Conservatives decry U.S. 'elite'...just the wrong one

An anonymous conservative forwarded this op-ed to me. In response, I'm not going to get into this whole Gruber-Obamacare thing because it's dumb. But it is odd that Mitt Romney gets a pass for employing Gruber while Obama does not.

I'm bringing Williams' column to your attention because of his repetition of a conservative meme: that liberal professors are the "elite" in America. 

What gets me is that conservative willfully ignore the real American elite: the super rich, the One Percent, or more exact, the 1% of one percent.

Indeed, the Sunlight Foundation discovered that, "In the 2012 election, 28 percent of all disclosed political contributions came from just 31,385 people. In a nation of 313.85 million, these donors represent the 1% of the 1%, an elite class that increasingly serves as the gatekeepers of public office in the United States."

But no, nutty professors with elbow patches are really running things.

Here's another illustration of the absurdity of a professorial "elite."  There are about 1.2 million college professors and instructors in the U.S. And there are over 11 million company CEOs and Presidents in the U.S.  The average CEO makes over $15 million, while the average full-time professor makes $127,000 and the average college instructor makes $50,000. 

So there are much fewer college teachers than CEOs, they're poorer, they don't influence consumer tastes, the economy, lobby the government or give huge campaign contributions the way CEOs do. And that's not even counting the CFOs, CMOs, boards members, and the true "capitalists" of the private sector who don't have jobs and let their money work for them. 

I think what really bothers conservative is that college professors' influence over American society is not proportional to their wealth and political influence. After all, isn't getting your way most of the time and bossing people around what rich people are supposed to do? Isn't that the whole point? That just seems correct to conservatives. Yet somehow in our free-market country, these eggheads in academia have managed to carve out a precious exception where they enjoy the power, (often while earning less than six figures), to mold young minds. That just goes against the natural order.

It's the same thing at the level of K-12, (even though conservatives would blush to call schoolteachers America's "elite"): these poorly paid teachers, most of them women, very sneakily or just by default (since nobody else wants to do it) retain the enormous power to shape young people's attitudes about the world. And it drives conservatives nuts. Nobody with so little economic power should have so much (potential) influence over people, they believe. It's unnatural.

Elite Contempt for Ordinary Americans

By Walter E. Williams

November 2014 | Creators

URL: http://www.creators.com/opinion/walter-williams/elite-contempt-for-ordinary-americans.html

Summers: Piketty is right about the past, but the future is ours

I'm tired so I'm not going to analyze now in depth Larry Summers' analysis of Piketty's seminal, once-in-a-generation economic treatise, I'm just gonna say what Summers says Piketty's data should lead us to believe [emphasis mine]:

Perhaps the best way of thinking about Piketty’s wealth tax is less as a serious proposal than as a device for pointing up two truths. First, success in combating inequality will require addressing the myriad devices that enable those with great wealth to avoid paying income and estate taxes. It is sobering to contemplate that in the United States, annual estate and gift tax revenues come to less than 1 percent of the wealth of just the 400 wealthiest Americans. With respect to taxation, as so much else in life, the real scandal is not the illegal things people do—it is the things that are legal. And second, such efforts are likely to require international cooperation if they are to be effective in a world where capital is ever more mobile. The G-20 nations working through the OECD have begun to address these issues, but there is much more that can be done. Whatever one’s views on capital mobility generally, there should be a consensus on much more vigorous cooperative efforts to go after its dark side—tax havens, bank secrecy, money laundering, and regulatory arbitrage.

Beyond taxation, however, there is, one would hope, more than Piketty acknowledges that can be done to make it easier to raise middle-class incomes and to make it more difficult to accumulate great fortunes without requiring great social contributions in return. Examples include more vigorous enforcement of antimonopoly laws, reductions in excessive protection for intellectual property in cases where incentive effects are small and monopoly rents are high, greater encouragement of profit-sharing schemes that benefit workers and give them a stake in wealth accumulation, increased investment of government pension resources in riskier high-return assets, strengthening of collective bargaining arrangements, and improvements in corporate governance. Probably the two most important steps that public policy can take with respect to wealth inequality are the strengthening of financial regulation to more fully eliminate implicit and explicit subsidies to financial activity, and an easing of land-use restrictions that cause the real estate of the rich in major metropolitan areas to keep rising in value.

