Terrific Piece on Reuters Commentary Page by Helaine Olen on Inequality Spurs Some Musing

January 31, 2014

Ms. Olen’s piece, framed around President Obama’s ideas for combatting income inequality (you’ll note he did not touch on the major cause–public policy), rang familiar to those of us passionate about this issue, both on the subjects of inequality and the attitude of the people on the far side of the income gap. She sums up the latter point with particular precision:

For the wealthy, the combination of isolation and privileged affluence leads to an increasing social cluelessness and entitlement. The smallest criticism is viewed as a personal affront — as venture capitalist Tom Perkins revealed when he compared criticism of wealthy people such as himself to the Nazi persecution of the Jews. As Josh Marshall at Talking Points Memo put it:

“There’s a slice of the population, whether it’s the top 1 percent or .01 percent or whatever, that doesn’t just have more stuff and money. The sheer scale of the difference means they live what is simply a qualitatively different kind of existence. That gulf creates estrangement and alienation…”

As for the rest of us? We live with a sense that the fix is in, that there is one set of lenient rules for the plutocracy, and a harsher set for everyone else. That explains the gallows humor about private profits and socialized risk, and the fury average Americans feel when demonized for buying homes they could not afford while the banks and mortgage companies that lent out all that mortgage money have escaped with little more than slap-on-the-wrist fines.

It’s corrosive, this sort of divide. It feeds on itself. People who believe they are permanently destined to look through glass windows at their financial betters are volatile. So too are the people on the other side of the divide — scared that every waspish comment about $4 slices of toast means Robespierre is around the corner.

I’ve written often about income inequality on this blog, so I’ll give that part a rest this evening and just look at the other issue. Loads of people have gotten there before me, of course, such as Jonathan Chait, Kevin Drum, and Ms. Olen herself. But, since I finally have some time to write, and since I’m speaking from the experience of losing my job when the bond market froze up, I think I have something to contribute to the discussion.

Referring to French Revolution is a bit classier than Mr. Perkins’ ugly and offensive remarks in a recent letter to the editor published by the Wall Street Journal. He has since sorta, kinda backed away from his words, but I doubt anyone believes he means it.

Perkins’ remarks were only the latest in a long line of let-them-eat-cake statements of contempt for those of us–the 99%, in current parlance–who aren’t as rich as they are. Remember those laugh-a-minute guys from Enron? Then there was Berkshire Hathaway VP Charlie Munger who, in 2010, told an audience that people whose lives had been trashed by the financial crisis his fellow plutocrats ignited should “Suck it up and cope.” Mitt Romney, on the campaign trail 2012 and since, has repeatedly laughed off concern about income inequality as nothing more than the product of “envy.” One could go on, but, well, coals to Newcastle.

Get right down to it, we’re growing sick of being on the losing end of a rigged game, watching Life get harder, meaner, smaller not because we’re stupid or lazy but because those of Mr. Perkins’ class have been able to steer public policy in their favor. They pour millions into groups like ALEC that push state legislatures to pass laws that undermine organized labor, prevent people from voting, and make our communities less safe. Their brethren occupy powerful positions in government, guiding policy to their collective advantage. I don’t remember anyone from the 99% calling for deregulation of the financial markets back in the day.

As recently as a few years ago, we might well have been satisfied if there had been just a little bit of justice. Okay, guys, you trashed the economy, walked away rich and largely unscathed, how about we extend unemployment benefits until things turn around, raise the minimum wage, or provide affordable health insurance? Nope, they said, that’s Socialism. Maybe a small tax increase? You blaspheme! they roared.

Perhaps instead of making the connection to the Nazis, they should follow Ms. Olen’s lead and think further back. They might learn that the longer people are forced to wait for justice, the higher the price of that justice will be.

There’s a particular kind of irony to hearing the bleating from Mr. Perkins and his class kin. For years, we were told they were amassing unbelievable wealth because they darned well earned it. They were obviously smarter, faster, tougher. They took great risks, and wealth was their reward.

Take the last one first. Risks? They don’t know the meaning of the word. Let them trade places with a coal miner, a cop, a firefighter, or a steelworker. Those and other folks who perform in really dangerous, but essential work risk their lives every day. I’ll bet Mr. Perkins’ family never had to worry as he walked out the door that he might not come home alive from the job.

Tough? Well, looking at their collective track record they’re really more bullies than anything else, good at being tough on people who can’t fight back. But let anyone criticize their actions, and, oh dear, call my therapist. You want tough? Tough is the husband and father who’s lost a job and listens to his wife and children cry themselves to sleep from the stress as the weeks run on and he still hasn’t found work.

