There’s Nothing Wrong with Being Rich

One of the frustrating aspects of this election is how the right has used the rhetoric of “class war” to try to make it seem like the Democrats are anti-wealth.  Using terms like “envy, jealousy” or even a charge that Obama and the left “hate the rich,” they paint a picture of a bunch of snarling socialists angry that they couldn’t succeed and plotting to take the wealth hard working Americans struggled to create.

Of course, that’s so far from reality as to be laughable.   Unfortunately when hundreds of millions of dollars, scores of pundits and even the most popular news network in the country amplifies and promotes such rhetoric, it’s easy for reality to get lost in the noise.

It is not bad to be rich.   It is good, honorable and worthy of praise to work hard, take chances, succeed and then be able to provide well for your family.   It’s also impressive and good for the economy to have icons like Bill Gates, Warren Buffet and Steve Jobs who may earn more than they’d ever need, but do so having contributed greatly to what this country has become.   Their individual efforts are a great part of the collective good that America has achieved.

However, what people don’t like is injustice.   Not a whiney “it’s unfair that the CEO gets $4 million and I work hard and only get $60,000.”   Yeah, that may contain a lot of unfairness when looked at the level of abstract morality, but given the way the system operates it’s often a necessary and even beneficial unfairness.    By injustice I mean a real sense that some people are able to bend and even shape the rules of the game to their advantage in a manner that harms others and the country as a whole.

Yes, you can pass down your wealth, but achievement and work should do more than birth to determine success

One reason people supported Barack Obama in 2008 was due to a belief that something had gone very wrong in the US.  Jobs flowed overseas, the middle class dwindled, and Wall Street engineered an inside job that, while barely legal (and sometimes not) hurled the global economy deep into crisis.   They hoped an outsider with a vision of change could shake up the institutions and resurrect the American dream.

Four years later people realize that the idea one man could do that was naive.     The way his efforts to compromise and find middle ground were rejected by a Republican leadership bent on reclaiming power made things worse, but given that this is a global crisis, the Democrats are wrong to say GOP obstructionism is why there hasn’t been more improvement.   Crises like these are driven by forces beyond the control of even governments.   A rebalancing of the global economy takes time.

The problem with Romney and the GOP agenda is that it’s backwards looking.   It seeks to resurrect the deregulatory mentality of the last thirty years and trust the markets.   And while there are a large number of people committed to that free market ideology, the arguments to support it are meager.   The evidence is strong that de-regulation failed, and that tax cuts lead not to more jobs but to chasing bubbles.   The growing gap between the very rich and the rest is impossible to ignore.

As society grows wealthy all workers and owners should improve; if one group gains at the expense of the other (not due to their own efforts), that’s wrong.

Rather than recognize that the free market alone can’t solve this crisis, the GOP so far has doubled down on ideology.   The only way they can pull it off is to wage class war – to say it’s the Democrats and the “poor” against Republicans and freedom.   A class war rallying cry that the Democrats represent the takers, while the Republicans represent the makers.   A simple dichotomy where you can’t choose rational regulation and an overhaul of the tax code with both sides compromising.  No, compromise seems to be seen as capitulation.   It’s either you choose socialism and envy of the wealthy or freedom and praise of the rich.

That’s a false dichotomy consisting of two bad choices.   Socialism doesn’t work, big government is dangerous, and very few Democrats want to tax the rich into oblivion.   Indeed, all but the most radical tax hike proposals still leave rates below where Ronald Reagan fought to put them back in the early eighties.   Rather, the argument is:  1) the wealthy have benefited disproportionately over the last 30 years and need to help pay for trimming the deficit; and 2) the wealthy benefit greatly from the way their lobbyists have rewritten the tax code and created the capacity to pay a far smaller share of their income than do average middle class folk.

Point two is the most salient, and that’s why Romney’s tenure at Bain and his tax documents are very important.   They illustrate the point Obama is making — that the system is structured against the middle class in favor of the very wealthy. The very wealthy are not suffering.    Pointing that out isn’t class war, trying to protect unjust structural attributes that benefit one group over another is.

