Too Much a commentary on excess and inequality
Too Much a commentary on excess and inequality

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August 2015

This Month

Donald Trump has said some stupendously outrageous things in his bid for the 2016 GOP presidential nomination. He has also been fascinatingly revealing — about the attitudes of extremely rich people.

“I’m the most successful person ever to run for the presidency,” Trump declared this past June. Trump’s proof? His billions. We “very successful people,” the Donald went on to add, don’t even need consultants. After all, he explained, “if the consultant’s so smart, why aren’t they rich?”

Trump is just articulating, of course, what so many of our awesomely affluent fervently believe. The rich must be “successful,” our deepest pockets assume. If they weren’t, how could they be rich?

In our staggeringly unequal contemporary America, few openly challenge this facile equating of wealth and success. But one American philosopher is taking that challenge on. We spotlight her insightful perspectives — and a great deal more — in this month’s Too Much.

 

About Too Much

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Images of Inequality

Rich Kids of Instagram

Summertime and the living is easy . . . for the progeny of America’s wealthiest. How easy? One social media site, the Rich Kids of Instagram, is doing its best to monitor that easiness, with shots of everything from stretching out on private jets to parking boats on super yachts. The site’s motto: “They have more money than you and this is what they do.”

 

Greed at a Glance

Today’s most egregious example of super-rich excess? Business Insider has compiled 21 nominees for that dishonor. Among the excesses: a $20-million Florida mansion built for horses and a champagne delivery service that brings in the bubbly by parachute.

The most expensive private island currently on the market lies in Barbados and hosts a 75,000-square-foot beachfront mansion. The asking price: $125 million.

Luxury realtors really do work for their money. Agents Rayni and Branden Williams have just spent $40,000 making a video promo for a $33-million Los Angeles home they’re hawking. The couple expect to clear $1 million on the sale. Says Rayni: “Money is not an object when we market these homes.”

Inequality by the Numbers

August TM infographic

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Stats of the Month

Inequality at the old ballgame: Back in 1962, the most costly Los Angeles Dodgers game seat ran $5.50, four times the price of a seat in the bleachers. The top Dodger game seat currently costs 30 times the price of a bleacher seat. 

The world’s wealthiest are hiding from their national tax collectors as much as $32 trillion, calculates former McKinsey chief economist James Henry, “a sum larger than the entire American economy.”

Three of the five zip codes with the highest income in the United States sit in New York City. Taxes in each of these three average over $2.1 million per federal tax return filed.

Connecticut’s Bridgeport-Stamford-Norwalk metro area, America’s top haven for hedge funds, also ranks as the nation’s most unequal urban area, says a new 24/7 Wall St. analysis. The area’s poorest 20 percent take home just 2.3 percent of local income. The top 20 percent: 59 percent.

A sign of our plutocratic times: In 2014, the U.S. Census Bureau reported last month, only 41.9 percent of voters turned out for the congressional elections, the lowest turnout since the Census Bureau first began asking about voting.

Some 84 percent of likely U.S. voters in 2016 describe themselves as “concerned” about the influence of Wall Street executives on public officials, including 64 percent who call themselves “very concerned,” finds new Lake Research polling.

 

 

 

The Too Much Interview

How Our Inequality Corrupts Success

In any society where great stashes of wealth amass at the top, philosopher Elizabeth Anderson reminds us, the wealthy will sooner or later see most of the rest of us as failures.

Elizabeth andersonDefenders of our deeply unequal economic order have a standard rejoinder whenever someone suggests that maybe we ought to consider taxing the rich at a somewhat higher level.

“Taking from the successful people to provide for those that aren’t isn’t the solution,” as White House hopeful Jeb Bush pronounced this past spring. “The solution is, How do you build capacity so people can achieve earned success?”

The core assumption behind this Bush pronouncement: Wealth equals success. Those who hold great wealth have achieved great success.

A claim this sweeping raises, of course, all sorts of philosophical questions. Economists and sociologists can’t really help us much with the answers. So Too Much went to someone who could: Elizabeth Anderson, the chair of the philosophy department at the University of Michigan.

The Harvard-trained Anderson may be perfectly positioned for helping us understand how wealth and inequality intersect with notions of success. She’s currently writing a history of egalitarianism from the 17th century days of the Levellers right down to the present day.

Anderson last month shared her take on wealth and success with Too Much editor Sam Pizzigati.

Too Much: Every society defines success. What types of societies come up with the best definitions?

