“Your Dollars At Work — For The Rich”: We’re Not Talking Trickle Here, We’re Talking Cascading To Privatize Everything
Conservative pundits and politicians routinely divide our U.S. economy into two totally distinct spheres. We have the noble private sector over here, they tell us, and the bumbling, bloated public sector over there.
In reality, of course, we have just one economy, with the private and public sectors inextricably entangled. Each year, in fact, hundreds of billions of tax dollars end up flowing directly into the private sector.
The federal government alone, a new Congressional Budget Office report calculates, annually spends $500 billion — that’s half a trillion dollars — to purchase goods and services from private companies. State and local governments spend many billions more on top of that.
We’re not talking trickle here — we’re talking cascade, as our elected leaders rush to privatize services that public employees previously provided.This massive privatization of everything from prisons to public schools hasn’t done much of anything to make the United States a better place to live.
On the other hand, this privatization has paid off quite handsomely for America’s most affluent. They’re collecting ever more generous paychecks, courtesy of the tax dollars the rest of us are paying.
In Washington, D.C., for instance, top officials of the private companies that run many of the city’s charter schools are taking in double or triple what traditional public schools take in, or even more.
The CEO at one company that runs five of these charters, The Washington Post recently reported, pulled in $1.3 million in 2013. That’s nearly five times the pay that went to the top public official responsible for the District of Columbia’s 100-plus traditional public schools.
America’s taxpayer-funded military contractors would, of course, consider that chump change. The CEO at Lockheed Martin, for one, personally pocketed over $25 million in 2013.
So do you like this idea of executives in power suits raking in multiple millions of your tax dollars?
Rhode Island state senator William Conley sure doesn’t. He and four of his colleagues have just introduced legislation that would stop the stuffing of tax dollars into the pockets of wildly overpaid corporate executives.
Conley’s bill directs Rhode Island to start “giving preference in the awarding of state contracts” to business enterprises whose highest-paid execs receive no more than 25 times the pay of their median — most typical — workers.
Back in the middle of the 20th century, only a handful of top corporate executives ever made more than 25 times the pay of the average worker. Today, by contrast, only a handful of top execs make less than 100 times median pay.
If Conley’s bill becomes law, the ramifications could be huge.
That’s because we may soon know, for the first time ever, the exact ratio between CEO and median worker pay at every major American corporation that trades on Wall Street.
Five years ago, legislation that mandates this disclosure passed Congress and made it into law. Intense corporate lobbying has been stalling its enforcement, but the stall may soon end. The federal Securities and Exchange Commission finally appears ready to issue the regulations needed to enforce full pay ratio disclosure.
CEO-worker pay comparisons for individual companies will likely start hitting the headlines the year after next. With these new stats, taxpayers will be able to see exactly which corporations feeding at the public trough are doing the most to make America more unequal.
With this information, average taxpayers could then do a great deal. They could, for starters, follow Senator Conley’s lead in Rhode Island and urge their lawmakers to reward — with our tax dollars — only those corporations that pay their workers fairly.
By: Sam Pizzigati, Columnist, OtherWords; Associate Fellow, Institute for Policy Studies: The National Memo, March 25, 2015
“The Impossible Dream”: Conservative Scolds Have A Vision, But They Don’t Have A Plan
The New York Times‘ two conservative opinion columnists — David Brooks and Ross Douthat — aren’t always in sync. But they certainly agree about the problems afflicting poor and working-class Americans.
Each has written a column in the past week commenting on Robert Putnam’s new book (Our Kids: The American Dream in Crisis) about the growing quality-of-life gap between college-educated and high-school educated Americans. Brooks does a nice job of summarizing some of Putnam’s more alarming statistics:
Roughly 10 percent of the children born to college grads grow up in single-parent households. Nearly 70 percent of children born to high school grads do. … High-school-educated parents dine with their children less than college-educated parents, read to them less, talk to them less, take them to church less, encourage them less and spend less time engaging in developmental activity. [The New York Times]
These and related trends are indeed troubling, and it’s good that Brooks and Douthat are highlighting them, are troubled by them, and want Republican politicians to address them. If GOP candidates for high office spent half as much time focusing on such problems as they do promoting tax cuts for the rich, we’d all be better off.
