A Fair Share of Scrutiny
Jan 17th, 2012 | 29 responses
WASHINGTON — From all evidence, the issue of economic justice isn’t going away. Break the news gently to Mitt Romney, who seems apoplectic that the whole “rich get richer, poor get poorer” thing is being discussed out loud. In front of the children, for goodness sake.
“You know I think it’s fine to talk about those things in quiet rooms,” he told the “Today” show’s Matt Lauer last week. “But the president has made this part of his campaign rally. Everywhere he goes we hear him talking about millionaires and billionaires and executives and Wall Street. It’s a very envy-oriented, attack-oriented approach.”
Actually, those blasts weren’t coming from President Obama. That was Romney’s competition for the Republican nomination, sounding like a speakers’ lineup at an Occupy Wall Street rally.
Now, I predict, will come a furious attempt by the GOP to unring the economic justice bell. Damage control efforts began with Newt Gingrich backing away from his sharp-fanged criticism of Romney’s record at Bain Capital, the investment firm he led. Don’t attack the GOP front-runner for being a ruthless, heartless corporate raider, Gingrich announced, but rather for not being conservative enough.
This admonition came as a pro-Gingrich political action committee continued to blast Romney as a ruthless, heartless corporate raider. Inconsistency, thy name is Newt.
By most accounts, Bain was a relative laggard in the ruthlessness department. Other private-equity firms were far more brazen in the way they bought troubled companies, laid off workers, stripped away assets and fattened investors’ bank accounts. While Romney’s claim to have created 100,000 jobs looks like a gross exaggeration, it’s true that Bain stuck with companies such as Staples and Sports Authority and helped them grow.
But as for heartlessness, well, it comes with the turf, right? Bain was just serving as an instrument of “creative destruction,” and if workers lost their jobs, if they had to raid their children’s college funds to pay their mortgages, if perhaps that money ran out and they ended up losing their homes, in the long run they’ll still be better off. Or the country will be better off. Or something.
In any event, capitalism means never having to say you’re sorry. Perish the thought that anyone would critically examine this ethos except in a “quiet room.”
But to the horror of radical free-market ideologues, the myth of no-fault capitalism is under scrutiny. No one is arguing against markets, which are indeed the best way to create wealth and thus the best weapon against poverty. No one is arguing that investors who risk their capital in a company should not be able to reap rewards. What the ideologues ignore, however, is that workers also have “capital” at risk — in the form of mind and muscle, creativity, loyalty, years of service. Why is this investment so casually dismissed?
The first of the Republican candidates to raise the fairness issue was Rick Santorum, who spoke in debates of the pain many families were suffering because of economic dislocation. This was before his strong showing in Iowa, so no one was paying attention.
Then Gingrich and Rick Perry picked up the theme in an attempt to slow Romney’s march to the nomination. Whether they meant what they said or were just being tactical, the effect was to open a discussion of economic fairness and justice that will be hard to squelch.
The next logical step is to look at the results being produced by the radically deregulated, no-fault capitalism that has been practiced in this country since the Reagan revolution. Overall, we’ve had tremendous growth and low inflation. But we’ve also seen rising inequality and falling mobility. Middle-class incomes have stagnated, upper-class incomes have skyrocketed, and rags-to-riches stories are now less likely than in most of the “European social democracies” Romney holds in such disdain.
We have failed to keep pace with other industrialized societies in public education; and rather than offer relevant retraining to employees displaced by innovation and globalization, we leave them to their own devices. As a result, we’re starting to lose not just basic manufacturing jobs but high-value-added, knowledge-based jobs to countries where workers are more qualified.
Government has played a huge role in guiding the nation through previous economic upheavals — after World War II with the GI Bill, for example. It can and should play such a role now.
That’s my view, at least. Thanks to the Republican candidates, of all people, we’ll get to hear what President Obama and his eventual opponent think.
Eugene Robinson’s email address is eugenerobinson(at)washpost.com. (c) 2012, Washington Post Writers Group
29 Responses to “A Fair Share of Scrutiny”
Shades of the Clinton campaign and his entire presidency.
I am seriously considering that it may be time to have ‘public’ education go to ‘grade’ 16. If we want a vibrant middle class, and if middle class workers are predominantly those with college education, then…why not? We mandated that communities offer education to grade 12 (used to be 6). Why not extend it?
I understand that the European model of High School gives students the equivalent of 2 years of college, and that this has been in place for decades.
