“During The Holidays, Remember Our Least”: Today We Have To Say “Thou Shalt Not” To An Economy Of Exclusion And Inequality
As we celebrate the holiday season, we are instructed by virtually all faiths to turn our thoughts to the “least of these.” January will mark the 50th anniversary of the War on Poverty, but most notable today is how impoverished our discussion of poverty is.
Political leaders in both parties pledge to save the “middle class,” because polls show that most Americans consider themselves part of the broad middle. Democrats tout their “middle out” economics against Republican “trickle-down” economics. Republicans claim to be fighting to save small businesses and middle-class homeowners from the rapacious demands of government. Very little attention is given to the poorest among us.
Perhaps that is because poverty scars this rich nation. A recent report by the United Nations Children’s Fund (Unicef) reveals that among 35 developed nations the United States ranks 34th in childhood poverty, above only Romania, a country several times less wealthy. Worse, we are also next to last in the depth of childhood poverty — the gap between average income of child’s family and that of poverty standard.
There is no argument about the facts. The poor were much more deprived when Lyndon Johnson declared his “war on poverty,” of course, but the percentage in poverty hasn’t changed much . Childhood poverty translates into poor health, poor education, and poor prospects. It isn’t an accident that the country frequently at the top of the international education rankings – Finland — also has the lowest levels of childhood poverty in that U.N. study.
So you’d think Washington would be focused on what to do to reduce the number of children in poverty, to address mass unemployment, declining wages, family distress. Instead, Washington has decided to administer a little “tough love.” Last month, Congress cut food stamps by an average of 7 percent for 48 million Americans . And this week 1.3 million jobless Americans will lose unemployment benefits , with as many as 5 million left in the cold over the course of the coming year .
In his recent “exhortation,” Pope Francis wrote starkly about the moral challenge of poverty:
“We can only praise the steps being taken to improve people’s welfare in areas such as health care, education and communications. At the same time, we have to remember that the majority of our contemporaries are barely living from day to day, with dire consequences. A number of diseases are spreading. The hearts of many people are gripped by fear and desperation, even in the so-called rich countries. . . .[Emphasis added.]
“Just as the commandment ‘Thou shalt not kill’ sets a clear limit in order to safeguard the value of human life, today we also have to say ‘thou shalt not’ to an economy of exclusion and inequality. Such an economy kills. How can it be that it is not a news item when an elderly homeless person dies of exposure but it is news when the stock market loses two points?”
Here, the Pope was standing firmly in the long tradition of the church’s concern for the poor, but among American conservatives, the response was hysteria. Rush Limbaugh accused him of peddling “pure Marxism.” Louis Woodhill in Forbes scorned him for “Papal Bull” that seemed “copied and pasted out of The Nation or Mother Jones.” (I take that as a compliment.) Rep. Paul Ryan (R-Wis.), a pious Catholic, was notably silent.
In a recent speech on inequality, President Obama insisted, “We are a better country than this,” and he made the case for government action. But his agenda was far less impressive than his rhetoric — including lower corporate tax rates, more trade accords, “streamlined” regulations, a “responsible budget” (meaning continued austerity).
The president touted his “race to the top” education program, when, in fact, schools in low-income districts have been forced to fire teachers, leaving classrooms far more crowded. He bragged on his college loan efforts even as reports showed students are graduating even deeper in debt. He did repeat his call for universal preschool and raising the minimum wage, but neither of these has been able even to receive a vote in the Republican-led House.
The reality is that government programs to lift the poor work. Johnson’s War on Poverty brought poverty down dramatically, but that war was lost to the war in Vietnam. Today, the United States does a much better job lifting poor children out of poverty than it did before Johnson pushed through Medicare and Medicaid expansions, child nutrition programs, subsidized school lunches and more. Even so, the United States still does far less than other developed countries. In 2010, for example, Dutch government programs reduced its poverty rate from 25 percent to 7.5 percent , while the United States only reduced its rate from 28 percent to 17 percent .
Two fundamental issues should be at the center of our debate. The first, posed by Pope Francis and Barack Obama, is what must be done to make the economy work for working people? The second is that posed by the president: Are we a better country than this? Do we want to be? We know what works. We can afford it, even more than other industrial countries. But are we prepared to do what needs to be done?
By: Katrina vanden Heuvel, Opinion Writer, The Washington Post, December 24, 2013
“America’s Greediest”: Sheldon Adelson, Who Hates Gambling, Unless He’s Profiting From It
Among the most venerable Yuletide traditions is the annual appeal on behalf of the “neediest cases,” which has spread nationwide since it first appeared in the New York Times so long ago.
