Let's Talk about Rich People, or Why Poor and Middle Class Republicans Are Stupid

There's a lot of debate right now over tax increases on the wealthy.  Obama and most Democrats suggest that extraordinarily rich Americans should honor their social contract and pay a more substantial tax rate than their secretaries, while Republicans argue that this is "unfair" and "socialist."

But let's look at how those people got rich. Most extremely wealthy people start with much less than they end up with.  Lloyd Bankfein, for example, attended public primary and secondary schools, lived in subsidized housing, and was the son of a US Postal Service employee. Now he's the CEO of Goldman Sachs.

Obviously, there are exceptions, but most people don't inherit all their money, not in the United States anyway. An industrialist's success depends on quite a few things: a well-developed infrastructure, a trained labor force, a political system that allows entrepreneurs to take risks and (in the US at least) some degree of protectionist policies to keep low-wage and labor-intensive jobs from migrating abroad.  Roads, bridges, high schools, universities, and the various economic tools that encourage entrepreneurship and domestic employment are all funded by government.  Despite the benefits of these publicly funded enterprises being tilted toward the mega-rich, the poor and middle classes often contribute a higher percentage of their income into the tax system than their employers.

Obama is trying to fix this via the Buffett Rule, based on an editorial by billionaire fund manager Warren Buffett in which he pointed out that he pays a lower tax rate than his secretary. 

And that's what the ultra rich oppose - the idea that they should have to pay more, or even the same, percentage of their incomes as the rest of us.  They own factories that hire up all the recent graduates of local public high schools, their shipping trucks run on public roads, their fuel and energy prices are kept artificially low by the state and federal subsidies and they are catered to by powerful officials at every level of government.  

Let's look again at Lloyd Blankfein, the man whose early success depended entirely on the opportunities afforded to him by public services.  Even his father's income at the USPS was subsidized by taxpayers.  Fast forward to now.  Mr. Blankfein made well over $14 million in 2010, about 417 times the average salary of a worker in the United States, and that was a down year. In 2006, he made $54.4 million; in 2007, he made $54 million.  And now, his accumulated wealth hovers around $450 million.  This is the same man who once joked that, as a banker, he's "doing God's work." Seeing how extravagantly the Lord must compensate his angels, I guess all the rest of us can do is pray that there's some gold left to pave the streets of Heaven when we get there.

But perhaps that's an unfair example, since Goldman Sachs controls almost $1 trillion in assets, so let's consider something a bit closer to home: Last year in Mississippi, the average CEO earned over $1.8 million in compensation, almost 68 times more than the median income of Mississippi workers. These are the CEOs of businesses like Trustmark, Sanderson Farms, Renasant, Parkway Properties, Hancock Holding, Eastgroup, Callon Petroleum, Cal-Maine Foods, and BancorpSouth.  All of these companies rely on public education to provide them with skilled laborers, whether it's a bank teller who went to Ole Miss, a geological engineer from Mississippi State or a line worker who's just earned a high school diploma or GED from a public high school.  The companies that have to ship things from their factories to various retail outlets depend on public funds even more.

Imagine how much it would cost Mr. Sanderson if he had to transport his chickens on a privately-funded road, one that would likely charge huge tolls.  And how much more would Mr. Patterson at BancorpSouth have to pay in wages if all of his tellers had attended private high schools and colleges instead of federal- and state-subsidized institutions.

Austerity measures had to be implemented at Sanderson Farms after public infrastructure was privatized andaccess to highways was restricted.

All the while, poor and middle class Republicans have been brain-washed by the rich, who have convinced many Americans that it's greedy to ask millionaires to pay their fair share and lazy to expect them to.  They cling to faux conservative values that at their very core chip away at the foundation of American democracy. Some of the people who would benefit the most from social programs like better access to family planning, public health insurance, and subsidized education, are the the ones whose opposition to these initiatives is the loudest.  It's irrational that a teacher in a public high school would support a Tea Party candidate who thinks the Department of Education is unconstitutional.  How can a man whose parents depend on their monthly Medicaid checks justify his support for a candidate who has called that safety net that so many people rely on an unconstitutional Ponzi Scheme?