We are currently not even giving 12 years of quality education, so I’m not sure that extending it would be helpful until that situation is corrected.
In California, before Reagan, we had free college tuition at any college we could qualify for.
Gov. Reagan’s first two actions of governor were to stop free college tuition and then put those patients who were in mental institutions on the street with little to no care afforded them.
I have to say, I am stunned by how revealing some of Romney’s comments have been. They show how much he is genuinely out of touch with how most Americans live. Apparently his favored approach to dealing with the problems of increasing, gross economic (hence representational) disparity is to sweep straightforward and open dialogue under the carpet. Peachy Mr. Wannabee leader of the free world. Just peachy.
We have come to the point that the market economy as it is currently constructed has become an end unto itself, where we must except whatever outcomes that result from it without complaint.
This is ridiculous. The economy, how it operates and who it rewards are the result of the way it is constructed and the rules it operates under. If we are unhappy with the outcomes from the economy we can try to change them. This is because we live in a democracy.
For the last thirty years we have had economic policies in place to tilt the playing field toward rewarding capital which increases supply, and away from rewarding labor which increases demand. Is it any surprise that after thirty years of this we have too much capital, too many of the rewards of economic growth going to the wealthy and too little going to wage growth and the resulting increases in demand?
@Merkin
For the last thirty years we have had economic policies in place to tilt the playing field toward rewarding capital which increases supply, and away from rewarding labor which increases demand.
I think you are right here Merkin, but the problem I see is identifying the policies that are the problem. Generally instead of identifying the problem we just hear a lot of bitching about the “other side” or non-specific references to deregulation or excessive regulation.
My feeling, which could certainly be wrong, is that with increased world markets and improvements in communications and shipping our unskilled and medium-skilled labor is competing with comparable labor in other countries that is willing to work for a much lower wage. The professions that are unique, highly trained or for some other reason insulated from this competition tend to thrive. Other than taking a protectionist stance or increasing tariffs (which I see no one willing to do) I don’t see an easy fix, and all the wrangling currently going on seems misguided and pointless. I’d appreciate your opinion on what you see as the major policy problem causing income inequality.
And as always I must persist in my lonely push back against the notion that our education system is somehow failing us because we are falling behind other countries.
It is a popular idea that is repeated everywhere to the point that it is almost universally accepted without argument. But like weapons of mass destruction in Iraq there is little or no support for it from the facts.
This notion of the failure of our schools is based on the fact that the United States now ranks say 15th in the world in standardized testing. And that this is a large drop from where we were in the good old days proving that we are falling behind the countries ranked above us.
The problem with this argument is that implicit in it is the assumption that in the good old days before the standardized tests we were number one in the world or at least much higher than we are today.
But this is a very dubious assumption. In the good old days it was true that public education in this country was quite good, if you were white and middle or upper class. If you were poor the schools were not so good. If you weren’t white they were poor and if you weren’t white in the rural South the schools were intentionally, criminally poor. Taking this into account there is no chance that the US was number one or even very much of a chance that we were ranked as high as we are now.
What the scores reflect now, as they would have in the good old days, is the under achievement by our poor and our minority students. And this under achievement is used also as an argument for the deterioration of our schools. But it actually shows the exact opposite. The gap between the poor and minority students and the rest of our students has been steadily closing for the last forty years. That it is shows that we are getting better at educating the under achievers, not worse. It might not be happening as fast as we would want but it is happening.
I won’t defend Romney’s assertion that such things should not be talked about passionately, but other than that I’m unclear on what this post is claiming that Romney did wrong.
Eugene recognizes that, while Romney’s numbers may be exaggerated, his operation appears to have had some success at growing businesses and jobs. He also says that he is for markets, which presumably means that he understands that some businesses must fail. But then he claims Romney is heartless for (I assume) letting some people lose their jobs when those businesses failed. So, what is the criticism exactly? Is it that he should have somehow kept those people employed even though the business was going under? Is it that all of his business ventures should have been successful?
The concluding point that our economic system has problems, including income inequality, lack of mobility, unsatisfactory education, etc, are all good points, but I’m unclear on how that ties back to Romney and his time at Bain.
duck– but Clinton also had a balanced budget, signed welfare reform and left a healthy surplus. The 90′s were largely a time of peace
and prosperity. The surplus quickly evaporated with the Bush tax cuts–and became a nasty deficit.