Dominant groups are defining success according to their own narcissistic self-image.

Elizabeth Anderson: I’m wary of any society that reduces success to a single definition. If a society is free, people will pursue different conceptions of the good and define success in different ways. They won’t be unified around a single common definition of success any more than they would be unified around a single common religion.

Now if we have a society that respects basic freedoms — the rights to pursue different conceptions of the good — and this society still appears to share a common definition of success, we most likely have a very unequal society. We have a society where dominant groups are defining success according to their own narcissistic self-image, and that usually involves defining despised groups as unsuccessful and depriving them of the means to attain success as the dominant groups define it.

The societies that arrive at the best, plural definitions of success will be free societies of equals.

Too Much: In our current political environment, candidates like Jeb Bush and Donald Trump seem to equate success with the accumulation of wealth. Is wealth a legitimate yardstick for success?

It’s hard to find a more absurd mistake than to equate success with wealth.

Anderson: It’s hard to find a more absurd and corrupt, yet tempting mistake than to equate success with the accumulation of wealth.

Wealth has only instrumental value. It’s ridiculous to pursue wealth as an end in itself.

That doesn’t mean that accumulating wealth is wrong. There may be legitimate reasons to accumulate: for basic needs, security, comfort and convenience, and for the pursuit of things that do have intrinsic value — for example, among many others, education and the arts, improving the environment, and helping others.

Too Much: If we don’t define success by wealth, what other options do we have?

Read the rest of the full Too Much interview . . .

 

Quotable

“Let us say no to an economy of exclusion and inequality, where money rules, rather than service. That economy kills. That economy excludes. That economy destroys Mother Earth.”
Pope Francis, Santa Cruz, Bolivia, July 9, 2015

“It would be healthier for our society if CEOs were paid less.”
Michael Kagan, managing director, ClearBridge Investments, Reuters,
July 12, 2015

“The most common shared trait among entrepreneurs is access to financial capital — family money, an inheritance, or a pedigree and connections that allow for access to financial stability.”
Aimee Groth, Quartz,
July 17, 2015

“It’s impossible to overcome widening economic inequality without also dealing with the legacy of racial inequality, and impossible to overcome racial inequality without also reversing widening inequality.”
Robert Reich, Raw Story, July 20, 2015

“I’d like to see them implement a maximum wage. If you can’t live off of $100,000,000 a year, there's something wrong with you. There's not a person on the planet that should make more than that in one year.”
Jesse Ventura, former Minnesota governor, Examiner, July 21, 2015

“There is something profoundly wrong when we have a proliferation of millionaires and billionaires at the same time as millions of Americans work longer hours for lower wages and we have the highest rate of childhood poverty of any major country on earth.”
U.S. senator Bernie Sanders, remarks at the Southern Christian Leadership Conference, July 25, 2015


Petulant Plutocrat of the Month

Nigel TravisDunkin’ Brands CEO Nigel Travis is calling the decision to raise the hourly minimum wage for New York fast food workers from the current $8.75 to $15 statewide in 2021 “absolutely outrageous.” This “sudden increase,” Travis declared last month in a CNN interview, will hurt the small-business people who run Dunkin’ franchises. Travis has enjoyed a bit of a “sudden” pay hike himself. He made $10.2 million last year, over double his take-home the year before. That sudden move upped his personal pay rate, assuming he works 50 hours a week, to $4,000 an hour. Travis says the minimum wage hike will mean “less hiring” at Dunkin’ Donuts. Adds the CEO: “I don’t want to sound threatening.”

 

Plutocrats at Play

An over-the-top hobbyist: A hefty chunk of the campaign cash for GOP presidential candidate Ted Cruz, the New Yorker reports, has come from Robert Mercer, a hedge fund exec who once sued “a toy company that installed a model train set in his home and, he felt, overcharged him — by two million dollars”!

Antidotes to Inequality

India Shines a Bright Light on Pay Ratios

Over the past five years, new data show, Wall Street has spent $1.166 billion to elect lawmakers opposed to the Dodd-Frank Act financial industry reforms enacted in 2010 — and another $2.08 billion on lobbying to keep those reforms from going into actual effect.

One result: Corporations today can still legally ignore the Dodd-Frank provision that requires them to annually reveal the ratio between their CEO and median worker pay.

In India, firms now must disclose the ratio between CEO and median worker pay.

The reason? The Securities and Exchange Commission, the chief federal agency that regulates Wall Street, has yet to finalize the rules that would allow this disclosure mandate’s enforcement.