More than a century later we still have the poor with us, of course, and the rich, not to mention the unspeakably super-duper-rich – many of whom comport themselves in ways that likewise provoke public concern, especially in an era of growing inequality and impoverishment.
National Memo editor-in-chief Joe Conason believes the time has come to revive a somewhat less charitable tradition that he and his late colleague, the great progressive journalist Jack Newfield, established at The Village Voice during an earlier era of avarice: “The Greediest Cases.”
This holiday season we will feature a series of profiles of America’s Greediest Cases, and we encourage readers to nominate deserving public figures in the worlds of business, government, media, entertainment, and sports who exemplify the grasping materialism and rank hypocrisy of our time.
No list of America’s greediest would be complete without the nation’s 11th richest man, casino billionaire Sheldon Adelson. Adelson, who serves as chairman and CEO of Las Vegas Sands, is worth an estimated $28.5 billion. While he has profited quite handsomely from gambling, however, he is not eager to share the wealth that the industry has bestowed upon him. That’s why a man who made more than $25 billion from casinos in the past three years alone has become the public face and the checkbook of the anti-online gaming lobby.
According to Adelson, gambling online — currently legal in Delaware, Nevada, and New Jersey, and being debated in at least a half-dozen other states — is “a societal train wreck waiting to happen.” That’s how the 80-year-old casino mogul described it in a June column for Forbes, in which he declared that “as a father, grandfather, citizen and patriot of this great country, I am adamantly opposed to the legalization and proliferation of online casino gaming.”
In that overwrought essay, Adelson lays out his moral opposition to the industry, terming it “a toxin which all good people ought to resist,” and warning that it could bring a “plague” to American society by allowing “underage children” or “people betting under the influence of drugs” to pick up gambling and ruin their financial futures. Of course, if this sounds like something that could also happen at one of Adelson’s brick-and-mortar casinos, that’s because it is.
Adelson insists that he could make even more money from online gambling — boasting that his popular brands “would be very effective competitors in this market place” — but it is simply not worth the moral cost.
This may be a good time to mention that Adelson earned the vast majority of his wealth through his casinos in Macau –where he allegedly gained licenses for those establishments with help from organized crime, and by using his vast political connections to kill congressional legislation that would have punished China for human rights abuses. It will always be difficult for Sheldon Adelson to claim the moral high ground, but on questions of gambling it is basically impossible. Instead, common sense suggests that Adelson is less concerned with protecting the poor addict who could “click [his] mouse and lose [his] house,” as he put it in his Forbes op-ed, and more concerned with exerting his influence on any reform that affects the gambling industry.
Even if Adelson’s motivations in his crusade against online gambling are pure, it’s not hard to find other reasons to include him among the “greediest cases.” After all, this is a man once sued by his own children, who alleged that he defrauded them by convincing them to sell him their shares in his company for just half of their true value (the younger Adelsons lost that case, although Adelson also lost a motion attempting to saddle his sons with deposition costs).
Adelson’s extensive involvement in the 2012 election may represent the clearest example of his greed. Although he spent over $100 million supporting various Republican candidates last year, he was once a Democrat. In fact, even as he was spending the GDP of a small country in an effort to elect Republicans, Adelson confided to the Wall Street Journal that he is “basically a social liberal,” who supports stem-cell research, a woman’s right to choose, comprehensive immigration reform, and even “socialized-like health care.”
Why then is he so committed to electing politicians who would wage war against his deeply held beliefs? According to Adelson, it’s because of the Republican Party’s stronger commitment to charity and to the state of Israel. But others aren’t so sure; former Adelson employee (and U.S. Representative) Shelly Berkley (D-NV) claims Adelson once told her that “old Democrats were with the union and he wanted to break the back of the union, consequently he had to break the back of the Democrats.”
Moreover, the billionaire has a strong personal financial incentive to support Republicans. According to an analysis by the liberal Center for American Progress Action Fund, Adelson could have received a $2 billion tax cut had Mitt Romney been elected president and enacted his tax plan. That’s apparently more than enough to buy his silence on reproductive rights or health care reform (not to mention a great return on his $100 million investment).
And although Romney lost, there’s no need to pity Adelson. Even without his chosen candidate in the White House, he has managed to dodge about $2.8 billion in gift taxes since 2010 by aggressively exploiting the little-known GRAT loophole. Indeed, no matter who wins the presidency — or the battle over online gambling, for that matter — Sheldon Adelson is going to do just fine.