The Democrats have to be clear:  wealth is not bad.   After alll, many very wealthy, successful people support the Democrats.  Steve Jobs supported President Obama, as does Warren Buffet.    We need a system that truly rewards innovation and hard work, not lobbying efforts and inside information.   We need to produce stuff, not bizarre financial instruments with the capacity to obliterate credit markets.

Mitt Romney famously said that corporations are people.   Well, so is government.   Both big corporate actors and big government represent centralized power with the capacity and information to do things that most average folk can’t do.   But governments are supposed to act according to the will of the people with rule of law as the goal; corporations act by the will of the shareholders with profit the goal.   Governments shouldn’t be in bed with corporations because the power of those two together shove out average folk and the middle class.

When that happens politics just becomes what the Romans called panem et circenses — bread and circuses.   Make sure the people are fed and have some spectacle to jolt their emotions.   Gladiator games or talk radio.   Chariot races or talking heads screaming at each other on CNN.    True accountability disappears; democracy is replaced by marketing.   If we go that route we’ll fall deeper into crisis while, as Don Henley put it:

Although released in 2000, Henley’s LP prophetically foreshadowed this crisis

Ah, it’s open season here my friend
It always is; it always has been
Welcome, welcome to the U.S.A.
We’re partying fools in the autumn of our heyday
And though we’re running out of everything
We can’t afford to quit
Before this binge is over
We’ve got to squeeze off one more hit
We’re workin’ it

….

We’ve got a whole new class of opiates
To blunt the stench of discontent
In these corporation nation-states
Where the loudest live to trample on the least
They say it’s just the predatory nature of the beast

But, the barons in the balcony are laughing
And pointing to the pit
They say, “Aw look, they’ve grown accustomed to the smell
Now, people love that shit
And we’re workin’ it.”
Workin’ it

We got the short-term gain, the long-term mess
We got the suffocating, quarterly consciousness
Yes man, run like a thief

– Don Henley, “Working It” from Inside Job

Advertisements
  1. #1 by lbwoodgate on July 21, 2012 - 03:51

    Well stated

  2. #2 by Jeff Fordham on July 21, 2012 - 04:45

    Scott…….thank you….as they say……spot on

  3. #3 by Kristine Hunt on July 21, 2012 - 18:01

    Sometimes I think all of US politics boils down to false dichotomies.

    I read an NY Times article about Alex Soros, which quoted him as saying “I detest the idea that money is speech, but if the other side is going to do it, you have to do it.”

  4. #4 by pino on July 22, 2012 - 03:56

    It’s Romney’s inability to understand the institutional advantage that he gains from the government’s tax code largesse, that’s a little offensive to people, especially considering Romney’s view on anyone else who looks to the government for things like, I don’t know, food and medicine.

    You know what’s a little offensive to me? That people look to the government for things like, I don’t know, food and medicine. And college. And cell phones. And home loans.

    One of the frustrating aspects of this election is how the right has used the rhetoric of “class war” to try to make it seem like the Democrats are anti-wealth. Using terms like “envy, jealousy” or even a charge that Obama and the left “hate the rich,” they paint a picture of a bunch of snarling socialists angry that they couldn’t succeed and plotting to take the wealth hard working Americans struggled to create.

    How else would you categorize Obama’s use of “the rich need to pay their fair share” combined with “you didn’t build that?”

    but given the way the system operates it’s often a necessary and even beneficial unfairness.

    Yes. I would suggest that the CEO is often dramatically higher in the cognitive ability scale than the line worker. Further, the CEO suffers significantly more sacrifices; hours worked, travel, relocation etc.

    The way his efforts to compromise and find middle ground were rejected by a Republican leadership bent on reclaiming power made things worse, but given that this is a global crisis

    See Obama, “I won.”

    Democrats are wrong to say GOP obstructionism is why there hasn’t been more improvement.

    My point exactly.

    The growing gap between the very rich and the rest is impossible to ignore.

    You aren’t including compensation other than cash.

    • #5 by Scott Erb on July 22, 2012 - 04:32

      Obama’s “you didn’t build that” was falsely edited by FOX and Romney. He was talking about support and infrastructure. It’s sleazy how they twisted it to appear to say something it doesn’t. Compensation other than cash? The wealthy get the best of that too!

