The Filthy Rich
I haven't investigated, but I'm sure of it. A pollster in ancient Babylonia was sampling the citizenry on a proposal to raise money by taxing the vineyards and flesh pots of the obscenely rich. I don't know a word of ancient Babylonian, but can we doubt the response went something like, "You bet! Go for it! Get those miserable shekel-grubbing sons of camels!"?
In other words, there never was a human instinct that didn't continue to play out, century after century, millennium after millennium. Class resentment included: which explains polls purporting to demonstrate that a majority of Americans want to fight the federal deficit by raising taxes on those earning $250,000 a year.
Two hundred and fifty thousand is indeed a lot of bread, and you can see why poll respondents who work at the hardware store might lack innate sympathy for those who earn such a sum. True, we're not supposed to envy others—envy being one of the Seven Deadly Sins—but whenever the plate is being passed around, you may count on a raft of demands that those who earn the most should pay the most.
Actually they do already, generally speaking, while those who earn the least, plus some who earn as much as $50,000 a year, pay nothing at all in the way of income tax. The imbalances inherent in the present system—which ought to be thrown out the window, as everyone with a brain well knows—are not today's subject. Today's subject is the left's pathetic acquiescence in the nonsense that if we'd just squeeze the #*^&%$# rich harder, the government could turn to the serious business of spending their money in behalf of us all.
As this particular brand of nonsense never goes away, there's no surprise in hearing, say, (The Hill's finance and economics blog) that Democrats "are more than happy, messaging-wise, to set themselves up as champions of programs like Medicare and Medicaid while casting Republicans as defenders of millionaires and billionaires." Yes, take that, Paul Ryan, for daring to propose maintenance of the tax rate cuts engineered nearly a decade ago under George W. Bush.
The should-we-tax-those-rich-guys question, followed by the expected you-bet, shows Americans to be unserious about getting our finances under control. Sure, tax the rich—it's all their fault, right? Couldn't it be ours on account of demanding government favors and services larger than we seem able to finance? No need, in such an event, to reorder our larger priorities: just make the rich do it for us.
Horse feathers! Had Congress last year scrapped the rate reduction for over-$250,000 earners, the resultant gain to the Treasury for this fiscal year would have been $32 billion. That's assuming the intended victims sat still in order to be plucked rather than, as is far likelier, ferreting out new loopholes and exemptions.
The wealth of the wealthy is large, undoubtedly, but far smaller, in relative terms, than is often imagined. There is an old story about an agitator who supposedly went to see Andrew Carnegie, I think it was, demanding that Carnegie distribute his wealth to the poor. As the story goes, Carnegie, after listening, reached into his pocket, took out a quarter, handed it to the man and said, helpfully, "Here's yours."
Obsession with other people's money isn't humanity's only problem, but it's among the major ones blocking constructive overhaul of nearly all our financial assumptions. Why not just make the rich do everything? Saves time and elects Democrats—a persuasive way of looking at things if you're a Democrat; at least until you've stamped out the ability to rise financially, pulling up others as you rise.
The price of prosperity is putting up with rich blowhards and showoffs—does Donald Trump come to mind?—so as to make room for the rich who start hospitals, finance museums and symphony orchestras and, yes, create jobs; all the things you rarely hear about from certain politicians. Why should they tell you such things? If they did, you wouldn't vote for them.
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Rush Limbaugh used to say, "tax the poor because taxing something means you will get less of it." But Limbaugh could never be that creative because he's quoting Brother Dave Gardner, and Gardner's reason was that taxing the poor would give them something to strive for. Go for it! After all the other failed, goofy Washington schemes which have been tried during my adult life, it might just work.
The standard Leftist rhetoric of class resentment is a manipulation that confounds two very different social categories:
1. The entrepreneurial middle and big bourgeoisie who create employment and prosperity while taking home somewhere between $250,000.00 and $1,000,000.00 per year.
2. The parasitic super-big bourgeoisie who destroy employment and wreck prosperity while taking home somewhere betwenn 20 million and 50 million dollars per year.
Unfortunately, the standard Rightist response often makes the same conflation.
Jonathan, income statistics are very misleading in identifying "class". I'd rather look at consumption statistics instead.
I come from a joint family of 10 people involved in family business.
