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.

Morally Impaired

I recently wrote a blog focusing on a comment made by an anonymous blogger who characterized the poor as “folks who are usually smoking crack and pumping out babies at 1 a year..” The blog drew a very incisive comment from MFB (My Favorite Blogger) newsofthetimes who said “I don’t understand how people can be so sure that they are not going to be the next person in line asking for help. . .” I was going to jot a quick response to MFB, but decided it warranted a longer response. So here goes.

Some years ago during the Summer I was a visiting professor at the University of Rhode Island and taught a course in Ethics to a class of about 30 students. It was a good class and we had some lively discussions. At one point we were discussing Kant’s Categorical Imperative: “Act so the maxim of your will can serve as a universal law.” We tried to unpack the peculiar words in order to make some sense of them and perhaps see how they might help us resolve moral perplexities — which is the purpose of an Ethics course, after all. We decided that Kant was saying something like this: adopt a moral principle that would affect both yourself and others equally. In a word (though somewhat of an oversimplification) Kant was saying something very much like the “Golden Rule” — do unto others as you would have them do unto you.

The interesting part of the discussion came about when we were trying to use examples to see how the rule might be applied in a particular case. We finally came around to the case of a poor person who required assistance and we decided that anyone who was in the position of the person in need would want, even welcome, assistance. We all pretty much agreed — except for one student who simply could not imagine that he would ever be the person in need. He denied that it was morally right to help those in need if the rule depended on the one making the rule supposing himself or herself to be the person in need. He simply would not allow that the right thing to do was to help the other person. The entire class went after the young man to the point where I was genuinely concerned about his well-being. He never did change his mind.

It is possible the young man was just trying to draw attention to himself, or make a scene. But I suspected that he honestly could not imagine himself ever to be a person in need of assistance from someone else. He was not stupid by any means, though he certainly lacked sympathy. But above all he lacked the faculty of imagination. He simply was incapable of putting himself in the place of another person — even for a moment. As a result after the discussion was over and I reflected on the class, I decided that this young man was incapable of acting morally in Kant’s sense of that term. If he were to do the right thing it would have to be by habit, training, or accident.

I think this is the case with the anonymous comment to my previous blog: the author of the comment, “Auth” by name, simply cannot imagine that he might be poor and in need of assistance. Otherwise, how could he possibly take such a narrow, superior, unfeeling, condescending attitude toward another human being? I suspect that in this person’s mind, the poor are less than human — certainly nothing like him! Perhaps this is what allows such people to adopt the superior air. In any event, most of the comments on the blog suggested that “Auth” is in the minority: most people responded with feeling to the possibility that they might themselves be poor, given the uncertainty of today’s economy for example, and that we do have an obligation to help those in need. I just hope that the majority of those who responded to the blog are typical of the rest of the people in this society. If they are like “Auth” or the student in that class then heaven help us!

Giving Us The Finger

I have touched on this before at the time when Mitt Romney announced his running mate, (you remember, the next President of the United States….sorry, the next Vice President of the United States) Paul Ryan. As a rule the Vice President of the United States is a titular figure —  he or she Chairs the Senate and mostly does PR for the President when he is playing golf or shooting buckets with some friends. But think of LBJ and think of Paul Ryan as next President of the United States. ‘Kind of sends a shiver up the back, doesn’t it? But he’s like us, he says, because he worked at McDonald’s and he drives a truck. Somehow I don’t find that very reassuring.

But what Romney’s selection does is, in effect, is to present his middle finger to the country. It says, in effect: (1) we don’t give a damn about the poor and those in need; we will continue to cut social programs while we increase “defense” spending;  (2) we don’t care about education and improving the public school system so our kids can compete with the world at large in the coming years — where they are rapidly losing ground; (3) we don’t give a damn about the planet as long as we can continue to amass profits and maintain our “way of life.” The only thing we really care about is saving some tax dollars so you can buy a few more pull-tabs or perhaps a new golf club and we can augment our off-shore bank accounts. And we think enough of you will buy into this plan and vote us in to office in November.

In a word, these two Republican candidates taken together represent the reduction of politics to greed and filthy lucre, pure and simple. There is only one thing that matters and that is tax dollars, though neither man seems to want us to know how much they pay in taxes! The fundamental message sent by a moderate Republican who has already announced a tax plan that favors the wealthy and has targeted the E.P.A. for “reductions” when he selects a Tea Party supporter who is known to favor cuts to social programs that help the poor while increasing defense spending is clear: people and the planet don’t matter. What matters is that we save a few dollars. Let’s hope the American public sees through the smiling political masks to the smirking faces beneath.

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.

Pity the Rich

A recent article in the New York Times is worth a moment’s reflection. It was written by a former Republican insider, Bruce Bartlett, who was a senior policy adviser during both the George H.W. Bush and Ronald Reagan administrations. He was suggesting (with tongue firmly in cheek) that we pity the rich during hard times. Well, actually, he was reporting that the wealthy seek our sympathy during hard times because they have to suffer a reduction in their large incomes. There’s no doubt that Bartlett has little sympathy for those who cry the loudest. As he put it,

A curious phenomenon occurs during every economic crisis – the rich whine that they are the ones who are suffering most. While obviously one’s capacity to suffer under any circumstances is subjective, when we hear that the very well-to-do, under any reasonable definition of the term, seek pity, it comes across as callous and clueless.

