Are YOU experienced???

September 17, 2008

What a topsy-turvy few weeks in the news it’s been!  Let me mention my highlights:

Federal Government declares it will let Lehman fail to protect the principles of the free market.  Rep. Barney Frank declares Sept. 15 Free Market Day.  Sept. 16 Federal Government effectively nationalizes AIG.  This under a Republican president!

John (Keating Five) McCain, the Republican candidate, lambastes the “greed” of Wall Street and calls for more government regulation.  Experience, Oscar Wilde said, is the name so many of us give to our mistakes.  Has John learned from his?   He did recently say that he knew little about economics.  Time to hit those textbooks, John!

Republicans, whiter and richer than ever, have a convention at which they rail against the elite.

Does experience matter?  OF COURSE – Palin has none…ooops, it doesn’t REALLY matter!

David Brooks, at sixes and sevens over the nomination of an airhead evangelical for veep practically endorses Obama-Biden.  What other conclusion can you draw from his recent column?  He just can’t face the facts of it.  (Shocked, shocked!!! that Republicans would nominate such a person simply because she assures their rabid base of religious nuts.)

News reports say that the Fed bailout of AIG may actually be quite profitable for the taxpayer, as was the loan bailout of Mexico in the 90s.  They charge high interest rates, and they get to call the shots, having dumped the shareholders.  Why not do this more often a reporter asks?  “That would be socialism…”

Electioneering Food for Thought

June 10, 2008

Some new statistics on the distribution of wealth in the USA.  I think those in my previous post on this topic are somewhat out of date.  As Lester Thurow pointed out years ago, 40% of the non-residential wealth (i.e., not your home values) is controlled by about 400 people and families in our democracy.  Lately, there has been a lot of huffing and puffing about the estate tax, known to Republican killjoys as the Death Tax.

Right now, the estate tax is on a downward path to zero, and then after 2010, it’s supposed to go back up to its original level.  This creates a rather queer situation for those deciding when they should kick off.  Aside from that, the idea that the estate tax is something that ordinary people have to be upset about is one of the more remarkable successes of Republican political propaganda.  

In 2006, about 23,000 tax returns kicked in the estate tax.  The top 5% of those estates held 40% of the wealth taxed.  (Forget about what wasn’t taxed!)  In other words, a restored estate tax would fall most heavily on those with more than $20 million.  That’s the target of the policy, not the small estate holders near the threshold of $1.5 million.  But no – give the feds a chance, and they’ll go after that fat middle, the $2-$5 million estates that comprise nearly 60%  of all taxable estates, but hold only 30% of the value.  Yes, that’s the conservative line.  We must protect the rights of the SUPER rich because WE will be next.  An interesting twist on an old idea…

Of course John Lennon had a nice twist on another old idea:  “You’re all fuckin’ peasants anyway…”

Who Rules? America’s Ruling Class

August 26, 2006

Here in America, the ‘C’ word is taboo: CLASS! We have no ruling class, and we have no classes, except for the middle-class, which includes just about everyone except for Bill Gates and the few homeless people still left. This fuzzy way of thinking about society obscures the facts, and is partly an example of what right-wing Republicans like to use to explain why working-poor people will vote for a party that advances policies that are really in the interest of a tiny, wealthy minority: voting their “aspirations.” Well, here’s to hope!

Now, I’m not arguing for a Marxist concept of rulers-proletarians and all that, but the fact is, every society of any complexity has a ruling elite, and whether or not they constitute a social class, well that’s a knotty problem for sociologists to argue over. Was the Soviet upper crust a “class” rather than a ruling clique? Maybe, but here in the USA, we have what looks like a pretty tried and true ruling class.