Writing rules for pay ratio disclosure shouldn’t, of course, take over five years. In India, lawmakers passed a CEO-worker pay ratio disclosure mandate in 2013, three years after the passage of Dodd-Frank. That mandate has already gone into effect, and the first required pay disclosures are now emerging.

The top exec at India’s largest cigarette maker, the Indian public has learned, is making 439 times the median employee salary at his company. His counterpart at India’s top IT services firm is pulling down 416 times his company’s most typical employee pay.

Disclosures like these, one Indian business publication editorial noted last month, “drive home the point that income inequality is alive and well in corporate India” — and needs “reining in.”

Pay ratio disclosure makes this “reining in” easier. Disclosure gives shareholders a benchmark they can use to compare the pay gap at their company with the gaps at other firms in their industry.

Many consumers don’t want to do business with firms that overcompensate CEOs.

With this info in hand, observers believe, institutional shareholders in India “have no excuse for remaining silent spectators when corporate boards approach them with exorbitant pay packages.”

But activists in the United wouldn’t have to rely only on shareholders for reining in executive excess if ratio disclosure went into effect. They could link ratios to legislative remedies — by pressing for corporate tax rate hikes on companies with wide pay gaps or pushing to deny government contracts to firms with wide divides.

Activists could also organize consumer campaigns against corporations that overpay their execs at the expense of their workers.

Such campaigns, new research shows, would likely encounter widespread support. If given a choice, Harvard Business analysts Bhavya Mohan, Michael Norton, and Rohit Deshpandé have found, consumers would rather buy from companies with fairer CEO-worker pay ratios.

Ratio disclosure, in other words, could be a game-changer, and activist groups in the United States, Institute for Policy Studies analyst Sarah Anderson relates, are demanding that the SEC end its foot-dragging on finalizing a ratio enforcement rule.

The long-delayed SEC vote on CEO-worker ratio disclosure could come this month.

The AFL-CIO has submitted a freedom-of-information request for all the SEC’s ratio-related records. The labor federation and 18 other labor and public interest groups have also publicly labeled the agency’s five years of delay on ratio disclosure an “unacceptable” reality that suggests the SEC has been “improperly influenced by corporate CEOs.”

This sort of ongoing pressure may be having an impact. The long-overdue final Securities and Exchange Commission vote on pay ratio regulations, news reports now indicate, could take place early this month.

More antidotes: Why do regulators in Washington so often do their best not to irritate overpaid bank and corporate execs? In many cases, they’re counting on these same execs to hire them into cushy corporate jobs that pay astronomically more than they’re making in government service.

Progressive lawmakers last month filed legislation to slow this revolving door between Wall Street and Washington. The new Financial Services Conflict of Interest Act doubles the times former government employees have to wait before they can lobby for a company they used to regulate and bans government employees from accepting bonuses from their former private sector employers for entering government service.   

The lead sponsors for the legislation: Wisconsin senator Tammy Baldwin and Maryland representative Elijah Cummings . . .

New legislation targets the revolving door between public service and corporate suites.

Swiftian satire lives! Two new “modest proposals” have emerged this summer. From London, the city where ugly steel–and-glass towers full of empty investment condos for the ultra rich are turning neighborhoods into soulless wastelands, Rosamund Urwin is proposing a law that would require architects and developers to live in the towers they create.

“That might serve as a reminder,” observes Urwin, “that they have a duty to protect the public interest — not just to take the cash of plutocrats.”

Oxfam inequality analyst Nick Galasso is suggesting that poor nations “invest in inequality.” Back a decade ago, Galasso notes, researchers at Citigroup realized that the goods and services the super rich love to splurge on are getting more expensive. The more expensive these goods and services become, the more the super rich seem to crave them.

Investors could take advantage of all this, the Citi researchers concluded, by investing in “a stock portfolio made up of the luxury items and toys the rich desire.” Poor countries, urges Galasso, could go the same route.

“Why should only investors get to make out on rising inequality?” he asks.

 

Summer Reading

Looking for a gripping yarn that won’t leave you feeling empty after a weekend on the beach? Check out The Rich Don’t Always Win, Too Much editor Sam Pizzigati’s compelling history of the triumph over America’s original plutocracy. Read the first chapter, then order at a special publisher’s discount.

