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September 28, 2009 |
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Ralph Nader has written a fun new book. A fun book from Ralph Nader, the relentless crusader against corporate power? From Ralph Nader, we expect an earnest book — or even an angry book. But a fun book? And the strangeness doesn’t stop there. The heroes of this new book from Ralph Nader, the scourge of the rich and powerful, turn out to be billionaires. What is going on here? Down below, in our Too Much review of the week, we take a peek. We actually have a good bit more, this week, on the strangeness front. Earlier this month, just before the global economic summit in Pittsburgh, a conservative world leader and two world-famous economists who typically challenge conservative world leaders joined up to call for a totally new global economic yardstick. And they want that yardstick to measure inequality. The world press in Pittsburgh last week snubbed that story. We don't. Read on! |
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Meanwhile, at comic book dynamo Marvel, mergers have been making equally sweet music. On August 31, Walt Disney announced a deal to acquire Marvel Entertainment for $4 billion. Disney agreed to pay $50 each for Marvel shares, a neat piece of news for Marvel CEO Ike Perlmutter, who, last March, shortly after talks between Disney and Marvel opened, collected options to buy over a million Marvel shares at no more than $25.86 per share. Those options, the Wall Street Journal reported last week, will bring Perlmutter a $34 million payday as soon as the Disney takeover goes final . . . The biggest merger magician of them all? That may be billionaire Sam Zell. He can make millions even when his takeovers go sour. Late in 2007, Zell took over the troubled Tribune Co., the media chain that also owns The annual Frankfurt Motor Show ended last week, and auto aficionados are still buzzing about the show’s unveiling of the new Lamborghini Reventon Roadster, at $1.6 million the “costliest model” the Italian automaker has ever made. Lamborghini plans to assemble 15 of these roadsters — and already has orders for 12. The others may move quickly. Nearly 80 percent of the world’s wealthy, says a new survey by wealth management consultants at the Scorpio Partnership, “expect to grow their wealth in 2010.” Despite the financial crisis, 41 percent of the 1,500 wealthy Scorpio surveyed have seen their wealth grow over the last year. Another 25 percent saw no net change . . . The six emirates that make up the six-nation Gulf Cooperation Council control over 45 percent of the world's documented oil wealth. But analysts with the Persian Gulf chamber of commerce federation don’t like what they see when they look into the future. In a new report, released earlier this month to a regional business magazine, the analysts urged the emirates to start protecting their fledgling middle class from threats that include an “unfair distribution of wealth” and an emerging “super-rich class.” The “erosion” of the Gulf’s middle class “safety-valve,” says the report, endangers “the social stability in the whole region” and could “lead to a big social tremor.” |
Quote of the Week “For all the talk of reining in CEO pay and enacting financial reform — even from some CEOs themselves — it's beginning to appear that very little has changed in the way companies are run and executives get paid.”
New Wisdom Felix Salmon, Blankfein’s disingenuousness, Reuters, September 23, 2009. All about the CEO of Goldman Sachs and his efforts to deflect critics of banker executive pay. Erik Nilsson, Equality, social safety net are the concern, China Daily, September 24, 2009. Why “what kind of developed country China will become“ will depend on “what it does now to lay the foundations for a relatively equal distribution of wealth.” Les Leopold, Where is the Progressive Agenda for the Great Recession? AWOL, Huffington Post, September 25, 2009. For real recovery, this New York economist argues, we need to “move money from the top of the income ladder to the middle and the bottom.”
