Fifty years ago, President John F. Kennedy famously declared that “a rising tide lifts all boats” – and then asked Congress to cut taxes on America’s rich. His rationale: More money in rich people’s pockets would grow the economy and leave everybody better off.
Lawmakers agreed. They began a tax-cutting spree – for the rich – that would spill into the 21st century. And how did all those extra dollars in rich people’s pockets work out? Some tides, as it turns out, only lift yachts.
Earlier this year, at Knox College in Illinois, President Obama gave a welcome good riddance to JFK’s “rising tide.” Letting wealth concentrate “at the very top,” the president said, has been both “morally wrong” and “bad economics.”
The White House, unfortunately, has been coming up “seriously short” on policies that would make for a much more equal economy. But others are stepping up. Last month, for instance, two senators introduced legislation that would deny corporations tax deductions on executive pay over $1 million. Our major media never bother with bills like this.
Greed at a glance
More than 11 million Americans remain officially unemployed. What advice do the nation’s rich have for all these jobless? New polling from Spectrem Wealth Research finds that Americans holding over $750,000 in assets, want the jobless to “stay laser-focused on looking full-time for work.”
Only 14 percent of the deep pockets, says Spectrem, feel corporate America ought to “do more to relieve the strains of those who are unemployed.” And just 15 percent feel that social organizations and churches should do more to help the jobless.
More people are hurting than the one percent suspect – or want to. Some 79 percent of Americans, other new data show, now experience “economic insecurity” – a year or more of joblessness, income near the poverty line, or reliance on food stamps or other assistance – before they hit 60.
TV football talk to omit big owner subsidies
America’s most lucrative professional sport – NFL football – returns to the nation’s TV screens this month, and 24/7 cable sports networks will cover every aspect of the games, from the toenails of placekickers to the latest in cheerleader fashion, in exhaustive detail. Well, almost every aspect.
The massive taxpayer subsidies that go to deep-pocket NFL team owners won’t get much, if any, attention. For instance, fans had to turn to a business magazine to discover that New Orleans Saints billionaire owner Tom Benson, the richest man in Louisiana, will pocket an estimated $392 million in state subsidies through 2025. The windfall is coming from a deal Benson struck with state officials in 2009.
You can find the details of such golden subsidies for the one percent — Benson is far from the only one – at a new website called Field of Schemes. It “casts a critical eye on the roughly $2 billion a year in public subsidies” that go to billionaires building new pro sports facilities.
Plenty for an oil billionaire, nothing for Detroit
By contrast, forget any federal aid – or state subsidies for that matter — for the bankrupt city of Detroit. No can do, not in America’s current political climate. But federal help for a Russian oil billionaire who wants to buy up luxury jets from the U.S. aircraft boutique Gulfstream Aerospace? Step right up, Gennady Timchenko.
A powerhouse D.C. lobby group is now helping Timchenko – net worth, $14.1 billion – gain loan guarantees from the U.S. Export-Import Bank, the federal agency that helps foreign firms buy American. Meanwhile, in the absence of federal help, the GOP-named Detroit financial czar is set to ravage city worker pensions. Notes Nobel Prize economist Joseph Stiglitz: “If you took any large country and took the poorest part and said, ‘You’re on your own,’ there would be problems, and that’s precisely what we’ve done in our metropolitan areas.”
Fed up with the “givers”
Former hedge fund manager Andy Kessler has had it up to here with “Generation G,” those young people today who devote themselves to “more giving, more sacrifice, living within our means, and helping our fellow man.” For Kessler, the “G” stands for “guilty.” Gen-G’ers, Kessler groused in the Wall Street Journal, would rather “serve” than work “productively” and create wealth “that could be given away (and tax deducted) to help the unfortunate.” His son — who volunteers at a homeless shelter, admits Kessler — gets bent out of joint when his dad suggests the homeless aren’t working “because someone is feeding, clothing and, in effect, bathing them.” But Kessler will keep lecturing anyway. Just please, he asks, “don’t mistake me for Scrooge.”
Workers take a bite out of Apple
Computer giant Apple could afford to drop a pay package worth $378 million on chief exec Tim Cook in 2011, his first year as CEO. But Apple can’t seem to afford to compensate the 42,000 employees at the company’s fabulously profitable retail stores for the time they spend every day waiting to get searched – for stolen goods – before they can leave the store premises. As Press Associates reported last month, two former Apple employees filed a class-action lawsuit to recoup those unpaid wages, estimated at about $1,500 per year. Apple retail stores, notes Forbes, “take in more money per square foot than any other United States retailer.” Yet Apple store employees take home on average of only $25,000 a year.
Inequality by the numbers
Don’t cry for Microsoft CEO Steve Ballmer. Among the chief execs of America’s 30 largest publicly traded corporations, Ballmer did receive the smallest total paycheck last year, only $1.3 million. But Ballmer still holds a larger personal fortune than any other CEO of a top 30 enterprise. His current personal net worth: $17 billion.
So you can’t be Ballmer, but how much wealth do you need to be wealthy in the United States today? The American wealth management office of the Swiss investment bank UBS recently put this question to nearly 4,500 Americans with at least $250,000 available to invest.
Half this UBS survey sample had at least $1 million in investable assets. Of these affluent millionaires, the UBS researchers found, only 28 percent consider a net worth of $1 million enough to rate “wealthy” status.
But the UBS research team’s new analysis doesn’t stop there. The number crunchers at UBS thoughtfully drilled down deeper into the responses millionaires gave them to see how deep pockets with at least $5 million available to invest think about who rates as “wealthy” – and who doesn’t.
And what did the UBS researchers discover? A stunning 40 percent of the affluent who were surveyed, all with at least $5 million to invest, informed UBS that they don’t consider themselves “wealthy!”
A little perspective: Last fall researchers with the Swiss bank Credit Suisse calculated that the median, or most typical, adult in the United States currently holds a total net worth of $38,786 – which also happens to be the median annual income in the U.S.
Veteran labor journalist Sam Pizzigati edits Too Much, an online journal of wealth and inequality sponsored by the Institute for Policy Studies.
Photo: Apple retail stores, like the one pictured in San Francisco, rake in more dollars per square foot than any other U.S. retailer; yet Apple storeworkers on average earn less than $25,000 per year. Apple.com