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||February 14, 2011|
This will be “budget week” in Washington, D.C. Or maybe we should rephrase that. This will be “cutback week.” Elected leaders, all week long, will be falling over themselves demanding cuts to programs — everything from home heating cost assistance to Sesame Street — they say we can no longer afford.
In truth, of course, we could afford plenty — if we dared to tax the rich. A modest tax on Wall Street speculation alone, a new analysis notes, could raise $40 billion.
Our lawmakers seem absolutely determined to disregard any proposal that would take us down that road. But we can overcome that determination. People all over the world are showing us how, from Egypt to the UK, where young people are mobilizing online for inspired street actions that target corporate tax avoiders.
Meanwhile, here in the United States, some of the folks who’ve been fighting the good fight for quite some time are coming up with some innovative new efforts of their own. This week, in Too Much, we hone in on one outstanding example.
Too Much online
|GREED AT A GLANCE|
Egyptian labor activists are making history, too. They've broken away from their nation’s government-run union federation to launch their own independent labor center. Activists in the new Egyptian Federation of Independent Unions are demanding a higher minimum wage for workers — and a new “maximum wage” for bosses, as a first step toward reversing Egypt’s staggering concentration of income and wealth. That maximum, says the new federation, should be fixed at ten times the nation’s minimum wage. Egyptian workers, the federation declares, want “a society that does not allow the few to buy private jets while the rest of the population cannot even afford public transportation.”
Texas political commentator Jim Hightower, a few years back, had a suggestion for America’s corporate boards. If those boards really wanted to pare down their payroll costs, Hightower quipped, they’d start outsourcing — their CEOs. World-class CEO talent in India, he noted, comes cheap. How cheap? In the fiscal year that ended last March, the Economic Times reported last week, top Indian CEOs took home 68 times the pay of their average workers. The comparable corporate pay gap figure for the United States: 263 times. But India’s corporate pay gap is growing. The year before last, India's top execs outpaced their average workers by just 59 times. Notes one leading Indian executive search firm official, Head Hunters India's Kris Lakshmikanth: “We are definitely headed the U.S. way.”
That “U.S. way” seems to be surviving the Great Recession quite nicely. Top execs, so far at least, have been able to deflect public outrage at their lavish pay and perks. They’ve had help in that effort, a congressional oversight panel last week charged, from the “pay czar” the White House appointed two years ago. That pay czar, Ken Feinberg, last July labeled as “inappropriate” some $1.7 billion in compensation that went — after the 2008 Wall Street meltdown — to executives at Goldman Sachs, JPMorgan Chase, and 15 other bailed-out banks. But the pay czar refused to label those payments as “contrary to the public interest,” a labeling that would have, by statute, triggered an official effort to “claw back” the $1.7 billion. That refusal, the congressional bailout oversight panel concluded, may have set “an undesirable precedent.”
Budget “hawks” the nation over have lately been loudly demanding cuts in the pensions that go to public workers. Curiously missing from all these cutback demands: any talk about cutting the fees that go to the Wall Streeters politicians pick to “manage” public pension fund investments. Economist Dean Baker estimates that “excessive Wall Street fees are costing public pension funds almost $15 billion a year.” Wall Street greed, Baker notes, helped caused the crisis that has devastated public employee pension fund assets. Instead of beating up on teachers and firefighters, he adds, states ought to be enacting fee limits strong enough to make sure “people at the top pay for the damage they have caused.”
In the precincts plutocrats prowl, news reports are starting to note, a “new bling” has erupted onto the super-rich scene. Interior design. Billionaires are forsaking jewels for ever fancier home fixings. Designer John Lees, the Guardian reports, recently had a job where the tab for “accessories” — “teaspoons, glasses, plates,” he explains — came to over $3.2 million. Towels and linens, he adds, fell under a separate budget, as did the beds, at $32,000 each. For the children of the super-rich, Lees will sometimes orchestrate surprise “secrets” for the kids to discover, like doll houses full of make-up. Laments this creator of luxury interiors: “There is a sense of loneliness these children have, and that's a great shame.”