Obviously there are smart Republicans, but they've listened to rich, well-connected politicians and their disillusioned ilk croak about Jesus and saving babies and death panels so much, that they've actually come to believe that there is somehow a moral - even religious - aspect to our tax code, our debt ceiling and our federal agencies.  They've allowed rich people to convince them that a flat tax represents equality, but this is a fallacy.  A 15% tax, for example, means a person making $50,000 will take home about $42,500 after income taxes alone.  That same flat tax would allow a person who made $10,000,000 to keep $8.5 million.  The rich argue that a tax increase would discourage spending and hurt the economy, but riddle me this: Is it logical to believe the spending difference between a man whose net income is 8.5 million dollars and a man whose net income is 5 or 6 million dollars will have any more than a marginal impact on the economy? Maybe he'll buy one less Ferrari that year. A flat tax spread across the entire range of incomes is unjust - equal percentages of income along the earnings spectrum represent vastly unequal financial burdens, and anyone who argues otherwise is a fool.  

Unfortunately, the fools today are many, and it's sad that "conservatism" in America has come to be associated with greed and ignorance. I was reading an essay last night by Oscar Wilde, and this quote seemed especially relevant:

"As for the virtuous poor, one can pity them, of course, but one cannot possibly admire them. They have made private terms with the enemy, and have sold their birthright for very bad pottage.  They must also be extraordinarily stupid." 

For context, Wilde was discussing how poor people should protest their socio-economic situation, and that suggesting that the impoverished accept additional burdens while the rich soar on the wings of "free market ideals" is insane. Wanting a better life is human nature; accepting a lower standard of living when it's not necessary is irrational. In fact, Wilde finds it "incredible" that "a man whose life is marred and made hideous by such laws [that make his life harder] can possibly acquiesce in their continuance," even if his "morals" would normally encourage him to do so.

The question, then, is what's more important to you - the welfare of millions or the ability of the uber-rich to shirk their societal obligations under the guise of conservatism and fairness? Those who choose to support an oppressive, backwards ideology that forces them to take on even heavier burdens because it's what they believe is "good and right" - an idea created and propagated by the people it benefits the most - might just be our generation's group of extraordinarily stupid people.

And they are to be pitied, not admired.

London, Day 1

My first impression of London couldn't be any better. The second I stepped off the tube at Holborn Station, I knew I was where I was supposed to be.  I looked like an idiot hauling over a year's worth of luggage through the station, and two old ladies were quick to point it out.  They were joking, of course, and when I told them I was moving here for graduate school and possibly (probably) a career afterwards, one of them snatched one of my bags up and helped me wag it up the stairs while the other one told me everything I have to do and see in London.

After I dropped my stuff off at High Holborn, the temporary housing I'm staying in until I can move to Bankside, I walked down Kingsway to LSE, where this was my first glimpse of campus:

And another...

I walked around for a bit more, grabbed a bite to eat (at a pub that was founded before America and located on Drury Lane), and went back to High Holborn to check into my room (check-in wasn't until 3:00).  After a quick nap, I walked around the area and found this little side street, full of cafes, restaurants and shops.

Everything I've seen in London so far is unbelievably British, whatever that means.  There are double decker buses everywhere, all the people I've had to ask for directions seem very hospitable and the weather has been perfect. Maybe I'm just really used to living in China, but when I saw people lined up (queuing) at the ticket counter, I almost had a heart attack.  I haven't seen anyone spit on the sidewalk, there are no overflowing trash cans, and I haven't seen a single dead animal hanging from a window.  Obviously, there are a lot of really great things about China, but London really demonstrates the huge cultural differences between China and the West, especially when you compare it with Shanghai. Instead of seeing fake Apple stores or massage parlors, there are handmade umbrella stores and local boat shops that look like this like this...

