Streams

Gets? How About Earns

Thursday, March 31, 2011 - 03:04 PM

The New York Times Economix blog reported yesterday that the "Economic Policy Institute, a liberal research organization, has published a new report looking at disparities in wealth in the United States." They found disparities are extreme, lopsided and lots of other words that mean "bad."

Before getting into these wealth figures, Economix sums up previous reports specifically on income: "the highest-paid Americans have been claiming a larger and larger share of earnings." And "as of 2008, about 21 percent of income was received by just 1 percent of earners."

Today, on the Brian Lehrer show, economist Joseph Stiglitz said that "1 percent gets almost 25 percent of the income...in the US."

I'm not disputing the numbers. I'm not an economist and I haven't looked at the data. My issue is with the language. These high-income people "claim", "receive" and "get" their money, according to the two examples above. It's like they're handed checks every week, poof, by magic. It minimizes the accomplishments of so many hard workers who reached their own American dream.

There are under-serving people in the ranks of the high-income minority, this is true. The last few years have made people particular sensitive to the question of whether someone deserves the paycheck they get. We saw storied companies fail while their leadership cut themselves huge checks and we saw government handouts given to prop up large corporations while mom and pop shut their store down. I get it, and I'm not criticizing those who point out that things in life are sometimes unfair. And yet it's still not appropriate to blanket condemn the rich. Let's face it, most of us hope to be in their ranks someday. We want to work hard and be rewarded for it appropriately. The best way for that to happen for us all is not to pretend that the rich don't earn their money. The answer isn't to make the rich poorer, through higher taxes, double-taxing, death-taxing, but to strive to make the poor richer.

Born in the Soviet Union and raised in Brooklyn, Karol Markowicz is a public relations consultant in NYC and a veteran of Republican campaigns in four states. She blogs about politics at Alarming News and about life in the city with her husband and baby at 212 BabyShe can be followed on Twitter.

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Comments [7]

Marcello from Brooklyn

With mounting evidence pointing to jaw-dropping income and wealth inequality in America, conservatives are now finding it more convenient to shift from talking about inequality itself to “the tone of the debate about inequality”.
In other words we have moved from a conversation to a meta-conversation.
Even in within these new boundaries, Karol Marcowicz manages to be completely off the point. She confuses the negative connotation attached to the notion of inequality with a negative characterization of the rich in general claiming that the negative terms often used when discussing income disparity “minimize the accomplishments of so many hard workers who reached their own American dream”.
Obviously, there is nothing wrong with being handsomely compensated for one’s honest work like there is nothing wrong with being rich.
Comedian and TV host Bill Maher recently talking about inequality in America, had a very appropriate comparison that quantifies the reality of wealth concentration while making it easy to grasp.
Imagine one hundred people ordering a pizza that is cut in 100 slices. The box is opened and the first person in line takes eighty slices leaving the other 99 hungry persons to share the remaining 20 slices. (The analogy is actually slightly inaccurate because to reflect the actual level of inequality in America, the first person would have to take approx. 85 of the 100 slices…)
From an economic standpoint, this is simply the way the market works meaning that, although outrageous, that is simply the way things are; it’s what we, as a society, sanction and find acceptable.
The market however, is not the same as a democracy. For a democracy to work properly, its citizens need to be aware and informed of what the economic, social and political realities are and my opinion is that the only reason people in the US accept this outrage and are not in the street with pitchforks is that they buy the lies and misinformation coming from people like Markowicz, from a propaganda apparatus like Fox and from all the rest of the (real..) elites that thrive thanks to this abysmal general ignorance.
As a demonstration of this, a recent study on a sample of 5000 people by the Harvard Business School professors Dan Ariely and Michael Norton shows that Americans have absolutely no idea how profoundly lopsided the income distribution in the US is. Moreover, when asked what they think a “fair” wealth distribution should look like, they came up with an even more equitable spread, and their answers all clustered around the same results, regardless of party affiliation, age, and social condition.
Here the article about the study:

http://www.nytimes.com/roomfordebate/2011/03/21/rising-wealth-inequality-should-we-care/living-beyond-your-means-when-youre-not-rich

This of course, spells trouble for Republicans who count on the reinforcement of their alternative reality in order to siphon more wealth to the top while keeping everybody else quiet and dumb.

