The Rich are Different

by MICHAEL WINSHIP

Washington, DC, is a Potemkin village of alabaster and marble where the perpetually stalled and broken escalators of the city’s subway system are a perfect metaphor for the government’s inability to generate positive, upward movement. Yet with all the calumnies that are committed on an hourly basis behind the facade of our nation’s capitol, what had local media there outraged a few days ago? Lemonade.

Seems a TV news cameraman caught a county inspector in an affluent Washington suburb trying to shut down a kid’s lemonade stand just outside the Congressional Country Club during the recent US Open. And if that wasn’t bad enough, he slapped the enterprising tikes — who were raising money to fight pediatric cancer — with a $500 fine.

As the June 18 Washington Post reported, for a while it seemed “the all-American rite of passage might instead become a master class in government overreach,” yet public anger was so immediate and vociferous the fine was quickly revoked and the youngsters permitted to reopen down a side street a few yards away.

But these weren’t your garden variety, neighborhood moppets, selling drinks from Mom’s Tupperware pitcher on a card table near the sidewalk. For one thing, according to the Post, “There was a tent for shade, five plastic coolers, and a couple of industrial steel ones packed with ice and cans of Coke and Diet Coke. For the fundraiser, the kids’ parents had also secured cases of bottled lemonade wholesale…”

For another, among those helping out and defending their boys and girls were the former head of Lockheed Martin and the Red Cross and members of the Marriott family. “When something’s right you stand up for your beliefs,” Carrie Marriott, wife of the hotel heir, said. “That’s what America’s about. It’s about free enterprise. It’s about taking an idea, making it happen, and making it successful.”

Coincidentally, the very next day, the Post reported that total compensation was up an average of more than 20 percent last year for the Washington area’s highest paid executives. Among them, Ms. Marriott’s father-in-law, J. Willard Marriott, Jr., who in 2010 earned nearly $10 million. The report was part of the newspaper’s investigation of so-called “breakaway wealth” among the nation’s richest.

“The evolution of executive grandeur — from very comfortable to jet setting — reflects one of the primary reasons that the gap between those with the highest incomes and everyone else is widening,” according to the Post. “For years, statistics have depicted growing income disparity in the United States, and it has reached levels not seen since the Great Depression. In 2008, the last year for which data are available, for example, the top 0.1 percent of earners took in more than 10 percent of the personal income in the United States, including capital gains, and the top 1 percent took in more than 20 percent…

“Other recent research, moreover, indicates that executive compensation at the nation’s largest firms has roughly quadrupled in real terms since the 1970s, even as pay for 90 percent of America has stalled.”

The reasons? “Defenders of executive pay argue, among other things, that the rising compensation is deserved because firms are larger today. Moreover, this group says, more packages today are based on stock and options, which pay more when the chief executive is successful.

“Critics, on other hand, argue that executive salaries have jumped because corporate boards were simply too generous, or more broadly, because greed became more socially acceptable.”

The enormity of this increase in executive compensation is reinforced by a new study that examines the proxy statements and financial filings of the companies that make up the Standard & Poor’s 500-stock index. Issued by the independent research firm R.G. Associates and titled “S. & P. 500 Executive Pay: Bigger Than… Whatever You Think It is,” the report finds that among the 483 companies they were able to analyze, the pay of 2591 executives was up 13.9 percent in 2010. Total, before taxes: $14.3 billion, almost equal to the GDP of Tajikistan, population: more than seven million.

At 158 of the companies, more was paid to those in charge than was shelled out for outside audit fees. And 32 of them paid more in top salaries than they paid in corporate income taxes.

As it turns out, this is not a uniquely American phenomenon. Despite the ongoing, international financial malaise, the British newspaper The Guardian notes that, “The globe’s richest have now recouped the losses they suffered after the 2008 banking crisis. They are richer than ever, and there are more of them — nearly 11 million — than before the recession struck.”

The annual wealth report by Merrill Lynch and Capgemini finds that the assets of these so-called “high net worth individuals” reached $42.7 trillion in 2010, a rise of nearly ten percent from the previous year at a time when, as The Guardian observed, “austerity budgets were implemented by many governments in the developed world.”

More than half of the world’s richest live in Japan, Germany and here in the United States. The annual “Executive Excess” survey from the progressive Institute for Policy Studies last September found that back in the seventies, only a handful of top American executives earned more than thirty times what their workers made. In 2009, “CEO’s of major US corporations averaged 263 times the average compensation of American workers.” And a USA Today analysis earlier this year found that while median CEO pay jumped 27% last year, workers in private industry saw their salaries grow by just 2.1 percent.

So how are many of those corporations addressing this gross inequity? By trying to cover it up.

Last year’s Dodd-Frank financial reform legislation requires publicly traded companies to report the median of annual total compensation for workers, the total compensation of the CEO, and the ratio between the two. Big business has lobbied loudly against the reporting requirement, and on Wednesday, the House Financial Services Committee voted 33-21 to repeal it.