      Pino, you’re better than this. You’re relying on ‘soundbites’ to make your case. One has been debunked (the ‘you didn’t build that’), and the other — ‘I won’ — is pretty meaningless. You need to actually address the real points rather than play sound bite emotion games.

      • #6 by pino on July 22, 2012 - 04:49

        Obama’s “you didn’t build that” was falsely edited by FOX and Romney. He was talking about support and infrastructure.

        Many many things:

        1. Where were you when Romney was misquoted as saying, “I like to fire people?”
        2. I didn’t get this from FOX.
        3. I cede the point. Obama was clearly referring to infrastructure. However, the left won’t cede that Obama led with:

        But you know what, I’m not going to see us gut the investments that grow our economy to give tax breaks to me or Mr. Romney or folks who don’t need them. So I’m going to reduce the deficit in a balanced way. We’ve already made a trillion dollars’ worth of cuts. We can make another trillion or trillion-two, and what we then do is ask for the wealthy to pay a little bit more. (Applause.) And, by the way, we’ve tried that before — a guy named Bill Clinton did it. We created 23 million new jobs, turned a deficit into a surplus, and rich people did just fine. We created a lot of millionaires.

        There are a lot of wealthy, successful Americans who agree with me — because they want to give something back. They know they didn’t — look, if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something — there are a whole bunch of hardworking people out there. (Applause.)

        His whole speech in Virginia was this point; the rich need to pay “their fair share.”

        You’re relying on ‘soundbites’ to make your case. One has been debunked (the ‘you didn’t build that’)

        Absolutely not. Obama actually believe that business owners did not build their business on their own. In fact, I think you feel the same way.

        the other — ‘I won’ — is pretty meaningless.

        It provides a contradiction top the claim Obama is this angle of compromise.

        I suspect there are many line workers who are superior to CEOs on core cognitive ability, but they didn’t have the same breaks so they ended up being smart people on the line.

        I suspect that you are wrong; the number would be very low.

        To try to claim CEOs “sacrifice” more than workers is absurd! I mean, it’s over the top!

        I know VP’s, not even CEOs, that work in excess of 90 hours a week. They wake up, having traveled so far, so long and so often, they they don’t remember where they are. They haven’t seen their kid pass a karate belt, dance a ballet or played a piano recital. They’ve moved from city to city as the job demands and often times see their families less than 2 days a week.

        Tell me Scott, how much money would have to be offered to you to live the next 10 years from a hotel 90% of the time. How much would you have to make to agree to miss your kids school play, debate competition, first communion, science project or simply to work 90+ hours a week.

        I suspect, to your credit, you wouldn’t take any amount of money. But some do. And because of that we have computers, banks, steel, trains and medical devices.

        So, guessing you wouldn’t trade the amount required to be a top flight CEO for the millions they make, who is sacrificing? You or them?

      • #7 by classicliberal2 on July 22, 2012 - 04:54

        “Obama’s ‘you didn’t build that’ was falsely edited by FOX and Romney. He was talking about support and infrastructure. It’s sleazy how they twisted it to appear to say something it doesn’t.”

        The idea that the Obama is “anti-business” or “anti-rich” is a ludicrous caricature, and the fact that finding something to support it required manufacturing such an outrageous lie (dutifully and mindlessly parroted above) speaks to its soundness.

        Another amusing trick is to look at things the Obama says when he’s hitting a populist note on the campaign trail, and use that to represent his views, rather than what he’s actually done (extended the Bush tax cuts, refused to fight for financial reform, the too-big-to-fail bill, the anti-job-export bill, and on and on and on).

      • #8 by classicliberal2 on July 22, 2012 - 04:58

        “2. I didn’t get this from FOX.”

        It came from the Romney campaign, and was picked up and run into the ground by Fox. You got it from one, the other, or from someone who had gotten it from one or the other.

        And you can’t “cede the point,” then repeat the lie, as you just did, and expect anyone to take you seriously.