If Clinton understood that the way for most Americans to live well was higher taxes for the wealthy– then that is a message that helped lead to success for the majority.
Romney admits that his effective tax rate is 15%. He’s far from the only one like that among the ranks of the very wealthy. Will he admit that one of the primary policies of his party is to reduce that rate to 0%? Will anyone ask him how that will help create jobs in the United States, as opposed to building new facilities overseas and new systems to displace more jobs through technology? Most of those in that category don’t go out and start new companies that hire tons of people. They invest in funds that will increase their wealth as much as possible. While that isn’t inherently wrong, it is time to quit pretending that it is something that will create enough good jobs to make a difference. That time is past and we need to look honestly at where that leaves us. The Republican Party and their supporters refuse to admit this, insisting that the good old days will return if we just let the wealthy pay less taxes and when that doesn’t work, well, obviously we didn’t reduce taxes enough.
I agree, Jim.
Taxes have been very low for almost 12 years, and many companies are showing record profits while paying very little to the government…… So— why aren’t they hiring? Is it the hope that they will dip even lower and that they’ll be able to operate without adhering to pesky government regulations?
I get the plight of the middle class and the poor- I don’t get the plight of the corporate movers and shakers. The argument that high taxes and overregulation is choking business is a total myth. All I can come up with is that the GOP wants policies in place that will guarantee low taxes, little regulation, cheap abundant labor and permanent wealth to their supporters
BB, sorry, I was referring to the scrutiny bit:
“You know I think it’s fine to talk about those things in quiet rooms,”, imagining the Clintons saying something like that regarding sex and such.
DaGoat, you are correct that there have changes in the world market that have disadvantaged us in competition primarily with developing countries. These changes put downward pressure on our wages. I have three points concerning this.
There are actually other technology driven changes that tend to suppress our wages and to reward capital investment instead, the adoption of automation for one, the improvement in logistics allowing consolidation of production in one place for another. And all of these factors tend to suppress wages and to reward capital investment. Making it even more insane that we have economic policies in place to do the same thing, suppress wages and shift the money to rewarding capital investment. As always the government’s economic policies should be counter to the economy. If there is a recession the government should spend. If there are boom times the government should save, that is the hard one. If the economy is suppressing wages the government should be trying to raise them.
And there is no reason that we have to lower our wages to compete with China. For one thing we can’t lower wages enough to compete with them in any event. For another about 90% of the wages in this country are shielded from foreign competition. Wages in just about everything but the manufacturing of consumer goods. And even there the manufacturing cost is a relatively low percentage of what you finally pay for the product, as little as 10% of some clothes for example.
To lower the wages of this 90% because the 10% is facing competition from developing is, once again, insane. But that is what we are being asked to do, see Newt’s argument about the under aged janitors.
And lowering wages doesn’t really help anyone in the long run. Because wages aren’t just a reward for labor, they are the money that translates into the demand for products in the economy. You lower wages you lower demand. The recent recession was an object lesson of what happens when you try to violate this rule, which we did by going into private and public debt to increase demand. This will always end badly.
By the 1990s it was obvious: development in other nations in the Third World as well as the recovery after war of Europe and Japan changed our economic situation, and now the unskilled and low-skilled work is properly priced where the work can most cheaply be done. There is a huge difference between unskilled and low-skilled work and those kinds of labor which remain in demand and are priced accordingly, which is more important in the real world than this highly creative, imaginative, largely fictitious 1% vs. 99% stuff.
That’s not to say “the 1%” have rigged things themselves, or are looting their employees’ livings as well as other parts of their companies to enrich themselves excessively (outright greed as well as from short-term thinking), but let’s back off the more silly class warfare silliness.
D. Duck, regarding discretion:
J. P. Morgan: ” …, that’s what closed doors are for.” (You know, like when managing the Dem and GOP “contests” for high office)
I figure something will have to be done sometime because of how many there are going to be without the skills to earn their way, much less pay the higher taxes needed for the growing entitlement burden.
The “fun” part is to what extent the loss in wages is broadened in addition to being deepened (how badly reduced wages are). What I mean is, what happens when people finally learn that a) management, too, can be outsourced or offshored and b) it makes more sense anyway for management, whose existence is based on Being There, Hands On, directing things based on what is being observed, to be relocated to where the production is!
Add to that, heh, that these managers tend to be older men and women and we already hagve ageism.
