|Email not displaying correctly? Click here for Too Much online | Subscribe | Share|
||September 29, 2014|
U.S. attorney general Eric Holder announced his plans to resign last week, and media outlets promptly responded with assessments of his tenure. Curiously missing from these assessments: any coverage of Holder’s failure to criminally prosecute Wall Street's finest for the massive fraud and malfeasance that helped melt down the financial industry — and the economy around it — back in 2008.
Other nations made different choices in the wake of that meltdown. Iceland, for instance, has sentenced four execs at that nation’s top bank to multiple years in prison. Iceland also didn’t bail out its misbehaving banking giants. Officials let them go bankrupt instead.
The lesson in all this: We really don’t need to suffer the super rich, on the financial front or anywhere else. The sooner we understand that lesson, we note in this week’s Too Much, the sooner we can start really saving our planet.
|GREED AT A GLANCE|
Should the U.S. government “do more to reduce the gap between the rich and the poor”? The Public Religion Research Institute’s American Values Survey has put that question to a broad cross-sample of the U.S. public for the past three years. The results from the Institute’s latest survey, released last week, show growing support for more pronounced egalitarian action. By a 66 to 32 percent margin, Americans want to see elected leaders do more to confront inequality, a gap up from 63 to 35 percent last year and 60 to 39 percent in 2012. By nearly the same margin, 64 to 34 percent, Americans agree that the nation’s economic system “unfairly favors the wealthy.” Some 69 percent also agree that “corporations do not share enough of their success with their employees.”
Former handbag mogul Bruce Makowsky feels America is facing a housing shortage — for really wealthy people. His solution? He’s now building super deluxe mansions “on spec.” His first, an eight-bedroom Beverly Hills property, carries an $85 million price tag. Makowsky told reporters recently that he’s clearly trying to attract “a very narrow group,” the sort of folks who can appreciate a 24-person dining room table with place settings that run $3,700 apiece. Makowsky so far has two offers for his initial Beverly Hills spec house — and three more manses in the pipeline. Ultra luxury real estate, says New York appraiser Jonathan Miller, “has become a new global currency.” Since 2010, Miller's realty firm calculates, “at least 20 U.S. homes have sold for $50 million or more.”
Exploring down under, says the personal submarine manufacturer U-Boat Worx, “has never been so much fun and so easy.” Easy, that is, for anyone with a spare $2.3 million. Last week, at the 24th annual Monaco Yacht Show, U-Boat Worx unveiled its new Super Yacht Sub 3, a submersible that can take a trio of deep pockets as deep as 300 meters down. Every yacht owner, says U-Boat Worx founder Bert Houtman, can now “enjoy the amazing underwater world.” In comfort. The Sub 3 comes with “luxury leather seating” and complete air-conditioned climate control. Totally unrelated fun yacht fact: The 10 most expensive super yachts now plying the Seven Seas, calculate researchers at the Singapore-based Wealth-X, have a current combined value of $4.3 billion.
Quote of the Week
“Overall, the higher the level of income inequality in a county, the higher the reported rate of maltreatment of children tends to be. That is true no matter what the average family income happens to be.”
Few journals battle inequality any better than the American Prospect. Now Too Much readers can get a complimentary one-year subscription. Sign up today!
|PETULANT PLUTOCRAT OF THE WEEK|
Thomas Piketty took the world tour for his blockbuster bestseller Capital in the Twenty-First Century to South Korea earlier this month. But one local power suit didn’t exactly roll out the red carpet. Center for Free Enterprise chief Hyun Jin-kwon complained just before Piketty’s arrival that the French economist “provokes our natural feelings of envy for other people’s success and contends that we can resolve this envy by raising taxes on a small number of people.” If Piketty’s perspective gains any traction, Hyun Jin-kwon added, “the Korean legend of economic growth will end with our generation.” Some feel that legend may have already ended. South Korea’s bottom 90 percent accounted for 70.8 percent of national income in 1995, but take only 55.1 percent today.
|IMAGES OF INEQUALITY|
Good news! You don’t have to settle for 24-carat yellow gold if you want the accessory company Brikk to hustle up a luxury version of the new iPhone 6 for you. The Brikk team is offering its “Lux” iPhone model in 24-carat pink gold, too. Want a carat of white diamonds to “embellish” the Apple logo? That will bring your unit’s price to $8,395. You do get a one-year warranty with every order.
