Obscene Wealth

Aristotle’s notion of virtue is built around the concept of moderation. Virtue, for The Philosopher, is defined as a mean between extremes. Courage, for example, is a mean between cowardice and foolhardiness. Indeed, extreme behavior of any kind was anathema to the Greeks generally, though their behavior often lent the lie to the ideal. But at least they paid lip service to the notion, whereas we seem to have lost sight of it altogether.

In 1995 Christopher Lasch, whom I have referred to a number of times in these blogs, published a rejoinder to Ortega y Gasset’s Revolt of the Masses which Lasch called Revolt of the Elites. In that book he took exception to Ortega’s notion that it was the masses who would drag down democracy and eventually destroy it altogether through their “radical ingratitude” and their “incredible ignorance of history.” For all the masses know, or care to know, history started when they were born and will end with their death: they have no obligations to anyone. Lasch is convinced that it is the elites who will bring this about because they are so much like the masses whom Ortega describes and because they have lost their sense of community and, indeed, lost all touch with reality. Their “community” is one made up of “the best and brightest of contemporaries, in the double sense that its members think of themselves as agelessly youthful and that the mark of this youthfulness is precisely their ability to stay on top of the latest trends.” Note here the absence of any sense of belonging to a place and any group to bond with, a total immersion of self into self.

Lasch defines the elites as the opinion-makers, the “thinking class,” which he defines as “those who control the international flow of money and information, preside over philanthropic foundations and institutions of higher learning, manage the instruments of cultural production and thus set the terms of public debate.” These folks, feeling “no obligation either to their progenitors or their progeny,” are lost in a world of abstractions; they belong to no nation.

“The new elites are at home only in transit, en route to a high-level conference, to the grand opening of a new franchise, to an international film festival, or to an undiscovered resort. Theirs is essentially a tourist’s view of the world — not a perspective likely to encourage a passionate devotion to democracy.”

Certainly not to this democracy. They have dissociated themselves from what was their parents’ country and become non-involved citizens of the world, as it were. Traveling the world and taking their millions with them. And here’s the rub. The new elite control the wealth in the country and are in the process of destroying the middle class on which the capitalist economy and a vital democratic system have always depended. They are, above all else, the greatest threat, in Lasch’s view, to the preservation of this democracy. In fact, they don’t care much about the preservation of Western Civilization either. As Lasch points out, the “thinking class” who people the universities have turned their backs on Western Civilization which they traditionally pledged themselves to preserve. For these people

“. . . the very term ‘Western Civilization’ now calls to mind an organized system of bourgeois values [which keep] the victims of patriarchal oppression — women, children, homosexuals, people of color — in a permanent state of subjection.”

Preoccupied with minor concerns like political correctness and cultural diversity, they ignore such things as the dissolution of the family, the intrusion of the market into all phases of human life, and “the crisis of competence; the spread of apathy; and a suffocating cynicism, the moral paralysis of those who value ‘openness’ above all.” But above all else, outside the academy the new elite have been enabled to amass great fortunes with the approval of the very class they seem determined to eradicate. Capitalism has traditionally frowned on the amassing of wealth beyond a person’s needs. For John Locke and Adam Smith, for example, capitalist accumulation was tempered by a sense of community coupled with a strong feeling of restraint from accumulating unnecessary wealth which might otherwise go to those in need; this tradition has been lost. These convictions are reflected in the words of Horace Mann who, two hundred years later, helped us recall that “The earth was given to mankind for the subsistence and benefit of the whole race, and the rights of successive owners were limited by the rights of those who are entitled to the subsequent possession and use.” No one, according to this way of thinking, has a right to unlimited wealth and possessions they cannot possibly ever use. But those restraints are no longer with us. In light of these changes, Lasch expresses the hope that

“boundaries are permeable, especially where money is concerned, that a moral condemnation of great wealth must inform any defense of the free market, and that a moral condemnation must be backed up with effective political action. . . In the old days Americans agreed, at least in principle, that individuals cannot claim entitlement to wealth far in excess of their needs. The persistence of this belief, even though it is admittedly only an undercurrent in the celebration of wealth that now threatens to drown all competing values, offers some hope that all is not yet lost.”