RDAW cover

Peasants
with Pitchforks

The deep pockets who gathered at the Hamptons mansion of hedge fund billionaire Daniel Loeb last month expected a pleasant summer evening with New York governor Andrew Cuomo. The last thing they expected at the $5,000-a-plate political fundraiser: busloads of loud riff-raff from New York City.

That riff-raff, over 250 activists strong, spent two hours outside Loeb’s estate chanting spirited slogans while a plane overhead tugged a “Hedge funds = inequality” banner.

The protest’s organizer: Hedge Clippers, a new group working to expose the damage our billionaire-driven politics is inflicting on average Americans . . .

How best to dramatize the struggle against austerity budget cuts that benefit only the privileged?

British egalitarians have a new answer: a tug-of-war. The activists stretched a rope across a public space in Portsmouth last month and had one team dressed as bankers and pols — the 1 percent — going against the “will of the people.”

The UK’s ruling Conservative Party, noted demonstration organizer Jon Woods, “has no mandate to play Robin Hood in reverse.”

 

 

 

Reports

A look at major new studies

Worlds ApartWorlds Apart: Inequality between America’s Most and Least Affluent Neighborhoods
Urban Institute, June 2015
Rolf Pendall with Carl Hedman

In an America with wealth concentrating ever more ferociously into the pockets of “exceptionally privileged people,” this new Urban Institute study notes, “builders and local governments have many incentives to accommodate clustering of the affluent into their own neighborhoods.”

Builders and local governments have seized these incentives. Between 1990 and 2010, income divides in 433 of the nation’s 570 commuting zones widened. Incomes in the nation’s highest-income 10 percent of neighborhoods rose over 12 percent in that two-decade span. Incomes in the bottom tenth rose less than 1 percent.

Federal, state, and local policies helped forge this neighborhood inequality. Better public policies, the Urban Institute adds, could help undo it — by limiting the creation of “new isolated enclaves of privilege” and investing “more heavily in the very small proportion of the nation’s land mass contained in its bottom neighborhoods.”

A Global Middle Class Is More Promise than Reality
Pew Research Center, July 8, 2015
Rakesh Kochhar

In 2001, only one nation in the world had an appreciably greater share of its population living on over $50 a day than the United States. Back then, Denmark had 66 percent of its people living at that comfortable level, the United States 58 percent.

These days, notes Pew Research analyst Rakesh Kochhar, five other nations surpass the United States on this basic financial security yardstick. Only 56 percent of Americans lived on over $50 a day in 2011, the most recent year with comparative stats available.

In Norway, over three-quarters of the population, 77 percent of Norwegians overall, lived above that level in 2011.

Pew mobility studyEconomic Mobility
in the United States

Pew Charitable Trusts and the Russell Sage Foundation, July 2015
Pablo Mitnik and David Grusky

Within the family of nations, the United States certainly still does rank as an exceptionally high-income country. Worldwide, 71 percent of us live on under $10 a day. Only 5 percent of Americans live on less than $5 a day.

But within the ranks of major developed nations, only the United States is moving backwards. In other words, this new Pew and Russell Sage study details, social mobility in America has hit the rocks.

Our deeply unequal United States, new IRS data show, has become even less socially mobile than experts previously thought.

Also new last month: The more billionaires a nation hosts, the worse that nation will do economically, concludes a new study from Columbia University’s Jan Svejnar and Villanova’s Sutirtha Bagchi. Nations would grow their economies faster, the pair document, if they had less of their money “controlled by the uber rich.”

Wealthy Americans think American families have more wealth than they do, relate Rael Dawtry, Robbie Sutton, and Chris Sibley in Psychological Science, and see “less need to distribute wealth more equally.”

America’s workplaces have become significantly more unequal places since 2007, the U.S. Bureau of Labor Statistics shows in a new paper on the pay divide between high-earning occupational groups like managers and low-earning groups like personal care service workers.

 

New Wisdom
on Wealth

Jim Tankersley, The thing Bernie Sanders says about inequality that no other candidate will touch, Washington Post, July 13, 2015. Redistribution matters more than mindless growth.

Barry Cynamon and Steven Fazzari, Rising inequality is holding back the U.S. economy, London School of Economics, July 13, 2015. A look at the numbers.

Robert Borosage, Hillary Clinton’s Economic Story: Stuff Happens, Our Future, July 14, 2015. Our top politicos need to start explaining inequality.

T.T. Ram Mohan, Why you should question the cult of the charismatic CEO, Quartz, July 16, 2015. The team as a whole must perform.

