.”
“Correct,” replied Standing. “And what happens to the house, then?”
“It goes on the market.”
“At what price?”
“At whatever the market will bear,” said Julia. “That’s the way markets work.”
“Not in this case. You see, the bank doesn’t just have one house, it has thousands; hundreds of thousands. It doesn’t want to be in the home ownership business, it wants to be in the money-lending business. Its motivation is not to hang around and wait for the free market system to work. It wants to dump that house as quickly as possible, and to do that, it’s going to dramatically mark down the price. What would that do to the values of the other properties in the homeowners’ association?”
“It would effectively lower them.”
“Which means, through no fault of your own, the equity in your home has been diminished. So, what would make more sense? Losing your equity? Or everyone chipping in together to make sure everyone succeeds?”
The woman looked at him. “You’re offering a false choice.”
“No, I’m not.”
“Of course you are, Mr. Standing. If I have worked hard, saved my money, and paid off my mortgage, I shouldn’t have to bail out another homeowner.”
“Not even if they have fallen on hard times?” he asked. “Imagine if you were in their shoes.”
“I have no doubt that it would be terrible, but it isn’t the government’s job to take money from one group and give it to another.”
Standing smiled again. “Really? What do you call taxes, then?”
“I disagree with a lot of how the U.S. government spends my money, but we’re not talking about taxes.”
“In a way, we are. What happens when the family in our scenario doesn’t pay their share of the fees and assessments of the homeowners’ association?”
“I would imagine that their property would end up getting a lien placed on it,” she replied.
“But in the meantime, the association’s expenses still need to be paid for, and that burden falls more heavily on the other owners. They have to dip into their reserves, or if the reserves are too thin, they have to pay more in order to cover those who can’t. We can push those who have the most to give more, but as increasing numbers of homeowners go under, sooner or later the burden to make up what they cannot contribute will be overwhelming. We won’t be able to collect enough from the wealthiest homeowners to make up for it.
“Wouldn’t it be better, not to mention easier, to simply rebalance the scales? The sooner you can get that family who is in default back into a job and working, the better it is for everyone. The prosperity effect, as I like to call it, inures to everyone’s benefit. This is about recognizing people’s dignity.”
“And in no place on earth,” she said, “have the freedom and dignity of the individual been more available and assured than in America.”
“Human dignity is a global concern,” replied Standing. “There can’t be social cohesion as long as there is such a vast chasm between rich and poor in the world.”
