By Gerald Friedman, who teaches economics at the University of Massachusetts, Amherst. He is the author, most recently, of “Reigniting the Labor Movement” (Routledge, 2007). Edited by Lynn Parramore and produced in partnership with author Douglas Smith and Econ4. Cross posted from Alternet.
Summer 2009. Unemployment is soaring. Across America, millions of terrified people are facing foreclosure and getting kicked to the curb. Meanwhile in sunny California, the hotel-heiress Paris Hilton is investing $350,000 of her $100 million fortune in a two-story house for her dogs. A Pepto Bismol-colored replica of Paris’ own Beverly Hills home, the backyard doghouse provides her precious pooches with two floors of luxury living, complete with abundant closet space and central air.
By the standards of America’s rich these days, Paris’ dogs are roughing it. In a 2006 article, Vanity Fair’s Nina Munk described the luxe residences of America’s new financial elite. Compared with the 2,405 square feet of the average new American home, the abodes of Greenwich Connecticut hedge-fund managers clock in at 15,000 square feet, about the size of a typical industrial warehouse. Many come with pool houses of over 3,000 square feet.
Steven Cohen of SAC Capital is a typical product of the New Gilded Age. He paid $14.8 million for his Greenwich home, which he stuffed with a personal art collection that boasts Van Gogh's Peasant Woman Against a Background of Wheat (priced at $100 million); Gauguin's Bathers ($50 million); a Jackson Pollock drip painting (also $50 million); and Andy Warhol's Superman ($75 million). Not satisfied, Cohen spent millions renovating and expanding, adding a massage room, exercise and media rooms, a full-size indoor basketball court, an enclosed swimming pool, a hairdressing salon, and a 6,734-square-foot ice-skating rink. The rink, of course, needs a Zamboni ice-resurfacer which Cohen houses in a 720-square-foot shingle cottage. Munk quotes a visitor to the estate who assured her, “You'd be happy to live in the Zamboni house.”
So would some of the over 650,000 Americans sleeping in shelters or under highway overpasses.
By the time it was finished, Cohen's house had swelled to 32,000 square feet, the size of the Taj Mahal. Even at Taj prices, cost mattered little to a man whose net worth is estimated by the Wall Street Journal at $8 billion — with an income in 2010 of over $1 billion. Cohen’s payday is impressive, but by no means unique. In 2005, the 25 hedge-fund managers averaged $363 million. In cash. Paul Krugman observes that these 25 were paid three times as much as New York City’s 80,000 public school teachers combined. And because their pay is taxed as capital gains rather than salary, the teachers paid a higher tax rate!
Back in the 18th century, Alexis de Tocqueville called America the “best poor man’s country." He believed that "equality of conditions" was the basic fact of life for Americans. How far we've come! Since then, the main benefits of economic growth have gone to the wealthy, including the Robber Barons of the Gilded Age whom Theodore Roosevelt condemned as “malefactors of great wealth” living at the expense of working people. By the 1920s, a fifth of American income and wealth went to the richest 1 percenters whose Newport mansions were that period’s Greenwich homes. President Franklin Roosevelt blamed these “economic royalists” for the crash of '29. Their recklessness had undermined the stability of banks and other financial institutions, and the gross misdistribution of income reduced effective demand for products and employment by limiting the purchasing power for the great bulk of the population.
Roosevelt’s New Deal sought to address these concerns with measures to restrain financial speculation and to redistribute wealth down the economic ladder. The Glass-Steagall Act and the Securities Act restricted the activities of banks and securities traders. The National Labor Relations Act (the “Wagner Act”) helped prevent business depression by strengthening unions to raise wages and increase purchasing power. Other measures sought to spread the wealth in order to promote purchasing power, including the Social Security Act, with retirement pensions, aid to families with dependent children, and unemployment insurance; the Fair Labor Standards Act, setting a national minimum wage and maximum hours; and tax reforms that lowered taxes on workers while raising them on estates, corporations and the wealthy. And the kicker: Through pronouncement and Employment Act (1946), the New Deal committed the U.S. to maintain full employment.
The New Deal reversed the flow of income and wealth to the rich. For 25 years after World War II, strong labor unions and government policy committed to raising the income of the great majority ensured that all Americans benefited from our country’s rising productivity and increasing income.