But that “undercurrent” has grown very weak, not to say feeble, in the twenty years since Lasch wrote those words. And with it the hope that our democracy will survive grows weak as well. The infamous 1% who control more and more of this nation’s wealth, who do not see themselves as part of this nation or its people, who, indeed, see other people as simply exploitable, have taken this country so far away from the ideals envisioned by our Founders that we will assuredly never find our way back. And augmenting this demise is the full support of those mindless masses whom Ortega identified; those who see no reason why people should not accumulate wealth far beyond their needs because in their own shrinking minds they see themselves as at some point joining the group; those who have also lost any sense of moral restraint, who do not recognize how obscene — in the full sense of that word — is the accumulation of great wealth in a society where many have no food to put on the table or roof over their heads; those who are lacking in the moderation that Aristotle long ago insisted is the core of human virtue.

Poverty and Prison

One of the most insidious falsehoods out there is that the wealthy have earned their wealth and the poor deserve their poverty. The poor, it is commonly said (by the rich), are lazy and unmotivated: if they really wanted to they could apply themselves and be off the dole. This sort of reasoning is known as “rationalization” and is frequently used to attempt to justify the reduction in social programs that help those most in need — as though “need” is something people bring on themselves. Nothing could be further from the truth as a brief passage in Anton Chekhov’s brilliant short story “Ward No.6” tells us. In that story the young Ivan Dmitrich has just seen a couple of prisoners pass on the streets in irons accompanied by soldiers taking them back to their prison cells. He reflects as follows:

“Not for nothing has age-old popular experience taught us that against poverty and prison there is no guarantee. And a judicial error, given present-day court procedures, was very possible, and it would be no wonder if it happened. Those who take an official business-like attitude toward other people’s suffering, like judges, policemen, doctors, from force of habit, as time goes by, become callous to such a degree that they would be unable to treat their clients otherwise than formally even if they wanted to; in this respect they are no different from the peasant who slaughters sheep and calves in his backyard without noticing the blood. With this formal, heartless attitude toward the person, a judge needs only one thing to deprive an innocent man of all his property rights and sentence him to hard labor: time. Only the time to observe certain formalities, for which the judge is paid a salary, and after that — it is all over. Then go looking for justice and protection . . .  And is it not ridiculous to think of justice when society greets all violence as a reasonable and expedient necessity, and any act of mercy — an acquittal, for instance — provokes a great outburst of dissatisfied, vengeful feeling?”

These truths are coming home to growing numbers of people in this country in this economy as a recent study has shown — focusing on the plight of a great many young people who will doubtless soon either be in prison or regarded as ne’er-do-wells by those who are comfortably off:

WASHINGTON (AP) — Almost 6 million young people are neither in school nor working, according to a study released Monday.

That’s almost 15 percent of those aged 16 to 24 who have neither desk nor job, according to The Opportunity Nation coalition, which wrote the report.

Other studies have shown that idle young adults are missing out on a window to build skills they will need later in life or use the knowledge they acquired in college. Without those experiences, they are less likely to command higher salaries and more likely to be an economic drain on their communities.

“This is not a group that we can write off. They just need a chance,” said Mark Edwards, executive director of the coalition of businesses, advocacy groups, policy experts and nonprofit organizations dedicated to increasing economic mobility. “The tendency is to see them as lost souls and see them as unsavable. They are not.”

But changing the dynamic is not going to be easy.

The coalition also finds that 49 states have seen an increase in the number of families living in poverty and 45 states have seen household median incomes fall in the last year. The dour report underscores the challenges young adults face now and foretell challenges they are likely to face as they get older.

There is nothing quite so ugly as righteous indignation. When we think of those who are down and out it might be well if we were a bit less smug about their condition and recall that there but for the grace of God might go any one of us. As the middle class disappears into the impoverished class the notion that those people deserve their fate because of a failure on their part is absurd; we might think along with Ivan here that so much of what happens to each one of us is a matter of pure chance and the question of whether we deserve our wealth or our poverty is moot at best. Sometimes shit just happens, as growing numbers of people are learning every day.

Political Scum

A recent story on Yahoo News was somewhat disquieting but not that surprising under the circumstances. It begins as follows:

WASHINGTON (Reuters) – A U.S. government agency has withdrawn a report that challenged Republican ideas about taxes and economic growth – an action that drew fire from Democrats who accused it on Thursday of bowing to political pressure.