We were in negative incomes in bad years, so in certain years, we were "poorer" than people below poverty line. We lived off past savings and still maintained the same standard of living.
On the other hand, if times were good, we may be earning several times the median income, just enough to cover previous year's losses. Since business gets to set off and carry losses from previous years, that even meant zero taxes in years when the business brought in huge profits.
In short, there is a pretty large group of people like our family that fluctuates rapidly between bottom 20% to top 20% on a year-to-year basis. Of course, when the income of everybody else in the nation rises in a single year, then we go from second highest 20% to second lowest 20% without any change in income.
I smile when I hear about the evils of the top 10%, since I know quite well that 90% of the people in the top 10% will not be there next year. Why? Most of them are people who sold their house in that year...
Mr. Sanjay,
To an extent your argument that consumption better reflects class than income is correct. I was using income as a shorthand to describe the difference between the somewhat rich who still contribute to economic activity and the super-rich who are so paid to create so much turmoil that sustainable economic activity becomes ever more difficult. I would also add that there are limits to how much even the wealthiest person can consume. That is where the whole crisis of over-production and under-consumption comes in. The lion's share of the wealth of the super-rich does not go to consumption, nor to productive investment, but to speculation. Speculation is a legitimate activity for the actual users of the products or commodities being speculated upon, but speculation by third parties almost always have harmful consequences.
"...has harmful consequences."
I don't get this distinction between rich and super rich. I don't even believe in class distinctions except in the most stark cases.
You have TV talking heads like Keith Obermann, paid $30 million a year, saying, "The rich get their tax cut and get to buy and sell the rest of us." What does he mean by "rest of us"? Did this multimillionaire suddenly become a working class populist? Ha!
And then we have Paul Krugman, New York Times columnist, paid north of $100,000 in speaking fee, who writes, "The rich are not like you and me." The rich are not like a multimillionaire like him? He wants to be a populist too?
What about Noam Chomsky - another multimillionaire? If that man believes that the top 1% are the problem in his country, he should man up and admit that he IS in the top 1%, easily making 100 family's annual incomes every year from his book sales.
In short: I scoff at these rich who have become class warriors against the super rich. Of course, it is even more absurd that a man earning $30,000,000 complains about people earning $250,000 not paying enough taxes and thus oppressing the poor.
Class is very real. Every society has rulers and ruled and some intermediate strata between the two, all with differing degrees of power over the forces of production...ergo...class distinctions. Just because Marx posited an excessively rigid distinction between bourgeois and prolaterian does not invalidate the concept.
The super-rich of today are the big financiers and the owners of the largest multinational corporations (often one and the same). There is little common class interest between them and smaller, more precarious business entities since the former constitute the greatest threat to the autonomy of the latter. Furthermore, the business of this super-rich is generally nefarious because they involve either rampant speculation far out of line with economic realities (financiers) or paying Third World slaves to make products that can then be sold to the First World unemployed (many big multinationals).
The media personalities you have cited are (with the arguable exception of Chomsky) the servitors of the super-rich. Every ruling system, whether it is relatively virtuous or deeply depraved, needs intellectuals to propound its legitimacy to the masses. Such intellectuals are often very well compensated for their work. Messrs Obermann and Krugman would fall into that category. Their role is to divert popular anger into ineffective channels. In the case of the USA, popular anger is canalized so as to maintain the farcical two-party rivalry.
Did you know that even the highest CEO salaries (~$50 million) are still lower than what is often paid to many A-list filmstars and sportstars ($100 million for Schwarzenegger in Terminator 3)? It is rare for CEO salaries to exceed $30 million - interestingly, the same pay given to TV talking heads. On top of this, although financial institutions CEOs have the highest *average* salaries, financial CEOs don't come up in the lists of most well paid. The top fivers are normally energy company executives. Financiers don't come up nearly as high.
It's a matter of who is out of sight and thus out of mind. Ordinary working people are glad to see mediocre multimillionaires run across the sports field, give their worthless opinions on television and newspapers, and star in half-decent action flicks. The large number of viewers drawn only encourages the fat pay given to these multimillionaires. And ordinary people may hate John D. Rockefeller when he was just a businessman and when his job did not require being popular. But when a Rockefeller runs for Senate or a top political position (take Nelson Rockefeller), he is suddenly an adored celebrity, voted over and over and over. Same for Donald Trump. In sight, in mind. Out of sight, out of mind.