Yet Republican lawmakers don’t slight those issues simply because they’d rather ingratiate themselves to wealthy donors. They also skirt them because the way that conservative policy intellectuals think about class convinces candidates for high office that there’s nothing that can be done politically to address the problem.
As far as Brooks and Douthat are concerned, the primary driver of bad outcomes among the poor and working class is culture, not economics. Yes, life is economically harder for people lacking college degrees than for those who have them, but life was hard — and in many cases much harder — for everyone, and certainly for the poor, in the past. And yet families formed and stayed together at much higher rates than they do today. Here is Douthat’s pithy statement of the conservative view: “In a substantially poorer American past with a much thinner safety net, lower-income Americans found a way to cultivate monogamy, fidelity, sobriety, and thrift to an extent that they have not in our richer, higher-spending present.”
When liberals read claims like this, they freak out. That’s in part because they believe that economics is a much more important variable than culture in explaining the social pathologies of the lower classes.
I’m inclined to give the conservatives the benefit of the doubt on this. Culture does matter. The poor and even middle classes did struggle much more in the past, in purely economic terms, than they do today. And yet they did form families and keep them together at much higher rates.
But what policies follow from this? That’s where I fear Brooks and Douthat go off the rails.
Brooks is a little more strident about it, and Douthat a bit more circumspect, but their advice is roughly the same: We need to combat the libertarian drift of American culture since the 1960s by taking a stand against “relativism,” “nonjudgmentalism,” and “permissiveness.” That’s because, while the upper classes may be doing fine in the easy-going, live-and-let-live culture bequeathed to us by the counterculture and sexual revolution, the lower classes clearly aren’t. What they need is more public shaming and scolding of irresponsible behavior.
What would this look like, practically speaking? This is the sum total of what Brooks recommends: “Reintroducing norms” has three steps. First, an unnamed someone — a newspaper columnist, perhaps? — needs to revive a “moral vocabulary.” Then we need to practice “holding people responsible.” (How we aren’t told.) Finally, because elites aren’t exactly beacons of virtue these days either, we need to hold “everyone responsible.”
That’s it.
Douthat’s proposals, contained in a single sentence, focus exclusively on the moral failings of the upper class “for failing to take moral responsibility (in the schools it runs, the mass entertainments it produces, the social agenda it favors) for the effects of permissiveness on the less-savvy, the less protected, the kids who don’t have helicopter parents turning off the television or firewalling the porn.”
All of this might add up to a plausible strategy for changing pathological behavior if it were wedded to concrete policies or a practical plan of action. But as it is, it’s just a micro-sermon vaguely advocating a bit of paternalism with a dash of noblesse oblige.
(I realize that Douthat has championed specific family-friendly policies in the past, but I don’t see how tweaking the child tax credit would meaningfully effect the kind of complex social pathologies he highlights in his recent column. A few extra dollars a month isn’t going to make it possible for a single mom to become a helicopter parent, let alone make it likely that a media executive will produce more wholesome entertainment.)
Back in the 1970s, founding neoconservative Irving Kristol proposed a more aggressive and explicitly political response to the post-’60s rise in permissiveness: government censorship of pornography and other forms of vulgarity. Nothing like this got enacted, of course, and it would be even less likely to catch on today. (A government-run firewall against porn, anyone?) But at least it was a policy proposal that, if it became law, might have contributed in a modest way to a change in mores.
By contrast, what Brooks and Douthat are advocating is guaranteed to have no such effect, because it can’t even be described as a policy proposal. That makes their writing on the subject an outgrowth of the libertarian drift of American culture rather than a strategy for combating it.
Brooks and Douthat know where they are and where they want to go, but they have no politically actionable ideas for how to get from A to B.