I'm no fan of Summers, yet his last two prescriptions are, I daresay, things you will never hear discussed in depth on Fox, MSNBC, CNBC, CNN or elsewhere. Wherefore the lib'rul media, indeed!

The only thing I will criticize now, is Summers' argument that "productivity" and "entrepreneurship" explain the outsized gains of U.S. managers. A look at average CEO pay among U.S. corporations and others gives the lie to this argument.  Nobody is arguing that U.S. CEOs are that much better, yet they earn orders of magnitude more than their workers.

As wonkish and un-sexy as it may be, I've talked about this before and will continue to talk about the OECD's effort to fight BEPS (tax base erosion and profit shifting) among global corporations. This is indeed a global problem, not just a U.S. problem, and the U.S. cannot hope to solve it in isolation, but must nevertheless play a leading role in ending this global "race to the bottom."

Thomas Piketty Is Right About the Past and Wrong About the Future

By Lawrence Summers

May 16, 2014 | The Atlantic

URL: http://www.theatlantic.com/business/archive/2014/05/thomas-piketty-is-right-about-the-past-and-wrong-about-the-future/370994/

Eskrow: Where did U.S. wages go?

Here's Eskrow's key observation, one that you cannot even make nowadays in America without being accused of a socialist bent [emphasis mine]:

We don't have a problem of inadequate wealth. The problem is inadequate wealth distribution. For 99 percent of Americans, wage growth has lagged significantly behind increases in productivity. As the authors [of the briefing paper "A Decade of Flat Wages"] note, this is true "regardless of occupation, gender, race/ethnicity, or education level." Since the Great Recession productivity has grown by 7.7 percent, while wages have actually fallen for the bottom 70 percent of earners.

[...] Between 2001 and 2012 productivity grew by 22.2 percent, while wages grew only 0.8 percent. 

My Republican friends, take special note of the phrase, "...regardless of occupation, gender, race/ethnicity or education level."  This phrase should stifle your knee-jerk reactions to blame those other people for America's economic woes.

So the facts are indisputable.  The question is: what are the causes? Eskrow points out a few:

A companion report from EPI, The State of Working America, 12th Edition, identifies some of the causes: Growing inequality. Policy inaction which eroded the value of the minimum wage. The weakening of employees' rights. Tax policy. Wall Street deregulation.

Other factors are left unmentioned, including problems in corporate governance and the distorting effect of changing executive compensation on corporate management practices.

Eskrow also blames another cause: "centrist" Democrats, aka 1990s-era Republicans who today call themselves Democrats: 

The word "centrist" is placed in quotation marks because polls show that their economic views are to the right of the American mainstream. On issues such as corporate taxation, Social Security benefits, and free trade, they stand to the right of most Americans -- and sometimes to the right of most registered Republicans.

Forget Republicans in Congress, they're nuts.  We need Democrats to be Democrats again, grow a spine, or get out of office.

Where Have America's Wages Gone?

By Richard (RJ) Eskrow

August 28, 2013 | Huffington Post

URL: http://huff.to/1ds6Asl

About that 'Are you better off?' line...

Meanwhile, nobody cares whether the QQ Percent are better off.

Actually some Americans are much better off compared to four years ago.  Corporate profits are at an all-time high.  (Romney: "Corporations are people, my friend.")  CEO pay and stock awards increased 5 and 10.7 percent, respectively, in 2011.  And the One Percent captured 93 percent of the income gains in 2010, the first year of post-recession recovery.  

Nevertheless, Romney's top priority is to cut these po' folks taxes and deregulate their industries.