Apr. 05 2011 07:44 PM
Marcello from Brooklyn

Marcowicz’s in the meantime, concludes her post by repeating the same old trite formula: “The answer is not to make the rich poorer through higher taxes, double taxing death-taxing, but to strive to make the poor richer”.
The implication here is the old conservative fairy tale that inequality is ultimately neutral meaning that if your neighbor has an income that is five hundred times yours, that shouldn’t bother you because it doesn’t make any difference on your life.
The second implication is that if your neighbor is making millions and you are not, then obviously you are doing something wrong meaning that you should be doing something different more like whatever your neighbor has done.
But is it realistic to think that we can live in society where everybody is banker or a Wall Street trader?
But back to the first point.
If the CEO of a health insurance company is paid a huge salary that is 700 times that of an average worker, that money is going to constitute an operating cost for the company’s finances. Since every firm, pass its costs to the costumers, it’s easy to understand that the luxurious compensation of the CEO is going to be factored in the premiums that the customers will have to pay if they want to get insurance. Therefore, many people will find themselves in a position of not being able to afford insurance thanks to the fact that the CEO just cannot live in a 15 bedrooms mansion. He really needs twenty five!...
Similarly, let’s imagine a president that comes into office with a budget surplus and leaves, eight years later, leaving behind a huge deficit hole and a catastrophic recession.
All of a sudden there is no money left: not at the federal, state or local levels.
To make up for the state shortfall, either taxes will have to be raised (a measure that, due to the progressive nature of the tax system, would hit mostly the rich) or public financing will need to be cut (a measure that would hit harder those in the lower income groups who tend to rely more on public programs).
Now, because in this country we believe that those who are already extremely rich should not be asked any additional sacrifice, a public university that relies on state financing is forced to drastically raise tuition. This raise in tuition, will cause many potential students who were considering getting a degree, to drop their plan because they now find themselves outside the market for education. So, while maybe one or two of them could have become a business owner or an entrepreneur had they had a shot at that degree, now they can’t.
Inequality levels raise and opportunities for economic emancipation shrink.
So while Marcowicz claims that we should make the poor richer, she endorses policies that prevent that from happening. And God forbid we should ask the guy who walked away with 85 slices of pizza out of 100 to leave back one or two…
That of course, would be Socialism!...

Apr. 05 2011 07:34 PM

First, every successful businessperson relies on an extensive public infrastructure of transportation, communications arrangements, international protections and administrative and court protections ("regulation") that make their success possible. These are mostly financed by taxpayers.

Second, some wealthy people such as Bill Gates clearly "earned" their money by providing goods and services that have been a great value to the nation and the world. Warren Buffet has picked many winners. Oh, and I forgot, Gates and Buffet think taxes on their bracket should be raised.

However, there does seem to be a cadre of people who use their great intelligence to create ever more complex financial and legal paper whose primary purpose seems to be to channel large sums of money into their own pockets. They claim to bring "efficiencies" to the market, but real value creation is usually pretty obvious. If it has to be hidden in fine print there is something fishy. Plus, these are the same people who brought us to the brink of the Second Great Depression, and who are arguing that regulating their (anti-social) behavior will inhibit the growth of business. As long as we insist on letting these people grab the whole pie while we put teachers, cops, firefighters and social workers on a strict diet, our nation will be on the road to greater poverty for the many and riches for the very few. Sound like...Egypt, Mexico, Indonesia...? all those places where the wealthy have moved their money to take advantage of low wages. The American middle class needs to wake up and stop listening to Rush Limbaugh before it is too late.

Apr. 04 2011 06:45 PM
Karol from NYC

Nicholas, for every Bill Gates there are plenty of lowly millionaires (as opposed to billionaires) leading similarly philanthropic lives. But even if they weren't, I don't think it's any of our business. They earned their money and they can spend it as they please. They give the government enough in taxes to not be begrudged their wealth. If someone is stealing their money then we should prosecute them, not wholesale condemn anyone lucky enough to be rich.

Apr. 02 2011 09:34 AM
Nicholas from People's Republik of New Jersey

I think you're right!

I wouldn't want all that money! It's a job in and of itself just making sure your tons of money is being spent the right way! Could you imagine buying the wrong plane, or the wrong kind of marble for your outhouse?

I kid, I kid...but in all honesty: any one of these guys in the top 1% will tell you that it takes a handful of lucky phenomena to get to the upper 1%. Sure, they work hard too. John Gatti worked hard, so did Lucky Luciano and Muamar Gaddafi. Working hard doesn't merit extreme wealth though, by itself, either does intelligence.

To make this whole thing seem sensible at all while at the same time give it a bit of substance, would be to pick someone out that is doing something useful with their money. When people see top 1%, they think of rich guys blowing money on hookers and cocaine.

Bill Gates is a great example of someone who is mega rich and doing something positive. He is a huge dork, but he does a great deal in giving back to the country and the world. THAT is hard work, not blowing smoke up investors' asses on a conference call.

Apr. 01 2011 04:23 PM
Karol from NYC

That's just false. Plenty of hard-working, honest people make up those ranks. They're not stealing anything.

Apr. 01 2011 02:27 PM
Troy Johnson from NYC

"We saw storied companies fail while their leadership cut themselves huge checks and we saw government handouts given to prop up large corporations..."
This statement says it all. Whether you call it "getting", "earning", or "stealing", the nation's wealth is increasingly going to fewer and fewer people because the very wealthy exhert far too great an influence on ou laws and how they are applied.

Apr. 01 2011 11:54 AM

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