What do the conservative scolds want? The impossible.
By: Damon Linker, The Week, March 17, 2015
“Those Bad Things Are Gone Now”: How The Supreme Court Is About To Explode America’s Racial Wealth Gap
When discussing race, the conservative argument is best expressed by the famous words of Chief Justice John Roberts: “The best way to stop discrimination on the basis of race is to stop discriminating on the basis of race.” Translation: America has done bad things in its history, but those bad things are gone now, so we should move past those horrors and look forward.
Conservatives believe that if blacks and Latinos simply work hard, get a good education and earn a good income, historical racial wealth gaps will disappear. The problem is that this sentiment ignores the ways that race continues to affect Americans today. A new report from Demos and Brandeis University, “The Racial Wealth Gap: Why Policy Matters,” makes this point strongly. The report shows that focusing on education alone will do little to reduce racial wealth gaps for households at the median, and that the Supreme Court, through upcoming decisions, could soon make the wealth gap explode.
Wealth is the whole of an individual’s accumulated assets, not the amount of money they make each year. As such, in his recent book, “The Son Also Rises,” Gregory Clark finds that the residual benefits of wealth remain for 10 to 15 generations. To understand why that matters, consider the fact that Loretta Lynch, Obama’s recent nomination for U.S. attorney general, is the great-great-granddaughter of a slave who escaped to freedom. (That’s four generations). Consider also that most people on Social Security today went to segregated schools. (That’s two generations.) If Clark is correct in his thesis, then the impacts of wealth built on the foundations of American slavery and segregation will continue to affect Lynch’s great-great-great grandchildren.
It is therefore unsurprising that addressing just one aspect of this disparity cannot solve racial wealth gaps. Demos/Brandeis find that equalizing graduation rates would reduce the wealth gap between blacks and whites by 1 percent, and between Latinos and whites by 3 percent at the median. Equalizing the distribution of income would only reduce the wealth gap by 11 percent for blacks and 9 percent for Latinos. Part of the durability of wealth gaps is the disproportionate benefits that whites still enjoy: They face less job market discrimination and are more likely to reap a big inheritance, for example. This means that the returns to education and income are generally higher for whites. But even after controlling for these returns, income and education can’t explain the entire wealth gap.
Because America’s primary vehicle for wealth accumulation is our homes, much of the explanation of the racial wealth gap lies in unequal homeownership rates. According to the Brandeis/Demos analysis, equalizing homeownership would reduce the racial wealth gap by 31 percent for blacks and 28 percent for Latinos. This effect is muted because centuries of discrimination—including racial exclusion from neighborhoods where home values appreciate, redlining, and discriminatory lending practices—mean that people of color are segregated into relatively poor neighborhoods. Indeed, in 1969, civil rights activist John Lewis bought a three-bedroom house for $35,000 in Venetian Hills, Atlanta. He and his wife were the first black family in the middle-class neighborhood. In his book, “Walking with the Wind,” he notes that, “within two years… the white owners began moving out.” Had the value of his house simply kept up with inflation, it would be worth $222,881 today. But Zillow shows that three-bedroom houses in Venetian Hills, Atlanta, are currently selling for around $65,000 to $100,000.
Systematic disinvestment in communities of color means that even when blacks and Latinos own their homes, they are worth far less than white homes. In addition, blacks and Latinos are targets of shady lending. They are more likely to be offered a subprime loan even if they are qualified to receive a better rate. In the wake of the financial crisis, big banks like Blackstone scooped up foreclosed homes and are now offering them to people of color to rent, further pulling wealth out of these communities to benefit rich whites.
The financial crisis had a disparate impact on people of color. A Center for Responsible Lending report examined the loans originated during the subprime boom (2005 to 2008), and found that blacks and Latinos were almost twice as likely to have foreclosed during the crisis. The New York Times reported that Wells Fargo “saw the black community as fertile ground for subprime mortgages, as working-class blacks were hungry to be a part of the nation’s home-owning mania.” They discovered that loan officers “pushed customers who could have qualified for prime loans into subprime mortgages” and “stated in an affidavit… that employees had referred to blacks as ‘mud people’ and to subprime lending as ‘ghetto loans.’”
