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Ed is on vacation for the July Fourth week so we bring you an article from the past.
The One Percent is going after wealth like Captain Ahab went after The Great White Whale. Rupert Murdoch’s Wall Street Journal recently wrote about “the up-market way to prepare for Doomsday.” We already know of dozens of the American uber-rich buying up thousands of acres of “Doomsday safe” land while purchasing New Zealand “citizenship” for millions of dollars. We know of tech titans and other filthy rich creating underground survival bunkers out of old missile silos in the Midwest. What are they thinking?
To begin to learn about this kind of thinking we have to go back to 1848. An English railroad construction foreman named Phineas Gage had an iron rod driven through his brain from an explosion. Phineas survived the injury to his frontal lobe, but his wife testified he changed from an empathetic, friendly, thoughtful, caring man to a dangerous, indifferent man. People with injuries to their frontal lobes have been examined since then and have had similar attitudinal changes. MRI studies have confirmed that type of brain damage since they were invented. The January, 2018 National Geographic has a fascinating article entitled “The Science of Good and Evil: What Makes People Especially Giving or Cruel? Researchers Say The Way Our Brains Are Wired Can Affect How Much Empathy We Feel For Others.” There’s not much doubt we humans are a social species—and also the most violent on earth. Witness the killing and wounding of Palestinian adults and children at the Israeli border by sniper fire last week while Evanka Trump on TV split-screen was rhapsodizing about moving the American embassy to Jerusalem.
There is a new scientific discipline called cliodynamics which analyzes history to predict future events. University of Connecticut Professor Peter Turchin says “elite overproduction” (In other words, the rich gaining more wealth!) has occurred about every fifty years over the last two centuries. When we examine the years 1870, 1920, 1970, and what is happening in 2018, we see that wealthy plutocrats dominated the United States and reached their peak in those years—about every 50 years. Around 1870 we had the growth of the Gilded Age with the Rockefellers, Carnegies, and Vanderbilts. The super wealthy ruled the 1920’s until the stock market crash of 1929. By the 1970s we had basically recovered from the Great Depression because of the rapid growth of powerful corporations such as General Motors, General Electric, Boeing Aircraft, and various railroads companies These were all years of income inequality. The extremely rich bought themselves power by throwing money at elections at 50-year spans. And after each one of these periods the country filled with rage. We are currently in the beginning of one of those “rage” periods.
The Big And Little Things Which Have Brought On Our Current “Rages”
By all economic accounts the Top Ten Percent is presently crushing everyone below. They are consolidating their wealth and buying most of the politicians. They are destabilizing politics and eroding democracy. World history shows that in that kind of game everybody in the society loses in the end.
Because of income inequality several major cities have become too expensive for the lower middle-class and the poor to live in. California, Washington, and Oregon cities have major problems with the poor and homeless. Full-time workers have to commute hours to their jobs. Road rage incidents have become commonplace. Fixer-uppers are all in the million dollar range. Over 40% of the homes sold in Seattle and California cities actually sell for much more than the original asking price. A 625 sq.ft. home in San Francisco advertised for $599,000 recently sold for over $800,000. There are signs all over the country that we are living in a country governed by oligarchs, not democrats.
• Two thirds of the women working full-time in this country are paid the minimum wage. One-third of them have children. All live below the adopted poverty level. I read some place this is supposed to be the “Year of the Woman!”
** Because of low milk prices, over 450 Wisconsin dairy farmers quit the business in 2017 and sold their cows.
• The first comprehensive study 0f CEO-worker pay indicates that the average CEO-to-worker pay disparity has reached 339 to 1—with the highest ratio reaching 5,000 to 1. The average U.S. CEO makes four times what CEOs in other developed countries make. The average worker at 219 of the 225 companies studied would need to work 45 years to make what his CEO earns in one.
• There is so much surplus cash in certain hands sneakers have become a highly collectible item. Nike Jordans originally priced at $190 are selling for $2,750. On display at a Stadium Goods Store is a pair of Addidas PW Human Race priced at $12,350. LeBron James 14 Mike sneakers are a hot item, with 46 pairs recently selling for an average of $6,000---each! Total regular sneakers sales reached $38 billion last year.
• A San Francisco low-cost housing development of 95 rental apartments opened up reserved for households with incomes up to 50% of the local income median. Affordable housing is so scarce in the city, 6,580 people registered for the 95 apartments.
• An art collection owned by David Rockefeller recently broke 22 world records at a Christie auction, bringing in a total of $832 million. A Picasso painting of a nude girl sold for $115 million. A 256-piece of porcelain dessert service once owned by Napoleon Bonaparte sold for $1.8 million, six times the estimate. There’s lots of disposable cash floating around the world.
