Our Concern for the Rich Is Heartwarming

Our president came out today for even larger tax cuts for the wealthy (himself included, of course). He’s urging Congress to cut healthcare spending to fund part of these cuts. And, of course, we’ll borrow the rest. Why not give more money to rich people today that our kids and grandchildren can pay back later, with interest of course? That’s so generous and selfless of us.

None of this comes as a surprise. Plain folk seem to have a deep and abiding concern for rich folk in our country. Even many of our evangelists promote such policies. Apparently, it’s what Jesus would do.

I assume there’s a sense in the countryside that our wealthy citizens have been treated unfairly. So all the country needs to make it great again are millionaires and billionaires who can hoard even more money for their children and grandchildren. And buy more houses. And bigger planes.

Just think how great we’ll become.

P.S. 11/14/17: It was announced today that the wealthiest 1 percent of the world’s population now owns more than half of the world’s wealth. But I suppose they can always use more.

Whistling Past the Graveyard

Real median earnings for men have gone nowhere now for over 40 years. Over the same span of time real corporate earnings have risen roughly five-fold. – Jesse Felder in “Is This How The Winner-Take-All Era Comes To An End?”

Since the early 1960s, the share of our GDP going to labor (not unions, but labor, which means anyone who works for a living and earns a wage or salary) has been declining. Indeed, it’s plummeted since the turn of the century. Labor has been the loser; corporations and their owners (i.e., capital) have been the winners. If you doubt that, consider the fact the stock market is at an all-time high and is trading at multiples not seen since the days leading up to the Crash of 1929. And consider how little of GDP growth is going to labor versus capital. (The data are easy to find if you’re interested.)

As a result of these dynamics and public policies skewed in favor of the rich and capital, economic inequality in our country has reached levels not seen since the depth of the Great Depression. The top 20 percent is leaving the bottom 80 percent in their dust. And the top 1 percent, and even more so the top 0.1 percent — well, they’ve been reaping nearly all the economic rewards our economy has been generating in recent years.

Not long ago, corporate CEOs earned about 40 times what their workers earned. Today, they earn 350 times what the workers earn. According to noted money manager Jeremy Grantham:

The system has gone to hell. Keynes, Schumpeter–and Marx, not to mention–thought, by their nature, corporations and capitalism would overreach simply because they could. Corporations would use their advantages to get more power and more money. Their share of the pie would increase, and cause society to push back. Sooner or later there will be pushback.

Yet the president and Republican-controlled Congress are now proposing a massive tax cut for corporations and, by extension, their owners (which includes, of course, many foreigners, such as the Swiss National Bank, the owner of $88 billion of U.S. stocks and, therefore, one of the prime beneficiaries of the new tax bill). Indeed, many foreigners stand to benefit greatly from this tax bill.

Congress and the president intend to pay for this tax cut in several ways:

  • by eliminating or curtailing many deductions and credits (for instance, by eliminating or drastically reducing deductions for medical expenses, home mortgage interest, state and local taxes, student-loan interest, employer-paid tuition assistance, child adoption credit, and a myriad of other deductions and credits), which will have the effect of increasing taxes on certain individuals and institutions (~ 12 percent of taxpayers) and making education, health care, child care and home ownership more expensive for some;
  • by imposing new taxes (for instance, a new tax on certain private nonprofit colleges);
  • by cutting back on health care expenditures (e.g., not appropriating funds for children who need health care but whose parents cannot afford it); and
  • by running an even larger deficit (“deficit spending”), which will be funded by more borrowing on the part of the federal government (in other words, by making our children, grandchildren and their children pay for the tax cut for corporations and the wealthy). The nation’s debt-to-GDP ratio already sits at a post-WW II high. This bill will take it higher (est. $1.75 trillion more over 10 years).

Oh, by the way, the tax bill preserves the outrageous hedge-fund tax loophole candidate Trump vowed to kill. I’m shocked. Another win for the wealthy; another successful head-fake on the part of the president.

On its face, the bill is ridiculous. Yet it’s being treated as a serious proposal. Indeed, I wouldn’t be surprised if it (or something very close to it) becomes law. And I also wouldn’t be surprised if the majority of the electorate support it. Of course, I also wouldn’t be surprised if it dies in the Senate (as it should).