Quote of the Week
“Research has conclusively shown that among the richest countries, it's the more unequal ones that do worse according to almost every quality of life indicator. A country's life expectancy, crime levels, literacy, and health are affected much less by per-capita GDP than by the size of the gap between the richest and poorest in the population.”
Stat of the Week
Last April the British tax rate on income over £150,000, the U.S. equivalent of about $241,000, jumped from 40 to 50 percent. Critics of the hike predicted a massive exodus of UK deep pockets to more rich people-friendly Switzerland. But since then, notes British analyst Johann Hari, the number of UK wealthy applying for visas to leave Britain for Switzerland has actually dropped by 7 percent.
|inequality by the numbers|
Finding the Good in the 'Good Old Days'
Sometimes we can move forward by turning the political clock
Frank Cocozzelli, Refuting the Reagan Legacy: Progressive Taxation is the Key to Prosperity, New Deal 2.0, February 7, 2011. A blueprint for reclaiming the narrative about the tax code Ronald Reagan so distorted a generation ago.
Upside Down: A Commentary on Inequality in New York State, February 10, 2011. An important new weekly newsletter from the Center for Working Families.
Robert Frank, More Super-Rich Investors Get U.S. Citizenship, Wall Street Journal, February 10, 2011. The number of foreign rich who are buying their way into the United States has tripled since 2007.
Bob Herbert, When Democracy Weakens, New York Times, February 12, 2011. About life in an age when “the wealthy call the tune.”
A New Approach for an Essential Resource
The State of Working America, Economic Policy Institute, Washington, D.C., February 2011.
The folks over at the Economic Policy Institute in downtown Washington can sometimes sound like a broken record. But they should take that as a compliment, a tribute to their wisdom — and perseverance.
Every two years now, ever since 1988, EPI researchers have been publishing a data-rich compendium entitled The State of Working America. The broken record part? Every State of Working America has essentially carried the same message: Working Americans are struggling mightily. Wealthy Americans are waltzing.
That message hasn’t changed because reality hasn’t either. Since 1988 — Ronald Reagan’s last full year in the White House — the nation’s most fundamental public policy choices, on everything from taxes to trade, have served to disadvantage working people and lavish luxuries on rich ones.
No one has detailed the impact of those decisions more comprehensively — or more clearly — than EPI president Larry Mishel and his fellow EPI economists.
These details, at first, only appeared in 500-plus-page State of Working America printed volumes. But EPI, with the advent of the Web in the 1990s, soon started porting data from the printed State of Working America onto its Web site.
The State of Working America, with this month’s new edition, has now gone totally cyber. EPI researchers have re-imagined their handiwork as an interactive online experience. And they’ve succeeded marvelously, most particularly with a fascinating feature they call, When income grows, who gains?
You can pick, with this new feature, any two years between 1917 and 2008 and compare how average incomes for America’s top 10 percent and bottom 90 percent have fared.
In the quarter-century between 1932 — the nadir of the Great Depression — and 1957, for instance, the EPI timeline shows that average U.S. incomes grew by $19,472, in 2008 dollars. America’s richest 10 percent took in 25 percent of that growth. The bottom 90 percent share: 75 percent.
Between 1973 and 2008, by contrast, average U.S. incomes — again in 2008 dollars — only grew by $12,707. The top 10 percent grabbed 87 percent of that gain, the bottom 90 percent only 13 percent.
And what do numbers like these mean for the lives working Americans actually lead? The State of Working America details that answer, too, in a series of charts on everything from average weekly wages to life expectancy.
Back in 1971, the EPI numbers show, male 60-year-olds in the bottom half of the nation’s income distribution could expect to live 1.2 years less, on average, than Americans in the top half. By 2001, that life expectancy gap between top and bottom halves had more than quadrupled, to 5.8 years.
EPI researchers haven’t just pumped all their data up onto the Web. They’ve done everything possible to make their research as accessible as possible, to students and scholars and just-plain concerned citizens.
Anyone who posts to a blog, for instance, can now quickly “embed” any State of Working America graph into any posting.
The folks at EPI, in other words, have done a fantastic job of sharing their information. The rest of us, armed with this information, can now do battle — more effectively — to share our nation’s wealth.
|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.