|September 17, 2012|
One year ago this week, some imaginative souls “occupied” Wall Street and gave Americans a new frame for talking about the staggeringly unequal place that the United States has become. Almost overnight, signs and chants and charts turned “1 percent” and “99 percent” into a vivid new political shorthand.
Occupy Wall Street, in effect, changed our national conversation.
Last week, striking teachers in Chicago brought that conversation to a new level. Backed by a majority of the city’s parents, the teachers challenged the billionaires who’ve been bankrolling an educational “reform” campaign long on “free market” ideology and short on respect for democratic norms.
Might Chicago have the same sort of impact that Occupy had last fall? We’ll have to see. In the meantime, America's economic divide continues to widen, as the Census Bureau documented last week with its latest annual income numbers. In this week’s Too Much, we have these numbers and more.
|GREED AT A GLANCE|
“Stealth wealth,” they call it, the trend to “understated luxury at an exorbitant price.” The latest exercise in luxury stealth: a $280 coated-paper lunch bag from fashion designer Jil Sander. A high-fashion logo appears tastefully printed on the lunch bag’s bottom, and the first batch of the new bags has sold out. But not all deep pockets are going stealth. Some are going into space. Excalibur Almaz, a company based on the Isle of Man tax haven, has announced plans to bring passengers to a “gravity neutral point” near the moon. Seats go for $150 million each. Interested in more bargain-oriented space travel? Virgin Galactic is promising a two-hour suborbital flight, with five minutes of weightlessness, for just $200,000. Over 500 future space-goers have so far booked a ticket . . .Is Brad Birkenfeld the key to understanding why Mitt Romney won't release any pre-2010 tax returns? Birkenfeld left prison last month after serving over two years for helping wealthy Americans dodge taxes. UBS, the Swiss bank that employed Birkenfeld, subsequently paid a $780 million penalty to the IRS and agreed in 2009 to turn over records on 4,500 U.S. tax dodgers. Another 14,000 rich Americans then rushed to take advantage of an IRS tax amnesty. All told, the IRS collected over $5 billion in unpaid taxes, and last week the agency handed Birkenfeld a $104 million whistle-blower award for outing Swiss banking secrets. The Romney link? His 2010 return and other records indicate a Swiss banking account and a family tie to UBS. Romney, analysts speculate, may have taken advantage of the 2009 IRS amnesty . . .
Agree or disagree: “Money is the only thing I can really count on.” Researchers from three different U.S. universities recently put this comment — and a host of related observations — to a broad cross-section of Americans in a series of laboratory experiments designed to have people imagine themselves in stressful and chaotic situations. The researchers found a “dramatic polarization” in the responses from rich and poor. The affluent tended to focus “on holding onto and attaining wealth,” the poor on “spending more time with friends and loved ones.” The research, funded partly by the National Science Foundation, “suggests that in times of economic uncertainty and social instability disparities between the haves and the have-nots could grow ever wider.”
Quote of the Week
“Since the late 1970s, economic policy has increasingly served the interests of those with the most wealth, income, and political power and effectively shifted economic returns from typical American families to the already well-off.”
|PETULANT PLUTOCRAT OF THE WEEK|
|the headline, “Get Lost, You Jerk!” Arnault quickly sued. His citizenship move, he asserted, had no tax-dodging intent. But news reports soon revealed that Arnault had talked about France's impending tax hike with a Belgian public official — and reminded readers that Arnault had left France back in 1981, the last time a newly elected French president had threatened higher taxes on the wealthy.Not the best week for Bernard Arnault, the CEO of LVMH, the French luxury retail giant of Louis Vuitton fame. A week ago Sunday, Arnault confirmed filing for Belgian citizenship, sparking immediate charges he was trying to dodge the 75 percent tax on income over 1 million euros that France's newly elected president has promised. On Monday, a French daily captioned a front-page photo of Arnault, Europe’s richest man, with|| |
|PROGRESS AND PROMISE|
|a proposition to raise the state tax rate from 10.3 percent on income over $1 million to 12.3 percent over $500,000. Revenue from this Prop 30 will help prevent local public service cutbacks, and users and providers of those services — from the Los Angeles Child Care Alliance to the Chief Probation Officers of California — are backing the measure. Meanwhile, from the University of California at Berkeley has come new research that bolsters the case for stiff taxes on the state’s rich. States with low tax rates on the rich, the research documents, turn out to gain no statistically significant economic and job creation advantage.On this November's California ballot:|| |
|inequality by the numbers|
Stat of the Week
In 2011, new Census data show, the share of U.S. income going to the statistical middle class — the nation's middle 60 percent of households — fell to 45.7 percent, the lowest share since the Census Bureau started tracking this stat in 1967.
Teacher Bashing: The Inequality Psychology
In any society where wealth and income concentrate overwhelmingly at the top, the affluent will almost always come to sneer at public services and the men and women who provide them.
Last year state lawmakers in Illinois did their best to make a Chicago teacher strike impossible. They passed a new law that required at least 75 percent of the city’s teachers to okay any walkout in advance.
How did Chicago teachers respond? In advance balloting early this June, 92 percent of the city’s teachers voted, and 98 percent of those teachers voted to strike if contract negotiations broke down.