Wow — managers as well as dinosaur-era “workers” being viewed just as around 1900 as worth hiring from ages 25-40, then scrapping. (40 today rather than 50- 70 due to notable ageism. Hide that gray hair and don’t get overweight!)
Combine that with immigration not only replacing lower-skilled native labor here in the states, but everything else through the professions (what decision making there wasn’t already relocated overseas already).
That would truly be about a 1-99% scenario
That’s with or without a handful of private communities (walled, privately guarded) hiring their own Everything, with a starved public sector struggling to provide an underpaid, underprovided copy to the 9
Come on, Hollywood, do something clever.
I would like to see someone in politics who understands that there is supposed to be a natural tension between markets and governments. In my view, one of the most difficult problems at the root of our economic woes is that now both the big money and the big government are working together to screw over labor, the consumer, and the middle and lower classes. The tension and balance are gone.
I’m actually kind of ok with what Romney did as a head of a firm like the one he worked for. It looks like he did his job, did it well, and stayed within the laws. It was his job. I’m fine with it. If the laws are too lax to allow such things to happen, that’s where government is supposed to step in and say “no”. Because that’s their job.
Also, a President is NOT a CEO. Should not be. The goals of a president — the job the president is elected and paid to do — shares almost nothing in common with that of a good CEO, with the notable exceptions of “be a strong and decisive leader with a clear vision” and “don’t go broke”. Almost absolutely everything else is different. It’s theoretically possible to do both well, but being good at business is not the same as being a good president — anyone who says otherwise doesn’t understand either job.
“imagining the Clintons saying something like that regarding sex and such”
But sex actually *is* something that occurs in quiet rooms — or, at least behind closed doors. Um, usually. The widening income gap, its causes and effects, is actually different than sex. (!)
By the way, merkin, I wholeheartedly agree with your comment on education. We’re also still really good at educating wealthy white people — in public schools, no less.
DeGoat – more, sigh, I know I am wordy.
As for which policies are in place to shift income to wealthy you only have to look at the policies put into place over the last thirty years. The policies called Reaganomics, especially any policies that promised to increase savings and investment. A good place to start would be any Republican platform of the last say hundred years. And distressingly enough big parts of recent Democratic Party platforms.
There is the obvious, reducing taxes on the wealthy while increasing them on everyone else. Or just borrowing the money to lower taxes on the wealthy.
Decreasing income taxes while increasing payroll and sales taxes for example.
Flattening the income tax by increasing deductions is another way
Transferring government functions from the federal government to state and and local governments, which generally are less efficient and rely on more regressive methods of taxation.
And we have policies in place to suppress wages, suppression of unions for example, to reduce workers negotiating leverage. Tolerance of higher levels of unemployment. High unemployment also reduces the worker’s negotiating position.
And we transfer the majority of the pain of recessions to the workers in the form of unemployment. Most countries have industrial policies that limit how much or how quickly employees can be laid off. This means that the companies have to bear more of the pain of the recessions.
Reducing what economists call transfer payments to individuals, welfare for example, while increasing transfer payments to the wealthy, corporate farmers, direct and indirect subsidies to corporations and even make work government contracts for weapons that aren’t needed. Can anyone tell me the advantages of the new 3 billion dollars a pop Virginia class fast attack submarines over the 1 billion dollar a pop Los Angles boats in the war against Al Qaeda, which seems to be hopelessly landlocked. Or maybe the advantages of the F-22 over the F-15s and -16s in the same war?
There are many others, outsourcing, shifting of health insurance costs (the crime of the individual mandate is not that it forces people to buy insurance it’s that it relieves companies of the burden of paying for it, increasing the transfer of money to the wealthy), reduced Social Security, Medicare and Medicaid payments, free trade treaties resulting in more wage competition, increased immigration, both legal and illegal, elimination of class action lawsuits, elimination of defined benefit pensions all together or replacing them with 401k’s, etc.
Like I said, just read through a recent Republican presidential platform or watch a Boehner/Cantor press conference, there is hardly a policy proposed that does suppress the wages of the 99% in one way or another. Certainly you will not find anything that takes money away from the 1%.
M, too bad Obama nixed the Bowles-Simpson proposal, that would have hit those stinking, dirty rat, Nazi, commie, poor hating 1%ers.
Roro, usually, LOL.
Merkin thanks, lots of good points. What I am really interested in is why aren’t the pre-tax wages of the lower and middle class keeping up with the higher class? I think the decline of unions is a big factor as well as international competition. Most of the comments from you and most others tend to focus on taxation, which to me is looking at the problem backwards. The ideal would be for everybody to make more gross income instead of continually tinkering with the net.