Advocates of laissez faire economics warned that we would pay for egalitarian policies with slower economic growth because we need inequality to encourage the rich to invest and the creative to invent. But the high costs of inequality in reduced social cooperation and wasted human capital point to the giant flaws in this view. A more egalitarian income distribution provides better incentives for investment, and our economy functions much better when people can afford to buy goods and services.
The New Deal ushered in a period of unusually rapid and steady economic growth with the greatest gains going to the poor and the middle-class. Strong unions ensured that wages rose with productivity, government tax and spending policies helped to share the benefits of growth with the poor, the retired and the disabled. From 1947-'73, the bottom 90 percent received over two-thirds of economic growth.
Then, the political coalition behind the New Deal fragmented in the 1960s. Opponents seized the moment and reversed its policies. They began to funnel income toward the rich. With a policy agenda loosely characterized as “neoliberalism,” conservatives (including much of the economics profession) have swept away the New Deal’s focus on employment and economic equity to concentrate economic policy on fighting inflation by strengthening capital against labor. That has worked out very badly for most of America.
The GOP has led the attack on Roosevelt’s legacy, but there has been surprising bipartisan support. President Carter got the ball rolling with his endorsement of supply-side taxation and his commitment to fight inflation by promoting labor market competition and raising unemployment. Carter's policies worked to reverse the New Deal’s tilt toward labor and higher wages. Under his watch, transportation and telecommunications were deregulated, which undermined unions and the practice of industry-wide solidarity bargaining. Carter also campaigned to lower trade barriers and to open our markets to foreign trade. These policies were presented as curbs on monopolistic behavior, but the effect was to weaken labor unions and drive down wages by allowing business to relocate production to employ lower-wage foreign workers while still selling in the American market.
Carter also began a fatal reversal of economic policy by refusing to support the Humphey-Hawkins Full Employment Act. Instead of pushing for full employment, Carter appointed Paul Volcker to chair the Federal Reserve with the charge to use monetary policy to restrain inflation without regard for the effect on unemployment. Since then, inflation rates have been brought down dramatically, but unemployment has been higher and the growth rate in national income and in wages has slowed dramatically compared with the New Deal era.
Already in the 1970s, a rising tide of anti-union activities by employers led Douglas Fraser, the head of the United Auto Workers to accuse employers of waging a “one-sided class war against working people, the unemployed, the poor, the minorities, the very young and the very old, and even many in the middle class of our society.” Organized labor’s attempt to fight with labor reform legislation amending the Wagner Act found little support in the Carter White House and went down to defeat in the Democratic-controlled Senate.
Any residual commitment toward collective bargaining under the Wagner Act was abandoned during the Reagan administration, ironically the only union president ever elected to the White House. Reagan, of course, is known as the president who fired striking air traffic controllers in 1981. He is also known for the devastating regulatory changes during his presidency and those of his Republican successors (the two Presidents Bush). Their appointments to the National Labor Relations Board helped to turn this agency from one charged with promoting union organization and collective bargaining to one charged with ensuring that employers were free to avoid unions. Under this new regime, private sector unionism, the unions covered by the Wagner Act, has almost disappeared.
The 1970s also saw a shift in tax policy away from the principles of ability-to-pay and income redistribution toward those associated with supply-side economists who argued for lower taxes on the rich to provide incentives to accumulate wealth. After campaigning for tax reform, Carter signed the Revenue Act of 1978, which gave small tax benefits for working people and dramatic cuts in capital gains and corporate taxes and on the top marginal rates. Since then, major reductions on taxes paid by the rich enacted under Presidents Reagan and George W. Bush have dramatically reduced the tax burden on the richest Americans.
Government spending policies have also turned away from ordinary Americans. In 1996, under President Bill Clinton, a vital piece of the New Deal safety net was repealed with the “Personal Responsibility and Work Opportunity Reconciliation Act.” Abolishing the provisions of the Social Security Act that established the program of Aid to Families with Dependent Children, the 1996 law ended the national right to relief. Along with restrictions on unemployment insurance, the abolition of programs of public jobs for the unemployed and gradual reductions in the real value of Social Security benefits, this act was another blow for working people.
The New Deal showed us how to combine economic growth and lower levels of unemployment. But the widening gap between rich and poor since the 1970s has been associated with higher levels of unemployment and a slowing of economic growth. Had economic growth rates continued after 1978 at the same rate as during the decades before, average income would have been more than $14,000 higher than it actually was in 2008.
