The rich are different

Excellent article in the Guardian today shows how a sense of social responsibility amongst the rich has gone.  We saw a sense of honor in which economic elites served in the military during the World Wars.  Now, the military is disproportionately people of lower income strata.  We got universities and libraries from the Rockefellers and the Carnegies.   Now, we get self-serving academic "institutes" from the Brothers Koch that are intended to reinforce their political views.

The military is only one example of how disconnected wealthy Americans are from their country. The extraordinarily low rate of charitable giving among the rich offers more evidence. Even though we live in a time of entrenched income inequality, poor Americans actually give a higher percentage of their income to charity than the rich do. .... 

The selfish worldview of America’s upper classes is underscored by their demand for ever greater financial rewards. In the last 50 years, CEO compensation rateshave soared. For example, in 1965 the typical CEO made about 20 times as much as average workers. By 2013, the CEO-to-worker pay ratio grew to nearly 300 to 1. 

.... 

Despite their soaring share of the nation’s wealth, the rich go to enormous lengths to avoid paying taxes. A recent study found that wealthy Americans have moved $36bn into offshore tax havens. 

The rich have also poured money into the campaigns of candidates who cut the government programs that most benefit middle-class and working-class Americans, such as public schools and healthcare. And the wealthy increasingly cluster in neighborhoods that isolate them from other social classes. 

History shows it does not have to be this way.

How do we re-connect the wealthy with the rest of us?  Well, if people are making that much money, they are living in a cocoon.  For example, I was walking along the waterfront a few weeks ago and totally awed by the Super-yachts, one with the helicopter on the back.  They were docked apart from the other pleasure boats, sea going vessels that looked lean and mean and fast, and anonymous, like the big black limos that snake around big cities.

Us vs them indeed.

More maps: social mobility (Updated)

We've talked a lot about the characteristics of the nation, particularly in the South that controls much of our discourse. We've looked at a lot of maps.

Here's a map from a New Yorker article showing that the South is particularly lacking social mobility.

In these low mobility areas, it isn’t just black residents who tend to get stuck. Whites, too, exhibit low levels of social mobility. In states like Georgia, Mississippi, and South Carolina, poor white children tend to grow up into poor white adults. Secondly, regardless of race, the level of income inequality itself seems to play an important role in determining levels of social mobility. In places where income is divided very unequally, and poorer groups get only a small slice of the pie, very few people manage to start at the bottom and end up at the top. 

But they still vote against their (economic) interests.

Update  8thday has some excellent remarks in the comments below, chastising me for a certain elitism.  (Go read!)   To which I plead guilty.  But I still think it's irrational to vote consistently against one's own economic interests.

The Pope, Poverty, and the discomfort of the rich

I tell you the truth, it is hard for a rich man to enter the kingdom of heaven. Again I tell you, it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God. When the disciples heard this, they were greatly astonished and asked, “Who then can be saved?”

I appreciate Pope Francis for his change in tone, although I do not believe that he will budge an inch on social issues including birth control and gay rights, or the role of women in the Church.

But he's using a bully pulpit to reclaim an aspect of Roman Catholic social justice teaching on the responsibility we all bear to the poor.  

And it's making some people Very Uncomfortable.  Andrew Sullivan tells us

A mega-rich donor to the American Catholic church is so offended by the Pope’s words on the importance of poverty that he is allegedly hesitant to pay for a large amount of the restoration of Saint Patrick’s Cathedral.

Think about that for a minute, from all directions.   It's really rather breathtaking.

The Right in the US is trying to spin the words to apply them only to Argentina (where Pope Francis comes from).  Andrew again:

Global capitalism in Argentina, according to the theocons and neocons, is so different than in the United States that Pope Francis’s critique is simply a regional one. In Argentina, he’s only referring to crony capitalism, entwined with government, combined with an entrenched lack of social mobility. If the Pope were to understand American capitalism better, he’d realize it was a truly free market, empowering social mobility, creating wealth and disseminating it on a massive scale.

Unfortunately, it doesn't fly.  The Pope writes, The worship of the ancient golden calf (cf. Ex 32:1-35) has returned in a new and ruthless guise in the idolatry of money and the dictatorship of an impersonal economy lacking a truly human purpose.

Looks a lot like this one, don't you think?