I still haven’t figured out myself why income inequality has become such a problem (speaking of gross incomes here) and haven’t heard a good explanation from others. That wages are stagnant at the lower and middle class levels is not a taxation problem. If it’s a policy problem then that policy should be identified and fixed.
@roro
I don’t agree the relationship between business and government should be defined as naturally tense. The role of government is to construct an environment where business can thrive while at the same time providing adequate regulation and protections. The relationship therefore has to be one of both tension and facilitation. The problem will always be trying to find the Goldilocks “just right” point.
For your question on why income equality has become such a problem, taxation is part of it, DaGoat. Those who already have enough cash on hand pay less taxes — they can buy homes, in which the interest is tax-free, they can put into tax deferred funds or tax-free growth accounts for their retirement (IRAs 401ks etc), and of course, they can put their wealth into stocks and get the super low capital gains taxes. People who don’t have a lot of extra money at the end of the month don’t have the option of buying a home or putting large sums away into retirement accounts or making the money they live on with capital gains. So they get to keep less of their money. If the tables were turned — if capital gains were taxed like we tax income and income were taxed like capital gains, you’d immediately have huge portions of the population who suddenly have 15-25% more of their income, which might allow them to take advantage of things like real estate and retirement plans with tax advantages.
It’s not the only reason, of course, but the tax structure is most certainly set up to reward those who already have cash to spare, and to punish those who don’t. You rightly talk about unions, which do most certainly bring up not only wages, but benefits. Huge portions of the working poor’s income goes into things like health care and transportation, both of which have skyrocketed in recent years. Wealthy people tend to have good jobs, which tend to provide medical care at a very low cost to employees. My job gives certain amounts of compensation (I think $100 a month) to transportation costs to and from work. I can even pay for my transportation to and from medical appointments with my HSA, which is tax-free money.
You can also look at programs like the recently-introduced measure to not allow food stamps to anyone with more than $2000 in assets. That’s less than two month’s rent for some people. How can you pull yourself out of poverty without being able to save more than 2 months rent? Take a thought at what kind of incentives this sets up, just think through the consequences. Things like this make it very clear that those making the laws simply do not understand what it means to be poor, or how to pull oneself out of poverty. They either don’t understand or don’t care that the laws that make it very hard to receive social benefits also makes it very difficult to get off of them.
In other words, the laws proposed by conservatives are to the distinct advantage of the rich, and to the disadvantage of the poor and lower middle class. Once I hit the point where I had a small amount to save each month, I quickly got to where I could make that money grow, pay many fewer taxes, and take advantage more and more of the system set up for the wealthy. Now, I’m 6 years into working life, and sitting really pretty, actually. In 30 years, I’ll most likely have a very comfortable retirement and a paid off house. But I’m already in the top 2% of earners in my early 30s.
Oh, on your question to me — I agree, it shouldn’t be antagonistic. But there needs to be balance. When you have unregulated systems — systems set up to protect and grow only the big money in the form of large corporations and wealthy people — you cannot and do not protect the interest of the majority of people. That should be the main goal. Note that what is good for the people is very often what is good for business — it wouldn’t help anyone to over regulate and have everyone just go out of business. But the goal of government should be to provide good to the people, which is often in tension with big business. In the cases where that tension exists, it should. Where the interests of the people match the interests of big business, as is often the case, then of course there shouldn’t be antagonism for antagonism’s sake.
But remember: nobody is owed a place in the market. If your company cannot provide a product at a cost people will buy it, while paying fair wages, assuring consumer and worker safety, and not dumping toxic sludge into the environment, that company should not be in business. The market can not only cope with safety and wage regulation, but it actually weeds out those companies that are just crappy at setting up their manufacturing lines, causing lots of waste, and making unsafe products.
Well the cat’s out of the bag. More public discontent to follow.
Now if we can just get those dummy Republicans that are publicly cheering against Romney and the excesses of Capitalism to realize that the excesses of Capitalism is the very Hallmark of the Republican party, the rest just might fall into place.
I’m not getting my point across very well. What I would like to see would be the folks in the lower and middle classes whose wages have not grown at the same pace as the upper classes make more money. Not keep more money with lower taxes or generate wealth such as in 401Ks, but make more money. A rising tide is supposed to lift all boats but that hasn’t happened. What I am looking for is what policies have led to wage disparity and how policies can be changed. Ideally this can be discussed without even mentioning a political party, since what I am interested in is the policies that have led to wage disparity, not to point fingers.