What's Romney gonna do for the shrinking middle class?  Zilch.  (Look at his website if you don't believe me: Romney made specific Issues statements on Israel, Iran, Russia and attracting more immigrants to the U.S., but nothing on the American middle class. Go figure.)  

In fact, Romney will have to raise taxes on the middle class if he wants to keep his promise to make his tax cuts on the wealthy revenue-neutral.

Decline of middle class not Obama's fault

By LZ Granderson

September 5, 2012 | CNN

URL: http://edition.cnn.com/2012/09/04/opinion/granderson-middle-class/index.html?hpt=hp_bn4

Sachs 'surprised' by CEO's ignorance, avarice

Economist Jeffrey Sachs, director of The Earth Institute at Columbia, is really showing he lives in the ivory tower. In his flabbergasted reaction to former AmEx CEO Harvey Golub's WSJ op-ed, Sachs reveals his ignorance about how fiscally retarded Americans really are, from the meanest unemployment-collecting Tea Party members all the way up to richest millionaire CEOs.

(And what in the world is "somewhat surprising" about the rabidly right-wing editorial pages of the Wall Street Journal publishing a slapdash, angry, ignorant rant from some rich blowhard? That's quotidian. It would be surprising if they didn't.)

All of Sachs' points are well taken... by reasonable, rational people. But again, Sachs, who divides his time among places like New York, Davos, Brussels, and Third World/developing countries, apparently doesn't visit American flyover territory often enough to interact with average Americans, whose intensity of feelings about our country problems bears no relation to a given problem's magnitude.

The sad truth is, most Americans will keep on blaming "high" taxes, "overpaid" teachers, "lazy" minorities, and "corrupt" bureaucrats for our nation's problems, while warning Washington to keep its guvmint hands off their Medicare, long after the collapse of the U.S. middle class and the establishment of a permanent plutocracy. 

Average Americans will not "act, and act resolutely" against the mega-rich who threaten the general welfare; they never have and never will. Because they aspire to be rich assholes themselves someday, even though their prospects are next to nil.

Sadly, scarily, professional scrooge Harvey Golub is in the mainstream of current political mood, and professional problem-solver Jeffrey Sachs is on the fringes.

CEO Follies

By Jeffrey Sachs

August 22, 2011 | Huffington Post

There may be no group of people in the world more out of touch with U.S. ground reality than super-rich CEOs of major U.S. companies railing against Warren Buffett's suggestion that the rich should pay higher taxes. The Wall Street Journal today brings a somewhat surprising case in point ("My Response to Buffett and Obama," by Harvey Golub, August 22, 2011). Former American Express CEO Harvey Golub, generally respected among his peers, lets loose an ill-informed screed that shows the cocoon in which many of these CEOs live their lives.

Before turning to Mr. Golub's list of particulars, let's start with the big picture. U.S. CEOs pull in compensation that is hundreds of times higher than their workers, a far higher multiple than in any other part of the world. Many of them pulled in hundreds of millions of dollars in compensation and stock options over the past decade or so. They shelter their money in endless tax loopholes; live like royalty in a country that once prided itself on being a republic; effectively set their own pay through their pals on the executive committee; and all-too-frequently drive their companies and the U.S. economy into bubbles and frauds, all the while taking tens or hundreds of millions of dollars in compensation.

Now comes Mr. Golub, reportedly with hundreds of millions of dollars in net worth, to tell us that he's upset with those asking him to pay more taxes. He's so upset indeed that half of what he says is utterly absurd. Mr. Golub is incensed that "gifts to charities are deductible but gifts to grandchildren are not." I'm going to assign that little philosophical puzzler to my freshmen students at the start of school this fall.

It gets worse. "Do we really need an energy department or an education department at all?" Golub's confusion on energy seems to be rather primitive. He asks why the government spends money on "solar panels, windmills, and battery-operated cars when we have ample energy supplies in the country." Golub seems to be completely unaware of some rather basic issues in the land, such as greenhouse-gas emissions, the government's role in R&D and environmental management, and the national balance sheet of energy resources. I will make Golub's energy views the second question I pose to the incoming class.