    • #9 by Scott Erb on July 22, 2012 - 04:34

      I suspect there are many line workers who are superior to CEOs on core cognitive ability, but they didn’t have the same breaks so they ended up being smart people on the line. And “Sacrifices!” CEOs live in luxury, take vacations to exotic places (average workers don’t earn enough for much of a vacation), and relocations are paid for. To try to claim CEOs “sacrifice” more than workers is absurd! I mean, it’s over the top!

    • #10 by Kristine Hunt on July 22, 2012 - 16:11

      I think most people only look to the government for things like food and medicine when the economic and political system is stacked against them paying for those things themselves. The people I know who have been on public assistance, including welfare, subsidized housing, and food stamps, wanted to get back to supporting themselves as soon as possible. I also know plenty of people working way over 40 hours a week just to barely get by.

      As for this whole thing of “You didn’t build your business on your own,” I agree that it’s a pretty self-evident assertion. Of course your business wouldn’t exist without all your hard work. But it also wouldn’t exist without serious infrastructure investment by the government paid for through taxation on everyone. Most small businesses that I know of rely on networking and word of mouth — again, not doing it alone. Not to mention all those hard-working people who are that business’s customers. Nobody creates wealth in a vacuum.

      I have yet to hear a compelling argument to support maintaining the tax code to give the wealthy their current advantages. The trickle-down theory has never borne fruit, for example.

  5. #11 by pino on July 22, 2012 - 05:11

    It came from the Romney campaign, and was picked up and run into the ground by Fox. You got it from one, the other, or from someone who had gotten it from one or the other.

    No.

    I got it from listening to the speech. I got it from reading the speech, I got it from listen to the man. I got it from the listening to the left.

    I got it from being raised poor. I got it from working my way through high school. I got it from working my way through college. I got it from graduating college. I got it from carrying three jobs. I got it from working 70 hours a week. I got it from carrying a pager and then a cell phone, 7×24. I got it from bringing my work laptop to my wedding. Then my honeymoon. I got it from waking up at 3:00 AM. And working until the job was done. I got it from working on Christmas. And Thanksgiving. And Labor Day. And New Year’s Eve. And every other holiday we have. I got it from telling my kids I can’t play catch cause I’m working; at 8:00 PM. Then at 9:00. I got it from moving across the country for my job, to place where I knew not even one single person.

    I got it from doing what other people won’t do. Or can’t do.

    And you can’t “cede the point,” then repeat the lie, as you just did, and expect anyone to take you seriously.

    Obama clearly was referring to infrastructure. However, he really honest to God believes that businessmen did not build that business on their own.

    And, I suspect, so do you.

    • #12 by classicliberal2 on July 22, 2012 - 07:36

      Well, poor pitiful you.

      You flap your arms and blow a lot of smoke, but behind all of it, you’re seriously short of ANY point. What the Obama actually said in those remarks–that those who succeed do so in part because there is a system in place we’ve all created that allows for that outcome–wasn’t even controversial. “The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together.” That’s not a thing to “believe”; it’s a fact. You may not like the implications of it, but it’s no more in question than is gravity.

      I’ve started two small businesses, and I’m working on another. I’m a product of public schools. My businesses got tax breaks, money the government took from elsewhere instead of me because it tries to encourage small businesses. With my first business, my product–its life’s blood–came to me every week via U.S. mail, over roads and bridges for which the public paid. And on and on. I put in every penny I had, put in the ridiculous hours, the ridiculous work, went without a life, and all the rest. Your story, if you’ve ever done a thing with your life at all, is the same as mine. I still haven’t made my fortune. I keep working at it.

      • #13 by Scott Erb on July 22, 2012 - 12:20

        Exactly – what Obama said was simply a keen perception of the obvious. Is Jon Stewart a successful comedian ONLY because he did it on his own? I suppose he could stand alone in front of the bathroom mirror and do routines that amuse himself. But to go out and make a career – you need others. And you need individual initiative. Either one alone isn’t enough.