Let's look at one of financiers most demonized by the press, since you spoke of nefarious super rich financiers.
Vikram Pandit, CEO of Citibank, is currently paid $1 million a year. Pretty high, except it is a small fraction of the billions of dollars in profits his banking business makes. Having or not having this man makes a difference of billions for Citibank, and they need only pay him a million. On top of that, he worked for no pay for two years, just to keep his business shielded from public wrath during recession years. Had he truly been one of the powerful elite, he could have continued drawing out a huge salary and not cared one bit what others thought of him. That he worked for no pay is possible a sign that he was fearful for his life.
Now, I don't want to be an apologist for Pandit, when there is a distinct possibility that he has a few skeletons in his closet. But the dichotomy you set is now not very convincing.
For it seems that even top bankers are relatively modest people compared to that other elite of columnists, sportstars, filmstars, talking heads, and politicians.
Who IS the elite exactly? It is ever unclear.
"For it seems that even top bankers are relatively modest people compared to that other elite of columnists, sportstars, filmstars, talking heads, and politicians."
I am afraid that you have a rather antiquated view of banking.
Furthermore, your argument about CEO pay is irrelevant. The CEO is an officer of the corporation, not necessarily its owner. Mr. Pandit is merely a servitor of men far wealthier than himself. These servitors may be subject to media demonization since they are never indispensable, but the true owners are not. Wall Street firms and multinational oil companies are typically owned, for all intents and purposes, by vast pools of private equity whose wealth dwarfs that of even the most highly-paid entertainer.
Furthermore, you are only referring to Mr. Pandit's approximate BASE SALARY and are forgetting about stock options and other such benefits that vastly increase one's actual income.
"In 2008, Pandit's compensation package was valued at $38.2 million. But most of that pay was made up of restricted stock and stock options."
http://www.ndtv.com/article/business/citigroup-gives-ceo-vikram-pandit-a-big-raise-80898
Who are the ruling elite of the Western world you ask? The top of the pile consist of ....
1. High finance in London and New York
2. Major arms manufacturers, private military firms, private intelligence firms, etc.
After them, then you can get to the oil majors, Big Pharma, and other such lesser lobbies.
Thank you for that correction.
Stock options, as I understand, are locked for many years before they are usable. On one hand, it's not exactly money immediately in one's own hands, but on the other hand, that compensation package is pretty big.
Tax the rich? Heck no. Just allow them to pay their fair share of the expanding Empire. Let us count the ways.
1)CBO Congressional Budget Office) says the total for the Iraq operations is about $752 billion since the United States went to war there in 2003, compared to the $386 billion for Afghanistan since 2001.
When operations in Iraq and Afghanistan are combined together and some "other" costs are added, U.S. taxpayers have spent $1.26 trillion on both wars, CBO says.
2) A Budget surplus before G. W. Bush and record deficits after him.
3) Bail-outs of the largest Banks and investment firms in the world?
4) New War in Libya
Collin Powell, James Baker and Madeleine Korbel Albright had a recent debate in our National Cathedral. (Afterall, is this not what Cathedrals are for?) The one common point of agreement was with General Powell's assertion that Mr. Rumsfeld's recent book about 9-11, Iraq, and Afghanistan "is deceptive when not delusional."
Physician, Heal thyself!!
I found this quote of Polybius of ancient Rome in a historian's blog:
"There were no funds in the treasury to finance the enterprise; but in spite of this, thanks to the patriotism and generosity of a number of leading citizens, the money was found. Single individuals or syndicates of two or three, according to their means, each undertook to build and fit out a quinquereme, which was fully equipped on the understanding that they would be repaid if the expedition was successful. In this way a fleet of 200 quinqueremes was quickly made ready."
Apparently, there was once a brief time when the wealthy funded wars with their own money and lifted their own heavy weights in order to get things done.
Now, if only the war in Iraq were funded 100% from the pockets of the hawkish statesmen most interested in it. Why not leave the rest out of it!
The Copenhagen Opera House, the most expensive opera house in the world, was funded entirely by a foundation. Politicians complained because of the tax credit earned by the huge donation (over $500 million). The design was also criticized for being too commercial. (The front entrance looks too much like an automobile grill.) (Maybe Dr.Flemming can add people who are not satisfied with free stuff to his list of jerks.)
