Pity the Poor Rich

When my son was born we were living below the poverty level. I’m bragging because it was more or less intentional. I grew up lower middle-class (After my father left when I was 13 my mother went back to work as a teacher and raised me with no child support.) Currently my wife and I are middle to upper middle-class. When she wants to buy something that before our changed circumstances would have given me grief which I would pass on to her I now say, “No problem, we’re rich.” which she hates to hear me say.

Am I happier “rich” than poor? Not at all, in fact, I believe the years we lived below the poverty level were the happiest of my life. I believe the reason was that I was doing meaningful things: raising food for my family, cutting, splitting and carrying wood to keep us warm, making do on a shoe-string, fixing things that broke. I had occasional part-time jobs during that period but as a bartender, for example, making a good drink or making a customer laugh or getting a big tip did not provide much satisfaction. Earning enough money to pay for utilities, insurance and the like was necessary but didn’t have the same instant payback in satisfaction over an accomplishment as work around the farm had. Getting through a very busy shift in which I was so busy the time went by in a blur was satisfying, doing a good job perhaps better than most others could have done it, felt good; but so much of the job was, well, just a job, whereas fixing a leaking water pipe, rebuilding the mower carburetor, raising, slaughtering, and butchering the beef that would feed the family for a year, growing, harvesting, canning, pickling, freezing and otherwise storing enough vegetables and fruit to feed the family for a year; ahh, nothing I did before or have done since provided that kind of satisfaction.

The difference now? Someone comes and picks up my riding mower to perform annual maintenance and to fix anything that breaks. There is no pride in that. I tell myself I am providing work for others; my financial good fortune is trickling down and that’s a good thing, isn’t it? It’s good for the economy, right? Plumbing was my least favorite home maintenance job but I did it and though I hated squirming around in the crawl spaces under our house and hated it even more when I turned on the water and found that one of the joints I had soldered had a leak and I would have to drain the water and dry the pipe before I could try again; but when the joints were good I came close to doing cartwheels. Now we call a plumber.

I was healthier when we heated with wood. It was our only source of heat for 20 years. Carrying half a dozen armloads of wood in every day in the winter kept me fit during the time of year when there wasn’t a lot of exercise. We still have the stoves and a woodshed full of wood but we also have an oil burner. I don’t have to carry in wood all winter so I hardly do it at all. Burning oil doesn’t make me feel good but, what the hell, I’m rich. Do you think that is an excuse for lazy?

Perhaps my years below the poverty level helped me avoid ethical problems studies have found with the rich. 

Integrity

The pundits say Greg Smith who left Goldman Sax in a very public way will have trouble getting another job on Wall Street. If I were in a position to hire him for a Wall Street firm, I'd be offering him a job right now. Following is part of the op-ed appearing in the New York Times.
http://www.nytimes.com/2012/03/14/opinion/why-i-am-leaving-goldman-sachs.html?_r=1&ref=business
"It might sound surprising to a skeptical public, but culture was always a vital part of Goldman Sachs’s success. It revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients. The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years. It wasn’t just about making money; this alone will not sustain a firm for so long. It had something to do with pride and belief in the organization. I am sad to say that I look around today and see virtually no trace of the culture that made me love working for this firm for many years. I no longer have the pride, or the belief."

He is the kind of person Wall Street needs.

Raise My Taxes, Please!

Dear Senator Snowe,
I just read the "Snowe Report" and I agree that the LIHEAP (Low Income Energy Assistance Program) should be funded at a higher rate than in the budget and that deficit reduction is important though the juxtaposition of these two statements in your report is a bit ironic, don't you think? Every spending program (like LIHEAP) is important to some people somewhere which is why spending cuts are so difficult.
There is one thing that the majority of people all across the country and in Maine agree upon as a deficit reduction measure yet you don't mention it. Why? Why don't you support raising the income tax on those of us who are doing well? The answer I keep hearing is that it will kill jobs, that the wealthy who create jobs will not bother to make more money and thus create more jobs if they are taxed too much. That is a bogus answer. We have had tremendous job losses under the low tax on the wealthy for 8 years running which should prove that argument to be spurious.
Did you know that the highest income tax bracket was over 90% throughout the decade of the 50s and that was a time when a family could be raised on one income. Perhaps the reason middle class people could get by on one income in that decade was because there was little incentive for entrepreneurs, business owners, corporate boards, bankers and the like to make gross amounts of money so they paid better wages and charged less for their products and services. That explanation, at least, makes a lot more sense than saying that taxing incomes over $250,000 will stifle job creation.