The slowdown in growth since the abandonment of egalitarian New Deal policies has cost Americans about 30 percent of their income. And the massive redistribution of income away from average Americans and toward the rich has destroyed the sense that America is a land of opportunity for all. Quality of life has plunged because the shredding of social protections has exposed average Americans to much higher levels of risk. The substitution of defined contribution pensions, such as Individual Retirement Accounts or 401K plans, for defined benefit pensions has reduced retirement security for individuals while reducing the risk borne by employers or other social institutions. Just as important as declining income for many Americans, the stress and anxiety associated with the risk shift has contributed to rising levels of depression and morbidity and a decline in life expectancy for Americans compared with residents of other countries.
Workers’ security has been abandoned. But the government has let financial markets run wild. In 1982, Congress deregulated the thrift industry, freeing thrifts to engage in reckless and fraudulent behavior. In 1994, it removed restrictions on interstate banking. In 1998 it allowed Citigroup to merge with Travelers’ Insurance to create the world’s largest financial services company. And in the Gramm-Leach-Bliley Act of 1999, it repealed the remaining Glass-Steagall barriers between commercial and investment banking. Acting with the virtual consent of Congress and the president, in 2004, the Securities and Exchange Commission established a system of voluntary regulation that in essence allowed investment banks to set their own capital and leverage standards.
By then our financial regulatory system had largely returned to the pre-New Deal situation in which we trusted financial institutions to self-police. Advocates of deregulation, like Federal Reserve chair Alan Greenspan, were unconcerned because they expected banks and other financial firms to limit their risk for fear of failure. Either they misunderstood the incentives facing company managers, or they did not care. In practice, financiers are playing with other people’s money (ours). When they do well, their compensation is tied to profits and they can earn huge sums. But when their investments fail, they are protected because monetary authorities and the United States Treasury cannot allow "too big to fail" financial companies to go bust. So long as risky investments would have periods of high returns, the managers of deregulated financial firms have an incentive to increase their risk, profiting from success while passing the costs of failure to the public. We have all been suffering from the consequences of their failures since the financial crisis of 2007-'08.
The share of income going to the top 1 percent has doubled since the 1970s, returning to the levels of the 1920s. The greatest gains have gone to the very wealthiest and to executives and managers, especially of financial firms. From 1973 to 2008, the average income of the bottom 90 percent of American households fell even while the rich gained. The wealthiest 1 percent gained 144 percent or over $600,000 per household; and the richest 1 percent of the 1 percent, barely 30,000 people, gained over 455 percent or over $19,000,000.
That's enough to buy a nice doghouse. Or a mansion in Greenwich.
Does anyone see the irony in these jokers owning Van Goghs and Gauguins?
I don’t fault them their wealth. I fault them the amount of time they take up from congressmen who should be helping the rest.
I fault the congressmen who spend nearly 50% of their house time passing laws for a foreign nation (thomas.gov). I fault the congressmen who helped cause this mess failing to shrivel in embarrassment and fix it. I fault the congressmen who are so out of touch that they don’t realize what four years takes away in the life of a child.
Duh! They didn’t earn their wealth — they stole it by buying congressman — that is their fault!
It is not wealth it is loot it, it was stolen through graft and corruption of government. Fault them for being the aberrant sociopathic diseased Xtrevilist pigs that they are and work to claw back every cent stolen!
Deception is the strongest political force on the planet.
That made me want to vomit. I wish Van Gough was here to collect his work from these Parasites. Or chase him around his barabaric vinyl and sheetrock-Taj Mahal with a 500 dollar carving knife from his 1000 sq foot kitchen
Let Mr. Cohen explore the German band “Rammstein” on YouTube. Tour in America 2012 was “explosive.” Considering history, what has he done?
This is not a love song!
Listening to Ich tu dir weh as I type! Awesome!
The band is fascinating, but the messeage was lost on me. Can you explain?
What part of a government enforced/backed usury for stolen purchasing power private money monopoly sounds like it would lead to social justice?
Keep in mind that you’re asking a guy that thinks that if we just triple down on more central planning with the right people, it would lead to social justice and prosperity.
Let’s see, so we raided, looted and destroyed the palace of Saddam Hussein over nothing more than BS charges, his direct malfeasance against the American citizenry?
In the case of the Mr. Cohen et al. we allow these criminals and their palaces to still exist in our own country while their crimes of theft and pillaging go unaddressed.
Their track record?