Anyone who's spent time working in that sewer Wall Street knows the wealth earned there is unmerited--a swindle mostly, and that Wall Street has next to nothing to do with the efficient allocation of scarce capital resources (per Blankfein) and everything to do with the manipulation of insider information. There is no philosophical, religious, ethical, moral, political, or cultural justification that I'm aware of for such obscene wealth and the disparity of wealth in this country.
How about the Founders thinking on the limits of private property rights? I'm reading Novus Ordo Seclorum again, which deals heavily with the Founders beliefs on the limitations on property rights, scamming markets, etc., and I'd say the Founders are rolling over in their graves at the current state of affairs. We need to distinguish how the wealth was acquired. As far as Wall Street goes, I say confiscate it all, not because it will lower the budget deficit, but because it's unmerited and otherwise due to the type of preferment that is antithetical to our founding spirit. Throw Bernanke, Geithner, et al., in jail and then throw away the key.
Dan, all you are really saying is that some people earn more money than others and some people have more money than most.
I don't care that some people earn more money than others.
Most people I know also don't care.
So why do you care? I simply ask, because third-party anger is on the rise in today's world, and I have too begun to get curious about why some people care that Tiger Woods had extramarital affairs, why some people care that Kurt Cobaine and other celebrities keep dying of drug overdoses, or why some Wall Street executives have money. Columnist Thomas Sowell suggested people today have such a vested interest in these things, because their personal responsibility occasionally takes a backseat to a faux responsibility for all of humankind. Life is too boring when we mind our business, for sure.
To be honest, that's how I feel about one American Founding Father, Thomas Jefferson. As he wrote in one of his letters, he met an old French lady who needed money for bread. He did the right thing by giving her the money. But afterwards, he entered into pointless moody contemplation about disparity of wealth in France. As if he would feed every hungry French child by being angry about it.
"Where there was no solution, there was no problem." - James Burnham
I agree with Dan, until after WWII, the greedy rich were looked upon with contempt. Teddy Roosevelt called them the "malefactors of great wealth" and Founders looked with contempt with anyone whose only claim to fame was "mere money".
I've made quite a bit in the market, but anyone with a brain knows its really nothing more than sophisticated gambling casino run by crooks. Our current worship of the wealthy is just another side of the decline of America. Millions love Trump, but he's done nothing except make himself rich by building gambling joints that go bankrupt.
#15
Mr. Sanjay you continuously confuse wealth procured through equitable commerce and that procured through inequitable commerce. Unfortunately for your perspective, every moral system of any substance that has been known to humanity considers that difference to be important.
Dan is saying that those who make piles of money from pursuing essentially destructive activities do not deserve their wealth. The Wall Street interests have all the moral legitimacy of Mexican drug kingpins. Consequently, they should also find themselves behind bars.
"I don’t care that some people earn more money than others.
Most people I know also don’t care."
Most yuppie types do not care because they entertain the delusion that they will also be able to achieve stratospheric levels of income at some point.
Furthermore, you are confusing two very different things:
1. The truth that one cannot make real positive change in the world without first rectifying one's own conduct.
2. The ultra-liberal sophistry that one should forget about justice altogether and focus on gratification in one's own life.
At a time when the actions of the Wall Street financiers are pushing the world into economic collapse, societal upheaval and ever-more prevalent war, it is a strange notion of individual responsibility that considers condemnation of such actions as being irresponsible.
"I have too begun to get curious about why some people care that Tiger Woods had extramarital affairs, why some people care that Kurt Cobaine and other celebrities keep dying of drug overdoses..."
Human society is inevitably hierarchical. The question is what hierarchy dominates? According to what source of legitimacy? In any case, an elite must rule in the name of justice. No one can explicitly claim authority in the name of evil. Consequently, the elites inevitably hold themselves out as exemplars for their lessers to follow.
In the contemporary Western society, egoistic entertainers and athletes (a highly visible but practically marginal element of the elite) who are fabulously talented in a certain area but are at best mediocre or even degenerate in their other qualities have been held up as moral exemplars for the rest of society to follow. Naturally, when their less desirable features come to public attention, public revulsion follows.
My goodness, Jonathan, you are putting words in my mouth.
When did I say that self-gratification should be life's end? I didn't say it. You said it.