    • #14 by Scott Erb on July 22, 2012 - 12:19

      Lots of poor people work extra shifts, weekends, holidays and barely make enough. Lower middle class and middle class probably work harder shifts and hours than most CEOs. But you know what — that’s OK. I accept that to build incentives into the system you need such discrepancies. What I don’t accept is a tax code that gives undue advantages to those always wealthy, and how the wealthy use lobbyists, off shore tax shelters, and other nefarious things to avoid taxes, when anyone making over about $35,000 has to pay what they owe. I don’t like the very wealthy complaining about taxes when they pay so little (compared to the rest of the industrialized world) while poor struggle with lack of health care and a struggle just to get food on the table and their children educated. I have NO patience for those who somehow think the poor are lazy or inferior because they don’t make a lot of money, or to those who say that any one who thinks the tax code is unfair and criticizes is somehow jealous or envious.

      And for you to say that Obama really believes individual initiative can’t build business is just like someone saying Romney really believes the poor are worthless chumps who don’t matter. When you start fantasizing beliefs to political opponents like that, beliefs that do NOT come out from what they say (indeed, they say and act as if the opposite is true) then you’re giving up the capacity to listen and consider what Obama and others are really saying.

  6. #15 by pino on July 22, 2012 - 16:17

    You flap your arms and blow a lot of smoke, but behind all of it, you’re seriously short of ANY point.

    Your claim is that I got it from FOX. As if I’m some mindless drone that can only repeat what I hear on a channel I don’t watch all that often. That claim assumes that I’m incapable of assimilating a bunch of words and coming to my own conclusion. That conclusion is this:

    Obama, and you, feel that businesses didn’t get there on their own. Scott just confirmed this with the Jon Stewart statement. So, Obama was referring to infrastructure while at the same time actually believing that businesses didn’t get there on their own steam.

    Well, poor pitiful you.

    Nah, I’m pretty happy in balance.

    I’m pretty glad that a poor kid can make it to the top quintile.

    That’s not a thing to “believe”; it’s a fact.

    If Obama wanted to make that noble, and true, point, he would have said something like this:

    “They didn’t get their on their own. They had to rely on the industrialist who built the company that paved the road, he had to reply on the entrepreneur who bring him his office supplies. That computer he uses? He had to reply on the manufacturer that built it. And the IT company that supports it.”

    He could have made THAT point. But he didn’t. Rather he used government programs to make his point. So, if you ask a business owner if he got their literally alone, he’d answer “No, I rely on other business.” But Obama makes the case that it’s government. You KNOW that he’s making the case for bigger government and higher taxes.

    And THAT is the whole thesis of his speech. Not this lofty “On the shoulders of giants” that you’re trying to give him.

    With my first business, my product–its life’s blood–came to me every week via U.S. mail, over roads and bridges for which the public paid.

    You make my point. You’re selling me more government. And I don’t want it.

    Lower middle class and middle class probably work harder shifts and hours than most CEOs.

    Work harder? Do you think differential calc is harder than stitching ball gloves together?

    More hours? That is so silly as to not reply.

    What I don’t accept is a tax code that gives undue advantages to those always wealthy, and how the wealthy use lobbyists, off shore tax shelters, and other nefarious things to avoid taxes, when anyone making over about $35,000 has to pay what they owe.

    Then say that. And fix that. Raising the rate is populist nonsense and doesn’t change your complaint.

    I don’t like the very wealthy complaining about taxes when they pay so little (compared to the rest of the industrialized world)

    We fought a war so that we wouldn’t be like the rest of the world. What you raise as a complaint I see as a feature.

    or to those who say that any one who thinks the tax code is unfair and criticizes is somehow jealous or envious.

    That is Obama’s currency. It’s the fight he’s picking.

    And for you to say that Obama really believes individual initiative can’t build business is just like someone saying Romney really believes the poor are worthless chumps who don’t matter.

    That is an honest comparison.

  7. #16 by Scott Erb on July 22, 2012 - 17:17

    Having read a number of books on the financial crisis, it became clear these CEOs raking in tens of millions were clueless about their own industry and often vain and even lazy. The idea that somehow CEOs work that much harder or are that much smarter than average workers is preposterous. They are paid much much more for about the same — or sometimes a little more or a little less — work. No, I think that’s part of what happens in a market. Unless one buys into the labor theory of value, some are going to get more than others because of the role they play. That’s good – that creates incentives and that’s why it is not bad to be rich. But when the wealthy stack the deck in their favor, start gaining massive wealth while the rest are stuck, and then give themselves huge tax breaks because they somehow think they *deserve* all the money they are able to rake in because they think they actually are worth that much more than others, then they are acting like the old aristocrats of past eras.