Republican lawmakers blasted the Congressional Research Service (CRS) report when it was issued in September and then went to the agency to complain. The report suggested that lower tax rates on the wealthy are not linked to economic growth, an item of faith among many conservatives.

The attack on the agency was led by Republican Senators Mitch McConnell and Orrin Hatch who released statements replete with political gobbledygook about the unreliability of the study and questioning its methodology. This is standard operating procedure these days: we don’t like what the study concludes, so let’s question the methodology. That is to be expected. What is not to be expected is the pressure these Republicans were able to bring to bear on the agency to force them to withdraw the report. Do I hear cries of “foul!”?

This is the season for dirty politics as we realize — on both sides of the political aisle. But some tricks seem to be dirtier than others and refusing to allow a group to do its job on the grounds that they have uncovered evidence to support a conclusion that is in opposition to party ideology seems to be very low indeed: down there with political scum.

We are all concerned about the economy. For some it has become the only issue that matters in the present election. But the trickle down economic theory that began with Ronald Reagan and was later coupled with tax breaks for the wealthy under George W. Bush are the major reasons our economy is in such dire straights at the present moment. Despite the mountain of evidence to the contrary, the Republicans would still have us believe that reducing taxes on the wealthy in this country will benefit the rest of us and thereby turn the economy around and they don’t want us to believe anything to the contrary. In fact, while they weep crocodile tears about the weak economy, the wealthy are hoarding their wealth and not investing it in economic growth. There is no “trickle down.”

Consider the following: Prior to 1981 when this country was experiencing considerable economic strength, the percentage of their income the very wealthy paid in federal taxes was anywhere from 40% to 70%.  Then under Bill Clinton the wealthy who now pay at most 35% of their acknowledged income in taxes (Mitt Romney pays 14%) were asked to pay 39% and the economy began to recover from its slide that began soon after Ronald Reagan introduced supply-side Reaganomics early in his presidency — the infamous “trickle-down” theory, which George H.W. Bush called “voodoo economics.” When sizable tax breaks for the wealthy were ushered in during “W’s” regime in 2001 and again in 2003 the downward slide began again in earnest. Furthermore, this country as a whole has one of the lowest tax rates among all of the developed countries in the world while the Tea Party screams hysterically about “cutting taxes” and the wealthy insist that they should be taxed even less than they are at present.

One can quibble about probable causes, but the fact remains that when the wealthy paid their fair share of taxes the economy was on much firmer ground. Whether or not there is a causal relationship here one cannot say for certain. Economics is not an exact science. But it is clear that the wealthy in this country do not pay their share of the taxes; and the trickle down theory of economics has been a bad joke. The strength of our economy depends on the buying power of a healthy middle class, not pennies “trickling down” from the overflowing pockets of the fat cats.

Thus we have two conjoined issues here:  first, the wealthy refuse to pay their fair share of the taxes required to get this economy back on its feet, and next there are the foul political shenanigans that have forced a federal agency to withdraw a report that would confirm the fact that lower taxes for the wealthy don’t help the economy one whit.  What’s wrong with this picture?

The Rich Get Richer

As the gap widens in this country between the rich and the poor — and as mentioned before the middle class gradually slips into that gap — it behooves us to consider what the hell is going on. I recently blogged that 26 U.S. companies pay their CEOs more than they paid in taxes in the year 2011. The following chart tells the bigger story:

The standard excuse for this incredible disparity is that CEOs have to be paid huge amounts because of the competitive nature of Big Business — if we don’t pay the man or woman at the top enough $$ they will go elsewhere. In fact, that has become an excuse for hiring people at the highest levels not only in business but in such seemingly unrelated activities as coaching college football. But that’s a topic for another time.

The sad truth remains that the very rich in this country are becoming so at the expense of the middle classes who are, as a consequence, becoming poorer and poorer. While the rich grow richer and increasingly stash away more of their wealth in off-shore bank accounts (thereby giving the lie to the claim that they will create jobs with their tax breaks and subsidies and help the economy recover) the number of poor increases. In fact, the poverty levels rose 15.1% (46.2 million) in 2010 and 15.7& in 2011. As a recent story in Huffpost tells us:

WASHINGTON — The ranks of America’s poor are on track to climb to levels unseen in nearly half a century, erasing gains from the war on poverty in the 1960s amid a weak economy and fraying government safety net.