By: Henry Decker, The National Memo, December 19, 2013
“The Meaning Of A Decent Society”: What Do We Owe One Another As Members Of The Same Society?
It’s the season to show concern for the less fortunate among us. We should also be concerned about the widening gap between the most fortunate and everyone else.
Although it’s still possible to win the lottery (your chance of winning $648 million in the recent Mega Millions sweepstakes was one in 259 million), the biggest lottery of all is what family we’re born into. Our life chances are now determined to an unprecedented degree by the wealth of our parents.
That’s not always been the case. The faith that anyone could move from rags to riches – with enough guts and gumption, hard work and nose to the grindstone – was once at the core of the American Dream.
And equal opportunity was the heart of the American creed. Although imperfectly achieved, that ideal eventually propelled us to overcome legalized segregation by race, and to guarantee civil rights. It fueled efforts to improve all our schools and widen access to higher education. It pushed the nation to help the unemployed, raise the minimum wage, and provide pathways to good jobs. Much of this was financed by taxes on the most fortunate.
But for more than three decades we’ve been going backwards. It’s far more difficult today for a child from a poor family to become a middle-class or wealthy adult. Or even for a middle-class child to become wealthy.
The major reason is widening inequality. The longer the ladder, the harder the climb. America is now more unequal that it’s been for eighty or more years, with the most unequal distribution of income and wealth of all developed nations. Equal opportunity has become a pipe dream.
Rather than respond with policies to reverse the trend and get us back on the road to equal opportunity and widely-shared prosperity, we’ve spent much of the last three decades doing the opposite.
Taxes have been cut on the rich, public schools have deteriorated, higher education has become unaffordable for many, safety nets have been shredded, and the minimum wage has been allowed to drop 30 percent below where it was in 1968, adjusted for inflation.
Congress has just passed a tiny bipartisan budget agreement, and the Federal Reserve has decided to wean the economy off artificially low interest rates. Both decisions reflect Washington’s (and Wall Street’s) assumption that the economy is almost back on track.
But it’s not at all back on the track it was on more than three decades ago.
It’s certainly not on track for the record 4 million Americans now unemployed for more than six months, or for the unprecedented 20 million American children in poverty (we now have the highest rate of child poverty of all developed nations other than Romania), or for the third of all working Americans whose jobs are now part-time or temporary, or for the majority of Americans whose real wages continue to drop.
How can the economy be back on track when 95 percent of the economic gains since the recovery began in 2009 have gone to the richest 1 percent?
The underlying issue is a moral one: What do we owe one another as members of the same society?
Conservatives answer that question by saying it’s a matter of personal choice – of charitable works, philanthropy, and individual acts of kindness joined in “a thousand points of light.”
But that leaves out what we could and should seek to accomplish together as a society. It neglects the organization of our economy, and its social consequences. It minimizes the potential role of democracy in determining the rules of the game, as well as the corruption of democracy by big money. It overlooks our strivings for social justice.
In short, it ducks the meaning of a decent society.
Last month Pope Francis wondered aloud whether “trickle-down theories, which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness…”. Rush Limbaugh accused the Pope of being a Marxist for merely raising the issue.
But the question of how to bring about greater justice and inclusiveness is as American as apple pie. It has animated our efforts for more than a century – during the Progressive Era, the New Deal, the Great Society, and beyond — to make capitalism work for the betterment of all rather merely than the enrichment of a few.
The supply-side, trickle-down, market-fundamentalist views that took root in America in the early 1980s got us fundamentally off track.
To get back to the kind of shared prosperity and upward mobility we once considered normal will require another era of fundamental reform, of both our economy and our democracy.
By: Robert Reich, The Robert Reich Blog, December 19, 2013
“Pushing Bad Politics And Bad Economics”: Washington ‘Centrists’ Don’t Want President Obama To Target Inequality
Last week, President Obama delivered an impassioned address about growing income inequality and declining mobility, correctly identifying the trend as both a problem long in the making and the seminal economic challenge of our time. Inequality in the U.S. has not just meant a growing divide between the rich and the poor, but a weakening middle class, with median wages declining to $51,404 a year, down from $56,000 a year in 2000, all while productivity increased. As President Obama put it, “We know from our history that our economy grows best from the middle out, when growth is more widely shared.” But this belief that a strong and growing middle class is key to economic growth and that inequality actually harms the economy is not an argument Obama pulled out of thin air. Rather it is a theory at the core of the Democratic Party, adhered to by both recent and long past Presidents. Indeed, Bill Clinton who titled his campaign book “Putting People First,” made the same argument when he accepted his party’s nomination for the middle class, stating he was doing so “in the name of all those who do the work, pay the taxes, raise the kids and play by the rules.” And of course, FDR was the father of middle-out economics, adopting demand-side Keynesian economics in the face of the Great Depression.