One is reminded of Latrell Sprewell who not long ago turned down a $21 million contract extension to play basketball on the grounds that he had his “family to feed.” What is one to say?

At a time when there are those living at or below the poverty level and many people aren’t sure where their next meal is coming from, we are asked to show sympathy for the fabulous wealthy whose income drops from six figures to five — or from seven to six. Bartlett says the rich claim they suffer “the most” and that it is all “subjective,” but I disagree. It’s not at all subjective, and the rich have no idea what suffering is. The wealthy who complain of lowered income and a change in their fast-lane lifestyle are not deserving of a drop of our sympathy. We should save that for the father of three who was recently laid off by the wealthy fat cat who now bitches about his own sacrifices (and puts the screws on his political friends to make sure he gets more tax breaks). That’s where our sympathy ought to rest.

As Bartlett says, looking back on the pitiful rich in the 1970s, “It’s hard to feel sorry for people who may have saved almost nothing during their prosperous years and made 50 percent more than the median family income of $13,000 in 1974. But the urge to find ways to pity the well-off is still alive and well.”  Perhaps so, at least among the wealthy themselves. One imagines they form support groups at the country club.  But one thing we do know: the wealthy will find a way to survive while the poor fall farther and farther below the poverty level. To say this is “subjective” is to dismiss the legitimate claim of the poor to our sympathy. To put the issue into a context, consider the following passage, referring to the plight of a stockbroker in those days:

“[This] stockbroker whose income had fallen to just $20,000 in 1974 from $100,000 in 1970, forcing his wife to take a job and him to make extra money selling desserts to local restaurants. (To put these numbers into perspective, a calculator maintained by the Economic History Association says that $100,000 in 1970 has an ‘economic status’ value of $925,000 today, and $20,000 in 1974 is worth $134,000 today.)”  Poor baby!

To an extent, anyone whose lifestyle is altered has grounds for complaint. At least they think they do. That, I suppose is what Bartlett means by “subjective.” But some grounds are legitimate while others are bogus. The rich have the weakest possible grounds for complaint. They can take care of themselves even if their wives have to sell desserts. All of us are going to have to make adjustments as the economy continues to spiral downward and some can afford to do that more easily than others. It’s simply something we are not used to and thus we complain. But the wealthy among us are clearly a self-indulgent, spoiled group with a lifestyle that requires continued sacrifices from the rest of the world that must simply go without. Some of us are more spoiled than others.

Perhaps the chickens have come home to roost, and we must all face the fact that a growth economy is a thing the world can no longer afford and we must begin to think in terms of simply attempting to maintain the status quo. In any event, save your sympathy for those who deserve it and turn a deaf ear to the Sprewells of the world who shed crocodile tears.

A Modern Parable

Harry Jones is a happily married man with two kids and a good job. He is an investment counselor and very good at his job. He is living the American dream and doing very well, so well he has a cabin on a lake and an RV he and his family take to Colorado every Summer. He is putting money away for the kids’ college because he knows the costs are rising and despite the fact that his daughter, at least, is sure to get a scholarship she will get married and want a big wedding. So it is a good idea to be ready for whatever the future might bring. He works hard, loves his job, takes his family to church every Sunday and regards himself as a good Christian. By most standards, he is a happy and successful man.

On a business trip Harry happens to pick up the Gideon’s Bible in the table at his bedside in the Motel and starts to read. He has always half-listened to the sermons at Church and thinks he pretty well knows what his religion demands of him. He regards himself as a good man, certainly better than many he knows. The minister is a good one, though he seems more intent on making his flock feel good about themselves than getting them all riled up. Harry likes him for that. But what he is reading sends chills down his spine. He is reading in St. Matthew and he reads what the Lord said about wealth and the blessedness of the poor. This is not sitting at all well with Harry. He is especially put off by the notion that it is easier for a camel to go through the eye of a needle than for a rich man to get into heaven. And especially disturbing is the passage “If thou wilt be perfect, go and sell what thou hast, and give to the poor, and thou shalt have treasure in heaven.” He has never thought much about heaven, or about death in fact. But he isn’t getting any younger and he certainly doesn’t want to go to “that other place.” He is in a quandary. As he reads on he becomes more and more disturbed by the thought that he has been living a lie. He considers himself a good Christian, but he hasn’t been living the life Christ talked about in the New Testament. There it is right in front of him: “Ye cannot serve God and Mammon.” That is precisely what he has been trying to do.

He feels like he is caught between a rock and a hard place. He can’t have it both ways — either he gives away all his wealth and follows Christ, as the New Testament teaches, or he continues to pursue the American dream. He loves his job, loves the challenge of finding the right investment and seeing his clients do well. And he has to admit he likes the commissions that come his way. But the purpose of his life to this point has been to “serve Mammon.”  What is he to do?