Politics

Politics from my sister in New Zealand

“He(Gingrich) knows how to deflect a negative against him back onto the projector as proven by his stern reprimand of John King at the beginning of the CNN debate.”

Yeah, that was classic Republican-right shoot-the-messenger and it seems to work very well for them.

“I am dismayed by voting statistics that say married women have rallied behind Gingrich.” My mother, a staunch Republican, said of Rockefeller, a Democrat, when he was running for president 50 odd years ago that she could never vote for someone who was divorced reasoning that if they couldn’t run a marriage they couldn’t run a country. It didn’t matter several years later when she voted for divorced Republican Ronald Regan.

I watch the Fox news channel occasionally to try to understand where those folks are coming from. The most recent rant seems to be how unfair the “liberal media” was in their attacks on Gingrich when they gave Clinton and Edwards a free pass on their extramarital affairs. Apparently the Murdoch Media (FOX) doesn’t watch Liberal Media because it was on “Liberal Media” that I got more information about Clinton’s blow job and Edwards’s affair than I cared to hear. If the Liberal Media was so over the top attacking Newt, you would think they would have brought up the South Carolina governor’s lying and affair with the woman in South America. If they did, I missed it. I’m betting FOX would have made something of it if the governor and Newt were Democrats.

“Personally I cannot stand Sarah Palin being inserted into the conversation, as if she has any influence.”

Ah, ha, you are watching Fox because the only place I ever see Palin these days is on Fox where she said: “If I had to vote in South Carolina, in order to keep this thing going I’d vote for Newt and I would want this to continue. More debates, more vetting of candidates because we know the mistake made in our country four years ago was having a candidate that was not vetted…” I guess Palin wasn’t paying attention to the Democratic primaries and the debates between Obama and Clinton and the close scrutiny of Obama by the “liberal media” and the Murdoch Media. Of course, she wouldn’t have been paying attention then because that was before she was picked as Republican VP candidate and she was much too involved in her job as Governor of Alaska, a job she loved so much she quite mid-term. (For any who don’t know me, that last sentence is meant to drip with sarcasm.)

Mort Media here says Newt must like quitters as he told CNN “I would ask her to consider taking a major role in the next administration if I’m president…” Like what, Newt, Secretary of State?

“I would sure like to know your opinion about this election process to date.”

Well, Sis Chris, I think we have more problems than any president can fix without making a lot of people unhappy. I think that we, the citizens of the U.S., have come to the place that someone said of our Constitution 200 years ago that when we figured out we could vote for our self-interest our system of government would fail. We don’t seem to have a long view. Rich people seem to think that they can hold onto all the money and somehow the economy will thrive even though the vast majority doesn’t have buying power. Henry Ford paid his workers good wages so they could buy his cars. Smart.

We are afraid to make a transition to a different source of energy even though the current source is killing us, damaging the world we live in, contributing to our national debt and making us vulnerable to foreign powers. We have a political system that is so divisive it is unlikely any leader no matter how extraordinary he or she might be has little chance of making positive change. There is a part of me that thinks one of the Republican candidates as president might not be such a bad thing as they would not fix the problem and could then take the Republican nonsense down in flames two years later and then again two years after that but then a better part of me holds out hope that four more years of Obama might give him a chance to turn things around.

This is a difficult time to be a caring U.S. citizen with a long view.

Occupy Wall Street and Tea Party

[I have added a conservative response to this.]