These problems are troubling, but, as unlikely as it seems, things are about to get even worse. The Supreme Court is set to decide Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, a landmark case challenging the disparate impact test, which allows a practice to be considered discriminatory if it disproportionately and negatively impacts communities of color, even if a discriminatory intent can’t be proven.
The case involves an excellent example of why disparate impact is so important: Nearly all of the tax credits that the Texas Department of Housing and Community Affairs had approved were in predominantly non-white neighborhoods. At the same time, the department disproportionately denied the claims in white neighborhoods. A federal judge decided that regardless of racial intent, the result had a “disparate impact” and increased neighborhood segregation. As Nikole Hannah-Jones has extensively documented, disparate impact has been crucial in holding banks accountable. For instance, the Justice Department used it to settle with Bank of America for $335 million after it was discovered that a mortgage company purchased by BofA had been pushing blacks and Latinos into subprime loans when a similar white borrower would have qualified for a prime loan. Because there was no official policy that required blacks and Latinos to get worse loans, the case would not have been won but for the disparate-impact statute.
The Supreme Court has already decimated the Voting Rights Act, opening the door for onerous restrictions on voting. They upheld a law banning affirmative action at state universities and have already crushed integration efforts at K-12 schools. Worryingly, as Demos Senior Fellow Ian Haney López told ProPublica, “It is unusual for the Court to agree to hear a case when the law is clearly settled. It’s even more unusual to agree to hear the issue three years in a row.” Given the importance of neighborhood poverty to upward mobility and wealth building, this case had the potential to be the most destructive, dramatically curtailing opportunity and making the wealth gap into a chasm. As Patrick Sharkey notes, “Neighborhood poverty alone accounts for a greater portion of the black-white downward mobility gap than the effects of parental education, occupation, labor force participation, and a range of other family characteristics combined.”
Demos and Brandeis suggest policies to boost homeownership, like better enforcement of anti-discrimination laws, lowering the cap on the mortgage interest deduction so blacks and Latinos can benefit and authorizing Fannie Mae and Freddie Mac to allow homeowners to modify their loans. In addition, America needs to systematically invest in poor neighborhoods. Equalizing public school education funds for poor and nonwhite schools would increase home prices in poor neighborhoods. In addition, a baby bond program would directly reduce wealth gaps by giving children money that could be used for a down payment on a house or an investment in their education. What’s clear is that we cannot simply hope that wealth gaps will disappear. These gaps were created by racially biased federal policies and need to be remedied by public policy as well. Government created the white middle class in the 1950s; now it’s time to create a black and Latino middle class. The Supreme Court, with its supposedly race-neutral philosophy, will only make it more difficult to close racial wealth gaps.
By: Catherine Ruetschlin, a Senior Policy Analyst at Demos & Sean McElwee, Research Assistant at Demo: Salon, March 14, 2015
“Three Legs Of The Conservative Stool”: The ‘War On Women’ Is The Latest War That Republicans At CPAC Want To Win
All political movements, to some extent, sound nonsensical to outsiders because groupthink elides the needs for certain connective thoughts to be voiced aloud. CPAC, a celebration of orthodoxy among a bullet-point-equipped faithful who all try to sound more stridently like everyone else than anyone else, magnifies this tendency to maddening degrees. Two separate subjects are mentioned with the causal relationship omitted. Facts appear without context; good things are named as though good outcomes inevitably eventuate. When cause-and-effect statements appear, they aren’t much better.
By this process, you can arrive at a conclusion like this: To win the War on Women, you better put a ring on it.