Together these sociopaths have cost the American people on the order of TRILLIONS OF DOLLARS worth of damage, damage that to this day is only exacerbated and shows no signs of abating.
Now, I’m not saying that we should drag these criminals from their homes and burn their houses to the ground.
I truly thought, given how many Wall Street employees lost their jobs, that Bernie Madoff’s apartment building would get torched while he was in it. As Americans, we have come a long way.
Going from upright to prone isn’t really that far.
I wonder how important context is to this story? e.g. this time period of America having strong unions ran concurrent to the rebuilding of much of the ‘inustrialized’ world, following WW2.
Were American businesses able to compete internationally, even with strong unions, because there was so little foreign competition throughout the world? Could American business compete today if unions, and laws of redistribution toward the lower classes, were as strong now as they were then?
Is there a current example (in Scandanavia?) of a country with strong unions and policies of redistribution, where dometistic businesses are able to thrive and compete internationally?
On the one hand higher costs make businesses less competitive, but on the other hand, a wealthier/wider/broader middle class provides increased aggregate consumer demand… after all, business is all about sales.
SDB: Is there a current example … of a country with strong unions and policies of redistribution, where dometistic businesses are able to thrive and compete internationally?
Thanks to a beggar-thy-neighbor policy…
The main issue anyways is not international competition, is is external products that are so cheap they remove any incentive for domestic production of same unless there are harsh import taxes. Imports drains a nation of purchasing power over time.
“Thanks to a beggar-thy-neighbor policy…”
Yes this really should lose he circle because in the end, as in the beginning, capital and labor are the same thing.
sorry: close the circle
I thought capital was the surplus value wrung out of the backs of Labor? The continent of North America was staggeringly Beautiful, and clean and biologically diverse in 1600, but in capitalist terms it was a barren wasteland. Labor created the capitalist fortune – for 200 years, much of it slave labor. So, “nature, or “God” created the material resources, labor converted it to wealth and what, exactly did parasites like cohen and dimon do to “deserve” so much of it?
I’d hazard a guess they deceived, lied, cheated, gambled and abused positions of extraordinary privilege. At least they are good at what they do.
Ted Bundy was good at what he did.
Why is competing internationally so important? I mean – if it means penury for a sizable percentage of the population.
Because it means extraordinary wealth for a minority.
“Is there a current example (in Scandanavia?) of a country with strong unions and policies of redistribution, where dometistic businesses are able to thrive and compete internationally?”
Norway. They have a low level of income disparity, ranked 25th in world, with a 25.8 GINI in 2008. The bottom 10% earn 4% of the income and the top 10% earn 21% of the income. Norway has both a trade and budget surplus, relatively low level of government debt, no poverty, and enjoy one of the best standards of living in the world. Last year they laid claim to their largest oil reserve yet.
Norway is currently using some of their surplus funds to expand their military. Will we be declaring war on Norway next?
Norway has tremendous oil wealth. For that reason, I wouldn’t cite it as a good example.
So has Saudi but they are not making such a good fist at it. Just maybe the Norwegians are doing something right.
The US has fairly significant oil reserves, but more importantly, the largest natural gas reserves in the world. Why aren’t we like Norway?
Iran has the largest oil reserves in the world, larger even than S. Arabia. I believe Venezuela has the third largest reserves. (It’s in the link I posted above.) Nigeria is high on the list, too. In general, the countries with the largest oil reserves are either in the Middle East or the republics of the former USSR. Great oil wealth does NOT seem to be associated with redistributive policies or thriving international industries.
Besides Norway, Libya and Alaska are the only two places I can think of that have chosen to implement policies that shared the oil profits with the citizenry. Ironically, Alaska also collects more federal dollars per capita than any other state. And Texas, home of the Houston Oilers, redistributing wealth???
If the oil reserves are state owned (Norwegian) public propety, then yeah you can bet there is plan for an invasion .We will work them over in other less gauche ways first though, they are white people after all.
I’ve seen Cohen more than once on lunchtime walls in our corporate park, where SAC resides. He’s totally a sneaker and jeans guy on weekdays, believe it or not. Oh, and you can’t buy handsome.
Cohen is a slacker. Fellow hedge-fund manager John Paulson is worth $12 billion ($4 billion more than Cohen) and made $3.7 billion in 2007 and $4.9 billion in 2010. Cohen’s never made more than a billion in any given year.
