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Wit and Wisdom
|Posted on January 8, 2012 at 5:50 PM||comments (38)|
Much was rightly made of Newt Gingrich’s recent avowal that he’s “not rich,” despite an annual income of several million dollars and a net worth somewhere between $6.7 and $7.5 million. It’s certainly a stark example of how disconnected the wealthy are from the economic realities of mainstream America.
But the former House Speaker’s finances and his view of them illustrate other important points as well. The first is that the spectrum of riches has become so extended in our country that it’s possible for a multimillionaire to view himself as strictly middle class.
Gingrich poor-mouthed himself as part of his struggle for the GOP presidential nomination against Mitt Romney, a rival he’s trying to define as a Wall Street plutocrat. Since Romney (whose net worth is approximately $200 million) has some 30 times the wealth of Gingrich, looked at comparatively, Gingrich isn’t rich.
But for the purposes of public discourse and policy-making, wealth can‘t be breezily dismissed as all in the eye of the beholder—there should be an objective standard, and that standard should in a democracy be the average citizen. By that yardstick, Gingrich is rich: he stands in approximately the same position financially vis a vis the typical American family—30 times as wealthy—as Romney does to him.
What’s mind-boggling, though, is that there are individuals who similarly dwarf Romney—multi-billionaires beside whom the former Massachusetts governor must feel like a pauper. These are the hyper-rich, handfuls of whom own more assets than whole, thick percentile slices of the rest of the U.S. population. These are the folks who have benefited so magnificently from the scandalously low tax rates on passive income like capital gains and dividends—rates that have exacerbated our nation’s widening, destabilizing wealth gap and added billions to the national debt.
Also pointed up by Gingrich’s finances is the important, often-overlooked distinction between income and assets. If this distinction were better understood, even high earners would be more likely to support appropriate tax rates on passive income—the kind of money made by other money, rather than by work.
This income-asset distinction shows that significant wealth doesn’t spring from hard work alone. Look at Gingrich: he’s making several million dollars a year, principally from his production company (which publishes books, makes documentaries, and otherwise monetizes the ideas and celebrity of Newt). Whatever you think of his products, Gingrich is essentially a small-business owner who works for a living: writing, editing, giving paid speeches. Because that multimillion dollar income comes from work, it’s taxed at a marginal rate of 35 percent. And after many years at this kind of high-paid employment, he’s accumulated what by rich-person standards is a fairly modest fortune.
Now if he had inherited wealth—or been a high-tech entrepreneur who struck it rich in a stock deal, rather than crashed and burned like dozens of equally hard-working entrepreneurs who were less lucky—he could enjoy the same multimillion dollar income and pay no more than 15 percent on it, since it would be income (capital gains, dividends) generated by money, not work.
The moral is that high-paid athletes, actors—and political performers—should feel free to join the cause of tax equity, since it’s not principally targeted at them. Even with years of hefty salaries and ample small-business income, their chances of joining the hyper-rich and enjoying millions of dollars of passive, low-tax income are not much better than those of the 99 percent.
|Posted on December 26, 2011 at 6:51 PM||comments (37)|
Suggesting voluntary contributions to the Treasury are a viable alternative to a more equitable tax system reveals an ignorance of the difference between charity and taxes, between individual and communal action. Charity and taxation, though both indispensable components of a civilized society, nonetheless represent very different principles and scales of action. A cynical conflation of the two does an injustice to them both.
Charity is good for the world and good for the soul. It springs from personal conviction and can achieve great ends, especially from the power of example. But charity by its very nature is capricious. Certain favored causes gain, while others equally or more deserving languish.
In a democratic republic such as ours, taxation and the pubic investment it funds represent, however imperfectly, the collective decision of the populace. As in a family, club or organization, once a course of action is agreed upon, every member is expected to contribute to its success according to individual ability, not individual choice.
Moreover, the capacity of the two processes—charity, and tax-supported public spending—are of entirely different magnitudes. The assets of the world’s largest charity, the Bill and Melinda Gates Foundation—the entire assets, mind you, not the merely the annual income they produce—would fund the federal government for a grand total of three days. Achieving big and important things requires public investment; the tax system that pays for it is only stable and reliable if it is fair.