Grassroots Economic Organizing/ A decentralized collective of educators, researchers, and activists working for an economy based on democratic participation, worker and community ownership, social and economic justice, and ecological sustainability.
|antidotes to inequity|
Must economics always be an pedagogically “dismal science”? Progressive profs and students have been organizing worldwide to build vivid real-life phenomena — like rising inequality — into the standard conservative curriculum that dominates the world’s postsecondary economics departments. Over two dozen economists working under the banner of the CORE Project are preparing a free online text they hope can serve as the foundation for an entire new curriculum. Their motto: “Teaching economics as if the last three decades had happened.” Students from over 30 countries, meanwhile, have launched an International Student Initiative for Pluralist Economics to combat “the dramatic narrowing of the curriculum that has taken place over the last couple of decades.”
Payday lenders make financial industry execs $10 billion in fees by trapping working Americans in a cycle of endless debt. Join the Preyday Lenders campaign to stop them.
|inequality by the numbers|
Stat of the Week
The general public in the developed world, says new survey data from 2012 highlighted last week in the Harvard Business Review, would like to see a much smaller gap between CEO and worker wages. The ideal gap? No public in any of the 16 major nations surveyed wants to see CEOs making over nine times what workers receive. The U.S. public puts the ideal gap at 6.7 times. America's actual gap in 2012: 354 times.
Why an Unequal Planet Can Never Be Green
The more wealth concentrates, the greater the strain on our biosphere. Top environmentalists get that connection. Now our societies must.
What is it going to take to save the planet from environmental devastation?
Sheer people power? We certainly saw that on the eve of last week’s UN Climate Summit in New York. Some 400,000 marchers packed the streets of Manhattan. Millions more rallied the same day in over 2,600 other actions in 162 countries.
Or can simple shaming get world leaders to start seriously addressing the climate change challenge? We saw some serious shaming last week, too.
Spoken-word poet Kathy Jetnil-Kijiner from the Marshall Islands — the nation climate change most immediately endangers — helped open Tuesday’s UN summit with an open letter to her baby daughter that reportedly brought many of the 120 world leaders present to tears.
That letter, unfortunately, wouldn’t be enough to bring those world leaders to their senses. Last week’s summitry, a Christian Science Monitor analysis notes, left the international community “without a comprehensive strategy to fight climate change,” just the hope that maybe the next summit “would enact a plan to slow and eventually reverse the upward growth of global carbon emissions.”
People have been entertaining hopes along that line, British commentator George Monbiot has observed, ever since world leaders first started gathering for environmental summits back in 1992.
“These summits have failed for the same reason that the banks have failed,” Monbiot explains. “Political systems that were supposed to represent everyone now return governments of millionaires, financed by and acting on behalf of billionaires.”
Expecting these governments to protect the biosphere, Monbiot adds, makes no more sense than “expecting a lion to live on gazpacho.”
Why should that be the case? Over recent decades, analysts and activists have made all sorts of links between the increasing degradation of our global environment and the increasing concentration of our global wealth.
The super rich, for starters, stomp out a huge carbon footprint. The best symbol of this stomping? That may be the private jet.
These high-powered playthings of the global elite emit six times more carbon per passenger than normal commercial jets. Between 1970 and 2006, the number of private jets worldwide multiplied by ten times over.
The super rich don’t just consume at rates that dwarf the consumption of mere financial mortals. Their profligate spending stimulates endless consumption all the way down the economic ladder.
“Large income gaps,” as Rob Dietz and Dan O’Neill point out in their book Enough Is Enough, “lead to unhealthy status competition and consumption of materials and energy beyond what’s necessary to meet people’s needs.”
In more equal societies, analysts note, most people can afford the same things. In that environment, things don’t matter all that much.
But things become a powerful marker of social status in unequal societies where most people can’t afford the same things. In these societies, you either accumulate more and bigger things or find yourself labeled a failure.
How do we begin to reverse this endless consumption cycle? We can overcome “socially and environmentally destructive status competition,” social scientists Richard Wilkinson and Kate Pickett argue in their just-published pamphlet A Convenient Truth, by working to "extend democracy into the economic sphere."
Firms with worker representatives on their governing boards, employee-owned companies, and co-op enterprises “typically have much smaller pay differences within them,” note Wilkinson and Pickett, the authors of the landmark bestseller The Spirit Level: Why More Equal Societies Almost Always Do Better.