Plus, Paulson’s slimier. He got rich betting against housing in ’07 and then sunk everything into gold in ’10. Most of his net worth is in gold. See, real job creators like Paulson don’t invest in productive businesses, they sell short and then sit on piles of gold.
And, of course, pay 15% tax and say things like, “I believe our tax situation is fair.”
a) Paris Hilton is (maybe) building a guest house to improve the value of her property, her publicist states that it’s for her pooches, the gullible swallow whole and a flagging ‘career’ get’s a boost.
b) Paris Hilton has nothing close to a 100 mil, if she did she wouldn’t be attending the opening of an envelope for a few grand (as she does). Gotta give the girl credit for work ethinc if nothing else.
c) The poor get poorer and the rich get richer due to government and central bank policy of fiscal and economic ‘stimulus’ which debases the demoniator and steals productivity from ordinary people. A policy btw which appears to have a fair bit of support on this blog.
Not sure being one of the parasitical rich qualifies as a job, not even if one is paid to go to the parties one attends.
The poor get poorer and the rich get richer due to government and central bank policy of fiscal and economic ‘stimulus’ which debases the demoniator and steals productivity from ordinary people. Borsabil
What good is increased purchasing power if one loses his job in the process of obtaining it?
And for the record, I advocate that “restitution checks” be given DIRECTLY to the entire population with a ban on further credit creation to prevent the new money from increasing the size of the total money supply (reserves + credit).
Btw, assuming $40 trillion in private US debt, 250,000,000 US adults and a 15 year repayment schedule at 3% APR, a ban on new credit creation would allow each of those 250,000,000 American adults to receive a MINIMUM* of $702/mo for those 15 years WITHOUT increasing the total money supply (reserves + credit).
*Payments would increase over the 15 years to a final payment of $1,100.
The stimulus would actually be a good thing if it went to the bottom 80% for a change . . . like if we provided jobs or better yet a minimum income for all or Medicare for All, etc.
But you are probably right that stimulus doesn’t help much when it increases inequality even further.
Oh, and I agree Paris is hard working. Hey, some of us love our jobs so it looks easy.
For some reason though I find her humorous–as I do Donald Trump. I mean both of them are fairly honest hucksters and I kinda respect them for it ;)
One of my high moments during the 2008 campaign season was Paris’s ad responding to “the wrinkly old man,” “I’m hot and you’re not.” Unfortunately I also fell for the hopey changey thing without realizing it had the same level of seriousness. Trump, on the other hand, I regard as something best left undisturmed under its rock, not even as interesting as the Mad Man Muntz midnight used car commercials on Saturday nights of my youth. Now THERE was an unabashed huckster. Trump is just pompous.
For clarity, she built a dog house that, had it been a free standing structure for sale, was estimated by a realtor to sell for $325K.
I HEART SOCIALISM!!!!!
I H8 FINANCE CAPITALISTS!!!!!!
Antidote for the article above.
Marat/Sade, von Peter Weiss: Guillotine
Great summary. It puts in one place much of what we have been saying around here for some time.
Three points: This inequality didn’t just happen. It is the result of looting. Basically, our elites decided it was easier to steal from us than to work for us. And the history of the last 40 years, a period of unparalleled elite criminality, has largely confirmed their views.
The repeal of anti-usury laws is another crime that can be placed at Carter’s doorstep.
We can afford good jobs, schools, healthcare, housing, and retirements for all or the 1%, but not both. It is and has always been that simple.
If you are paying a mortgage, you can get some payback against the banksters. People, often representing themseles as their own attornies, are winning restraining orders from the courts against banks collecting mortgage payments. MERS fraud was so pervasive that hardly any bank in the USA can prove it legally holds the note on any home. File with your county courthouse to get free of your mortgage. It’s the patriotic response.
Leave Paris alone! She’s the only one who did jail time.
Let’s hope the doghouse has no video system lest we be subject to more Hilton family tapes…..
Don’t forget Martha Stewart.
Maybe Paris should ask Martha to help her properly outfit the doghouse.
Martha Stewart works. Different class.
An alternative historical narrative: Big Capital, Big State and the Heist of Democratic Decision-Making
I would argue that American labor has always waged war within a universe defined by Big Capital, an Emerging Big State and the American judiciary.
The American workplace up until the 1930s was still politically active and collectively unorganized with approximately 1 in 10 American workers belonging to a union(primarily craft unions).