It seems to me strengthening unions and curbing foreign competition would help close the wage gap. Obviously both of those actions would have far-ranging effects some of which would be negative, but I guess what I’m looking for is what things can we ask our politicians to do specifically to close the wage gap.
I see what you’re saying, I guess I was just pointing out that paying 15% less in taxes on huge incomes does contribute strongly to the wage gap — a lot of those things I mentioned above aren’t wages, but are wealth-building and income-building, which goes into the calculation.
For your actual quesiton of how less wealthy people can make more money, there are a few answers, including what you talk about — strong collective bargaining by labor, and a certain amount of protectionism in the form of tariffs and trade laws, which I’m actually in favor of. I think another point that is overlooked is that industrial/manufacturing engineering as a field has definitely declined in its “sexiness” factor in the states. Having good manufacturing engineers set up lean, demand-driven lines does incredible things to the cost balance between labor and shipping. Meaning that I think if we did a better job at setting up our lines, we could definitely be making things here in the states that we are now making overseas. In fact, the companies who still manufacture here do that.
The other factor we’re desperately failing on is, of course, education. The US does seem to have something in its character that encourages creative critical thinking and innovation in ways that most other countries do not; this is where I see hope. However, in my opinion, we’re squandering that by focusing in our schools on what those other countries focus on — standardized tests, and rote memorization instead of art, music, creative writing, and problem solving — and then compounding that by drastically under-funding education in general, but particularly, I’d say, those who would bring new life and new ideas to our workforce.
I sorta get the point(s) you are trying to make, DG. However, I get a: he is trying to have a system where we eat our cake (higher wages) and have it (lower taxes, overall).
Unions, in the past did get “members” a lot of high wages (relative to some other countries) and after work benefits, passed costs on as in in higher relative car prices, etc, and pensions, that are killing local governments, for civil servants.
But are they the ones to perform the miracle of increasing wages that are not passed on to consumers, I don’t think so. Can government create better paying jobs? Sure, one crew digging government holes and the other crew filling them in.
I guess that is why I am one of those deluded Reps, because I still believe private enterprise, treating its workers fairly and ethically and not destroying the environment and taking unfair advantage of their power(s), would be the ideal.
OK, it is a utopian dream, but on the other hand, a runaway government is a less desirable outcome.
That’s an interesting question, DaGoat, that I’d like to weight in on. Forgive my verbosity.
I think there are really two levels of income inequality: the gap between the Haves and Have-Somes (2% vs. the 98%) and then the gap between the Haves and the Have-A-Lots (2% vs. the .2%). I separate these because I think they have different causes, affects, and potential remedies.
Regarding the first:
The effect of this is that high-skill services (ie. healthcare) are increasingly out or reach for the poor and even some middle class.
The causes, I believe, are the globalized labor market putting pressure on low-skill wages while increasing opportunities for knowledge workers and entrepreneurs, and secondly the education disparity. There are other minor causes also, as recently described in the series by Timothy Noah, but I think those are the big two.
The solutions to globalization are difficult. I don’t favor protectionism except to the extent they are needed to level the playing field between differing labor laws. But, as Alan Greenspan advocated, allowing more legal, skilled immigration would help with this also. Regarding education, the problem is partly unequal financial support, but also extends the communities in which those school operate. A school that sees a large number of kids from single-parent homes in drug-ridden neighborhoods is going to have a tough time producing well-rounded kids. The solution to the education problem is not confined to the education system as is often assumed.
Regarding the second:
Effects: If some very small portion of the population makes a ton of money, it doesn’t affect me directly. I never need to hire a professional basketball player or a hedge fund manager to work for me, so I don’t care how much their labor costs. But, it does affect me indirectly because they skew the market so much. A lot of our resources are spent satisfying the desires of the super-rich since they have the money to pay for it. It also has political implications.
Causes: Globalization plays a role here too as big-shots have more opportunities to increase their reach. Also, our obsession with celebrity. And disproportionate political influence.
Partial Remedies: Raising taxes which indeed have gone down disproportionately for the super-rich (but not for the ordinary rich), and a more informed and responsible electorate less willing to swallow propaganda bought by the super-rich.
Just a few thoughts.