FacebookTwitterGoogle+RedditEmail

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.

 

 

MICHAEL WINSHIP is senior writer of the weekly public affairs program Bill Moyers Journal, which airs Friday night on PBS.

May 05, 2016
David L. Glotzer
Welcome to Fortified Europe: the Militarization of Europe’s Borders
Adam Szetela
Beyoncé’s “Formation” and the Boutique Activism of the Left
Bruce Lerro
Lost at Sea: Left Liberals Have No Party
Paul Cochrane
Hot Air in the Saudi Desert: a Kingdom in Descent?
Brian Terrell
My Visit to a Las Vegas Jail
Judith Deutsch
The Military’s “Securitization” of Climate Change
Phyllis Bennis
Kunduz Bombing: Proof the Pentagon Should Not Be Allowed to Investigate Itself for War Crimes
Chad Nelson
When Compassion is Terrorism: Animal Rights in a Post-911 World
Dan Arel
Making Sanders’ Dream a Reality Through Political Activism
Kent Paterson
Ten Years Later: Reflections on the Legacies of Immigrant Spring
Serge Halimi
Why Firefighters are Against Free Trade
Andrew Stewart
Green Bernie or Green Party Machine?
Binoy Kampmark
Yuri Gagarin in Space: the Politics of Cosmic Discovery
Hayes Rowan
This Naming of Things
May 04, 2016
Kshama Sawant
It’s Not About Bernie: Why We Can’t Let Our Revolution Die in Philadelphia
Conn Hallinan
Baiting the Bear: Russia and NATO
Joshua Frank
Hanford’s Leaky Nuke Tanks and Sick Workers, A Never-Ending Saga
Paul Craig Roberts
TIPP: Advancing American Imperialism
Ted Rall
Hillary to Bernie Supporters: Don’t Vote for Me!
Eric Draitser
Hillary Clinton and Wall Street’s Neoliberal War on Latin America
Leslie Scott
The Story of Jill Stein: Putting People, Peace and the Planet Before Profits
Ann Garrison
Building the Greens Into a Mass Party: Interview with Bruce Dixon
Tom Clifford
Crying Rape: Trump’s China-Bashing
Lawrence Davidson
Getting Rid of Bad Examples: Andrew Jackson & Woodrow Wilson
Ellen Brown
Bank of North Dakota Soars Despite Oil Bust: A Blueprint for California?
Nelson Valdes
Is Fidel Castro Outside or Part of Mainstream Thinking? A Selection of Quotes
Jesse Jackson
Don’t Send Flint Down the Drain: Fix It!
Nathan Riley
Help Bernie Keep His Halo
Rivera Sun
Remembering Nonviolent History: Freedom Rides
Clancy Sigal
Rachel and the Isolationists: How Maddow Blew It
Laura Finley
Changing the Conversation About “The Woman Card”
CJ Hopkins
Coming this Summer … Revenge of the Bride of Sophie’s Choice
May 03, 2016
Gary Leupp
Hillary Clinton’s Foreign Policy Resumé: What the Record Shows
Michèle Brand – Arun Gupta
What is the “Nuit Debout”?
Chuck Churchill
The Failures of Capitalism, Donald Trump and Right Wing Terror
Dave Marsh
Bernie and the Greens
John Wight
Zionism Should be on Trial, Not Ken Livingstone
Rev. John Dear
A Dweller in Peace: the Life and Times of Daniel Berrigan
Patrick Cockburn
Saudi Arabia’s Great Leap Forward: What Would Mao Think?
Doug Johnson Hatlem
Electoral Votes Matter: Hillary Clinton or Bernie Sanders vs Donald Trump
Chris Gilbert
Venezuela Today: This Must Be Progress
Pepe Escobar
The Calm Before the Coming Global Storm
Ruth Fowler
Intersecting with the Identity Police (Or Why I Stopped Writing Op-Eds)
Victor Lasa
The Battle Rages on in Spain: the Country Prepares for Repeat Elections in June
Jack Rasmus
Is the US Economy Heading for Recession?
FacebookTwitterGoogle+RedditEmail