But beginning with the National Recovery Act and its Section 7A the American labor movement slowly was integrated into the Corporate State. A great variety of legislation (the National Labor Relations Act, the Public Contracts Act, the Fair Labor Standards Act) all resulted in a gradual national administration and control of Labor.
The determination of an individual workers hours, wage scale, hiring, firing, disability and contract bargaining were reduced to regulated routine procedures largely administered by the growing Federal labor bureaucracy, the big Corporations and the national labor unions. By being granted some limited say over material concerns, union membership sacrificed job control issues and subsequently almost never asked to participate in decisions concerning output, pricing, scheduling and the resource allocation of corporate decision-making.
This pattern of the national administration of labor continued during World War II and immediately afterword through the National War Labor Board, the Employment Act of 1946 and the Taft-Hartley Act of 1947. The partnership between Big State, Big Capital and Big Labor seemed to guarantee mediated labor conflict and a management from afar for the then emerging mass consumer society.
Is a 2nd New Deal proclaiming a further administration of Big Capital and Big Labor the best that we can hope for?
Is a 2nd New Deal proclaiming a further administration of Big Capital and Big Labor the best that we can hope for?
No. We could try ethical capitalism for a change.
Sounds rather lonely for both Paris and the dogs. Hope the dogs are color blind.
Ironically, de Tocqueville’s America was the best poor man’s country for the same reason it was the slave country: a giant labor “shortage” (what should really be called a resource glut instead). Without slavery, it would have been an even better country for a free worker, at least until the population grew enough to supply the labor demand.
Why is there even a distinction between Capital and Labor and how did it grow?
The answer is credit creation – the means by which the so-called “credit-worthy” (for whatever reasons including talent and drive but also for less noble reasons like race and family connections) are allowed to steal or at best “borrow” purchasing power from everyone else.
Now talent and drive are good but they are not reasons to allow theft.
You can have inequality just as good without credit creation. Debt servitude is just a more sophisticated form of serfdom.
Not to say that I disagree with the post’s contents, but it seems to me important to point out that Paris Hilton’s dogs would’ve been better off than me anyway, pretty much regardless of anything that’s happened in the past 50-60 years.
As such, my question: how ‘fundamental’ do you wish your critique/claim to be?
Thanks for making this point! REALLY!!?? using Paris Hilton in a headline to call attention to it? That’s an infotainment technique to boost page hits, right? I’ve read numerous articles in recent years on the increasing income discrepancy trend so am on the lookout for new insights, which I don’t see in this post. Perhaps that why Paris Hilton’s name was invoked.
It’s not about her dogs. Its about the aberrant moral depravity of her, and other sociopathic greedy rich pigs, spending excessive wealth — corruptly gained excessive wealth — on unnecessary, self promotional, narcissistic crap, while so many others suffer as a result of the selfish misdirection of resources.
We could be all better off with a more fair allocation and fair use of resources.
Deception is the strongest political force on the planet.
Bitching about the rich has a long history and is just about constant these days in many places. Yawn…
Yawn…yes… so boring bitching about the misdirection of resources by the aberrant sociopathic morally diseased gangster rich…
Deception is the strongest political force on the planet.
You big softy, can I help you with that?
Skippy… Always keep you mouth shut in combat or you may inadvertently experiment with cannibalism. Could be your mate or some complete stranger and who know what they get up too in their personal lives. Combat condoms, where is the free market when ya need it the most!
Exactly…It’s your own damn fault you’re poor, so stop your jealous whining and shut up, why dontcha!
My theory is that when the bill for Vietnam came due, the stagflation hit. The elites didn’t want to pay for that or for the high oil prices that resulted from the US meddling in the near east. So Paul Volcker and Milton Friedman worked things to deceive the public into thinking there was growth, when all we’ve had since the disastrous recession of the late 70s was phony growth that’s nothing more than an extension of credit. Now we’ve had several more colonial ventures and a neo liberal takeover of the academy….and what have regular people got to show for it? Gays can marry? Whoopee Effin Doo!
“surprising bipartisan support”?
Really Yves, you’re not so naive as that.
It’s supposed to be surprising.
It’s a ridiculous joke that hedge fund guys are taxed at capital gains rates. Other than that, they just happen to be lucky enough to be in a legal racket, where dumshit investors pay them 2% of assets under management plus 20% of any gains. The hedge fund managers aren’t the ones who fucked up the country — they’re just good at profiting from it. Big distinction between them and the big banks, who worked arm-in-arm with the government to create the mess we’re in.