The Tea Party raised the hopes of many though it soon morphed into a right wing social agenda leaving moderates who felt a need for change in the dust. Occupy Wall Street has raised the hopes of many but hope for what? The right wants to pit it against the Tea Party but I think the basis for both is the same. OWS’s lack of a clear agenda is both its strength and its weakness. Without an agenda each hopeful person can hope the agenda will align with their hopes and they grow evermore anxious to see “their” agenda articulated. Once an agenda is articulated there are bound to be many who will feel “that’s not my agenda”.
What brought about the TP and OWS is frustration and anger by many that our system is broken. We are all mad as hell and loosing patience. We blame it on the politicians and the lobbyists, the bankers and the stock brokers, greed and avarice. Our frustration is that in a democracy we the people are supposedly in charge—we are the boss, we can fire those who don’t do our bidding and yet when we fire incumbents, the replacements are little, if any better and often worse. The TP threw out the bums and gridlock in our government got even worse. OWS is focusing more on bankers and stock brokers and avarice but where will that focus lead? Some good was done by picketing a bank. Bank of America was picketed and responded by removing a recently added fee. This worked because there was a specific and easily understood goal and a clear target. The picketing drew enough media attention to get the bank to respond.
That is a great model for OWS—pick a specific and easily understood goal with a clear target and bring attention to it by getting media attention.
Example: A constitutional amendment putting some limits on congress is a possibility that both TP and OWS people could support. It takes a two thirds vote in the Senate and the House of Representatives to start the amendment process. Clearly it would take a lot of pressure for Congress to make a vote that would limit them in any way but if the TP and OWS teamed up to get it done, I think it could happen. Both get a lot of media attention now, imagine the power if they joined forces on one issue. It could become a major campaign issue with candidates signing a pledge to vote for Amendment 28 if elected.
I rather like the idea of term limits and making it illegal for anyone who has served in congress to become a lobbyist. It would decrease the motivation for getting elected to become rich and, hopefully, increase candidates’ interest in moving our country forward. It would also free up a lot of the time now spent by our congresspeople on raising funds and campaigning for the next election, time they could put to good use by focusing on the job we sent them there to do. Or a similar idea from Warren Buffett. "I could end the deficit in 5 minutes," he told CNBC. "You just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election.”
Cynic that I am I doubt this will happen simply because the OWS folks wouldn’t want to join an idea that came from the TP folks and visa versa. The Tea Party is and Occupy Wall Street likely will become as polarized as Congress.

FOLLOWING IS A REPEAT OF THE ABOVE WITH COMMENTS (in color) FROM MY CONSERVATIVE FRIEND. MY LIBERAL FRIEND HAS COMMENTED ELSEWHERE. My cynicism is well placed though my reason for it was overly optimistic.

The Tea Party raised the hopes of many though it soon morphed into a right wing social agenda leaving moderates who felt a need for change in the dust. Occupy Wall Street has raised the hopes of many but hope for what? The right wants to pit it against the Tea Party but I think the basis for both is the same. OWS’s lack of a clear agenda is both its strength and its weakness. How can the inability to articulate your position ever be interpreted as a strength? Without an agenda each hopeful person can hope the agenda will align with their hopes and they grow evermore anxious to see “their” agenda articulated. Once an agenda is articulated there are bound to be many who will feel “that’s not my agenda”.

What brought about the TP and OWS is frustration and anger by many that our system is broken. We are all mad as hell and loosing patience. We blame it on the politicians and the lobbyists, the bankers and the stock brokers, greed and avarice. Our frustration is that in a democracy we the people are supposedly in charge Not the way it works, not even the way it’s designed to work … we elect people who are in charge. —we are the boss, we can fire those who don’t do our bidding and yet when we fire incumbents, the replacements are little, if any better and often worse

. Obviously, we’re not making good choices, but in this case you haven’t given the new guys time to do much of anything … first you need to give them a clear majority in both houses. The TP threw out the bums and gridlock in our government got even worse. Nothing could be worse than the one-party system we had for two years starting in early 2009. OWS is focusing more on bankers and stock brokers and avarice but where will that focus lead? Some good was done by picketing a bank. Bank of America was picketed and responded by removing a recently added fee. This worked because there was a specific and easily understood goal and a clear target. The picketing drew enough media attention to get the bank to respond. Methinks that you give them some undeserved credit relative to overturning the monthly charges on debit cards.