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GDP: The Yardstick that Comes Up Short Sometime early this fall, new statistics are almost certainly going to show “positive” growth in gross domestic product, or GDP, for 2009’s third quarter. Economists, in quick order, will solemnly pronounce that the Great Recession has finally ended. Average working people, just as quickly, will have one more reason to be deeply suspicious about officialdom. “The world over, citizens think we are lying to them,” a prominent figure in that officialdom, French president Nicolas Sarkozy, noted earlier this month. “And they have reasons to think like that.” Statistics can lie, and the world’s single most important economic statistic, Sarkozy believes, has become something of a truth-perverting whopper. This all-dominating stat, GDP, essentially measures only what people are making for the market — and ignores every economic reality that impacts how well or poorly real people, in their daily lives, are actually doing. That’s why GDP can be rising at the same time jobs are disappearing, homes are foreclosing, and paychecks are shrinking. Last year, in the early stages of the current recession, Sarkozy moved to begin a “statistical revolution” and end GDP's political dominance. The French president, a right-of-center politico, asked two left-of-center Nobel-laureate economists, Joseph Stiglitz and Amartya Sen, to lead a commission “on the measurement of economic performance and social progress.” Two weeks ago, just before the meeting of the world’s 20 biggest economies in Pittsburgh, Stiglitz and Sen delivered the product of their commission’s deliberations, a thick report with recommendations for crafting a new yardstick for the world’s economies. The report’s “unifying theme”: “the time is ripe for our measurement system to shift emphasis from measuring economic production to measuring people’s well-being.” And that shifting requires, the report goes on to make clear, a serious look at inequality and who has what. The world needs new economic yardsticks that “give more prominence to the distribution of income, consumption, and wealth.” Current GDP statistics totally disregard questions of distribution. Policy makers addicted to GDP typically divide a nation’s domestic product by population to come up with a “per capita GDP” — and then use this per capita to rate how well off different nations may be. But this per capita average can be incredibly misleading, as Australian business editor Ross Gittins pointed out last week. If income is rapidly concentrating at the top of a society’s economic ladder, per capita GDP averages can show a “rising” standard of living for that society even if incomes for great numbers of people at the bottom are sinking. “Just as money can't buy happiness, per capita GDP can't measure it,” Martin Regg Cohn, a Toronto Star editor, agrees in his analysis of the Stiglitz-Sen recommendations. “Per capita GDP,” adds Cohn, “doesn't take account of the unequal distribution of wealth, but faithfully measures conspicuous consumption as a net gain. GDP ignores environmental degradation, but counts the hospitalization costs of people poisoned by pollution as a positive.” The Stiglitz-Sen report for French president Sarkozy doesn’t offer a specific statistical alternative to GDP. Sarkozy didn’t ask for one. The report, instead, explores what additional information needs to be collected to better measure real economic well-being — and compares various alternative approaches. Alternatives already abound. GDP first emerged in the 1930s. The first serious attempt at generating an alternative surfaced in the 1970s. Since then, calculates French economist Christian Chavagneux, the number of “alternative indicators of human and economic well-being” has jumped to about 30. But these alternatives have all sat at the policy-making margins. Sarkozy’s commission has now placed the challenge to GDP right in the laps of the world’s political leaders. About time, says Neal Lawson, the chair of a top British progressive think tank. “The irony and frustration is that it takes a right-wing politician to say what left-wing politicians should be saying,” explains Lawson. “Sarkozy has turned the debate on its head. We should start to measure the quality of our lives, not the quantity of the rubbish we consume.” The G-20 meeting in Pittsburgh, in its final communiqué, didn’t address the Sarkozy Commission’s work. But Stiglitz and Sen see their effort as only a beginning. Their commission, they write, is “opening a discussion rather than closing it.” The world’s presidents and prime ministers need to join in. With only GDP in their pockets, the commission warns, these world leaders are steering “without a reliable compass.” |
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Warren Buffett to the Rescue? Ralph Nader, “Only the Super-Rich Can Save Us!” New York: Seven Stories Press, 733 pp. Hundreds of thousands of Americans — maybe millions — have at one time or another tried to push back politically against the powers that be. They’ve taken on rapacious developers. Or confronted corporate polluters. Or tried to organize a union at their workplace. Most all these Americans have, sooner or later, found the going tough. Against the powerful and their inexhaustible war chests, they come to feel overmatched and overwhelmed. Many probably end up sharing the same idle daydream.