And no doubt that they’re disgustingly wealthy, but it’s not a bad thing that Cohen spends money on building his mansion. That’s jobs for excavators, masons, carpenters, plumbers, electricians, painters, landscapers, and folks who work at manufacturing all the materials. Takes a lot of people working to build a zamboni.
That’s like saying that the serfs should be happy because the lords let them work. All that money Cohen and his class spend on themselves could have gone to building schools, roads, dams, water treatment plants, and other infrastructure. It could have been used to pay for teachers, medical care, nursing home care, retirements, university costs, and providing internet to all. We can afford a fair and decent living to everyone in our society or we can have billionaires like Cohen. We can not afford both.
“That’s like saying that the serfs should be happy because the lords let them work.”
Yeah, well. As it turns out, a lot of people are saying that.
A lot of serfs are saying that.
Brilliant marketing by the elites. Unless we have been modified like the Oods on Dr Who.
For a nice example, search for “Appalachia Turns on Itself” on the NY Times website.
As post after post reminds us, no one has forgot the New Deal. We’ve simply lost it. What we’ve forgot is the Square Deal, Teddy Roosevelt’s rhetorical A-Bomb that brought economic justice to the center of the national debate. For a refresher read this speech. The New Nationalism: http://www.theodore-roosevelt.com/images/research/speeches/trnationalismspeech.pdf
It’s more true than ever today.
And nobody mentions the FACT that the country should go back to the 1950’s tax rates. Let the mf’ers make all they want, but then pay it back at a comensurate rate. Its not how much money anyone makes that causes the aggravation for the poor, rather its the difference in percentage. Think if the highest paid made $10,000 after taxes while the lowest made $1000 after taxes, the chasm wouldn’t be unbridgable. Ther’ed always be a chance for someone to have a decent home, or for their kids to get somewhere. That chance is just not there nowdays.
Exactly. It’s what made this country great.
People think that taxes go to Washington and stay there. Taxes get spent. It increases velocity and funds the big things nothing else will fund. Big things that make great gains in efficiency such as highways, space programs, etc.
Paris Hilton is the perfect supermodel for confiscatory inheritance taxes. Like much of her class, she’s criminally clueless about the value of resources and the purpose of money.
I appreciate a good rant as much as anyone, but since when did De Toqueville say anything back in the 18th century? He was born in 1805.
Hey, folks, accuracy counts, and, by indulging in sloppy scholarship, you only diminish your own credibility and re-enforce the pedantic sophistries of the other side. This reminders me of a recent rant I received via email against U.S. military imperialism claiming that the U.S. had bases in over 450 foreign countries. There are only about 200 countries in the world today, (and the remaining overseas territories and dependencies wouldn’t remotely approach the claimed number).
Second the motion for basic accuracy – especially when it involves the correct century.
Can’t tell if that’s sarcastic or not, but De Toqueville was wandering about in Jacksonian America, as still a young man,- (and ostensibly on a mission to examine carceral reform,- speaking of getting centuries right),- which was a much different America than even the late 18th century “model”. Which goes to the historical contextual understanding of the remark about the “best poor man’s country”.
But then indulging in New Deal nostalgia rather than structural analysis of where “we” are now and how the news happened and arrived doesn’t strike me as the best or most relevant “scholarly” approach, though I realize that left-liberals need to mourn their loss of innocence.
This Paris Hilton story really takes the cake, though there is analogous precedent in Leona Helmsley leaving her entire fortune to her small dog.
The Real “doggy real estate” trend is running parallel to another one, covered dutifully by the “Paper of Record” (NYT) — puff piece on elaborate miniature mcmansions and eco-homes that are being made and sold for .01% pooches — some of the pictures could qualify for Antidote du Jour on a dark-humor day:
The Marat/Sade guillotine scene wasn’t enough of an antidote, so here’s another one, a poem, from an earlier time when (unlike today) writers used to notice the poor, that is, before they disappeared from the culture at large…..
Crouch’d on the pavement close by Belgrave Square
A tramp I saw, ill, moody, and tongue-tied;
A babe was in her arms, and at her side
A girl; their clothes were rags, their feet were bare.
Some labouring men, whose work lay somewhere there,
Pass’d opposite; she touch’d her girl, who hied
Across, and begg’d and came back satisfied.
The rich she had let pass with frozen stare.
Thought I: Above her state this spirit towers;
She will not ask of aliens, but of friends,
Of sharers in a common human fate.
