Tuesday, March 01, 2011

Reversing The Moral Compass (or Trickle Up)

Who do you worry about more, the rich or the poor? The powerful or the disenfranchised? The man in the Rolls Royce or the man working three jobs to send his kids to college?

The answer should be obvious but, for some reason, it isn’t.

Somehow we have been convinced that the wealthiest Americans are under siege by the poorest and that the future of our nation is directly dependent on the greediest and most selfish of its citizens.

It shouldn’t really be surprising. Whether it is Feudal lords viscously taxing their farmers, Imperial Russia and their serfs or America being built on the backs of its slaves, the rich and powerful have always stood with their feet firmly planted on the necks of the poor and they justify their actions with racism, classism, social Darwinism and every other rationalization.

While every major religion lists charity, compassion and sacrifice among its virtues, there has been, of late, a conscious distortion of morality. Today, more than half of our deadliest sins, Pride, Gluttony, Envy, and, of course, Greed, are seen as admirable. In fact, our so called, “consumer” economy, is predicated on the idea that Greed consumption and selfishness are not only good for us but good for everyone.

This is a lie.

Unfortunately, it is also a very successful lie.

One of the cornerstones of that lie is “trickle down” economics. The idea, pushed by the Reagan administration in the early 1980’s that tax breaks for corporations and the very wealthy would stimulate the economy and eventually those benefits would “trickle down” to all Americans, even the very poor. This economic philosophy has been called many things over the years including Reagannomics and Supply side, but I still think the best name came from George H.W. Bush when he called it “Voodoo economics”.

I wont argue about whether or not lower taxes on the richest Americans encourage investment in the economy. Give a rich guy more money and he will invest more money. The question is, does it benefit anyone else? Even a cursory glance at the last 30 years of American history should tell you that the answer is, unequivocally “no”

The rich have certainly gotten richer in the last 30 years but the poor and middle class have only gotten poorer. In 1981 (at the beginning of “Trickle Down”) the average CEO in this country made 43 times more than his average worker. Today they make somewhere between 185 and 263 times more (depending on where you get your statistics) Doe that sound like wealth is trickling down?

In the last decade income for the bottom 90% of Americans has increased 3.9% (well behind cost of living) while income for the wealthiest .1% has almost doubled. The rich are getting much richer and everyone else is getting killed.

But what about all that money we gave to the wealthy so they could invest in our economy? What happened to all the jobs they were supposed create? Where did they go?

Again, the answer should be obvious. They were outsourced.

You see, the problem here isn’t just economic. It is cultural. Once you say that greed and selfishness are good, then anything you can do to make more money is absolutely justified. If unionized American workers are too expensive... Fine. We can find cheaper workers where they don’t have unions or safety regulations or child labor laws. That call center in Tennessee is costing you an arm and a leg... Fine. You can build a new call center for half the price elsewhere.

Cheaper workers mean more money, but not for everyone.

Still, we all know that increasing taxes on the wealthiest Americans will hurt the economy, right?


In the late 1940’s and 50’s tax rates on the wealthiest Americans were above 60% (approximately twice what they are at today). Did the economy collapse? No. It boomed. It was, in fact, one of the greatest periods of growth in American history. The difference is, in the fifties, that growth was across all economic classes, with the middle class benefiting the most. We were also able to use that revenue to build the interstate highway system (which further helped the economy), vastly increase the national parks and launch a space program.

Am I saying we need to go back to 60%? Absolutely not. However, the people that are telling you that asking multi-millionaires to kick in a little more will wreck the economy are lying to you.

Lies, in fact, are one of the major investments they’ve made with their tax breaks. Billions have been spent through news media, through advertising and through high paid lobbyists to spread the gospel that greed is good and that our wealthiest citizens are also our best citizens.

First they took aim at the poorest among us, the ones least likely to fight back, the welfare mother, the juvenile delinquent, and the illegal alien. (all of which are disparaging titles given to those people by the wealthy elite)

The poor are characterized as lazy and dishonest, unworthy not only of assistance but even of compassion. They are, in fact, what is dragging America down. The suber-rich on the other hand, the ones who bankrupted our nation with their greed, the ones who we have spent trillions to bail out, they are characterized as our nation’s saviors.

That is the message that dominates our country today and it is that message that we must defeat at all costs.

Because now, it’s not enough to demonize the very poor and disenfranchised. Now, they are moving up to the middle class (or, more accurately, what used to be the middle class) Apparently it is the civil servants who are the real problem. The policemen, firemen and teachers.


