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.

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.

Wall Street Bonuses

“What to do about those gross Wall Street bonuses?” politicians, “experts” and pundits bewail. They debate how best to regulate such things. Please. The answer is simple. Bring back the 91% income tax bracket.

Those of us who remember the 50s do so with fondness. It wasn’t all “Life with Father”, “Leave it to Beaver” and “Ozzy and Harriet” but it was a time when most mothers concentrated on the most important jobs like raising a family and managing a household. She was able to do that because one income supported the American Dream. Why did employers pay better then? One answer might be that there was little incentive to make gobs of money as the highest tax bracket was 91%. In 1954 income below $75,000 (today’s dollars) was taxed at 20%. Someone earning $1 million (today’s dollars) was in the 62% tax bracket. Anyone earning over $7.5 million paid 91% of every dollar over that amount in taxes.

Consider the fights between millionaire sports stars and millionaire sports team owners over multimillion dollar contracts. They are fighting over figures because in actual money it is too much for any individual to spend reasonably. I would put a cap on individual income. If you make over $2 million a year, you have to either give it away or give it to the IRS. Now the choice is either to make less than $2 million or to give it away which is a good motive, rather than greed, for making money. The sports stars will be easier to negotiate with. The team owners will either be generous to charities or, more likely, they will pay their employees more and charge less for tickets.

The 1954 tax brackets were essentially the same from 1951 through 1963. Want to guess what years the highest tax bracket was lowest? Other than the first three years of income tax in the US the lowest high tax bracket was 24%. Come on, guess the year. It was the year when greed ran amok. That it! 1929! The rate was 25% for the four years leading up to the Great Depression.

One more question in this quiz. When was the second lowest? It was, thanks to President Reagan, 1988-90 and has remained low ushering in the Great Recession.

I’m not talking about wealth redistribution. I’m talking about people making more money than they know what to do with and in the process bringing down a society that would be much better off if families could pursue the American Dream on the income of one wage-earner. I’m really just talking about family values as opposed to greed rules.