But even as they wail, they still find ways to rub their contempt in our faces, as when the aforescorned Mr. Perkins showed off a wristwatch estimated to cost $380,000. Think about that: the man has a wristwatch whose price is almost twice that of the median-priced single-family home in the U.S. and more than seven times the median household income. And he complains about a little finger-pointing?

Dude, as Mr. Munger advised, suck it up and cope.



Born Today in 1882

January 30, 2014


A man who cheerfully exclaimed, “I love a good fight.” We could use somebody like that right about now.


45 Years Ago Today, Where We Once Belonged . . . .

January 30, 2014


Pew/USAT Survey: A Lot of Middle-Class Americans are Worried, With Good Reason

January 29, 2014

“Despite a slowly recovering economy, the proportion of Americans who identify themselves as middle class has dropped sharply in recent years. Today, about as many Americans identify themselves as lower or lower-middle class (40%) as say they are in the middle class (44%),” says a recent from Pew and USA Today.

They have good reason to worry. Previous Pew research found that “adults whose annual household income is two-thirds to double the national median [their working definition of middle class) is the only one that also shrunk in size (during the 2000s). . . .” Pew notes the 2000s were the first time since the end of World War II, mean family incomes declined for Americans in all income tiers, and the middle-income tier took the hardest hit:

“In 2011, this middle-income tier included 51% of all adults; back in 1971, using the same income boundaries, it had included 61%. 2 The hollowing of the middle has been accompanied by a dispersion of the population into the economic tiers both above and below. The upper-income tier rose to 20% of adults in 2011, up from 14% in 1971; the lower-income tier rose to 29%, up from 25%. However, over the same period, only the upper-income tier increased its share in the nation’s household income pie. It now takes in 46%, up from 29% four decades ago. The middle tier now takes in 45%, down from 62% four decades ago. The lower tier takes in 9%, down from 10% four decades ago.”


Late Night Listening with Otis Redding

January 28, 2014

Released January 27, 1968, a few weeks after we lost him:


Some Things to Keep in Mind While Listening to the SOTU

January 28, 2014

First, don’t expect anything particularly bold or progressive. Give the administration credit for pushing income inequality into the debate (I personally feel, as passionate as I am about this issue, we need different language that illustrates this is the product of ordinary people getting screwed, but save that for later), but don’t count on a populist call to arms. Besides, as Zach Goldfarb in the Post writes, Obama may not have a lot of maneuvering room.

I understand, via NYT’s Annie Lowrey, that he’s planning to dust off the old idea of creating economic areas for special investment. This has been tried many times before, without the expected results. They’re always “zones,” “Enterprise Zones” or “Opportunity Zones” or some such. Obama’s calling them “Promise Zones.”

Since we’re not going to be talking about how the whole economy got royally rogered by a few rich, greedy hustlers who bent the law to serve their personal wealth and left the rest of us to struggle while walking away largely unscathed and certainly unpunished, let’s consider the context of tomorrow night’s speech:

1. Nearly five years after the recession “ended,” a big chunk of the country has not recovered.

2. For the first time, working-age Americans make up the largest group of recipients of food stamps.

3. Profits are soaring, and productivity is generally on the rise, yet wages are falling, in part because profits are soaring.

4. A lot of jobs being created don’t pay very well.

There’s tons more, of course – long-term unemployment, a concentrated assault on organized labor, continued efforts to gut social programs – but you’ve already got the idea.

Perhaps the President, who’s not going to get any cooperation from the Republicans who control Congress anyway, might just once want to come out swinging on the side of ordinary Americans, call for some economic justice, and commit his administration to re-righting the economic wagon so that more people can climb back aboard.

Sigh. Not holdin’ my breath.


Harvard Study – Economic Mobility Stuck Where It Was 50 Years Ago

January 26, 2014

This should be a call-to-arms. It will, in all likelihood, be characterized by some (three guesses) as illustrating the failure, the utter failure, I tell you, of social programs and why people should get and stay married. The authors find five factors that have a strong correlation to economic mobility – segregation, income inequality, social capital, education, and family structure – but they also point out. “[W]e emphasize that these factors should not be interpreted as causal determinants of mobility . . .”

Derek Thompson, blogging at The Atlantic’s site, has this handy illustration of the report’s examination of where people can have hope, and where they can’t.