The Wealthiest 1% of Americans receive 700 Billion dollars in tax cuts last year but the people who dedicate their lives to helping children, people who have already endured multiple salary and benefit cuts, people who have seen their responsibilities and class sizes grow while their text books age and their supports dissolves are being greedy when they ask for a living wage and a few benefits.

It makes you wonder who they will come after next.

Our Veterans?

No, the soldiers who served our country “with the last full measure of devotion” have already seen their health benefits cut, their pensions destroyed and the GI Bill stripped down to nothing.

In the end, that wealthiest 1% will come after all of us because once you declare that Greed is good everything that serves greed is, by definition, justified.

If you hate the idea of people living and benefiting off the public dole... Fine. But ask yourself this, who is more worthy of your condemnation, the Mother who has to stretch her welfare check to feed her children, or the profitable corporation which receives billions of dollars in federal subsidies.

Last year the oil industry received sixty billion dollars in federal money while earning record profits.

This moral shift has manifested itself in another way as well.

Things which can make money for someone are valuable. Things which pay non-economic dividends are not. Government services which can be monetized such as prisons, social security, the military and health care should be privatized. Services which cannot be monetized such as the FDA, EPA, education, national parks and, of course, public broadcasting should simply be cut.

The wealthiest Americans have used their power and influence to turn our moral compass upside down. They have succeeded in casting themselves in the role of victim while transforming the poor, the hungry, the sick, the veteran, the civil servant and the teacher into the villain.

I am not saying the rich are all evil or that Americans shouldn’t strive to improve their economic position. I am merely saying that we can choose where to invest, not only our dollars, but our care, our compassion and our empathy.

We have spent the last thirty years believing that wealth could trickle down only to watch that wealth pool in the hands of the few while the many only grow poorer. It is time, I believe, to reverse that trend and see if wealth can trickle up.

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Blogger Parvenue said...

What I wonder about is what the wealthy expect the long term effects to be? How do they see the benefit of destroying the middle class? Do they think they will be safe when the vast majority of Americans wake up and decide it's time to storm the gates? Is it just short sightedness?

1:26 PM  
Blogger Steve said...

As always I agree 100%.

In fact, I've read a great deal lately about how the degree of wealth inequality relates to instability and even revolution. Apparently, america is starting to enter the same realm of economic inequality as pre-soviet Russia Cuba, and Nicaragua.

I also wonder what the wealthy are counting on in terms of the environment they are destroying in order to line their pockets. In the end, they are going to have to live on the same messed up planet as the rest of us.

2:40 PM  
Blogger Some Dude said...

I guess I'm left wondering...who are we talking about? I mean, you and I are 2 of the more well off people I personally know. It wouldn't surprise me if we're both in the top 1%.

Yet I don't feel morally depraved or anything and have never really thought of myself has having "lined my pockets".

Although I'm a believer in local talent, I guess I've outsourced selected software engineering tasks. It just seemed to make business sense at the time.

I guess I'm saying, this feels like an indictment on a nebulous "them" or "the others", which always feels like a slippery slope leading to divisiveness.

Personally, I'm more appalled at the divisive nature of discourse lately than I am about wealth distribution (which seems to be a worthy but ageless issue)...but then again I can't claim to be poor so probably unfair for me to choose that way.

3:48 PM  
Blogger Eric said...

Well said, dude... as always.

4:13 PM  
Blogger Steve said...

Thanks for the comments Dan,

The top 1% earns over $300,000 per year.
The top .1% (who have received the lion's share of the benefits from the Bush tax cuts) earn over 1.6 million per year.

One thing maybe I should have said is that I have no problem with people making a lot of money. And I certainly don't believe that rich people are inherently evil.

What I have a problem with is the wealthy people and corporate interests who paint themselves as victims while painting the people with serious problems in this country as the victimizers.

(None of which I have ever heard you do)

I certainly agree with you on the divisive nature of the discourse in this country and I usually try to keep inflammatory language out of my blogs.

However, the recent attack on teachers and unions was just too much for me.

Teaching is one of the most important, thankless, and unsupported jobs in this country and to hear them described as greedy, lazy and unpatriotic really pissed me off. Particularly, when those same commentators were describing wall street executives with salaries in the tens of millions as the ones making great sacrifices for our country.

4:15 PM  
Blogger David said...

