|October 22, 2012|
In this week’s Too Much we spotlight some rather stunning new stats on global wealth distribution. But stats, even the most dramatic of them, can’t really convey the human cost we pay when we tolerate vast divides of income and wealth.
This story can: Management at Manhattan’s prestigious Lenox Hill Hospital, a news report last week revealed, has set up a special, lushly carpeted floor that features maternity suites that go for up to $2,400 a night, plus medical care. The suites feature “close to the bedside” nursing, with nearly one nurse per patient.
To meet that ratio, Lenox Hill nurses charge, the hospital is letting the nurse-baby ratio soar — as high as 18 newborns to one nurse — on the floor for ordinary moms. Hospital execs, one angry nurse feels, “only care about the 1 percent.”
Elsewhere in America, in California’s Silicon Valley, hospital workers have come up with an innovative strategy for going after 1 percent-friendly hospital chiefs. In this week’s Too Much, we have that tale, too.
|GREED AT A GLANCE|
The Chinese people, says new Pew Research Center polling, are worrying more these days about their nation’s gaping divide between rich and poor. About half of the Chinese, 48 percent, now rate inequality as a “very serious problem,” up from 41 percent four years ago. China’s rich, meanwhile, are worrying about . . . finding the right pony. Polo has become China’s latest luxury import. At the Tianjin Goldin Metropolitan polo club, memberships start at $60,000. Xia Yang, a property developer who founded the Sunny Times polo club in Beijing, calls polo an “aristocrat’s sport.” Adds Yang: “We don't have aristocrats in China, but we do have a lot of people who have got very rich very quickly. I want to encourage them to behave like gentlemen, and playing polo is part of that.”How much did Vikram Pandit, the Citigroup CEO who stepped down unexpectedly last week, pocket over his five years at Citi? That’s about, says analyst Brett Arends, “as clear as mud.” Estimates of Pandit's Citi CEO pay are ranging from $56.5 to $96 million, on top of the $165 million Pandit cleared when Citi bought his two-year-old hedge fund in 2007. Eleven months later, Citi shut down the failing hedge fund, losing $202 million in the process. Citi shareholders, for their part, lost nearly 90 percent off their share value during Pandit’s tenure. Things, of course, would have gone worse for Citi, the nation’s third-largest bank, without the 2008 taxpayer bailout. Pandit’s parting words of wisdom: “The bank is actually in damn good shape.” If the bank isn’t, Pandit certainly is . . .
Last Wednesday, the day after Vikram Pandit’s surprise resignation, former Morgan Stanley CEO John Mack delivered a surprise of his own. In a “let’s be totally honest” moment on national TV, Mack showed that at least one power suit on Wall Street may have some shame. The money on Wall Street, Mack pronounced, has been “unbelievably generous.” With one group of Americans doing “extremely well” and another not, he noted, “we need to make changes.” What kind of change? Mack doesn’t say. Lawmakers in France do. Late last week they voted in a new 75 percent tax rate on income over 1 million euros, the equivalent of $1.3 million. The current top U.S. rate: 35 percent.
Quote of the Week
“Economic inequality begets political inequality and vice versa. Then the very vision that makes America special — upward mobility and opportunity for all — is undermined. One person, one vote becomes one dollar, one vote. That is not democracy. That is political decay.”
|PETULANT PLUTOCRAT OF THE WEEK|
|doesn’t much like “liberal elitists, radical environmentalists, unionists, and Americans who do not want to work.” He also doesn’t much like employees who ignore his missives soliciting contributions for conservative political candidates. How much pressure does Murray bring to bear? In 2010, the 3,000 employees at Murray Energy ended up the second-largest source of campaign cash for GOP House speaker John Boehner. His top source, AT&T, had 200,000 employees to draw from. This past August, at a rally near a Murray mine in Ohio, Mitt Romney spoke against a backdrop of “coal-smudged” miners. Grassroots enthusiasm? Not exactly. Murray had shut down the local mine for the day and let it be known that he expected miners to show up, unpaid.Robert Murray, the CEO of America’s largest privately held coal company,|| |
|PROGRESS AND PROMISE|
|a proposition to cap El Camino executive pay at twice the salary of California’s governor, just $165,288 next year. Some 10 El Camino execs, in all, would see their take-homes sliced if local voters give the pay limit a thumbs up. CEO Tomi Ryba has so far had the hospital spend $149,000 to defeat the pay cap ballot measure. El Camino, local workers note, “receives millions of taxpayer dollars annually.”Workers at Silicon Valley’s El Camino Hospital were feeling more than a little squeezed last spring. Hospital management was demanding serious benefit cutbacks — at the same time the hospital’s CEO was raking in $695,000 a year, with a potential 30 percent added bonus. The worker response? They decided to squeeze back. They placed on the November 6 ballot|| |
Become a one-person election truth squad on tax claims. Check Citizens for Tax Justice for some handy background info and get the latest on Cayman Islands scams with this new video from the Other 98%.
|inequality by the numbers|
Stat of the Week
Only 3 percent of America’s families have net worths over $1 million, but millionaires make up a clear majority of Congress. Since the 1980s, adds new research from Duke University political scientist Nicholas Carnes, the share of state lawmakers with working-class jobs has dipped from 5 to 3 percent.
Joe the Plumber, Please Speak Up Already!
We haven't heard much at all from Joe the Plumber this election cycle. A shame. Without his rants against sharing the wealth, no one's bothering to debate how desperately we really need to be sharing.
Four years ago, a plumber by the name of Joe Wurzelbacher injected a bit of a debate over inequality right into the heart of the 2008 Presidential race.