The number of homeless grows daily and those who find themselves suddenly out of work  struggle to find a minimum wage job — or two — in order to keep their homes and feed their kids. We need to consider who these people are. They are our friends and neighbors who have tripped over a weak economy. And increasing numbers of them are joining the ranks of the poor who need our help. Yet all we can think about is cutting taxes and eliminating social programs because we know of a few extreme examples of welfare abuse.

Those who work with the hard-pressed and homeless have a perspective that the rest of us can learn from. One such person is a blog-buddy who made the following comment on a recent post I wrote about the “typical pauper.” He said: ”

The homeless have no greater propensity toward substance abuse than those who are housed. Throughout my volunteer work with homeless families beginning in 1999, I have witnessed people who try to paint all of the homeless people with a broad brush based on the image of a panhandler on the street. The panhandler is just a small percentage of the homeless population. The agency I do most of my work reported in its July 30 fiscal year-end results – 84% of the homeless families they help are employed with a median average family wage of $9.00 an hour. A living wage for an individual is just under $10 an hour and for a family is just under $17 an hour (note this statistic varies by region).

Imagine yourself working at a well-paying job with a happy spouse and two kids in private school. Your home is mortgaged to the hilt and you have a fairly fat Visa bill to pay each month. But you can manage because you have a good paycheck coming in each week. Then imagine that one day you are called into a room by your boss who sits you down with the H.R. person and the company attorney and tells you that he deeply regrets he will have to “let you go.” You are given severance pay and there is always unemployment benefits to tide you over, but they will run out. In this economy it is quite possible that you will not be able to find any job at all except one that pays minimum wage with no benefits. While all this is happening to you and several of your fellow-workers, your boss is given a raise and more stock options and is now among the enviable 1% — those in the yellow box above. How do you cope?  Suddenly, it’s not someone else’s problem!

My example is fiction, of course, but in the world “out there” this sort of thing is happening with alarming regularity. In fact, I have a friend to whom this very thing has recently happened. He is a man with a Master’s degree and years of experience who now finds himself homeless and without an income. It is a serious problem. The gap between the very rich and the very poor is widening and while our anger over the obscene wealth of the few is perfectly justified, our attitude toward the poor needs to be tempered with compassion and the spirit of charity.

Trickle-Down Economics and Other B.S.

[You’ve probably seen the photograph. It shows Ronald Reagan with a group of his associates in their Armani suits, holding drinks in their hands and doubled over in laughter. The word “Reaganomics” appears below the photo and below that the caption “We told them the wealth would trickle down.”]

Candidate Romney has proposed a tax plan that would continue and even expand the current tax breaks for the infamous 1% and increase taxes on the rest of us. The plan, which is phase two of Reaganomics and the equally infamous “trickle-down” theory, is designed to encourage the wealthy to invest their money and thereby create more jobs for those currently unemployed, thus enabling them to carry the tax burden which the wealthy prefer to transfer to others. In case we didn’t know that this is bogus economics, a recent story reveals that

The 2012 Survey of Affluence and Wealth in America, from American Express Publishing and Harrison Group, finds that One Percenters are hoarding three times as much cash as they were two years ago. Their savings rate soared to 34 percent in the second quarter of 2012, up from 12 percent in 2007.

I couldn’t possibly improve on the careful and detailed analysis my blog-buddy did on the idiocy of Mitt Romney’s tax plan which pleases no one this side of the Tea Party (which may help explain Romney’s recent choice of a running mate).  But unless I am mistaken what this means is that the poor will get poorer and the rich will be more careful to protect their already obscene amounts of spare cash. We have already seen the gap between the rich and the poor widen annually since the Reagan presidency as the rich continue to hide behind their tax breaks and subsidies and the poor continue to struggle to put food on the table. The notion that the rich will expand their companies, invest, and create jobs is tissue paper-thin: it is a myth exploded by downsizing and outsourcing — and information like that in the article quoted above. Indeed, there are a number of myths out there in this election year — some coming at us from the right and others coming at us from the left. We must be on guard. But above all, we must think through all the empty promises and vapid bromides to the real truth that lies hidden beneath — if there is any.