That is a great model for OWS—pick a specific and easily understood goal with a clear target and bring attention to it by getting media attention.

Example: A constitutional amendment putting some limits on congress is a possibility that both TP and OWS people could support. It takes a two thirds vote in the Senate and the House of Representatives to start the amendment process. Therein lies the problem and a bunch of kids sleeping in tens on Public Square aren’t the way to address it. Clearly it would take a lot of pressure for Congress to make a vote that would limit them in any way but if the TP and OWS teamed up to get it done, Somehow I’m having difficulty getting my mind around the notion of a bunch of Ivy League liberals teaming up with a gang of red neck conservatives on anything. I think it could happen. Both get a lot of media attention now, the media has been and continues to do everything possible to completely ignore the TP. imagine the power if they joined forces on one issue. It could become a major campaign issue with candidates signing a pledge to vote for Amendment 28 if elected.

I rather like the idea of term limits (dream on) and making it illegal for anyone who has served in congress to become a lobbyist. Can’t happen any more than enforcing employment agreements that prohibit you from working in the same industry for a competitor … it’s restraint of trade and unconstitutional. However, Congress has passed laws limiting a retired bureaucrat’s ability to lobby his former co-workers for a brief window … it’s either 1 or 2 years. It would decrease the motivation for getting elected to become rich and, hopefully, increase candidates’ interest in moving our country forward. It would also free up a lot of the time now spent by our congresspeople on raising funds and campaigning for the next election, time they could put to good use by focusing on the job we sent them there to do. Did you read the piece I sent yesterday about elected officials trading on insider information on land purchases it was a transcript of something 60-Minutes ran on Sunday. Or a similar idea from Warren Buffett. "I could end the deficit in 5 minutes," he told CNBC. "You just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for reelection.” And this is going to get passed in the Senate when?

Cynic that I am I doubt this will happen simply because the OWS folks wouldn’t want to join an idea that came from the TP folks and visa versa. The Tea Party is and Occupy Wall Street likely will become as polarized as Congress. They already are. We happen to have a vocal little band of Occupy Cleveland so I get some things that you never get to hear or see … they are remarkably disorganized … I can’t think of any single belief that they share with the TP. I love it when they talk about getting Congress to pass a law to get the rich to pay their fair share … don’t they know that Congress did that a long time ago … it’s called the AMT (Alternative Minimum Tax) and that’s worked so well that guys earning as little as $110K got hit last year, but on a percentage basis old Warren paid less than his secretary.

I think we get too focused on buzz words and fuzzy political double talk. I do know that the media does a piss poor job of vetting candidates that they like and go into assassination mode on the ones they don’t like. I would like to believe that you’re right about the public being angry enough to get off its collective fanny, but I don’t see it. However, they did get mad enough at W to vote for Obama though in retrospect he was less qualified for the job than my Brittany Spaniel. Wish I could embrace one of the GOP candidates. By the way, what is so bad about a Mormon? I’m missing something there … not real excited about the guy, but certainly not over his religion.