Just outside Toledo, in a chance campaign encounter, then-candidate Barack Obama explained to Wurzelbacher — soon to become the celebrated “Joe the Plumber” — that “when you spread the wealth around, it’s good for everybody.”
GOP Presidential candidate John McCain almost immediately jumped on Obama’s remark, as if his rival had committed some horrible gaffe, and wealth redistribution suddenly became one of the campaign’s hottest issues.
Now four years later Joe the Plumber has largely faded from view. He’s running a lackluster campaign for Congress, as a conservative Republican. And the issue that gave Joe the Plumber celebrity status — wealth redistribution — has more or less totally disappeared.
Last week, the second Presidential debate of 2012 came and went without a single mention of the word “inequality” or America’s incredibly top-heavy distribution of income and wealth.
President Obama, to be sure, did talk about hiking taxes on the rich, back to Clinton-era levels. But those Clinton rates didn’t do much at all to stop the concentrating of America’s wealth. Our super rich saw their fortunes continue to soar during the 1990s, just as they had soared during the 1980s, before Clinton’s presidency, and just as they’ve soared since Clinton left office.
And where do we stand right now with this concentration of income and wealth at America’s economic summit? An up-to-date answer came last week from the global research arm of Credit Suisse, the Swiss banking giant.
America’s rich aren’t just pulling away from the rest of America, the Credit Suisse Research Institute’s just-released third annual Global Wealth Report details. They’re pulling away from the rest of the world’s rich.
Between the middle of 2011 and the middle of 2012, Credit Suisse calculates, overall global wealth dropped 5.2 percent, the first annual decline since the global financial meltdown in 2008. Over most of the globe, this dip even included million-dollar fortunes. In Europe, nearly 1.8 million affluents lost their millionaire status.
But American millionaires have actually expanded their ranks over the last 12 months, by 962,000. Americans now make up a stunning 39 percent of all the global households worth at least $1 million.
If you jump up a few wealth notches, to the level of “ultra high net worth individuals” worth at least $50 million, the U.S. global wealth dominance becomes even more pronounced. Of the 84,500 global super rich with over $50 million in net assets, 45 percent hail from the United States.
Joe the Plumber and other fans of great fortune don’t have much problem with this huge accumulation of wealth at America’s economic summit. What about the rest of us? Should we be concerned? Might our lives be more secure if we did more in the United States to share the wealth?
The researchers at Credit Suisse have helpfully crunched all the numbers we need to answer this most basic of questions. Three of today’s most important developed nations, the Credit Suisse data show, turn out to have almost identical quantities of wealth per adult.
If you add up the total household wealth in each of these three countries — the United States, France, and Japan — and then divide that overall wealth by adult population, you get virtually the same average wealth: $262,351 per adult in the United States, $265,463 in France, and $269,708 in Japan.
In real life, of course, we don’t divide wealth equally by population. Some of us have more wealth than others, much more wealth. But the degree of inequality, the new Global Wealth Report from Credit Suisse reminds us, varies enormously by nation. In the United States, the bulk of our wealth rests near the top. In France and particularly Japan, much more of the wealth rests around the middle.
How much of a difference — to the typical person in the United States, France, and Japan — do these differences in inequality levels make? A great deal. To be more specific: over $100,000 worth of difference per person.
In the grossly unequal United States, our most typical — or median — adult now holds just $38,786 worth of wealth. Half of American adults have more than this $38,786, half have less.
Japan’s most typical adults have a net worth of $141,410. In France, a nation with wealth much more equally distributed than in the United States but not as equally distributed as Japan, that typical adult holds $81,274 in wealth.
In other words, a typical Japanese household today sports more than triple the wealth of a typical U.S. household, and typical French households have twice as much wealth as their American counterparts.
Average Japanese and average French don’t work any harder than average people in the United States. They just live in societies that do a much better job of sharing the wealth that work creates.
Maybe one day Americans will live in a society that shares. Maybe one day our Presidential candidates will even talk about sharing.
Annie Lowrey, Income Inequality May Take Toll on Economic Growth, New York Times, October 16, 2012. Mainstream economists no longer see inequality as the unavoidable price societies must pay to grow.
Matthew O'Brien, Don't Pity the Rich: The Great Recession Was Worst on the Poor, Atlantic, October 16, 2012. Striking charts that show how meager a dent hard times have made on America's affluent.
Ryan Wood, What we need is a maximum wage, New Zealand Herald, October 17, 2012. Top New Zealand pols are pushing a new low “starting out” wage to “create jobs.” Reducing wages can create jobs, but not that way. The wages that need reducing? Those that go to CEOs.
Plutocrats Then and Now, Moyers & Company, October 19, 2012. A clever comparison of the super rich in the original and current Gilded Ages. The related new Bill Moyers discussion with Matt Taibbi and Chrystia Freeland on plutocracy rising.
|new and notable|
David Cay Johnston, The Fine Print: How Big Companies Use 'Plain English' to Rob You Blind, Portfolio/Penguin, 320 pp.In his fine latest book, David Cay Johnston, the nation’s top tax journalist. explores among other questions why your employer can’t seem to afford your pension anymore. One reason: “the cost of unlimited tax deferrals for your bosses.” In 2012, a 45-year-old worker in a 401(k) plan can have no more than $17,000 deferred from taxes. A CEO can have $100 million deferred, and Johnston shows us how, step by step, this deferral can turn that $100 million into $387 million by retirement. The tax cost of this deferral to the company? In a 10,000-worker firm, that cost will hit $4,000 per worker, dollars that could have gone to employee salary and benefits.
Tax the Richest 2%/ In Minnesota, activists are pushing back against budget cuts with a vital online presence. A model for other state battles against austerity bud