Let me give you a look at my perspective.
My father started the family business in the garage and I worked my way through USC during those start up years. We take pride at earning our own way, are prideful about the number of employees we have because we give them useful, stable jobs and ok pay. Our business competes globally and it is tough to compete. California is an anti-business state, higher taxes than all but two states in the union, heavy regulation and general obstruction of
progress. Guess what, California is ranked the number three worst state for job creation, (Gallup Poll (2/28/2011). The list is directly correlated to tax rate. That's the tax and spend legacy of our California government.
If you want to help society, then create an environment where
companies can grow, and people can have useful employment. The public sector does not work under the performance demands of private industry. We have only to look at the State of California as an example of a very poorly managed public organization. We as Californians are over taxed because the taxes we do pay are not used well. The poor receive lousy care and students receive marginal educations. There are school teachers that hate their jobs and receive tenure after two years! The federal government is bloated, inefficient and ineffective. They are not worth the taxes we are paying. I like to think that our business earns its income, and we expect to retain what we earn.Our customers do not buy our products just because they like us, it's
because they need our products. When the demand declines or stops so do we. We enjoy donating to causes we think useful and enjoy being free American citizens. As taxes are increased our freedom decreases. As taxes are increased the number of employees we have decreases, because we cannot
compete on price nationally and globally. The government seems to want to make all the decisions for us and mis-spend our earnings. That socialist
thing. "Socialism works well until they have spent all of someone else's money", to paraphrase Thatcher The Obama administration has made war on
success and it makes me sick. What ever happened to the American
admiration of taking a risk, working hard, succeeding or failing on your own merits? The harder I work the bigger target I become.
Unions: I have nothing against them in theory, but my direct
experience in the construction world is that they are run by organized crime. They call you up and tell you how many steel workers you are required to hire for a job or else they will, beat you up, steal or destroy your property, block your work effort, chase your employees
etc. And the union workers don't even show up. Gang land crime
stuff. We won't accept a construction contract if it requires dealing with unions. That's one of our freedoms which I hope to retain. I have met people that are 10 years into their retirement as union workers and are still bitter about their work. Unions are obstructive, destroy peoples pride in the work they do, and inhibit team work. And for greed let's look at any teacher's union, their objective is to increase their income, increase their benefits, increase the number of teachers and aids, and decrease the hours worked. If they cared about students they would make sure that only the best teachers teach. If they did that I would vote for their candidates and donate to their causes.

There are a lot of un employed, well educated people in California
that would love to teach English or History or Science and receive
even a third of the income that our California teachers receive. A little competition might be a healthy reset button for our society.

That's all for now. Your goddamn right wing friend.


8:44 AM  
Blogger Steve said...


First of all, thank you for the great comments and different perspective.

Let’s start with where I think agree. Small businesses are the backbone of the American economy. I believe that hard work, innovation and just plain guts should be rewarded. I am certain that you and your father have worked extremely hard to build your business and that you take the responsibility of your employees and the community you work in very seriously.

I suppose, that one of the mistakes I’ve made in this blog (as evidenced by Dan G.’s comments) Is to give the impression that I am anti-rich or anti-business which I am not.

I simply have no sympathy for the nation’s super rich (of which I don’t think you are one) who made millions by gambling with our economy, made millions more from our bailout, are making millions today from our recovery and spend millions lobbying against the poor, homeless, and, of course, teachers while demanding further tax cuts so they can make even more.

What I am against is the idea that the top .1% of the Americans, who make more than 1.6 million dollars a year are being threatened by a small raise in taxes while teachers are being greedy when they resist seeing their wages and benefits cut again and again.

My sister is a professor of education and she has seen her salary cut several times while her work load continues to increase. She is incredibly dedicated to her students and the cause of education but she feels that she is fighting a losing battle as support for teachers dwindle. She has told me that sometimes she feels like she’s sending soldiers off to fight in a war they cannot hope to win. This is particularly true in our inner cities where the need for good teachers is the greatest and the obstacles to success are almost overwhelming.

For me there are two basic questions I wanted to address.

The first is mathematic. Does lowering taxes on the wealthiest Americans really mean that wealth will trickle down the poor and the middle class. The evidence of the last 30 years shows that the answer to that is clearly, “no”.

The second question is one of sympathy. Who should I spend my time worrying about, the super rich or the super poor? The big multi-national corporations (of which I don’t think you are one), or the teachers?

I think you know where my sympathy lies.

Thanks again for the comments


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