Wealthy people who advocate for higher taxes on themselves and people like them, but abstain from making voluntary contributions to help retire the federal debt, are being perfectly consistent. Their aim is an improved system of taxation in which everyone takes an appropriate part, not haphazard, insufficient acts of charity that fall entirely to the most generous. It is the critics who know better but pretend not to understand the difference between taxes and charity who are the hypocrites.
|Posted on December 15, 2011 at 5:45 PM||comments (40)|
“Hey, Jimmy, would you lift the other end of this trunk so we can get it in the car?”
“Because if you keep asking me to lift pieces of luggage, I‘ll lose interest in this trip. And I’m central to us having a good time. Check the photo albums: I’m the happy-memory-creator.”
“Son, this is a family vacation we all agreed on. Now help me with this trunk.”
“Dad, don’t you see we can’t go on packing like this? We don’t have a lack-of-lifting problem, we have a too-many-Bermuda-shorts-and-deck-shoes problem.”
“You’re right: sometimes we pack too much. But this is a long vacation and we’ve already cut down our luggage by three suitcases. The stuff in this trunk is important. So help me lift it.”
“Look, Dad, if the trunk is so important to you—if you’ll feel guilty if we leave it behind—fell free to lift both sides yourself. Just leave me out of it.”
“I can’t lift both sides. We each have to do our part. Now lift the trunk!”
“Do you realize that half our family lifts no luggage at all?”
“Your mother’s in a wheelchair, and your sister’s four years old.”
“Still, it means they’re not fully invested in this vacation. And why do lifting duties always fall to me?”
“You’re on the high school weight-lifting team. It seems like a good fit.”
“Aha! You’re punishing my success, undoubtedly through envy.”
“Jimmy, I’m your father—we’re your family—we’re all proud of you. We want you to succeed. But given that you can bench press the rest of us combined, it seems reasonable to ask you to lift heavy objects.”
“Sounds like socialism to me.”
“Lift the trunk!”
“Now it sounds like fascism.”
|Posted on September 28, 2011 at 5:01 PM||comments (24)|
Political prognosticators, including some conservative ones, declare that a candidate as radical in his views as Governor Rick Perry cannot defeat President Obama—even in the midst of a recession—because the swaggering Texan will alienate moderate swing voters. But history shows voters who have abandoned an incumbent are not easily won back simply by sowing fear of the opponent, however extreme that opponent’s ideology may be.
A good example came in 1980. Then, like now, the economy was in bad shape: instead of today’s Great Recession, it was 14 percent inflation at the beginning of the year followed by a sharp (though short) recession that summer. Then, like now, a seemingly endless confrontation in the Middle East was straining the public’s patience: instead of Afghanistan, it was the Iranian hostage crisis. President Jimmy Carter’s competence and leadership ability were questioned then just as President Obama’s are now.
Enter Ronald Reagan. With his name now adorning airports and government buildings (part of an official “naming project” of the Right, intended to weave the Gipper’s memory and ideology into our collective unconscious), it may be hard to remember what an extreme and polarizing figure he was considered when the 1980 presidential campaign began.
Admittedly, I was firmly ensconced in the East Coast liberal elite world, but it’s still worthy of note that the principal of my school—a sober, level-headed fellow—declared he would move to Canada if Reagan was elected. (I don’t think he followed through on his threat.)
Why the fear and loathing of Reagan? Well, he casually discussed the possibility of nuclear war, claimed air pollution came from fallen trees, and espoused a “blame the poor” social policy not heard from a serious political leader since the 19th Century.
And yet, the economy was in bad shape, America seemed trapped overseas and Jimmy Carter was unpopular. Reagan, the former actor and television pitchman, was able to reassure the nervous middle with some prime time commercials. And when Carter in a debate tried to stoke the fear again, Reagan permanently doused it with his now-famous line: “There you go again.”
The lesson is that Obama supporters should not assume an extreme Republican candidate like Perry can’t beat their man. When the nation is in turmoil as it is now, sometimes the only attribute the electorate is looking for in a challenger is that he not be the incumbent.
|Posted on September 12, 2011 at 1:37 PM||comments (31)|
Some of the religious-minded saw a political message from God in the earthquake, hurricane and flood that hit Washington in quick succession this summer. Recent FEC filings, however, reveal it wasn’t the Almighty behind the string of meteorological disasters, but a force perhaps even stronger: a super PAC—specifically, the Get Our Dominance (GOD) Super PAC. (Thanks to recent Supreme Court rulings, and much to the consternation of campaign reformers, Super PAC’s can raise and spend unlimited amounts of political money with little or no oversight or disclosure.)