That’s why it was so surprising that the day before Obama’s speech hosted by the Center for American Progress, Third Way’s Jon Cowan and Jim Kessler declared economic populism “a dead end for Democrats.” They argue that messages about income inequality are overly idealistic and claim that the progressive economic agenda doesn’t excite voters outside of midnight blue districts. Of course, they ignore that it was a populist message about reducing inequality that won Obama reelection just over a year ago.
However, the push from leading progressives for Democrats to embrace a policy agenda that says the promise of America should be for all wasn’t born from a political playbook, but from the economic reality of the last decade. Wages have been unacceptably stagnant: in 2000 the median American worker earned $768 per week, in 2012 that worker still makes $768 per week even as productivity increased over the same time period by 23 percent. Inequality is on the rise. Between 2009 and 2012, 95% of the country’s income gains went to the top 1% of earners. An overwhelming majority of Americans—85 percent—feel that it’s more difficult for middle-class families to maintain their standard of living now than a decade ago. It is in response to this economic hardship and widening income inequality that Americans have embraced a policy vision that rejects failed austerity measures in favor of smart investments in the middle class.
This vision is far from “fantasy-based blue-state populism.” In fact, it’s budget-hawks whose arguments for austerity find support in fictional evidence. The deficit is falling fast—in 2013 it decreased by 37 percent. Where in 2010, the Congressional Budget Office projected deficits would exceed 8 percent of gross domestic product by 2023, today deficits are projected to average around 3 percent of GDP; the unemployment rate, on the other hand is higher today, averaging 7.5% this year, than the CBO predicted it would be by this year , 6.7%. But unemployment isn’t following the same trend. While debt projections are no longer threatening to spiral out of control, budget hawks continue their relentless focus on deficit reduction. And Washington’s obsession with fiscal “solutions” that are in search of a problem has made it harder, not easier, to create good jobs, to increase wages, and to boost overall economic growth.
This is the reality not only in true-blue districts and states, but across the country. That’s why a focus on inequality and requiring the wealthy to pay their fair share has not just been a successful political strategy for Bill de Blasio and Elizabeth Warren, but for leaders in Ohio, California, Maryland, and across the country.
In Ronald Reagan’s home state of California, Gov. Jerry Brown fought for a proposition to raise taxes on those making $250,000 or more a year and to increase the state’s sales tax by a quarter-cent directly to Californians in 2012. The establishment of a “millionaire tax” didn’t drive away innovators, but allowed the state’s leaders to say no to painful budget cuts and turned California into a global model for how to make an economy that works for everybody. Brown turned a $27 billion deficit into a surplus, brought down California’s unemployment rate, and improved the state’s credit rating. As Brown’s progressive, middle-out economic agenda paid dividends, his approval ratings soared.
Kessler and Cowan disingenuously term the serious policy ideas put forward by progressives as a “‘we can have it all’ fantasy.” But what’s lofty about a proposal to enable every child the opportunity to attend preschool when the plan would dramatically expand opportunity by boosting children’s lifetime earnings, reducing teen pregnancy rates, and lowering the chances of future arrest and incarceration? Making smart investments in early childhood education could not only generate more than $7 of economic benefits over a child’s lifetime for every dollar spent up front, but would also benefit our economy in the immediate term by providing parents with increased workplace flexibility. In pursuit of pragmatic, big ideas like universal pre-k, progressives are more than willing to talk about entitlement reforms that don’t hurt beneficiaries. In fact, the idea that every child should have access to high quality pre-k in return for enormous economic dividends is simply smart economics, not fantasy.
