Friday, July 5, 2013
Stars and Swipes Forever?
July 1, 2013
Peter Dreier, one of America’s top progressive political scientists, has caught the list bug of late. Dreier has a new book out, The 100 Greatest Americans of the 20th Century: A Social Justice Hall of Fame, and last week he chimed in with a list of this summer’s top 15 books on “what ails America and how to fix it.”
In the list’s third slot, we'd like to note, the new book by Too Much editor Sam Pizzigati, The Rich Don't Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970.
Dreier's list also gives a shout-out to 99 to 1, the latest inequality probe from Chuck Collins, a moving force behind Too Much's ongoing publication.
Americans live, Dreier reminds us, in the only major nation without guaranteed paid time off. But most Americans still manage to find some time every summer to relax. If you're looking for a good read for one of those relaxing moments, check out Dreier’s list. And if you’d like to get a richer taste of The Rich Don’t Always Win, just click your way to the intro chapter online.
GREED AT A GLANCE
America’s pension picture has, in modern times, never looked grimmer. The nation’s private sector hosted 112,000 pension plans 30 years ago. The current total: about 30,000. Half the American people, notes one recent study, have $4,500 or less in their retirement accounts. Now for the good news — if you happen to be John Hammergren, the CEO of drug distributor McKesson. The 54-year-old Hammergren can now collect, if he chooses to retire, a pension worth $159 million. That may be, analysts believe, the largest pension in U.S. corporate history. Hammergren’s regular take-home hasn’t been too shabby either. His annual paychecks have averaged over $50 million for the last seven years . . .
A word to the wise: Think twice before you buy that first yacht. The upkeep can be a killer. A paint job alone can run $1 million, points out luxury yachting expert Rupert Connor. Many yacht owners, Connor also notes, pay another $100,000 for a special protective coating that typically adds two years to a paint job’s life. But costs these awesome aren’t fazing Charles Zhang, one of China's top high-tech executives. Zhang recently shelled out tens of millions of dollars to gain rights to sell China's ultra rich yachts from the UK-based luxury boat-maker Sunseeker. Zhang already has his own Sunseeker, and he sees an intense yacht hunger among his fellow Chinese deep pockets. For these wealthy, one analyst observed last week in the South China Morning Post, Rolls-Royces and Bentleys simply “don't feel new” any more . . .
Luxury yachts, of course, don’t feel “new” either — in lands where the uber rich have a much longer history than they do in China. What does rate as “new” to the global I’ve-seen-it-all set? That would have to be the private supersonic jet. This particular animal doesn’t yet exist, but one specialty aircraft maker, the Nevada-based Aerion, has been working to bring private luxury supersonic transit to life. Aerion has been promising to have the world’s first supersonic private plane in service by 2020. Last month, a setback. Aerion officials acknowledged that 2020 will likely come and go with no supersonic private plane. Billionaires will apparently have a wait a little longer to save three hours on a transatlantic flight. The finished plane, once available, will run somewhere north of $80 million.
Quote of the Week
“We need a secretary of commerce who will represent the interests of working Americans and their families, not simply the interests of CEOs and large corporations.”
U.S. Senator Bernie Sanders (I-Vermont), the only senator to vote against the cabinet nomination of billionaire business executive Penny Pritzker, June 25, 2013
PETULANT PLUTOCRAT OF THE WEEK
These should be happy days for Silicon Valley’s Sean Parker, the 33-year-old Spotify billionaire who just tied the knot at a $10 million Big Sur wedding. But the wedding has turned into a PR disaster for Parker. California environmental officials found that his Lord of the Rings-themed nuptials had plopped a variety of structures, including a dance floor for over 300 guests, amid old-growth redwoods and an endangered-fish stream. Parker ended up paying $2.5 million to settle the mess — and he’s now blaming the resort that rented him the unpermitted space. The whole episode, says the Atlantic’s Alexis Madrigal, perfectly reflects the basic Silicon Valley corporate mindset: “Dream big, privatize the previously public, pay no attention to the rules, build recklessly, enjoy shamelessly, invoke magic, and then pay everybody off.”
IMAGES OF INEQUALITY
Drivers of high-status luxury cars, recent research shows, will violate traffic laws and endanger pedestrians far more readily than drivers of ordinary vehicles. Psychologist Paul Piff describes this and related research — on the impact of wealth on people’s behavior — in an engaging new 10-minute video from PBS.
Subsidy Tracker/ Why battle for customers in the marketplace, today's CEOs have learned, when you can extort lush subsidies out of state and local governments? Since 2008, reports Good Jobs First, states and localities have awarded firms ranging from Sears to Samsung 240 subsidies worth at least $75 million. Subsidy Tracker identifies just which companies have pocketed the most.
PROGRESS AND PROMISE
The legislation that created the federal minimum wage, the Fair Labor Standards Act, turned 75 last week — with an unexpected cause for celebration. A flagrant loophole around minimum-wage protection may finally be closing. In recent weeks, a federal court has ruled against employers that treat unpaid interns as regular employees, and a new advocacy group, Intern Justice, has begun filing lawsuits against firms that continue to use interns to replace entry-level workers. Unpaid internships, even if managed as legitimate mentoring experiences, end up reinforcing inequality, notes analyst Tim Noah, since wealthier kids can more easily afford “to work free of charge.”
By law, intern experiences need to benefit interns first, not the employers who bring them on. Help end the exploitation of intern labor. Learn more at Intern Justice
Stat of the Week
Since 1965, the gap between the compensation of America's top corporate chief executives and average worker pay has widened by 14 times over, the Economic Policy Institute calculates.