A democratic society that tolerates a handful of very big winners while the vast majority of everyone else is denied their share of the wealth the economy generates is not sustainable. It will end badly. Civil strife. Social tensions unlike anything we’ve seen in at least 50 years. Violence. War. Radical populism (not the fake billionaire-led variety we’re presently experiencing). Or the whole kit and caboodle simply may unravel.

Mr. Trump and his lackeys on the Hill, as well as their corporate benefactors, may be feeling their oats these days. But they might be whistling past the graveyard. And by the time many of their supporters realize what’s happening, it may be too late.

P.S. Although the overall thrust of the tax bill is highly objectionable to me, there are some changes that I like. Such as limiting the home mortgage deduction. Stopping the practice of using tax-free municipal bonds (private purpose bonds) to build sports stadiums for billionaires. There are others. What I dislike the most is the unconscionable increase in our national debt that will result from these cuts, the huge benefits being conferred on foreign investors, the likely negative impact on individuals (higher interest rates, including mortgage rates) and the continuation of public policy favoring capital over labor (one of the sources of the gross economic inequity that grips the nation today). In short, it’s likely to make economic inequality worse, not better. Instead of addressing the deepening problem of the working class falling further and further behind, Congress and the president want to confer huge benefits on the wealthy. The wealthy are doing just fine. We need elected representatives who care about the working class. Despite their rhetoric, these jokers do not. 

Avoiding Terror

I’ve never been the subject of a criminal investigation. But I know people who have been — who lived in fear of being prosecuted and imprisoned. In a few cases, their worst nightmares came to fruition: they had to serve time.

One thing I’ve observed: when you’re the target of a criminal investigation and live with the fear of going to prison and having your life turned completely upside down, it instills pure terror. Even men who normally walk with a swagger and play the role of the strongest chimpanzee in the jungle melt into a puddle of fear. Terror works that way.

You might think this is an odd point to make to one’s granddaughter. But I learned something else along the way: the terror that I reference has visited sons and daughters from good families. One never knows who might cross the line.

There’s a lot of pressure to cross the lines these days. I know people in the business world who have crossed more than one line. Some were discovered by law enforcement. Most weren’t.

The pressure to “succeed” in America is intense. And the fear of losing one’s job can be pretty intense, too. It causes people to do stupid stuff — stuff that could land them in jail.

So I no longer think the terror of criminal prosecution is restricted to those who live on “the other side of the track.” I’ve learned that the odds of the getting caught and prosecuted are greater over there, but I’ve also discovered there is more criminality on the “good side” of the tracks than most people imagine.

Personally, I think it’s foolish to cross the line, to subject oneself to possible prosecution. But many people don’t share my concern. Many people are willing to take a lot of risk. I’ve kept some of these people from being prosecuted and from going to jail. But I’ve also visited some of them in prison.

Recently, we learned that our president is under criminal investigation (or at least that’s what he says). Based on what I know about his actions, he has reason to be concerned. Whether his concern has blossomed into terror yet, I don’t know.

It’s obvious, though, that his life and well-being are being affected. Unfortunately, when our president is under the spotlight like this, all of our lives will be affected.

I have no idea how any of this will turn out. I’ve gotten people out of worse predicaments than the president seems to be in, but, of course, I don’t have all the facts. Some of those facts may be helpful. Some may be damning. In any case, the spotlight that’s shining on this matter is unlike any normal case. Bright lights have a way of exposing dark corners.

If I could advise Mr. Trump, I’d tell him several things. First, stop tweeting. Second, stop digging. Third, stop acting so damn guilty.

People who make stupid decisions often make the situation worse by digging the hole even deeper. The president has been digging a lot lately. He needs to stop.

One way people often dig their holes deeper is by lying. It’s rarely a successful strategy. Indeed, it’s often the very thing that ensures things will turn out poorly. The president needs to stop lying. Unfortunately, it may not be possible for this man to do that. Lying has become who he is. This, combined with a deep-rooted insecurity, is usually a recipe for disaster.

As I’m sitting here this morning, Vera, I can’t imagine you would ever do anything that could put you into legal jeopardy. That said, I’m sure many, many parents and grandparents of future felons thought the same thing.