When did I say that I hope to achieve plutocratic levels of income? I didn't say it. You said it.
When did I say that a man who cheats to make money deserves it? I didn't say it. You said it.
I understand that internet discussions involve framing charges and leaving the burden of proof on others to prove themselves innocent, but that's not a game I enjoy playing or a game you'll enjoy much either.
Jonathan, all I say is that if you have money, you can give it away, you can spend it, you can keep it, and then you can forget about it.
But if you are thinking so much about money - your money or other people's money - then what end does that serve, other than thinking about money? And when you are the one who is thinking so much about money, you should not accuse me of being the money-minded person.
Let alone accuse me of hoping to achieve stratospheric levels of income...
third-party anger
I can't speak for the others here, but for my part I could not care less about the riffraff who lost homes they should never have bought and were not making payments on in the subprime crisis. I could not care less about the many thousands of "struggling families" peddled in the Obama campaign who blew themselves into negative net worth by binging on credit cards during the "good times." I couldn't care less about some exurban loser who paid $500,000 for a shoddily built snout house dozens of miles from any economically viable urban center and can no longer afford either the mortgage payments or the gasoline for a high-density commute in a SUV.
Henceforth I shall give only egotistical reasons for my anger:
I am angry that, fresh into the workforce, I have almost zero options for saving money--including speculating in the precious metal bubble--that are not guaranteed to end with my savings disappearing in five to ten years.
I am angry that this situation is being aggravated by the deficit-financing of immoral wars in which I would have no part.
I am angry that my wages are garnished at breathtaking rates to support the most bloated, outdated functionary infrastructure in the world.
I am angry that my country of birth is being subsumed into the worst sector of Latin America and that in thirty years' time I may not be able to visit it the same way.
I am angry that the government of my country of birth has collaborated with Muslims in the destruction of Christians in multiple places across the globe, and yes, this is egotistical, because I live in a Christian country and our governments have for at least fifty years been actively trying to make us less Christian and more Muslim and will not hesitate to imprison or kill my friends AND myself if we start making an unacceptable level of noise about this.
Yes, but what you are angry about, NGPM, is far more legitimate.
The fact that Middle Eastern Christians are losing their lives is a far graver situation than the fact that some people unjustly have more money than others.
There is nothing "unjust" about having money than someone else. There is everything unjust about plundering others to get it. I think that is what angers most of the people here.
It is true: they say that behind every great fortune lies a great crime. Tyranny settles down and is royalized and legitimized through the generations. But the current masters seem to be disproportionately kleptocratic. That cannot be a good thing.
I think Prateek Sanjay would be singing a different tune if he spent some time waiting tables at the clubs in New Canaan, Greenwich, Westport, Manhasset, Garden City, etc., for the young parasites on the Street with the real money, having to genuflect before their children like an animal to put food on his table. I barely have the stomach to reply to such self-abasing idiocy. But, the Street's rotten down to its bottom-rung losers (those financial advisors with the alphabet soup of bogus credentials after their name) working in Main Street brokerage offices, with their tasseled loafers and pastel socks, monogrammed and starched shirts, and Brooks Brothers club ties, who were charging up to 2% of a person's portfolio value throughout the '08 financial crisis, who couldn't get a job going for coffee at a trading desk. They don't have a clue what's going on--the market goes up, and the market goes down according to their efficient markets theory--and anyone who listens to them or thinks the trading software that comes with a brokerage account makes them a "player" is a damn fool who deserves to lose everything during the next blowoff. At the top, Wall Street is populated almost exclusively by the tribe--nothing fishy about that, right? Mr. Sanjay. Anyone who thinks these people got there by anything but collusion is a rube. Jim Cramer, for example, was fingered for getting calls from CNBC so he could front run breaking news, and he's a lightweight nobody. To defend the wealth of Wall Street crooks, the crony capitalists, or the real estate tycoon who's only advantage is unmerited preferment at your bank, ad nauseam, is really a sick confirmation of the emasculation of America. Oh, no, let's not tar and feather these rotten bastards, let's instead praise them.
Mr. Sanjay,
The comment about yuppies was uncalled for and was poorly formulated. I apologize. It should been written as the following:
Most yuppies do not care because they do not believe that their own opportunities for social mobility will be affected by the plunder that goes on at the top.
The rest of what I wrote still stands.