Getting Past Stars and Swipes Forever
Back in 1776, public-spirited patriots emerged from the ranks of colonial America's privileged. But our corporate elite today seems to offer up only thieving, tax-dodging parasites. Why such a contrast?
Almost ten generations have come and gone since 1776. Yet the giants of 1776 still fascinate us. Books about Benjamin Franklin, Thomas Jefferson, and George Washington still regularly dot our best-seller lists.
What so attracts us to these “founding fathers,” these men of means who put their security, their considerable comfort, at risk for a greater good? Maybe the contrast with what we see all around us.
Today's men of means display precious little selfless behavior. Our CEOs, bankers, and private equity kingpins remain totally fixated on their own corporate and personal bottom lines. They don’t lead the nation. They steal from it.
So who can blame the rest of us for daydreaming about a time when a significant chunk of our elite showed a real sense of responsibility to something grander than the size of their individual fortunes?
Actually, suggests a new book from University of Michigan sociologist Mark Mizruchi, we don’t have to go back to 1776 to find Americans of ample means who cared about “the needs of the larger society.” We had this sort of elite, he argues in The Fracturing of the American Corporate Elite, a half-century ago.
Many of America’s major corporate leaders, Mizruchi writes, spent the years right after World War II engaged in public-spirited debate over how best to put the Great Depression behind us and build a prosperity that worked for everyone.
These corporate leaders didn’t try to gut the social safety net the New Deal of the 1930s had created. They supported efforts to stretch this safety net even wider. In the postwar years, major corporate executives helped expand Social Security and increase federal aid to education six-fold. They even accepted high federal income tax rates on high incomes — their incomes.
Mizruchi takes care not to go overboard here. Corporate leaders of the mid-20th century years regularly did do battle, at various times and on various issues, with unions and other groups that spoke directly for average Americans.
But these corporate leaders also did display, notes Mizruchi, “an ethic of responsibility.” They compromised. They tried to offer solutions. They behaved, on the whole, far more admirably than the union-busters, tax-dodgers, and bailout artists who top Americans biggest banks and corporations today.
What explains why our corporate elite behaved so much better a half-century ago? Mizruchi explores a variety of factors. In the 1950s and 1960s, for one, our corporate elite had to share the political center stage with a strong and vital labor movement. Today’s corporate leaders face a much weaker labor presence.
This weaker labor presence has allowed wealth and power to concentrate ferociously at America’s economic summit. We have become, over recent decades, a fundamentally much more unequal nation.
This inequality, in turn, may be the key to understanding why corporate leaders a half century ago much more resembled the elite of 1776 than our own contemporary corporate movers and shakers. In both 1776 and a half-century ago, our most financially fortunate found themselves in relatively equal societies.
On the eve of the American revolution, researchers have recently documented, England’s 13 American colonies had a much more equal distribution of income and wealth than the nations of Europe.
In the years right after World War II, the United States enjoyed a similar epoch of relative equality. Corporate CEOs in the 1950s only made 20 to 30 times what their workers made, not the 200 and 300 times more, on average, that top corporate execs routinely take in today.
In both 1776 and 1976 America, the top 1 percent overall took less than 10 percent of the nation’s income. The top 1 percent share today, as economist Emmanuel Saez details, is running at over double that level, at 20 percent.
Did this relative equality of revolutionary America and America right after World War II help shape how elites interacted with their societies?
That certainly seems plausible. More equal societies, after all, have narrower gaps between those at the economic summit and everyone else. The narrower the gap in any society, the easier for all — elite and average alike — to feel invested in their society and share a sense of responsiblity for its future.
The takeaway for our Fourth of July, 2013 edition? If we want to rekindle that spirit of 1776, not just daydream about it, our course stands clear. We need to create a more equal America.
Timothy Noah, Spielberg test: Why the One Percenters don’t deserve twice as much, MSNBC, June 24, 2013. Today’s rich turn out to be no more deserving of their wealth than yesterday’s.
Marshall Poe, Growing Apart: A Political History of American Inequality, Big Ideas, June 25, 2013. An interview with historian Colin Gordon on his interactive new look at America's great divide.
Thomas Edsall, What if We’re Looking at Inequality the Wrong Way? New York Times, June 26, 2013. Conservatives are cheering a new analysis of U.S. income distribution. But this new analysis doesn't add up. A Dean Baker addendum.
Jesse Eisinger, Ixnay on ‘Say on Pay,’ Pro Publica, June 26, 2013. Why having shareholders take advisory votes on CEO pay has proved such an ineffective check on executive excess.
Tiffany Hsu, Top restaurant CEOs paid 788 times minimum wage, data show, Los Angeles Times, June 28, 2013. Chief execs at the nation’s top eateries make more in a morning than the average minimum-wage cook or dishwasher earns in an entire year.
Mark Engler, Should There Be a Maximum Wage? Nation of Change, June 30, 2013. An income cap that limited executive pay to no more than a multiple of worker pay would motivate CEOs to augment the pay of their janitors.
Understanding Our Revolutionary Roots
Harvey Kaye, Thomas Paine and the promise of America. New York: Hill and Wang, 2005. 326 pp.
Thomas Paine, the great pamphleteer of the American Revolution, wanted to see the nation he helped create become a place where “the poor are not oppressed, the rich are not privileged.” Throughout the revolutionary years and beyond, writes historian Harvey Kaye in this indispensable and engaging guide to Thomas Paine’s life and thought and legacy, America's first great egalitarian thinker would display “a disdain for excessive wealth” and “a recognition of the critical connection between affluence and distress.” In our own distressingly unequal times, these pages offer inspiration — and an ideal read for the Fourth of July.