As for Golub's suggestion to close the Education Department, where should we begin? Should we begin with America's low rankings (in the 20s and 30s) in international comparisons of student performance? Or should we take notice of the low levels of educational attainment in the Southern states, where conservative leaders join Golub in hankering to end the Education Department? Or should we first note the soaring costs of college tuition, and the mass dropout rates of working-class kids who can't make it? Or perhaps we should focus on the withering job pool and falling incomes of kids without a college degree, a majority of America's young people?

What's especially absurd, however, is the phony way that Golub argues against the need for more taxes by citing spending programs that he considers wasteful and costly. We all have our list of least-favorite spending, and we should all agree that spending should be cost effective. Yet there is a fundamental falsehood at the core of Golub's rant. The budget deficit has very little to do with Golub's list.

Golub attacks job-training programs, alternative energy, subsidies for sugar farmers and ethanol producers, rail subsidies, unneeded post offices, and energy and education programs. This is not the place to debate the merits of this list in detail. (I can agree on sugar and ethanol, but I would disagree vehemently on most of the others.) This is the place to show the irrelevance of Golub's list.

The entire Education Department budget in Fiscal Year 2012 is around $77 billion. The entire Energy Department budget is around $30 billion. The entire Labor Department budget is $13 billion. Obama's rail programs are around $8 billion. Farm subsidies, even on the most expansive definition, are in the range of $20 billion. Even if we closed all of these departments and programs entirely (and accepted the national catastrophe that would follow), the direct budget savings would be around $150 billion, or roughly 1 percent of GDP. Yet the federal budget deficit this year is roughly $1.4 trillion or 9.5 percent of GDP. Golub's list is a smokescreen, not a solution to anything.

Golub's attack against outlays on education, energy, training, and other programs on the list misses the basic truth of our fiscal arithmetic. Our current tax collections don't even cover Social Security, Medicare, Medicaid, the Pentagon, and interest on the public debt, much less the programs for education, environment, energy, job training and the rest. Golub evades the real question: how the core of the budget - health, social security, defense, interest servicing -- is to be financed. Should we raise taxes and preserve these programs, or should we spare Mr. Golub and his friends of this modest burden on their great wealth, and instead eliminate the core social and health security in this country? Or perhaps Mr. Golub is calling for a default on interest payments?

I'm sure that Golub's own health care and retirement comfort are not in danger. If Golub and like-minded CEOs continue their campaign to resist the tax revenues needed to protect the health and social security for average Americans, implying the need to slash core budget outlays, they will hear an earful. ["An earful"?!? Ooooh, anything but that! - J] That's why Golub has taken the easy way, railing against small targets that play well in the halls of the rightwing American Enterprise Institute that he helps lead. While Golub's targets are generally phony or misguided (yes, we do need education and energy programs), such attacks are less likely to elicit a broad public rebuke than would a frontal attack on social security and health spending.

Golub is one of the most fortunate people on the entire planet. America has treated him well. He perhaps went to public schools and made his way up with plenty of benefits of American society in the middle of the 20th century. He like everybody in his generation owes his prosperity not only to his own deeds ("I did earn it," he writes) but also to the vibrancy of America during the formative years of his career. Mr. Golub's generation, and the generations that have followed, owe a great deal to the New Deal and the vigorous U.S. Federal Government that led the world in technology and rebuilding after World War II, including the promotion of science, technology, national infrastructure, social security, public health, and higher education.

In another age, Golub would be asking what he could do for his country, partly to help ensure a safe and prosperous country and planet Earth for his own children and grandchildren. Not any more. The American people will not forget the irresponsibility of CEOs who are helping to lead the country towards the cliff. Currently the American people are stunned and bewildered. In the future they will act, and act resolutely to secure the future from those who now threaten it.