Thomas Lee, Silicon Valley should drop peer grouping to determine CEO pay, San Francisco Chronicle, July 17, 2015. A silly practice that inflates exec compensation.

Thom Hartmann, How the Billionaires Bought Justice For Scott Walker, Campaign for America's Future, July 20, 2015. Plutocracy is rotting judicial independence.

Sarah Anderson, Is Wall Street pay too high? CNBC, July 21, 2015. Other nations do more to rein in excess.

Dane Atkinson, Executives and Managers Should All Be Elected, Tech Crunch, July 21, 2015. We can purge the workplace of inequalities that grow into deformities.

Esa Jokivuolle, Jussi Keppo, and Xuchuan Yuan, Reducing risk-taking by regulating bonuses: EU vs US Dodd-Frank, Vox, July 23, 2015. Pay caps make more sense than trying to claw back excess.

Gar Alperovitz and Thomas Hanna, Socialism, American-Style, New York Times, July 23, 2015. Public ownership can ease inequality.

Sean McElwee, The 1 percent’s twisted games: How they’re distorting reality and diluting democracy, Salon, July 26, 2015. On the chasm between big donors and the rest of America.

Michael Dorff, Will Hillary reverse Bill? Politico, July 28, 2015. CEO performance pay needs to go.

Alexis Goldstein, Former Texas Senator: CEOs are the real victims, Medium, July 29, 2015. Phil Gramm assails “bigotry against the successful.”

Retorts

Handy rejoinders to the apologists for our top-heavy status quo

The claim: If Americans worked harder, the nation would have less inequality. Americans, as GOP White House hopeful Jeb Bush put it last month, “need to work longer hours and through their productivity gain more income for their families.”

The reality: Average Americans are already working longer hours than their counterparts across the developed world. Americans, in fact, annually put in 30 percent more hours of work than Germans do, as OECD research has detailed.

The claim: Any state — or nation — that attempts to raise taxes on the rich will see its economy suffer and its revenues tank.

No state has ever lost money by raising income or estate taxes for rich people.

The reality: No U.S. state, Center for Budget and Policy Priorities analyst Michael Leachman pointed out last month, “has ever lost money by raising income or estate taxes for rich people.”

At the national level, the same story: Higher inequality does not make countries richer. More equal nations sport economies just as rich, a new Inequality Briefing notes, but with incomes “shared more evenly between rich and poor.”

 

What to Watch

U.S. senator Elizabeth Warren has prepared a four-minute video that tells the story of what the Dodd-Frank financial industry reforms enacted five years ago have accomplished — and why these reforms haven’t accomplished more.

Now featured on
Inequality.org

Sarah Anderson on Wall Street Pay and Dodd-Frank

Bob Lord on the super rich feasting on the middle class

Josh Hoxie and Ben St. Clair on billionaire independence

Sign up for updates
on Inequality.org postings

 

 

Books

Carlos Anderson book coverJust a Little Bit More: The Culture of Excess
and the Fate of the Common Good

T. Carlos Anderson
ACTA Publications, 257 pp.

John D. Rockefeller, the story goes, once had someone ask him, “How much is enough?”

“Just a little bit more,” old John D. replied over a century ago.

The pursuit of that “little bit more,” T. Carlos Anderson argues in this sweeping new look at our unequal world, has essentially become America’s “bread-and-butter religion.” An unholy trinity of commerce, materialism, and consumption is piercing our souls and adulterating our spirits.

Anderson, a Protestant minister in Texas and Latin America for over 20 years, comes at inequality as someone who cares deeply about our spiritual side. But his book slides easily between the spiritual and secular worlds, as comfortable drawing insights from anthropology as Scripture.  

Anderson also writes engagingly. He dots Just a Little Bit More with fascinating asides on everything from the original egalitarian provenance of the retail price-tag in the 1870s to the introduction of luxury suites in Texas Stadium in the 1970s, a symbolic cultural moment when our “privileged elite began to separate” from the rest of us.

Anderson, above all, writes with a purpose. He’s hoping to help Americans understand that an egalitarian ideal — the vision of “a society free from great disparities in wealth among its citizens” — helped create the United States. We need that ideal, Anderson helps us see, now more than ever.

Interested in discussing Just a Little Bit More in your community group or religious congregation? Check this summary and study guide.

 

Take Action
on Inequality

Help build the new economy. Plug into 1:1, the new national network of unionized worker-owned co-ops that 1worker1vote.org and Mondragon International North America have created to help overcome our widening economic divides.

 


About Too Much

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