We sat down with the director of GOD Super PAC to find out more about the organization’s goals.
US: What does GOD Super PAC hope to accomplish?
GODSP: We want the American public to know how angry God is with the mess in Washington.
US: He told you so?
GODSP: No, that’s the one thing we can’t do as a Super PAC: coordinate with the candidate. But we have faith that we’re accurately representing His views.
US: Wait a minute: “candidate”? Is God running for something?
GODSP: Most observers agree there’s still plenty of room in a largely unsettled GOP presidential field. If there’s time for Chris Christy to get in the race, there’s time for God. Remember, He’d be starting with excellent name recognition and very high favorables.
US: How do the earthquake, hurricane and flood come in?
GODSP: We’re softening up the political class and media for the ultimate campaign launch. Of course, they’re mostly atheists, so we had to go all Old Testament to get their attention.
US: But how did GOD Super PAC cause all these natural disasters?
GODSP: I’m afraid that’s proprietary information we’re not required to disclose.
US: How much does an earthquake cost, anyway?
GODSP: I don’t have to tell you. But believe me, it ain’t cheap.
US: So where’d you get the money?
GODSP: Wouldn’t you like to know? But check the wording on the door you just came through: “Super PAC,” my friend. Don’t have to say.
US: Many might think it’s impossible for a PAC—even a Super PAC—to cause catastrophes on that scale with no Heavenly assistance.
GODSP: I didn’t say there was no assistance, I said there was no coordination. If we just happened to come up with the same idea as God and pursue it along parallel lines towards a common goal—well, that’s not against the rules, that’s just good luck.
US: But are you sure God’s running for president?
GODSP: God knows. But that’s what we’re praying for.
|Posted on August 22, 2011 at 4:11 PM||comments (20)|
“And we’ll need all your receipts from 1947 to 1961, including purchases at newspaper stands and vending machines. In addition--”
“This is ridiculous!”
“What’s ridiculous? That the United States Government wants to audit the finances of one of the nation’s three debt-rating agencies, private organizations responsible for determining the credit-worthiness of every large institution in the world?”
“No, that you’re conducting a witch-hunt against Standard and Poor’s simply because we revoked your AAA bond rating.”
“Did you do that? Huh. We didn’t notice. I guess it’s because we tend to pay a lot more attention to what Moody’s and Fitch are doing these days. They’re kind of more relevant. You know--more accurate and responsible. Cooler. Anyway: did you supply us with your pre-World-War-I lease agreements yet?”
“Don’t give us that. You’re mad at S&P because we downgraded you to AA+. And that’s precisely what we should have done. You’re dysfunctional. You’re just lucky we didn’t lump you in with Albanian turnip bonds. At least we know someone’s going to dig up the turnips next year. Do you know if you’ll have a budget next year?”
“Oh, we’ll have a budget. In fact, the budget for credit-rating investigations will be practically unlimited. So, do you know the marital status of all your employees great grandparents? We’re going to need copies of their blood tests.”
“Instead of having this temper tantrum, you should be figuring out how to get Democrats and Republicans to see eye-to-eye.”
“We agree on one thing: S&P sucks tailpipes.”
“Nice. Now try balancing your budget. Shouldn’t be hard: you’re only off by about a trillion dollars a year.”
“Are you sure you don’t mean a buck ninety-seven? Math hasn’t been your strong point lately.”
“It’s hard to do math when the federal government is using all the zeroes.”
“Not quite: check your boardroom.”
“Wall Street swindlers!”
“Wait a minute. This is getting us nowhere. Maybe it’s different in government, but in business, you can always come to a mutually-agreeable understanding. Just as a for instance: what would it take to make this whole fed probe go away?”
“Oh, you mean, what would cause the Justice Department to conclude its investigation without significant findings of misconduct and no referral to the Criminal Division? Hard to say: ever since the credit downgrade, we’ve had to push really hard on possible financial malfeasance, just in case there’s any uncollected taxes involved. And changing the subject entirely: what would it take to get our triple A rating back?”
“Oh, you mean, what’s the procedure for a reappraisal of endemic credit risk in the light of new circumstances? Well, first of all it takes a lot of man-hours, and unfortunately right now a big chunk of our staff is tied up in responding to this federal investigation.”