Picture of 40 Wall Street thanks to herval and New York Pictures

Political regression

Are we finally "as mad as hell and not going to take it any more"? Are we finally going to reclaim our country? Robert Reich contrasts progressive and regressive movements, and the attempts to drag us back into the horrors of the Gilded Age.

Eric Cantor, Paul Ryan, Rick Perry, Michele Bachmann and the other tribunes of today's Republican right aren't really conservatives. Their goal isn't to conserve what we have. It's to take us backwards.

They'd like to return to the 1920s -- before Social Security, unemployment insurance, labor laws, the minimum wage, Medicare and Medicaid, worker safety laws, the Environmental Protection Act, the Glass-Steagall Act, the Securities and Exchange Act, and the Voting Rights Act.

In the 1920s Wall Street was unfettered, the rich grew far richer and everyone else went deep into debt, and the nation closed its doors to immigrants….

In truth, if they had their way we'd be back in the late nineteenth century -- before the federal income tax, antitrust laws, the Pure Food and Drug Act, and the Federal Reserve. A time when robber barons -- railroad, financial, and oil titans -- ran the country. A time of wrenching squalor for the many and mind-numbing wealth for the few.

Nicholas Kristoff points out some facts:

• The 400 wealthiest Americans have a greater combined net worth than the bottom 150 million Americans. 
• The top 1 percent of Americans possess more wealth than the entire bottom 90 percent.
• In the Bush expansion from 2002 to 2007, 65 percent of economic gains went to the richest 1 percent. 

Here are some actual data

Kristoff goes on:

More broadly, there’s a growing sense that lopsided outcomes are a result of tycoons’ manipulating the system, lobbying for loopholes and getting away with murder. Of the 100 highest-paid chief executives in the United States in 2010, 25 took home more pay than their company paid in federal corporate income taxes, according to the Institute for Policy Studies. …

I believe that over the last couple of centuries banks have enormously raised living standards in the West by allocating capital to more efficient uses. But anyone who believes in markets should be outraged that banks rig the system so that they enjoy profits in good years and bailouts in bad years.

And far from helping us, this inequality is a hindrance. The IMF, hardly a socialist bastion, reports that increased inequality impedes growth

In fact equality appears to be an important ingredient in promoting and sustaining growth. The difference between countries that can sustain rapid growth for many years or even decades and the many others that see growth spurts fade quickly may be the level of inequality. Countries may find that improving equality may also improve efficiency, understood as more sustainable long-run growth.

This is the context in which to view Occupy Wall Street (OWS)., Sally Kohn opines at Fox News:

The key isn’t what protesters are for but rather what they’re against -- the gaping inequality that has poisoned our economy, our politics and our nation.

In America today, 400 people have more wealth than the bottom 150 million combined. That’s not because 150 million Americans are pathetically lazy or even unlucky. In fact, Americans have been working harder than ever -- productivity has risen in the last several decades. Big business profits and CEO bonuses have also gone up. Worker salaries, however, have declined.

Most of the Occupy Wall Street protesters aren’t opposed to free market capitalism. In fact, what they want is an end to the crony capitalist system now in place, that makes it easier for the rich and powerful to get even more rich and powerful while making it increasingly hard for the rest of us to get by. The protesters are not anti-American radicals. They are the defenders of the American Dream, the decision from the birth of our nation that success should be determined by hard work not royal bloodlines.

Why is this so hard for us to understand?

Update:  Dr Primrose highlights this table, from the article I cited above on Wealth, Income, and Power (This is from a sociologist at UCSC).  Those at the top rank = less inequality.  (GINI coeff of 1  means everyone makes the same;  GINI coeff of 100 means one person gets everything.)

Table 7: Income equality in selected countries

Country/Overall Rank	Gini Coefficient
1.  Sweden	23.0
2.  Norway	25.0
8.  Austria	26.0
10.  Germany	27.0
17.  Denmark	29.0
25.  Australia	30.5
34.  Italy	32.0
35.  Canada	32.1
37.  France	32.7
42.  Switzerland	33.7
43.  United Kingdom	34.0
45.  Egypt	34.4
56.  India	36.8
61.  Japan	38.1
68.  Israel	39.2
81.  China	41.5
82.  Russia	42.3
90.  Iran	44.5
93.  United States	45.0
107.  Mexico	48.2
125.  Brazil	56.7
133.  South Africa	65.0

Note: These figures reflect family/household income, not individual income.

Source: Central Intelligence Agency (2010).