This near-total teacher support for the walkout that began last week shows just how intensely frustrated the city's teachers have become. They've been teaching for years in schools woefully ill-equipped to serve the city’s students.
Chicago political officials haven't done nearly enough to help teachers help these students learn. Over 160 Chicago schools have no library. To help homeless and other children in unstable family situations, the 350,000-student Chicago schools have only 370 social workers.
Teachers have consistently called for more resources. But school officials from Chicago mayor Rahm Emanuel on down have totally bought into a “reform” agenda that dismisses concerns about overcrowded classrooms and inadequate student support. Schools don’t need better resources. They need, Chicago’s self-styled reformers argue, better teachers.
This “reform” stance pushes endless standardized testing to identify “low-performing” schools and teachers who can’t seem to raise student test scores. For over a decade now, Chicago officials have been closing down schools they deem as “failing” and replacing them with privately run charter schools.
The Chicago school chief who initially led this charter surge now serves as the U.S. secretary of education, and his test-heavy, charter-leaning approach has become the conventional education reform wisdom within both Republican and Democratic Party elite policy circles — despite a clear absence of evidence that this conventional wisdom actually works for kids.
“If we really wanted to improve schools,” as analyst Melinda Henneberger quipped last week in the Washington Post, “we’d do what education powerhouse Finland does — fund schools equally, value teachers more, and administer standardized testing almost never.”
So why does the conventional education reform wisdom — “get tough” on teachers and the unions that protect them — have such broad support among America's political elites?
One reason: The conventional wisdom can be unconventionally profitable for the corporate execs who run the rapidly expanding chains of charter schools. At campaign time, these execs love to show their appreciation.
But support for the teacher-bashing conventional wisdom goes well beyond the ranks of those who stand to profit directly from public education’s privatization. In affluent cocktail party circles, as the New Yorker magazine noted last week, “a certain casual demonization of teachers has become sufficiently culturally prevalent that it passes for uncontroversial.”
The well-heeled today, adds the New Yorker analysis, talk about breaking teacher unions “with the same kind of social enthusiasm” usually reserved for recommending “a new Zumba class.”
This teacher bashing has been spreading for several decades now, ever since the United States first began growing much more unequal in the 1980s. This linkage should surprise no one. These two basic phenomena — a rich growing richer and a rich growing more hostile to public services and the people who provide them — have always gone hand in hand.
Wealthy people, after all, don’t typically use much in the way of public services. They don’t partake of public parks or public education. They belong to private country clubs and send their kids to private schools, and they royally resent having to pay taxes to support public services they don’t use.
These well-to-do need rationalizations for this resentment, and teacher bashing makes for an ideal one. We don’t need to “throw money” at troubled schools, the argument goes. We just have to find and fire all those lousy teachers.
Interestingly, back in the much more equal United States of the 1950s, we did “throw money” at schools — and plenty of it.
In 1958, after the shock of the Soviet Sputnik launch, lawmakers didn’t bash teachers. They appropriated billions, through the National Defense Education Act, to strengthen schools. A half-dozen years later, the Elementary and Secondary Education Act vastly expanded funding for low-income students.
In today’s deeply unequal United States, by contrast, our political elites don't fund, they bash. That bashing, educationally, makes no sense. “Blaming teachers for the failure of schools,” as the New Yorker’s Rebecca Mead puts it, has to be about as absurd as “blaming doctors for the diseases they are seeking to treat.”
But bashing makes sense to the rich. And in a plutocracy, the rich drive the debate — until the rest of us rise up and change the conversation. In Chicago, teachers have now done just that.
James Ledbetter, What exactly do we mean by ‘inequality’? Reuters, September 11, 2012. In recent decades, we've forgotten how to grow the economy except by increasing inequality. The result: a series of bubbles, and bubbles always do damage when they pop.
David Korten, Growth or Equality: Two Competing Visions for America’s Future, Yes! September 13, 2012. On how closing the wealth gap can open the way to a fairer, more prosperous economy.
Salvatore Babones, How to End Hard Times? Reduce Inequality, Inequality.Org, September 13, 2012. A new United Nations Conference on Trade and Development report details how equality promotes economic growth.
Jacob Hacker and Paul Pierson, What Krugman & Stiglitz Can Tell Us, New York Review of Books, September 27, 2012. That CEOs could cause so much damage and suffer no paycheck pain “suggests an extraordinary culture of self-justification.”
|new and notable|
Why Inequality Matters, a pamphlet produced by members of My Fair London in association with the Equality Trust, with funding support from Centre for Labour and Social Studies, September 2012, 32 pp.In years gone by, people who worried about growing gaps between the rich and everyone else used to voice their concerns in abstract moral terms. Growing inequality, egalitarians would argue, endangers our democracy. But today’s egalitarian advocacy has become much more concrete. Worry about inequality? We sure should. Inequality impacts almost every aspect of our everyday lives, from our health to the trust we have in one another. This new pamphlet, a labor of love by activists with My Fair London, offers a solid, UK-oriented intro into the inequality research evidence. But you don’t have to be British to pick up new insights from these bright and lucid pages.