We also need to work together, suggests Boston College sociologist Juliet Schor, to start evolving the “community provisioning of basic needs,” through, for instance, publicly owned utilities that provide households power and heat at sustainably reasonable prices.
All this working together won’t be easy. People, at some level, are going to have to trust each other, notes Bill Kerry of the UK’s Equality Trust. But inequality undercuts trust. The more unequal a society, research has shown, the less trust within it.
The less democracy as well. In nations where income and wealth concentrate the most severely, the wealthy can wield their wildly disproportionate political power to derail the environmental reforms that threaten their gravy trains.
Energy company CEOs, for instance, can squelch limits on carbon emissions that endanger their corporate profits — and personal rewards.
These execs are now using “their considerable financial and political power,” notes veteran activist Chuck Collins, “to block sane energy policy, extract taxpayer subsidies, thwart renewables, and limit consumer choice.”
The wealthy can also employ their wealth to end run sane resource policies that do make it into effect. In drought-ravaged California, for instance, wealthy landowners in Montecito, news reports relate, have been “paying more than ten times the going rate for water” to sidestep new local water use limits.
These wealthy landowners are having water trucked in from private wells elsewhere in the state “in a desperate bid to save their manicured lawns and towering topiary.” The trucks are destroying local roads.
Like this article? Sign up
Other Montecito affluents are rushing to drill private wells on their own property — at $100,000 a pop — that could eventually empty local aquifers.
“If the world can’t find a way to collectively curb emissions by its largest users,” policy analyst Jim Tankersley noted last week, “rich countries — and rich people within those countries — will buy relief that the poorest among us cannot.”
The struggle against environmental degradation and for greater equality, in short, need to go hand in hand. A deeply unequal globe can never be sustainable. The “greenest” major city on Earth, Oslo, doesn’t just happen to sit in Norway, one of the world’s most equal nations.
Environmental activists increasingly understand this connection. Spreading that understanding — and acting on it — has now become our biggest challenge. We can solve both inequality and environmental decline, as the Earth Island Journal’s Annie Leonard sums up neatly, “but only if we see the two struggles as one.”
Susan Holmberg and Mark Schmitt, The Overpaid CEO, Democracy, Fall 2014. This year’s best overview of our executive overpay crisis.
Andy Stone, Listen carefully and you can hear it: bzzz . . . kersplat! Aspen Times, September 24, 2014. Concentrating wealth is turning ordinary folks into bugs on a windshield.
Jim Hightower, How Wall Street’s Robber Barons Are Exploiting America's Farmers, Alternet, September 24, 2014. The rich get richer while farmers become tenant laborers.
C.P. Chandrasekhar, Is Rising Inequality Inevitable? Naked Capitalism, September 24, 2014. This Indian economist doesn’t think so.
Paul Krugman, The Show-Off Society, New York Times, September 26, 2014. Exploring why the wealthy spend so profligately.
James Kwak, Who Are the Good Guys? Bull Market, September 26, 2014. Inside class exploitation in Silicon Valley.
Useful Statistics, Useless Conclusion
The problem this imperative creates: Researchers at global finance firms are having an ever harder time developing their own compelling statistical niche.
The researchers at Allianz, in their fifth stab at an annual global wealth report, have come up with a new niche. They've unveiled a brand-new “wealth matrix.”
The 2014 Allianz Global Wealth Report divides the world’s 53 top economies into quadrants. One includes the world’s most unequal nations. In each, the richest 10 percent of the population holds over 50 percent of national financial assets.
Another quadrant holds the world's most equal nations. The third and fourth highlight nations transitioning to either more or less equal status.
An interesting exercise, with predictable results. The distribution of wealth, Allianz finds, is “deteriorating” in most nations, with this development nowhere “more marked than in the U.S.”
So what do the authors of this Allianz report conclude from their stark stats?
“Anyone hoping to achieve more even wealth distribution,” they write, “should not aim to limit asset growth by imposing taxes and levies.”
Also predictable. What else do you expect a global high-finance company to say?
|About Too Much|
Too Much, an online weekly publication of the Institute for Policy Studies | 1112 16th Street NW, Suite 600, Washington, DC 20036 | (202) 234-9382 | Editor: Sam Pizzigati. | E-mail: email@example.com | Unsubscribe.