So, from the High Holborn area, I walked down to Victoria Embankment and onto some more touristy spots.  The architecture in London is amazing, and the lighting they use on the outside of buildings really showcases it.  My favorite thing, though, is the monuments - everywhere you look there's a sculpture or an obelisk dedicated the guy who engineered London's first sewage system, or to Queen Boudica, who led an uprising against the Romans in AD 61.  The sheer magnitude of British history is also amazing, and it's so well-documented along the streets via plaques and monuments that you don't even need to buy a history book.  The coffee shop I went to this morning for breakfast pre-dates the country I'm from.

Ok, this picture doesn't really fit here, and it's already on Facebook, but I wanted it to be on the blog, too, because I was very proud of it.  I'm still learning how to use this camera, so I surprised myself last night when this picture turned out almost exactly how I wanted it to. 

Alright, well that's all for now.  I'll just be rambling around London until classes start on 29 September, except for registration/orientation on the 21st.  I still haven't mastered the usage of "Cheers" but I gather that it's used kind of like 好 in Chinese and a bit less like "OK" or "alright" in American English. There's a party for incoming graduate students tonight at the Walkabout pub near Temple, so hopefully I'll meet a few people there.

Until next time,
Matthew

Hopping Across the Pond

Well, today's the big day.  In about 45 minutes, I'll depart Jackson International Airport for Houston, TX, and then to it's off to London.

I've been getting ready to move since I found out I got into LSE in February, so the past few days haven't really been stressful.  I'm more excited than anything, and I have very high hopes for the upcoming year.

Expect another post in 15 hours or so, when I get settled in my temporary housing at High Holborn.

Until then,
Matthew

High Points from the GOP Debate

Well, it'll actually be mostly low points, because if I stuck to high points only, this would be a pretty short post. I'm going to discuss each candidate separately.

Mitt Romney thinks green jobs are silly and that knowing how to start businesses is akin to running the world's biggest economy.  At least he's sensible on things like Social Security.  But, then he started talking about immigration, which he thinks a fence would fix.  Then he said there's a "magnet" attracting illegal immigrants to the US, which I presume we know colloquially as the American Dream.  Very strange, Mitt.  He's kind of a joke sometimes, but I would have considered voting for him if he had screamed "NO!" when Brian Williams asked if he's a member of the Tea Party.  Instead, we got another obtuse "sorta kinda" answer. Pathetic.

I was just really jealous of Jon Huntsman's hair all night. Why, oh Lord, was I not blessed with such supple magnificent locks?! Also, cool it on the spray tan, brah.  His gold tie was a little too matchy-matchy (with his skin), too. Jon, you probably should have stayed in China, let Obama finish his second term, and he might have supported you as a popular ex-president in your (likely successful) bid for the president as a moderate Republican in 2016.  Oh well, now you're forgettable, and you'll probably be forgotten. BUT WAIT, there was a sensible moment when Huntsman said he was anti-pledge, suggesting that he's willing to listen to academics and economists and professionals who say taxation is necessary for a government to be effective.  He's also the only Republican on that stage who had the balls to say "I believe in climate change and evolution, because it's a scientific truth". Bravo, Mr. Huntsman.  Bravo.

Rick Perry's modus operandi tonight was to ignore questions and blame the federal government for EVERYTHING.  When asked why Texas has the worst heath insurance record of any state (compared with Romney's MA, which has an individual mandate and almost no uninsured constituents), he said that people would rather be able to choose for themselves.  Oh really?  I'd rather the government help me by providing affordable insurance instead of letting me "choose" that I'd rather feed my kids than take them to the doctor.  He also thinks Social Security is unconstitutional and a Ponzi Scheme (which Karl Rove and Dick Cheney think is a little too right-wing...ummm...WTF). Apparently, Perry's not quite sure what a Ponzi scheme is, or the Constitution for that matter.  He was sensible, though, on his HPV executive order, where he required 12 year old girls to submit to the vaccine (with an opt-out option, obviously), and it was nice to see him defend a good decision.  Unfortunately, that was overshadowed by the fact that he thinks we should employ predator drones to monitor the US-Mexican border, along with 3,000 more federal border patrol agents (wait, I thought you opposed government spending? Can't border patrol be privatized?).  Perry didn't do anything tonight except snake his way around relatively straightforward questions, mispronounce "Keynesian", and prove once and for all that he is completely unfamiliar with science and completely full of bullshit.  Let's not forget that he killed an innocent man on death row once.

Michele Bachmann was surprisingly quiet in the beginning (and middle and end), except when she vowed to basically appoint 15 Republican (read: Tea Party) Senators.  Bachmann got a little sassy about energy dependence, arguing that we should life all restrictions on energy production.  She wants to make gas cheap so we can use it more freely, probably because she thinks 1) climate change is fake and 2) God put oil here for humans to burn. And apparently Bachmann thinks a country can yield national sovereignty to its own federal government.  Maybe I'm too stupid to understand her political science theories, but I doubt it.  Her economic theories are beyond me, too, apparently, since an immigrant who comes here legally to work and thus pays taxes can somehow be a drain on the American tax payer. And, like, for real, what the HELL is on top of your head?? You need to call Palin and see what's up. Then you need to GTFO.

Newt Gingrich made a fool of himself yet again. He accused Brian Williams of promoting Republican infighting (really, though, isn't that just like a few hens pecking each other to death over a few spilled kernels of corn?).  Then he admitted that his only goal was to get rid of Obama.  The worst Gingrich idea, though, was when he suggested providing Pell Grants to all K-12 students and their families so they can pick which charter school they want to attend.  Horrifying.  He also thinks immigrants should be forced to learn English and American history, which must have been super awk for him to say standing so close to Michele Bachmann.  And HOW DARE YOU INSULT BEN BERNANKE you ignorant prick.

Ron Paul is a crackpot anarchist, which is weird since HE'S RUNNING FOR A GOVERNMENT POSITION.

Rick Santorum just looked terrified all night, his jacket was ill-fitting, and he was unusually squirmish (a frothily fitting description).  He can't be president because he'd be too easy to make fun of.  At least he's anti-isolationist, I guess, although I wish he'd isolate himself in an insane asylum somewhere.

Herman Cain's 9-9-9 Plan (or Nein! Nein! Nein! Plan according to Andy Borowitz) is really stupid. He agrees with Ron Paul that the government shouldn't be responsible for air safety (i.e. dismantle TSA and the Department of Homeland Security). So crazy.

OVERVIEW: These people are nuts.  They fight with each other like kids in a school yard, and they just scream shit like "class warfare" and "bureaucratic socialism" and "Obamacare" - and then they wait for applause.  It's completely inappropriate to host this circus in the Ronald Reagan Library, since (as Think Progress pointed out earlier today) he would be "an outcast" in the modern GOP.  Michele Bachmann and Rick Santorum are out, because they both looked weak and were largely ignored by the moderators.  Herman Cain, Newt Gingrich and Ron Paul were never even serious contenders, which only leaves Jon Huntsman, Rick Perry and Mitt Romney.  Huntsman started off weak, but he came back really strong when he painted himself as a smart, pro-science candidate who appreciates the values of fiscal conservatism but recognizes the merits of Keynesian economics.  Perry and Romney were trying to appeal to the Tea Party, which isn't what's going to win this election.  Huntsman may not be too popular with the most conservative fringe of the GOP, but his ideas will reverberate among those who consider themselves moderates.

I'm extremely pretty liberal, but Huntsman convinced me to vote for him tonight because he was sensible and honest (and again, that hair!).  That's why I think he's the clear winner of the GOP Debate.

"Sanction China for Unfair Trade Practices"

Inflammatory, right? Well, Mitt Romney has vowed to make this one of the five executive orders he'll issue on the first day of his presidency. He claims that he'll support free trade policies like no president in history (unless they don't benefit America's big business bosses), but apparently he thinks it's a good idea right now to ostracize China, whose rapidly expanding middle class is creating a huge demand for American exports. Sounds stupid to me.

 And while we're here, let me point out a stupid analogy he made about phones and the economy, in which he claimed that Obama's "payphone strategy" isn't working because he's pushing quarters in the slot (maybe hundreds of billions of dollars of stimulus money injected into the economy is like quarters for Mitt?), but the payphones are no longer connected. Paraphrased: "Well, Mr. Obama, we're living in a smart phone age and payphones don't work anymore."

Actually, Mitt, even though a new BlackBerry may look cooler, payphones do still work. Unfortunately, America can't afford your "smart phone strategy" right now because we're broke as hell, i.e. THE PROBLEM. Looks like it's time to break out the quarters, a-hole. Here's a better analogy: There's a payphone near your house, but you'd rather have a new iPhone 4 because it looks good and everyone will think you're cool. So you save up your money (by using a payphone), and you buy one, only to realize that it was a stupid purchase because now you're out of money and have to pay a lot to use it. Hmm, sounded good on paper, but oh shit, looks like it didn't work in the real world. I guess the only option now is to cling to that outdated free market ideological nonsense iPhone and blame your fiscal woes on the payphone users.

Romeny also seems to hate smart people, parroting the Tea Party's anti-academic rhetoric. Again paraphrased: "I don't surround myself with professors and academics and economists who sit alone behind a desk all day. I have real world experience." Yeah, my dad's owned a pretty successful small business for almost 20 years. Maybe he should replace Ben Bernanke and lead the Fed in making decisions about federal funds rates, repurchasing agreements and money creation. I bet his experience in wholesale electrical supplies has prepared him to make decisions about regulatory institutions like the Asset Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, colloquially known as the ABCPMMMFLF (ain't that a bitch to remember). Sure, it's possible he'd be able to make successful fiscal and monetary policy decisions based solely on his business skills, but I kind of doubt it.

And what the hell?! Mitt Romney claims to have business experience in the "real world" that Obama doesn't have. Oh really? See, I thought Barack Obama came from a poor family, worked his way up the social ladder, to Columbia and then to Harvard, became a very successful public servant and eventually president of the United States. And I thought Mitt Romney's father was an extremely wealthy businessman and influential politician, who was CEO of American Motors and governor of Michigan, and who named his son Mitt after his best friend, J. Willard Marriott, THE FOUNDER OF MARRIOTT HOTELS. Mitt's story of struggle and triumph is inspiring. Not. Stop bullshitting us with your "I'm just like you" story. Because you're not.

To Mitt's credit, he did say that he thinks Obama is a good person and a good American, so that was a nice contrast to ignorant Michele Bachmann and her ilk.

This is going to be a rough year.

BREAKING: Barack Obama joins the Tea Party

In a devastating blow to the Environmental Protection Agency's already frail public image, President Obama has gone on the attack once again, rejecting EPA administrator Lisa Jackson's suggestion for updated air quality standards and effectively nullifying years of scientific research and pro-environment lobbying in one fell swoop.

Obama cited one of his executive orders from earlier this year that requires environmental regulations to be "based on the best available science". This was an attempt to discredit the EPA's scientific rationale for trying to impose stricter ozone regulations, but claiming that research conducted over the last five years is somehow inadequate or outdated is preposterous, and he should be ashamed for disguising his political weakness as a call for academic integrity. Propping up hack science in the public sphere has been a right-wing tactic for as long as I've been paying attention to politics - from family planning, to environmental policy to marriage equality. Barack Obama, welcome to the Tea Party.


Perhaps President Obama knows something the public does not, and the toxic industrial emissions that contributed to thousands and thousands of premature deaths just five short years ago - not to mention innumerable respiratory, cardiovascular and childhood development problems - has reconsidered its position on being harmful. How thoughtful!

Taking that into consideration, I guess this 1999 report is now outdated and irrelevant, as well, the one that says "Ozone [which the EPA's recent proposals were aimed at reducing], when it occurs at ground level, presents a serious air quality problem in many parts of the United States. When inhaled—even at very low levels—ozone can cause a number of respiratory health effects". That's great news! Because back in 1999, ozone was proven to have adverse effects on young people, old people, people with asthma and other respiratory diseases, adults who spend a significant amount of time outdoors and some completely random healthy people. Since that includes almost everyone on the planet, I guess all we can do is thank God that smog 12 years later is no longer dangerous. Let's try not to breathe a collective sigh of relief, though, just...well...it might still be kind of risky.

Obama even tried to argue that the new regulations would further impede businesses trying to crawl out of the recession, and that it would discourage employment growth. For a second, I thought Christine O'Donnell or some other Tea Party magician had put a mind control spell on poor old Barack:

I have continued to underscore the importance of reducing regulatory burdens and regulatory uncertainty, particularly as our economy continues to recover. With that in mind, and after careful consideration, I have requested that Administrator Jackson withdraw the draft Ozone National Ambient Air Quality Standards at this time.

At its core, the notion that environmental regulations hinder economic growth is bullshit. In the United States, there is almost zero empirical evidence that suggests environmental regulations reduce the international competitiveness of our domestically-manufactured goods [1]. As for economic growth and jobs creation, common sense should tell us that stricter regulations spur innovation. Requiring manufacturers to invest in cleaner technologies further diversifies the economy, creating MORE JOBS in a sector that has previously been all but ignored in the US. Opposing environmental regulations and supporting the theory of free market economics are not the same thing. On the contrary, it demonstrates a clear lack of faith in the strength and sustainability of the American economy.

Alas, if common sense fails us, we can turn to Paul Krugman for a cogent explanation:

And now you can see why tighter ozone regulation would actually have created jobs: it would have forced firms to spend on upgrading or replacing equipment, helping to boost demand. Yes, it would have cost money — but that’s the point! And with corporations sitting on lots of idle cash, the money spent would not, to any significant extent, come at the expense of other investment.

The federal government has a responsibility to implement legislation that protects our nation's business interests, but its responsibility to protect the physical health and well-being of American citizens supersedes it. A government that knowingly and willingly sacrifices the safety of its constituency for the sake of big businesses is demonstrative of a political system that has failed.

Obama seems less and less environmentally conscious every day. He has been dishearteningly quiet on energy and environmental issues since he was elected (which is even more dangerous in a country where the government allows public schools to ignore climate change in the science curriculum), his response to the Deepwater Horizon oil spill was lackluster, and he has allowed "conservatives" to chip away at the EPA's authority. He also seems increasingly incapable of fending off Republican/Tea Party attacks, and regardless of their absurdity and childishness, the attacks seem to be working.

It's important to have passionate people in Washington, and I think Barack Obama really is trying to do great things. But, if a leader is incapacitated because he's let a terrormongering fringe of the Republican Party paint him as weak and ineffectual, then he is, in fact, weak and ineffectual.

If you can't do your job, it doesn't matter how good of a person you are. You need to get out and let somebody in who can stand up to the idiots.

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[1] Jaffe, Adam B., Steven R. Peterson, Paul R. Portney, Robert N. Stavins. "Environmental Regulation and the Competitiveness of U.S. Manufacturing: What Does the Evidence Tell Us?" Economics of the Environment, Selected Readings (Fifth Edition), ed. Robert N. Stavins. Norton: New York, 2005.