Having a ruling class does have its advantages. After all, somebody has to run things, or at least provide cultural continuity.  (Some call this ideology).  I am more concerned with whether the ruling elite are “sensible”, open to some change, and comprise factions, of which one might be a liberal, compromising group. That way, the ruling class can allow new members once in a while, change with the times, give up privilege at times, and generally allow society to evolve instead of lurching along with violent rebellions when people get fed up with being treated like cattle. I guess that’s the Edmund Burke concept of a ruling class. So even though things can be relatively democractic, there is still a group in charge, if only because they have so much money, time on their hands to do all the politicking, they all know each other, and they’ve been running things for a long time. (A few hundred familes in the USA control more than 40% of the national wealth.) Because, as everyone knows, the easiest and most common way to be a member of this class is to be born into it.

American’s notions of middle class are woefully at odds with the facts now, and in the past. We all think about ancient society as being structured like a pyramid: pharaoh on top, then some priests and scribes, and then a lot of poor jerks who do the heavy lifting of schlepping stones, tending fields, herding goats and the like.  Most people are way below the pinnacle, which includes only a tiny population of the privileged ruling elite.

A more recent incarnation of the social pyramid is the way it’s used to describe feudal society, or the ancien regime before the French Revolution: King at top; some nobles and priests; then the peasant mass. Enter the middle class – the thrifty shopkeepers, tradesmen, and craftsmen, merchant princes etc. who occupy the sliver of society between the king/noble/priests and the peasant mass. They were called the middle class because they were in the middle between those two groups, but they too were a tiny portion of society. Nowadays, we have a bizarre notion of that class.

Today, in America at least, we have the bell-curve view of social structure. We have the ruling elite way off at the right hand side of the income distribution curve, and we have the really miserably poor way down on the left, but most people are in the middle, the middle class! The basic error is to associate the term middle-class with the notion of “average” or “typical”. Thus, the fat center of the bell-curve is seen by many as the habitat of the American middle-class. I would argue that our society is still pretty much the pyramid as in ancient days: we have the ruling elite, however democratically constrained they may be; and we have the poor and the working poor, and the working-class (which no one thinks exists anymore because all of its members are now, or think they are middle-class); then we have the real middle class, just where it always is, a thin sliver of privilege in between the elite and the rest of the mass.


Instead of looking at a bell-curve distribution, we should look at a cumulative distribution curve, which would look something like the one above. The bottom axis is income, lowest to the left, highest to the right. Almost nobody has an income of zero, so that’s where the graph starts. About half way up the left hand axis, percent of USA population, we have a pretty low income, about $45,000 for a family of four. Half of the households have a lower income, half have a higher one. Way off at the right, we see a household income of $200,000; about 95% of the households in America make less than that. And waaaay off to the right, off the chart, are the super high incomes, including Bill Gates, and nearly everyone makes less than that! These numbers are rough, but the distribution curve is true. And the middle class is right where it always has been; a sliver off to the right of nearly everyone else on the income curve, but to the left, lower than, the really rich people in the society.

American middle-class people don’t like this notion because they protest that “we’re not rich!” And they are not, compared to the upper crust, but compared to the rest of the USA? the rest of the world? definitely! The median income for a household in the USA (3.5 people) is about $45,000, so a lawyer, accountant, engineer, etc. even if married with child is going to be well above that level most likely soon, if not right out of school. So that’s more money than half of the rest of the USA – and how is that other half living?! Well, wealth is all relative to something, right? People feel poor just because they can’t jet to Europe whenever the urge takes them, and then complain about people living ‘well’ on welfare. I’d like to see them try it.

So, middle-class America, the real one, I mean, the professionals, the white collar drones and entrepreneurs making $50K, $70K, $100K a year or more for your household – all you dual income familes with gross annual incomes over $120K a year, stop your complaining! You may not be in the ruling elite, but you have a pretty cushy existence. Would you like to be below the median? And all you folks who aspire to a “middle-class” lifestyle on a barely or lower-than-middle-class income and educational level- stop fooling yourselves. You’re on the bottom of the food chain so you should vote and think accordingly.