“Think we have a deal. Who says Americans can't work together anymore?”
|Posted on August 3, 2011 at 4:38 PM||comments (16)|
We’ve got to be very quiet now—we’re coming close to the nesting area of that prized rarity: the Great American Job Creator. This was an animal long thought extinct; now, the Republican Party is fighting hard to expand the kind of business-friendly environment this very delicate creature apparently needs to survive.
We’ll just push aside these last tax shelters and...there it is! Just by that Capitol Hill watering hole—did you see? Unfortunately, he saw us too and immediately broke off his lobbying—he’s probably half way back to the narrow canyons of Wall Street by now. Gosh, what a majestic creature! Did you see how he flashed his gold cards as he ran?
Earlier we spoke to some local workers who have lived among the Job Creators for generations. Our economic guide will translate.
WORKER 1: Even though it was still profitable, they shut down the factory and shipped the machinery to China because the people there work cheaper.
TRANSLATION: The Job Creators made a prudent business decision to increase net profit through lower unit labor costs.
WORKER 2: Unfair trade deals are killing jobs, endangering our health and undermining our democracy.
TRANSLATION: Hooray for free trade!
WORKER 3: Why can’t billionaires pony up a few extra bucks so we aren’t holding classrooms in broom closets and my grandmother doesn’t freeze to death next winter?
TRANSLATION: How can we create an even more business-friendly environment for our Job Creators?
As the Republican Party continually reminds us, the Great American Job Creator is in trouble. But you can help this shy and easily-discouraged animal.
If you ever see anyone proposing regulations to combat fraud, protect our health or clean up our environment, remind them of the devastating effect such regulatory constraints would have on the fragile Job Creators in their annual migration through the business cycle. If you encounter people criticizing free trade, ask them if they really want to prevent the Job Creators and their brood of cash from being able to run free and wild across national borders, helpfully trampling nettlesome sovereignty underfoot. But most important of all: if you ever hear politicians even considering a tax increase on the wealthiest Americans, tell them they are in reality contemplating a death sentence for the gentle, blameless Job Creators.
FUN FACT: Did you know that, despite its name, the Great American Job Creator does not actually create any jobs? Linguists speculate the name derives from political jobs maintained through use of the term.
|Posted on July 31, 2011 at 8:43 AM||comments (13)|
Whatever shape the final budget deal takes, it will have been crafted along strictly Republican lines. Important government services—those serving the needs of the most needy—will have been cut, while taxes—on the wealth of the most wealthy—will not have been raised. Why such an uncompromising “compromise”?
The determining role played by the GOP’s Tea Party wing brings to mind several analogies. An old psychological dictum is that every family is controlled by its most neurotic member. A madman with dynamite and hostages has a lot of leverage. And if you can’t fight, act crazy, and people will tend to leave you alone.
But what are the limits of the right-wing extremists’ ability to set the terms of debate by their intransigence, messianic belief system and apparent unconcern for the consequences of their actions? How can the more sane among us exercise our rights?
One way is simply to show up. Many of the Tea Partiers who now control our government were elected last fall because large segments of the Obama coalition failed to vote in the midterm elections.
Another is to organize and focus. Minority opinions—not only on the federal budget, but on gun control, relations with Cuba, and more—can effectively control public policy because of disproportionate interest: though fewer in number, zealots care more about their cause and prosecute their position with greater vigor than the larger but more diffuse opposition. Of course, the majority—because it is bigger—need not replicate the fervor of the few in order to make their case: just a slight rise in all our voices can drown out the noisy minority.
Families can learn to control their neurotic members, rather than be controlled by them. It simply takes cool, calm and concerted effort—and a determination not to let madness reign.
|Posted on July 13, 2011 at 8:02 AM||comments (528)|
Police investigating the News Corp. phone hacking scandal today released a transcript of a call between an unlisted Manhattan number and the private line of Senate Minority Leader Mitch McConnell.
--Senator McConnell, there’s someone on the line for you--at least I think it’s for you--he asked for the “bozo in charge” and said you’d know who it is.
--Thanks, Pam, I’ll take it.
--Is this the bozo in charge?
--You know who this is?
--Let me ask you something: do you like your job?
--Very much, yes, sir.
--And your cushy office, with the Monument view?
--I’m viewing it right now, sir.
--And your family?
--Just making sure you’re paying attention. Now here’s another set of questions: do you know you can mess with my radio stations? In my car?