It’s quite possible you may feel the pressure to do the wrong thing at some point in your life. You may feel your job is at stake. Or your financial survival. Whatever fear or pressure may be present, my hope is that you will be strong and courageous and take the high road. Never approach, let alone cross, the line. Do nothing that unfairly injures another person or institution. Never put yourself into a position similar to the one our president has created for himself.

Terror is real. Keep it at bay.

Francis or Donald?

The meeting in the Vatican today brought opposites together: Pope Francis and President Trump. They’re not opposite in all respects of course. They’re both men. They’re both elected leaders. They’re both over 70, much closer to death than birth. They both oversee large organizations with massive resources. They both are adored by many. They both consider women inferior to men. They both claim to believe in God and the divinity of Christ. Actually, when you think about it, they have a lot in common. Yet they are very different.

One sees the world as full of children of God. The other sees everyone as either a winner or loser.

One lifts up the path of community and service. The other embodies the values of individualism and greed.

One stops his car to kiss the head of a disabled young person. The other mocks a disabled person to garner votes and amuse his disciples.

One builds walls. The other builds bridges.

One washes the feet of others. The other grabs people by their privates.

This is the choice we face, Vera: which path to follow.

The fact of the matter is, the vast majority of us choose a path in the middle. Or perhaps it’s more accurate to say the path chooses us.

We seek security in things and strive to have more than others, yet we cannot turn our back on the others.

We sense what is right and good, yet long for the comforts and security of riches.

We find appeal in the concept of the brotherhood and sisterhood of humankind, but are appalled by the banality of some of our fellow humans and would like nothing more than to distance ourselves from them.

We simply cannot commit ourselves to go all in on either path. Perhaps it’s out of fear we’re wrong. Or perhaps our heart or brain simply won’t allow it. Or, maybe, it’s just that we weren’t lucky enough to have born into the right family.

Some of us have tried to walk the path of life straddling the two paths, one foot in each. We can’t commit. We find fault with both. Risks in both.

We want and think we can have both. But we find we can’t. At least not fully. Something has to give.

A troubled discontent sometimes settles in. Often, self-delusion takes root. We find theological and philosophical justifications for our compromises. We become blind to the hypocrisy that envelops us.

Meetings such as the one that occurred at the Vatican today are helpful. They force us to confront important questions of life.

It’s tempting to trivialize them. Or to turn our attention to other matters. But I submit we should not avert our eyes and attention too quickly. We should linger in the moment for a while.

It’s Hard To Stop Laughing On Days Like This

There will be bad days. But this is one of the good ones.

When President Obama was in office, the Congressional Republicans voted to repeal the Affordable Care Act (ACA) so may times I lost track. Of course, it was all for show. They knew the president would never sign their act into law. It was a political gimmick. That’s all.

And then came along the big wind bag. He promised a simple, affordable replacement to the ACA. I knew it was a lot of hot air. I also believed he really didn’t care about the ACA or any replacement for the act. In fact, the evidence is pretty compelling that the only thing he cares about is himself. And perhaps his family.

In any case, all that hot air ran smack into arctic air today. The blowhard failed. Miserably. As did the Republican majority in the House of Representatives. They were unable to agree on a replacement to the ACA. They were unable to pass any bill. And they most certainly failed to fulfill their campaign promise — to repeal the ACA.

That could change in time of course. But for now, we (well, some of us) get to laugh at the circus, headed by the chief clown himself.

So, Vera, here is the larger point: it’s much easier to criticize than it is to actually accomplish anything.

In fact, it’s really easy to snipe. And poke holes. And ridicule. And demonize. And take hollow actions that entail no actual consequences. Or risks. And to huff and puff. And to make empty promises. But to actually do something productive, that’s a much harder lift.

What we’ve witnessed isn’t restricted to the world of politics. You’ll encounter it in the nonpolitical world too. People with loud voices but no skin in the game. And no ability to solve problems and make the world — or their company, other organization, or town — a better place.

Republicans are the teachers today. But it could just as easily have been Democrats. Or anyone else for that matter. No matter who the teacher, there is a lesson to be learned in all of this.

Try to be someone who gets things done and contributes, not merely someone who spouts off. If you do, you may not be able to get elected to the presidency or Congress, but I think you’ll be happier with yourself.