The bill to repeal is sponsored by rookie Congresswoman Nan Hayworth (R-NY), whose official biography cites “reducing regulatory burdens on businesses” as one of her top priorities. Among her leading 2010 campaign contributors: leveraged buyout specialists Vestar Capital Partners, distressed debt investors Elliott Management and financial services giant Credit Suisse. Not to mention the anti-taxation Club for Growth.

Ernest Hemingway claimed that when F. Scott Fitzgerald once said to him, “The rich are different from you and me,” he archly replied, “Yes, they have more money.” Whether it’s true or not, the Hemingway in the story got it wrong. The rich not only have more money, they have more power, more clout — and more to hide.

Michael Winship is senior writing fellow at Demos, president of the Writers Guild of America, East, and former senior writer of Bill Moyers Journal on PBS.

 

 

Like What You’ve Read? Support CounterPunch
August 04, 2015
Vincent J. Roscigno
University Bureaucracy as Organized Crime
Paul Street
Bernie Sanders’ Top Five Race Problems: the Whiteness of Nominal Socialism
Herbert Dyer, Jr.
Is White Supremacy a Mental Disorder?
Ramzy Baroud
The Palestinian Bubble and the Burning of Toddler, Ali Dawabsha
Pepe Escobar
Reshuffling Eurasia’s Energy Deck — Iran, China and Pipelineistan
L. Michael Hager
The Battle Over BDS
Eric Draitser
Puerto Rico: Troubled Commonwealth or Debt Colony?
Colin Todhunter
Hypnotic Trance in Delhi: Monsanto, GMOs and the Looting of India’s Agriculture
Benjamin Willis
The New Cubanologos: What’s in a Word?
Matt Peppe
60 Minutes Provides Platform for US Military
Binoy Kampmark
The Turkish Mission: Reining in the Kurds
Eoin Higgins
Teaching Lessons of White Supremacy in Prime-Time: Blackrifice in the Post-Apocalyptic World of the CW’s The 100
Gary Corseri
Gaza: Our Child’s Shattered Face in the Mirror
Robert Dodge
The Nuclear World at 70
Paula Bach
Exit the Euro? Polemic with Greek Economist Costas Lapavitsas
August 03, 2015
Jack Dresser
The Case of Alison Weir: Two Palestinian Solidarity Organizations Borrow from Joe McCarthy’s Playbook
Joseph Mangano – Janette D. Sherman
The Atomic Era Turns 70, as Nuclear Hazards Endure
Nelson Valdes
An Internet Legend: the Pope, Fidel and the Black President
Robert Hunziker
The Perfectly Nasty Ocean Storm
Ahmad Moussa
Incinerating Palestinian Children
Greg Felton
Greece Succumbs to Imperialist Banksterism
Binoy Kampmark
Stalling the Trans-Pacific Partnership: the Failure of the Hawai’i Talks
Ted Rall
My Letter to Nick Goldberg of the LA Times
Mark Weisbrot
New Greek Bailout Increases the Possibility of Grexit
Jose Martinez
Black/Hispanic/Women: a Leadership Crisis
Victor Grossman
German Know-Nothings Today
Patrick Walker
We’re Not Sandernistas: Reinventing the Wheels of Bernie’s Bandwagon
Norman Pollack
Moral Consequences of War: America’s Hegemonic Thirst
Ralph Nader
Republicans Support Massive Tax Evasion by Starving IRS Budget
Alexander Reid Ross
Colonial Pride and the Killing of Cecil the Lion
Suhayb Ahmed
What’s Happening in Britain: Jeremy Corbyn and the Future of the Labour Party
Weekend Edition
July 31-33, 2015
Jeffrey St. Clair
Bernie and the Sandernistas: Into the Void
John Pilger
Julian Assange: the Untold Story of an Epic Struggle for Justice
Roberto J. González – David Price
Remaking the Human Terrain: The US Military’s Continuing Quest to Commandeer Culture
Lawrence Ware
Bernie Sanders’ Race Problem
Andrew Levine
The Logic of Illlogic: Narrow Self-Interest Keeps Israel’s “Existential Threats” Alive
ANDRE VLTCHEK
Kos, Bodrum, Desperate Refugees and a Dying Child
Paul Street
“That’s Politics”: the Sandernistas on the Master’s Schedule
Ted Rall
How the LAPD Conspired to Get Me Fired from the LA Times
Mike Whitney
Power-Mad Erdogan Launches War in Attempt to Become Turkey’s Supreme Leader
Ellen Brown
The Greek Coup: Liquidity as a Weapon of Coercion
Stephen Lendman
Russia Challenges America’s Orwellian NED
Will Parrish
The Politics of California’s Water System
John Wight
The Murder of Ali Saad Dawabsha, a Palestinian Infant Burned Alive by Israeli Terrorists
Jeffrey Blankfort
Leading Bibi’s Army in the War for Washington