• A 45th floor condo in New York City has been advertised for $85 million. With it you get a yacht, a pair of Rolls Royce Phantoms, a Lamborghini, a Hamptons summer rental cottage, a chef and butler for a year, and a trip to outer space. This is for the person who thinks he has everything.
Who Will Win The Battle Between The Rich And The Poor?
The problems facing the city government of Seattle are a microcosm that a majority of the large cities in the United States now face. Community life has become subordinate to wealth. The rich have not only purchased politicians, they have driven a wedge between citizens with gated communities and McMansions with guardhouses that have their own parks, playgrounds, swimming pools, and tennis courts. The rich don’t need public recreational facilities. They own theirs and have the luxury of privacy.
Seattle, a city dominated by one very large and profitable company, is now plagued by the homeless and the poor. Housing, as an example, is too expensive for the servants who serve Seattle’s rich.
The state of Washington, where the two richest men in the country live, is one of seven states without an income tax. All public services are paid by high property taxes and an extremely high sales tax of 9.6%. These are both very regressive taxes. Amazon CEO Jeff Bezos, with his current world-leading fortune of $131 billion and climbing, pays the same sales tax as the kid working the window at McDonald’s. Amazon also did not pay a dime of federal taxes in 2017. Amazon also controls 20% of Seattle’s available office space. No other company controls so much space in other major cities.
The Seattle City Council is trying to solve local problems by passing an ordinance requiring businesses that have yearly receipts of more than $20 million to pay “head” taxes. Only 3% of the businesses will have to pay a special tax of $275 per worker. Amazon, by far, is the largest employer. This special tax will bring in $48 million which will be spent on building affordable housing and providing essential resources for the homeless. Bezos is fighting this tax by saying: “We remain very apprehensive about the future created by the Council’s hostile approach and rhetoric toward larger businesses, which forces us to question our growth here.”
The Battle Between Good And Evil
On one end of the human moral spectrum are empathy, generosity, sacrifice for others, and other traits that we recognize as being on the good part of the scale. On the other end of the spectrum is selfishness, destructive impulses, and violence. The Republican Party leaders of today seem to be enthralled by the rantings of Ayn Rand and the cult of selfish greed she outlined in “Atlas Shrugged” and “The Fountainhead.” She justifies the accumulation of wealth above anything else. According to her, the “makers” are always outnumbered by millions of “takers.”
Jeff Bezos, the richest human on the planet, has said he wants to convert his winnings into space travel, developing a space tourist business, and eventually putting millions of workers in heavy industries on other planets. He’s a smart guy. He has to know he is shortchanging his thousands of workers on Planet Earth. The reports coming from his 150 warehouses scattered around the globe are “shocking and demoralizing,” according to observers. First, the median salary for his workers is $28,446 a year. This is not a living wage. Most workers started at the minimum wage of the state. If you were not classified as “exceptional” in nine months you were fired. Bezos has thousands of employees whose salaries fall way below poverty levels. Taxpayers through the food stamp program and other government health and welfare programs lift some of his workers at least to a basic level of survival. He doesn’t seem interested in providing his warehouse workers a living wage.
Some workers claimed they were treated like robots because various devices were used to monitor all of their movements. These devices would send them messages if they fell behind the schedule or were slowing down. At one time Amazon used a six-point disciplinary program. Various infractions of rules could cost them points. As an example of the system, calling in sick cost workers one point, even if they provided a doctor’s statement. If a worker was charged with six points he was fired. Amazon claimed that toilets were easily accessible, although some workers said they had to pee in bottles on the work line. The company disputed this claim. It is quite evident Bezos should postpone his dream about space travel, space industries, and transporting millions of workers to other planets.
There seems to be something about the accumulation of wealth that destroys the frontal lobe, turning some plutocrats into psychopaths. Our Great Leader is an example. Billionaire Elon Musk is another. As workers at his Tesla Motors complain bitterly about pay and working conditions at his plants, he spends his time developing his space rocket industry, boring tunnels under cities to improve traffic, and pushing his ideas about high-speed hyper-loops between cities. On the other hand, Bill Gates and Warren Buffett still seem to have all their empathetic “marbles.” The richest family in the world, the Waltons of Walmart, have also had frontal lobe problems for years. It’s time to get Walmart employees off public welfare.
In our history we seem to have survived these 50-year lapses into Gilded Ages, bullish stock markets, and income inequality. Will we survive the period of rage we are in now? The recent teacher protests in the Republican states of West Virginia, Kansas, Oklahoma, Kentucky, and Arizona is a sign we will survive. I see North and South Carolina teachers have joined their educational sisters and brothers in raising hell about pay and school support. Go get ‘em!