She turns from that cold succour, which attends
The unknown little from the unknowing great,
And points us to a better time than ours.
Paris Hilton is a “job creator”. After all, somebody had to build that dog mansion!
“…on lookout for new insights, which I don’t see in this.” post.”
I suppose it isn’t an insight, but I had no idea Carter was so involved in selling out the working class. Yipes. Chis Hedges starts with Clinton’s skullduggery. http://youtu.be/GVz_yJAxVd4 He needs to go back a few years.
Actually Hedges goes way back in that talk, but when he gets to recent Democrat skunks, he skewers Clinton but never mentions Carter.
Left Liberals of a certain age still have a sentimental attachment to Carter. Take into consideration that in 1978 normal people (Jane Voter) might have thought(if they noticed at all) that Carter was “thinking outside the box”, or “showing a tendency to micromanage” but they didnt have any idea that massive, permanent and profoundly ideological policy upheaveals were taking place. And normal 9-5 working voters did not forsee the pit of political, economic and cultural degeneracy into which we’ve fallen. And the habitat for humanity thing, and Amy’s radical psoturing in younger days and so forth, leave left liberals of a certain age feeling wistful and nostalgic.
Great piece! Linked on Sprawler!
How are those “lefty” liberals Pelosi and Kerry doing?
Why does a partial reading of Steven Cohen of SAC Capital’s digs remind me of Michael Jackson’s; a zoo for entertaining children.
its owner run wild as well.
on dog houses: I’m reminded that upon relocating to Manhattan from Aspen in the early 1980s, at a business ‘entreprenurial’ conference featuring Tom Peters, overweight and bullying to adoring attendees, a friend presented plans for designing and presumably selling architecturally correct houses for dogs.
I couldn’t take it seriously. Silly me.
“Carter’s policies worked to reverse the New Deal’s tilt toward labor and higher wages. Under his watch, transportation and telecommunications were deregulated, which undermined unions and the practice of industry-wide solidarity bargaining. Carter also campaigned to lower trade barriers and to open our markets to foreign trade.”
Deregulation of beer and the other things you mentioned were about the only worthwhile actions of Jimmy Carter.
How can the destruction of trade barriers be a net negative? That is preposterous.
Thats not really a question its an ideological position statement. The author of the post desribed “how”, meaning why the rampant destruction of trade barriers was not a good thing. Of course, good here is relative, as in “good”, for who?
It was not a rhetorical question.
“Of course, good here is relative, as in “good”, for who?”
Destroying trade barriers does the most good for the most people.
First of all, industrialization is done, it’s obsolete. All that nostalgia for Joe Hill has nowhere to run, neither does any new New Deal.
The old New Deal didn’t work, the Depression was out-and-out class warfare. The War didn’t end the Depression, either. It was televsion, mass media marketing and consumer credit beginning in 1940: Milton Berle ended the Depression, not Roosevelt.
America = institutionalized irresponsibility, whether it is fund managers running amok or young cocaine addicts on TV, this is what modernity has been all about. It’s been a (long-running) fad of course, a piece of pop-pop-pop culture: Paris Hilton and her dogs would be right at home on Warhol’s couch on 47th street giving Joe Dallesandro a blow job then whining about it later … for the camera, of course.
As the world blows up Americans are too strung out to notice or care. We can blame our undoings on the meth, it’s convenient.
The future is either subsistence farming, sailing ships and building things out of stone or it is death. Death has been hanging around in the background all along, it was always the Warhol subtext and it is also our own. All of his artworks were about machines = death, that is our entire culture: machines = death and here it comes, a cloud on the horizon no bigger than a man’s hand.
To get to our death we must pass through that object of unsatisfied American desire: the love that dare not speak its name, Adolf Heidler. He made machine-death fashionable in ways that even the brilliant Warhol could not grasp. Like it or not, it’s coming …
What do the graphs in the article represent? Are they based on actual data, or are they merely illustrations to go along with the text? Hell, the axes on the first one aren’t even labeled.
Paul Krugman observes that these 25 were paid three times as much as New York City’s 80,000 public school teachers combined. And because their pay is taxed as capital gains rather than salary, the teachers paid a higher tax rate!
You have to love the teachers union, they endorse Senator Schumer who has been on of the main tax advantage protectors of the hedge fund managers. When you see a group of people act against their own interest who have to wonder about their leadership and collective intelligence.