Ralph Nader’s new book does that imagining — on a grand scale. America’s original “consumer activist,” drawing on the lessons that a half century of battling with the big boys has taught him, has authored the ultimate political “what if” for people who take economic justice seriously. You want resources? If you had $15 billion at your disposal, and one year to spend it, what could you accomplish? If that question intrigues you, so will this book. Nader has authored a work of “counterfactual history” that starts out by taking us back to the bad old days of 2005, right after Katrina blasted New Orleans. What if famed investor Warren Buffett, then 75 and America's second-richest person, had become so outraged watching the post-Katrina horror that he felt personally obliged to lead a caravan of supplies down to Louisiana? What if an elderly flood survivor, overcome by Buffett’s generosity of spirit, had wailed out to him: “Only the super-rich can save us!” What if Buffett, transfixed by that encounter, had decided to do that saving — by taking on the greed and corruption he saw rotting away the American body politic? What if he had rounded up a dozen like-minded aging billionaires and added a handful of beloved mega-millionaire celebrities long past their prime? What if these 17 super-rich souls set out to mobilize an end to corporate rule? What would happen next? Nader spends some 700 pages offering an answer — and he tells his story with surprising grace. Who knew that Ralph Nader could spin a good yarn? Who knew he could build up suspense, even make us chuckle? Nader, in a prefatory note, describes his tale as a “fictional vision that could become a new reality.” Does this mean he believes that someday we might actually see “the elder super-rich revolting against the reigning super-rich”? That question, in the end, doesn’t really matter. Ted Turner, Ross Perot, Yoko Ono, and the rest of the super-rich gang that Nader has Warren Buffett leading are not going to save America. But don’t let this “inconvenient truth” diminish what Nader has achieved. He hasn’t claimed to have written an organizing manual. He has written the 21st century’s first classic utopian fantasy. Such fantasies can make a crucial contribution to the struggle for equality. In fact, one already has. Six score years ago, at the height of America’s original Gilded Age, the frail son of a New England Baptist minister wrote a utopian novel that would go on to become, after Uncle Tom’s Cabin, the best-selling secular book of the nineteenth century. That 1888 novel, Edward Bellamy’s Looking Backward, imagined that a wealthy Bostonian went to bed in 1887 and awoke a century later, in 2000, to find an America that had totally erased the gap between rich and poor. Bellamy’s egalitarian vision proved immensely popular. “Nationalist Clubs” inspired by Looking Backward sprung up all across the nation. Reformers of every stripe found Bellamy an enormously energizing force. The journal of the Southern farmer group that would later help found the Populist movement offered a free copy of Looking Backward with every subscription. In a deeply unequal time just like our own, Looking Backward helped beleaguered Americans see that plutocratic power need not be eternal. And power, once seen in that light, will always become vulnerable. By the mid 20th century, the staggering inequality Bellamy knew had largely disappeared. The grand Gilded Age estates had become housing tracts and college campuses for the world’s first mass middle class nation. Staggering inequality now once again plagues us. So let us welcome the fantasy Ralph Nader presents. The super rich aren’t going to save us. But a novel about the super rich saving us, that might give the can a good kick down the road. |
Stat of the Week In 2008, says the just-released Corporate Library annual executive pay survey, about 2,000 CEOs at publicly traded companies in the United States spent the entire year in their firm’s chief executive suite. Of these executives, only six saw their pay actually go down.
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Too Much is published by the Council on International and Public Affairs, a nonprofit research and education group founded in 1954. Office: Suite 3C, 777 United Nations Plaza, New York, NY 10017. E-mail: editor@toomuchonline.org. |
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Another week, another billion. Ross Perot, the 68th richest American, and Ross Perot Jr., the 265th, 
the Chicago Cubs. A year later, the Tribune declared bankruptcy, and Zell began unloading assets — with a twist. To ditch the Cubs, for instance, Zell set up a “partnership” with the deep-pocket family behind the Ameritrade brokerage firm. The Trib put the Cubs and their Wrigley Field ballpark into the partnership. The family put in $150 million, and the partnership then borrowed nearly $700 million more. Last week, a federal judge 
What if our war chest, these exhausted activists wonder, matched theirs? What if we had all the money we could ever need to run our campaign right? Imagine what we could do. Just imagine.