Political change

My sister, Christie, living in New Zealand asks “In my whole lifetime and I am fairly sure in your whole lifetime, no change has been made. We are doomed to a mediocre world when we could have so much more. Why can’t we live in a perfect world?”
Dear Chris, There has been a lot of change during my lifetime. I was born at the end of the great depression. Franklin D. Roosevelt was president. He had instituted many programs to bring the country out of the depression and regulations to keep it from happening again. The 1950s was a decade of good times as depicted in television shows like Father Knows Best, Ozzie and Harriet and Leave It to Beaver—the good old days when one wage-earner could support a family. Interestingly, and I think it is related, income of more than $1.3 million was taxed at over 90%. In other words, someone earning $2.3 million only got to keep less than $100,000 of that last million. What would be the incentive to make more than $1.3 million if you could only keep $100,000? This question is usually asked with the assumption the high wage-earners are those who create wealth by creating more businesses, more employment etc. That’s not the way it actually works, however, as we see today in the multi-million dollar salaries and bonuses of CEOs of individual companies.
Let’s look at a very public business owning a sports franchise like the New York Yankees. The owners of sports teams don’t go out and create new teams. They may build a new stadium (or get the local government to build one for them) but the business is largely the expenses of paying team members, paying the people who sell hot dogs and the like. The income side is from ticket sales, sale of broadcast rights and advertising. If the owner had to pay really high taxes on really high income thus taking away his incentive to make gross amounts of money; he would have no incentive to keep salaries low either to players or other workers, no incentive to raise ticket prices. In fact the tax would have the exact opposite effect. Why raise ticket prices and why not pay higher wages and bonuses? Star athletes would have little incentive to hold out for an outrageous salary making it likely the other athletes on the team would get higher salaries. Now we have more people with a high enough wage to support a family. Isn’t that what family values are all about?
The change from the 50s has been gradual, wealthy people exerting more and more influence on politicians. I remember when Congress removed restrictions on banks allowing them to get into all sorts of other businesses; just one of many changes from the regulations that FDR put in place to keep the country from going into another depression. Reagan did the major drop in taxes for the rich which has created the super-rich who can exert even more influence on our political system.
You want a change away from rule by the greedy? It will come. It will get worse before it gets better but it will come.

I’m reading The Story of Civilization by Will and Arial Durant, 11 volumes averaging about 1,000 pages each. I read the last two first Rousseau and Revolution and The Age of Napoleon before beginning at the beginning. I’m about to finish volume IV now, six down and five to go. I admit to being proud of my accomplishment but it is not a chore. I’m having trouble putting them down (I’m also having trouble holding them up as they are heavy.) Every large society has gone through changes from caring about the people to focus on wealth and the power of the wealthy over the rest of society. Greed is really interesting, much like a disease. People who have it can’t get enough. They think that more—more money, more power, more things—will bring happiness yet when they get more they think they are happy yet a hunger for more persists. Rather than consider the possibility that the more they have been chasing is like the donkey chasing the carrot suspended in front of him on a stick tied to his back, they keep chasing the carrot rather than looking around to see if perhaps there is something other than money and power that would bring them contentment.
Obama did bring change. He brought us back from the brink of a depression. The loudest voices are those of the greedy who override voices of reason. Change takes time. We are a society of the instant—no patience, no foresight.
As for a perfect world, it may exist right now waiting for us to perceive it. Would a video game be perfect if everything went along easily? Would chess be fun is the opponent always made the moves you wanted? Perhaps all we need to live in a perfect world is the ability to accept this world as it is and play the game it presents to the best of our ability without unrealistic expectations.

How to Curb Greed

When I ask people to name the best decade, the 50s are the most popular—the age of Leave it to Beaver, Father Knows Best and Ozzie and Harriet. I graduated from high school in 1956 and I certainly wouldn’t argue with that choice. What made it so good—family values, families with just one-wage earner, low taxes, low unemployment. One of the reasons I propose is not true. Family values is a subjective judgment though I suspect most would agree that “family values” were higher in the 50s than now. I can’t find statistics to back up my belief that the percentage of single-wage-earner households was higher in the 50s but it certainly was on television. There was low unemployment--the lowest average unemployment for the decade than any decade since (4.5%). The one that isn’t true is low taxes, at least for the wealthy. The highest tax bracket throughout the 50s was 91%. In fact, in all the years Americans have been taxed there were only two years, 1944 and 45, when there was a higher tax bracket.

I believe there is a direct correlation. The incentive to make millions of dollars when you are only allowed to keep 9% is much less than if you get to keep 65% as currently. Some corporate CEO who might today have gotten a 17 million dollar bonus, might, in the 50s, have said, “Never mind. A million is enough.” Where would the other $16,000,000 have gone? Maybe to share holders. Maybe to consumers of the produce the corporation produced. Either way it would spread the wealth around and make greed less likely.

There is no rational reason for making more than $1 million a year. Bring back the 91% tax on income over $1 million. For those who say that would slow recovery from the recession I suggest you go back to the unemployment table. The decade with the highest rate of unemployment was….can you guess? The 80s, of course. The average for the 80s was 7.27%. I guess there wasn’t enough trickling down. The most recent decade was 5.54%.