--I didn’t know that, no, sir.
--You can. You can climb right into the passenger seat and start pushing buttons like a kid on an elevator. I don’t care.
--Very flexible of you, sir.
--And do you know you can mess with my hair? Just step right up and helicopter the heck out of it.
--Of course, I never would...
--But you could. Go to town. Seconds before I’m supposed to address the board. Don’t mind.
--Very free-spirited of you, sir.
--But do you know what you can’t mess with?
--I’m almost certain I know.
--Don’t mess with my money.
--All this flirting with default is messing with my money, Mitch. Messing with my bonds. Messing with my stocks. Messing with my money.
--Yes, sir. I can see how frustrating that might be. But you have to understand we have certain elements within the caucus who are quite adamant--
--Adamant? Who’s adamant? Some puffy-faced insurance salesman from East Jesus, Florida, who got sent to Congress on the Tea Bagger Ticket--
--They object to that name, sir.
--on the Tea Bagger Ticket by a bunch of home-schooling machine-gun collectors who think the world is flat, John Wayne was the 34th President and Katie Couric is the devil? What do they know about my money?
--Not much, I wouldn’t think, sir.
--But you know about my money, don’t you, Mitch?
--You like my money, don’t you, Mitch?
--Very much, sir.
--Well, I’ll tell you what. Why don’t you trot out in front of the TV cameras and tell everybody how you guys are going to stop acting like the cast of “Jackass”--rolling down a stone staircase in a shopping cart full of my money--and instead make my money feel safe and secure again with a clean debt-ceiling vote? Can you do that for me, Mitch?
--You mean right now? The negotiations with the White House are at a critical juncture, and I really think we have the upper hand--
--You’re not listening, Mitch. If you don’t do this, my money goes away. And if my money goes away, you go away.
--You don’t mean..?
--That’s right: you’ll wind up in East Jesus, Florida, with the insurance salesman and all those machine guns, drinking Gatorade with the home-schoolers and watching Glenn Beck morning, noon and night.
--I’ll call the press conference now.
--That’s a good boy.
|Posted on July 2, 2011 at 8:08 PM||comments (15)|
Except for the outraged reaction to Barack Obama’s suggestion that “when you spread the wealth around, it’s good for everyone,” no response to a 2008 campaign statement surprised me more than the vitriol directed at Michelle Obama for telling an audience that because of the positive response to her husband’s candidacy “for the first time in my adult lifetime, I am really proud of my country.” Not only did I strenuously object to the strenuous objections lodged against the couple, I couldn’t even understand the opprobrium directed at the Obamas for what seemed to me commonplace observations.
As we celebrate our national independence this weekend, I am reminded of both inexplicable uproars, now framed against a popular claim among the Republican candidates hoping to face and defeat President Obama next year: that the President doesn’t believe in “American exceptionalism.” Although it garnered less attention than the two campaign statements, an answer by President Obama to an interview question early in his administration has apparently stuck in the craw of these GOP presidential hopefuls: “I believe in American exceptionalism, just as I suspect that the Brits believe in British exceptionalism and the Greeks believe in Greek exceptionalism.”
The ancient, healthy, sociable inclination to spread wealth around offers obvious guidance in the current tax and spending debates. But the other two statements deserve particular pondering this holiday weekend, since they go to the question of patriotism, often a fraught subject for liberals.
Comedian and senator Al Franken once compared unthinking, “love it or leave it” patriots to the kind of friends who don’t care enough to offer constructive criticism; he thought a more discerning affection for one’s nation actually took more effort and displayed more respect. I agree. I would add that when it comes to love of country, one size doesn’t fit all--the nature and degree depend on your experience. Returning to Michelle Obama’s campaign confession: that anyone would be angrily surprised that an African-American woman would be pleasantly surprised to feel pride in a country that spent most of its history physically and emotionally assaulting people just like her is...well, surprising.
And that Barack Obama wants to tone down the American exceptionalism talk while trying to repair international relations damaged through too much jingoistic chest-thumping in previous administrations just seems like good sense. The U.S. fills a unique place in the world, stands for important principles, has done and does much good. But there’s too broad a shadow over our record to justify the kind of religious idolatry the right wing apparently demands. Instead of worshipers, let’s be--on this 4th of July and always--good friends to our country, as ready to help correct her faults as celebrate her greatness.