The most confounding piece of Kessler and Cowan’s argument is that they don’t distinguish between tax increases that affect everyone and tax increases that impact the wealthy. They argue that Democrats should learn a lesson from Colorado’s recent decision to turn down an across the board tax. While raising taxes on the wealthy has proven to be both good policy and good politics, there’s no doubt that raising taxes on everyone, as Colorado attempted, may be difficult to do—especially when wages are down. But, Bill de Blasio and Elizabeth Warren aren’t arguing that everyone should pay more in taxes, but only that the wealthy should pay their fair share. President Obama is advocating for the idea that when the top 10 percent of earners take home 50 percent of the country’s wealth, it’s reasonable to ask that the wealthiest Americans pay their fair share to ensure that all Americans have a shot at economic success. There’s another politician who raised taxes on the wealthy by raising the top marginal rate who was handily reelected President: Bill Clinton.
By: Neera Tanden, President of the Center for American Progress; The New Republic, December 15, 2013
“Why Inequality Matters”: Rising Inequality Is By Far The Most Important Single Factor Behind Lagging Middle-Class Incomes
Rising inequality isn’t a new concern. Oliver Stone’s movie “Wall Street,” with its portrayal of a rising plutocracy insisting that greed is good, was released in 1987. But politicians, intimidated by cries of “class warfare,” have shied away from making a major issue out of the ever-growing gap between the rich and the rest.
That may, however, be changing. We can argue about the significance of Bill de Blasio’s victory in the New York mayoral race or of Elizabeth Warren’s endorsement of Social Security expansion. And we have yet to see whether President Obama’s declaration that inequality is “the defining challenge of our age” will translate into policy changes. Still, the discussion has shifted enough to produce a backlash from pundits arguing that inequality isn’t that big a deal.
They’re wrong.
The best argument for putting inequality on the back burner is the depressed state of the economy. Isn’t it more important to restore economic growth than to worry about how the gains from growth are distributed?
Well, no. First of all, even if you look only at the direct impact of rising inequality on middle-class Americans, it is indeed a very big deal. Beyond that, inequality probably played an important role in creating our economic mess, and has played a crucial role in our failure to clean it up.
Start with the numbers. On average, Americans remain a lot poorer today than they were before the economic crisis. For the bottom 90 percent of families, this impoverishment reflects both a shrinking economic pie and a declining share of that pie. Which mattered more? The answer, amazingly, is that they’re more or less comparable — that is, inequality is rising so fast that over the past six years it has been as big a drag on ordinary American incomes as poor economic performance, even though those years include the worst economic slump since the 1930s.
And if you take a longer perspective, rising inequality becomes by far the most important single factor behind lagging middle-class incomes.
Beyond that, when you try to understand both the Great Recession and the not-so-great recovery that followed, the economic and above all political impacts of inequality loom large.
It’s now widely accepted that rising household debt helped set the stage for our economic crisis; this debt surge coincided with rising inequality, and the two are probably related (although the case isn’t ironclad). After the crisis struck, the continuing shift of income away from the middle class toward a small elite was a drag on consumer demand, so that inequality is linked to both the economic crisis and the weakness of the recovery that followed.
In my view, however, the really crucial role of inequality in economic calamity has been political.
In the years before the crisis, there was a remarkable bipartisan consensus in Washington in favor of financial deregulation — a consensus justified by neither theory nor history. When crisis struck, there was a rush to rescue the banks. But as soon as that was done, a new consensus emerged, one that involved turning away from job creation and focusing on the alleged threat from budget deficits.
What do the pre- and postcrisis consensuses have in common? Both were economically destructive: Deregulation helped make the crisis possible, and the premature turn to fiscal austerity has done more than anything else to hobble recovery. Both consensuses, however, corresponded to the interests and prejudices of an economic elite whose political influence had surged along with its wealth.
This is especially clear if we try to understand why Washington, in the midst of a continuing jobs crisis, somehow became obsessed with the supposed need for cuts in Social Security and Medicare. This obsession never made economic sense: In a depressed economy with record low interest rates, the government should be spending more, not less, and an era of mass unemployment is no time to be focusing on potential fiscal problems decades in the future. Nor did the attack on these programs reflect public demands.
Surveys of the very wealthy have, however, shown that they — unlike the general public — consider budget deficits a crucial issue and favor big cuts in safety-net programs. And sure enough, those elite priorities took over our policy discourse.
Which brings me to my final point. Underlying some of the backlash against inequality talk, I believe, is the desire of some pundits to depoliticize our economic discourse, to make it technocratic and nonpartisan. But that’s a pipe dream. Even on what may look like purely technocratic issues, class and inequality end up shaping — and distorting — the debate.
So the president was right. Inequality is, indeed, the defining challenge of our time. Will we do anything to meet that challenge?
By: Paul Krugman, Op-Ed Contributor, The New York Times, December 15, 2013
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