    They need a reality check – they are where they are in part because of the stable social system they enjoy, the infrastructure built by others, and much, much more. They benefit from the power and influence their wealth provides. Again, that’s simply a fact. That said, many of them also used initiative and daring, especially small business or first generation wealthy who pulled themselves up out of poverty or middle class. Clearly it’s just as wrong to say the rich did nothing to deserve their wealth as it is to demean the poor because they need government assistance. Dissing on either the rich or the poor is class war from either side.

    • #17 by classicliberal2 on July 22, 2012 - 23:36

      “Clearly it’s just as wrong to say the rich did nothing to deserve their wealth as it is to demean the poor because they need government assistance.”

      The far right characterizes left commentary on the matter of wealth and poverty as offering a narrative about “the evil rich,” but you’ll struggle to find anyone pushing such a notion out side of the fevered fantasies of the far right; it’s a caricature, offered up to avoid discussion of the real issues involved. The far right offers up the inverse notion–“the lazy poor”–all the time, and do so as a means of manufacturing a politically beneficial wedge. The problem facing the U.S. with regard to wealth and poverty doesn’t have anything to do with that kind of stupid soap opera narrative, though.

      In the U.S., wealth concentration, which had been flat or declining since the Great Depression, began to rise again in the mid-’70s and accelerated like mad from the ’80s forward. Wealth in the U.S. is now more concentrated than at any time since the Gilded Age. Various methods of measuring wealth differ slightly, but they all agree on that. Going by the figures developed by Edward Wolff at New York University (who has worked on this longer than anyone), the top 20% of Americans, as of 2007, own an incredible 85.1% of the wealth in the U.S. When it comes to total financial wealth, the top 20% has an even more incredible 94% of it. It’s nearly three times more concentrated now than in the 1970s. The 400 wealthiest people in America now how more wealth than nearly half the entire U.S. population.

      And, if it needs to be said, wealth concentration is incredibly destructive, and a sign of an economy and a society in decline; when it reaches the levels it has in the U.S., in serious decline. The trend of the last few decades, if it isn’t arrested, is the end of the good ol’ U.S. of A. Last year, Joseph Stiglitz authored a piece for Vanity Fair about some of the incredibly destructive consequences of it:
      http://www.vanityfair.com/society/features/2011/05/top-one-percent-201105
      The U.S. has been moving toward a hardened two-tier society for a few decades, with one set of rules for those with money, and another for those without. This has been particularly obvious in areas such as the health care and criminal justice systems. Just Friday, Media Matters ran a piece debunking the latest piece of propaganda by the tort “reform” crowd. This is a VERY well-financed effort, going back a few decades, to try to completely insulate the rich from being sued by ordinary people. Congress is purchased by those with wealth, and works diligently to protect their interests, rather than the public. For more than 3 decades, beating back public regulation of Big Business has been the prevailing sentiment, there. The tax code openly distributes wealth upwards. Want to move U.S. jobs offshore? Congress ensures the public will help pay for that, too, and any effort to stop the practice will be filibustered. Run your business into the ground, causing serious disruption across the entire economy? Well, the congress you bought will fix that too, and they’ll even beat back any serious effort to prevent you from doing the same thing again.

      This is one of the most serious issues facing the U.S. now, and it will remain one because of the even more serious issue that trumps it and all others: the belief among a growing percentage of the population (the conservative part) that everyone is entitled to their own reality, and that political considerations can dictate the substance of this reality. I call this group the Bubble People. Those who live within a bubble of their own puerile political fantasies and never interact with reality in any meaningful way. They’re a minority, but they enjoy insanely disproportionate power (because those with money and power foster the delusion in order to serve their own interests) and are enough to prevent any action on any of the other serious issues we face, or even any real discussion of those issues (they have all but destroyed public discourse in the U.S.).

  8. #18 by titfortat on July 24, 2012 - 02:02

    Hasnt it always been this way?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: