Dilbert creator Scott Adams has an interesting thought over at his blog:
Suppose you could snap your fingers and instantly reduce the huge disparity in income distribution across the globe. Would you do it?
Many of you will probably say yes. You'd take some of the "extra" money from the rich and use it to help the needy. But suppose I put one condition on this magic power of yours. Suppose the only thing you can do by magic is reduce by half the wealth of the top 1% while knowing the money would be transferred to no one. The money would simply cease to exist. The rich would have half as much, while everyone else remained the same. Would you use your powers then?
Of course he's right that burning half of Person A's money doesn't make Person B's life any better, but it's ludicrous to say that taking some of Person A's money and giving it to Person B wouldn't help make Person B's situation more comfortable. On the other hand giving Person B the money doesn't guaranatee he'll be any happier – money can't buy happiness and all that – but you can almost guarantee that Person B won't be any better off if Person A keeps all the money and helps engineer a system that insures that Person B won't have a chance to earn more money this year, next year and the years beyond.
Adams seems to be addressing the whole Occupy Wall Street – The 1% vs. The Rest of Us phenomenon, and focusing on the actual income disparity between the two groups in the process. That's a mistake. The real issue people have is with a system that appears rigged to insure that wealth continues to flow disproportionately to the already wealthy, and often to the detriment to those they employ.
How can people not be enraged by a situation where executives garner huge financial rewards by running their companies for short term stock gains, without an eye towards long term health, and then walk away as their companies lay of thousands of employees in order to avoid bankruptcy? How can they not be disgusted by an economic/governmental system that rewards the executives who mismanaged their massive financial institutions to the point that it almost crashed the world economy? How can they not want to find a way to redistribute money from hedge fund managers who made their billions by not giving a flip about the common weal as they played with the economy like it was their own private bingo game?
Isn't it funny how you don't hear anyone complaining about how much the local car dealer, community banker, or restauranteur is making? No one cares because they can see what that person is contributing to the community, but that's not the case with the vast majority of the 1%, because most of them are perceived as leaches on the economy rather than contributors to it. That's probably not a fair assessment across the board, but in this world perception is reality and that's the perception many folks have of the 1% and that's why Adams' argument won't hold much water with the 99%.
Thanks to the "Occupy" movements there's been a lot of talk lately about the wealth disparity between the top 1% and the rest in the US. Now comes some information about the growing wealth gap between the geezers and the greenhorns in our fair country:
The typical U.S. household headed by a person age 65 or older has a net worth 47 times greater than a household headed by someone under 35, according to an analysis of census data released Monday.
While people typically accumulate assets as they age, this wealth gap is now more than double what it was in 2005 and nearly five times the 10-to-1 disparity a quarter-century ago, after adjusting for inflation.
The analysis reflects the impact of the economic downturn, which has hit young adults particularly hard. More are pursuing college or advanced degrees, taking on debt as they wait for the job market to recover. Others are struggling to pay mortgage costs on homes now worth less than when they were bought in the housing boom.
Rolling Stone columnist Matt Taibbi, the guy who's had his teeth into Wall Street for a while now and just won't let go, has some advice for the Occupy Wall Street folks. You definitely need to read the whole thing to see the point-by-point demands he recommends they make (Break Up the Monopolies, Pay for Your Own Bailouts, No Public Money for Private Lobbying, Tax Hedge-Fund Gamblers, Change the Way Bankers Get Paid), but I thought I'd share this paragraph because it struck a chord with me:
That, to me, speaks volumes about the primary challenge of opposing the 50-headed hydra of Wall Street corruption, which is that it's extremely difficult to explain the crimes of the modern financial elite in a simple visual. The essence of this particular sort of oligarchic power is its complexity and day-to-day invisibility: Its worst crimes, from bribery and insider trading and market manipulation, to backroom dominance of government and the usurping of the regulatory structure from within, simply can't be seen by the public or put on TV. There just isn't going to be an iconic "Running Girl" photo with Goldman Sachs, Citigroup or Bank of America – just 62 million Americans with zero or negative net worth, scratching their heads and wondering where the hell all their money went and why their votes seem to count less and less each and every year.
Paul Krugman's piece, Panic of the Plutocrats, highlights one distinction that I think many people have forgotten – there's a difference between business in the "Main Street" sense and business in the "Wall Street" sense:
What’s going on here? The answer, surely, is that Wall Street’s Masters of the Universe realize, deep down, how morally indefensible their position is. They’re not John Galt; they’re not even Steve Jobs. They’re people who got rich by peddling complex financial schemes that, far from delivering clear benefits to the American people, helped push us into a crisis whose aftereffects continue to blight the lives of tens of millions of their fellow citizens.
Yet they have paid no price. Their institutions were bailed out by taxpayers, with few strings attached. They continue to benefit from explicit and implicit federal guarantees — basically, they’re still in a game of heads they win, tails taxpayers lose. And they benefit from tax loopholes that in many cases have people with multimillion-dollar incomes paying lower rates than middle-class families.
Listen, I get it that we need finance. We need people who can provide capital to the Main Street businesses, and I think there are plenty of fine people working in the financial sector, but just like there are crooks and scam artists working on Main Street there are also crooks and scam artists working on Wall Street. Even if we didn't already have plenty of stories showing that the Wall Street scammers filled their personal vaults while barbequing our Golden Goose, I think the incessant screeching like that currently emanating from halls of power would cause us to say, "The lady (aka the Whining 1%) doth protest too much."