Anyone who tells us that he has a “secret plan” to restore health to the economy should be suspect. We should want to know the details; we should demand to know the details. Otherwise we are buying a pig in a poke. And anyone who tells us that the current tax breaks for the wealthy are a good thing, that the very rich should not pay their fair share of the tax burden, is shooting the bull. I have written about the need to rethink our take on taxes, how they do a great deal of good and should not be seen as simply a burden. But however we perceive taxes, we should all be asked to pay them, the rich as well as the not-so-rich.

In the end, the unperceived problem here is that the middle class, on whom this country has come to depend for its economic stability, is rapidly disappearing in the widening gap between the very rich and the growing number of poor. So more than ever before, we need to be aware of the wind-eggs that are afloat, especially in this election year. That is to say, we should read what is printed and listen to what is spoken with a considerable amount of skepticism: the people running for public office are coached to tell us what their marketing experts have told them we want to hear. It’s not about telling us the truth; it’s about getting elected — that’s pretty much all they know how to do.

Karl Marx Redux

Karl Marx’s Capital is seldom read these days. This book by a dead, white European male has been tossed into the dustbins by the League of the Politically Correct and replaced by something more in fashion. Pity. What Marx had to say about capitalist exploitation still rings true even after more than a hundred years. This was driven home by an article I read recently about the current recession and the trend during that period to squeeze more work out of the labor force in the name of higher profits. Consider the following excerpt about the recent changes in the dynamics of the job market:

The drop comes after a string of steady gains in productivity, as employers slashed their payrolls during the 2007 recession but squeezed more output from thinner staffs. Some of those gains came from investment in technology and other efficiencies. Some of it came from asking workers – fearful of losing their jobs with the unemployment rate at 8.2 percent — to work harder and put in longer hours.

But employers have apparently wrung about as much work as they could from their existing employees. To increase output, they’ve had to hire back some of the people they laid off during the recession.

(Note here that there’s apparently a point of diminishing return in this dynamic. Employers are hiring back more workers not because they want to put people to work, but because productivity has dropped. This is not an ethical decision on the employers’ part; it is business as usual.)

I’m not a Marxist, though I think his notion of “alienation” is spot on. Further, he looked into the teeth of the capitalist beast and saw how it nurtured human greed and avarice. So let’s think about some of the things Marx had to say. He was convinced that the inherent nature of capitalism necessitated the exploitation of the workers in the name of increased profits. In the world of capitalism, the value of the products workers make is being determined independently of the amount of time they spend on the job. In Marx’s view, the opposite should be the case, as the value of the product should directly reflect the amount of labor time spent on its making. The separation here between labor and value results from the fact that the worker must sell his labor to the capitalist: his labor becomes a commodity. The ideal Marx had in mind was the intimate connection between a worker in his shop making, say, a chair, and the value he is able to realize in the market place. Once he goes to work for a factory owner his connection with the product of his labor is severed. Again, it is the intimate connections that Marx focused his attention upon. Capitalism, in his view, separated workers from their products and prices from real value. Those contradictions, he was convinced, would bring about the demise of capitalism as workers would experience increasing frustration and eventually rise up in revolt.

Well, he was certainly wrong about that. The closest thing we have to a revolt today is the “Occupy Wall Street” movement, which barely causes a ripple in the capitalist fabric. And the chains that Marx saw binding the workers have been replaced by credit card debt. Capitalism has prospered as the unions (among other things) have made the lives of workers tolerable and they can now afford important things like iPods, televisions (charged on the credit card) and new cars (leased, of course). The contradictions within capitalism no longer bother most people and the moral message of Capital has been silenced by complacency. Though its numbers are shrinking, the “middle class” which has sprung up after Marx’s death is relatively content and the revolution that Marx foresaw no longer seems possible, much less likely. The “workers” seem content to take what is given them while the 1% continue to prosper and grow fat on the fruit of the labor of the other 99%. That is, the essential framework that Marx analyzed is still in place. The difference is that, for the most part, the workers no longer care that they are being exploited because they have been pacified with a smattering of goods that makes their lives tolerable in a culture that is designed to mollify their discontent.