At CPAC, conservatives dedicated an entire panel to “The Future of Marriage.” One could be forgiven for assuming it tackled the issue via the sub-topic “Gays, and the Ickiness Thereof,” because that was the default assumption among those attending CPAC as part of an ongoing More Jaded Than Thou contest. Instead, the panel bypassed halting marriage equality and went straight for a return to celebrating a time when women had few stable life opportunities outside of marriage.
Heritage Foundation vice-president Jennifer Marshall signaled the need for conservative candidates to “be indivisible” on the matter of the “very interrelated” three legs of the conservative stool – marriage, small government and a stable economy. What a weird stool. Why these three things? Why not neighborhood bowling leagues, usury and the gibbet?
Marshall answered that question by explaining that “the sexual revolution has made relationships between men and women much more challenging”. Naturally, as polyamory and bed hopping have had very little effect on bowling or usury. Still, it was an important statement to make, because it implied that women had been complicit in the destabilization of their economic security.
Heather MacDonald of the Manhattan Institute – employer of such luminaries as Iraq War stooge Judith Miller, invariably wrong William Kristol and racist hack Charles Murray – was willing to go even further than Marshall in placing the blame for women’s economic travails on alienation from “the family” and then further blaming women’s thoughts for turning women against where they belong.
“Feminists have taken over college campuses. They run the bureaucracy. People are losing the vocabulary to say fathers are essential,” she said. “I predict there’s going to come a time when Father’s Day is hate speech because you’re dissing a lesbian couple.” Piles of unsold real, comfortable Wrangler Jeans clogging up landfills. Tasteful Methodist sex harnesses going unsold at tasteful Methodist sex harness shops. Ships teeming with rear spoilers for family sedans being turned away from the nation’s harbors. A chilling vision of dadless things to come.
Nonetheless, vague problems demand vague solutions. Thus MacDonald advised 2016 Republican candidates: “If you want to eliminate poverty overnight, you can wipe it out by having stable, two-parent households.” (Note the weaseling inclusion of “stable.”) After all, we determine income inequality by households, so take two people living together in poverty, marry ‘em, and presto! No more poverty. Statistical problems go away if you stop gathering statistics. That only sounds nutty if you don’t already know that global warming isn’t real because thermometers lie.
That more or less made sense if you’d listened to the previous hour’s explanations that everything is bad in the inner city, and too many urban folks don’t get married, so, like, the two things are connected, man. Meanwhile, according to MacDonald, “The most affluent members of American society are still getting married.”
Shortly after this, Wade Horn, former assistant secretary for children and families, weighed in with the observation that marriages save money and diversify productivity because “marriages allow for economies of scale and specialization” within the household. (For those scoring economies of scale at home, presumably because specialization has made one of you an actuary: economies of scale good when you are married to someone; bad when buying prescription drugs for nations.) When your bridesmaids give you bewildered looks at the altar, point at your groom and cross their eyes while miming throwing up, just hold your hands apart to show how much he scales your economy.
To a cynic, that might read like a heartless thought. But do you know what’s really heartless? Government. “Children need their mothers and fathers. There is no government program that can possibly substitute for the love and guidance and sense of place in the world that parents provide,” MacDonald explained. “What we’re seeing now in the inner city is catastrophic. Marriage has all but disappeared. When young boys are growing up, they grow up without any expectation that they will marry the mothers of their children.” And she’s right; people who think government will love you or your abandoned children are idiots. The Department of Love has been a failure since 1967, and large faceless institutions will never care for human beings no matter how well they claim to mean. Those “inner city” people shouldn’t have been trying to hug America. They should have hugged something more practical like each other and that smiley face from Wal-Mart.
But if these problems and solutions got too specific for you, there was always Kate Bryan of the American Principles Project and moderator of “The Future of Marriage in America” panel. Sometimes it’s all just The Culture. The Culture — the Great Silent Chobani — depicts marriage as negative. Example: “The old ball and chain.” Why, if we could just get rid of this expression that zero non-horrible people have used unironically for at least a generation, we could have this thing licked in no-time. Women, inequality, stability, stools, the Whole Chobani. Good talk, everyone.
By: Jeb Lund, The Guardian, February 28, 2015
“A Handy Way To Shift The Discussion”: How Republicans Will Use Scott Walker’s Lack Of A College Degree To Stir Class Resentment
Since we’re now all fascinated by Scott Walker, there’s been some discussion in the past few days of the fact that Walker would be the first president in many decades who didn’t have a college degree. He left Marquette after four years, and though he apparently was quite a few credits short of graduating, most people would regard it as an unwise career move when you’ve come that far. Nevertheless, Walker did fine for himself, and some conservatives are now holding up his example as a triumphant rebuke to liberal elitism. Anticipating the scorn Walker will receive from those elitists, they rattle off lists of the high-achievers who didn’t get a degree, like Bill Gates or Mark Zuckerberg.
From what I can tell, the only liberal who has actually said that Walker’s lack of a degree is problematic was Howard Dean, in an appearance on MSNBC’s Morning Joe. But Dean’s one comment keeps getting cited (see Glenn Reynolds or Deroy Murdock or Charles C.W. Cooke or Chris Cillizza) as evidence that “liberals” are looking down their snooty noses at Walker, and by extension, at the majority of Americans who don’t have a college degree.
Which leads me to believe that this is a vein Republicans may be tapping into repeatedly, particularly if Walker becomes the GOP nominee. It wouldn’t be anything new, though if he himself indulged in it, Walker could come by resentment of pointy-headed intellectuals a little more honestly than, say, George H.W. Bush, graduate of Phillips Andover and Yale, who sneered in 1988 that Michael Dukakis represented the “Harvard boutique.” Walker also recently started battling the University of Wisconsin (beloved within the state, but about which voters in Iowa have no similar feelings, I’m guessing), which should help him portray himself as a crusader against the tenured enemies of real Americans.
Anti-intellectualism has often been an effective way for Republicans to stir up class resentment while distracting from economic issues. It says to voters: Don’t think about who has economic power and which party is advocating for their interests. Don’t aim your disgruntlement at Wall Street, or corporations that don’t pay taxes, or the people who want to keep wages low and make unions a memory. Point it in a different direction, at college professors and intellectuals (and Hollywood, while you’re at it). They’re the ones keeping you down. You got laid off while the CEO took home $20 million last year? Forget about that: The real person to be angry at is a professor of anthropology somewhere who said something mean about Scott Walker because he doesn’t have a degree.
There are going to be more than a few Republicans who see in that argument a handy way to shift the discussion away from economic inequality while still sending the message that they’re on the side of ordinary folks. Here, for instance, is Rush Limbaugh yesterday:
The stories are legion of all the great Americans, successful, who have not graduated from college. And of course the two names that come to people’s mind right off the bat are me and Steve Jobs. And then some people throw Gates in there. So there are three people who have reached the pinnacle, who have not gone to college, and those two or three names get bandied about all the time in this discussion.
But it doesn’t matter. To the elites, that doesn’t matter, it doesn’t mean that they are qualified to be in the elite group. And the elite group in Washington is what we call the ruling class or the D.C. establishment, both parties, or what have you. And it’s especially bad in the Drive-By Media. That is one of the most exclusive and I should say exclusionary groups of people that you can imagine.
If you look at it as a club and look at the admittance requirements, it is one of the most exclusives things to get into. It doesn’t matter how successful you are, doesn’t matter how much money you make, whether you’re more successful than they are, whether you earn more than they do, whether you have a bigger audience than they, doesn’t matter, you are not getting in that club.
Something tells me that somewhere at the RNC there’s an intern who just got an assignment to monitor every bit of mainstream and social media she can for any moment where a liberal says something condescending about Walker. Then Republicans can wave it about like the bloody shirt of liberal elitism. It’s a lot easier than coming up with an economic plan that doesn’t involve upper-income tax cuts.
By: Paul Waldman, Senior Writer, The American Prospect, February 17, 2015
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