Wealth is Inequality, Pt. 4, The Government

There are a few areas of which I intend to discuss, such as the rich in Congress, the rich in key administrative positions, some of which are still holdovers from President Bush, and the access of the wealthy.

The first is that the medium assets of the entire congressional body is over $900k, which is up by about $150k over the two years previous to 2011.

There are 261 Senators and Representatives who are worth more than a million dollars.  That's almost half.  Virtually anyone who ends up in congress becomes a millionaire.  Even the President, after 4 years in office, will become a millionaire.  After all they don't pay for anything during their term.

This represents a major problem that isn't all that much exposed, which is that the wealthy, whilst not necessarily allowing the rich to come to their personal parties but will throw a fund raiser or two, do indeed use the rich as movers and shakers, primarily for their own benefit.  The rich can depend on their rich and wealthy friends to bolster their campaigns to the point of almost appointing people to represent them in congress. 

And while the people get a choice of candidates, the candidates are the choice of the wealthy.  Darrell Issa virtually appointed Arnold as Governorator by initiating the recall of Grey Davis in the first place.  When Arnold left California was in far worse shape then when Grey Davis was driven out by a well financed recall strategy funded in large part by Representative Issa. 

Politics is the art and science of governance, but politics also recognizes that you must be elected to get the job you want to do done.  And notice, I did not say "what the people want done" because the people are not a consideration.

With almost half of our legislative representatives being well outside of the norm in terms of station of life, the obvious thing is to understand our little lives only matter to them either every two or six years, and the other times are devoted into doing the work of the wealthy.

And yes, that includes the Democrats too.  In the concept of being rich in congress, both sides are about equal.  While the Democrats do lean towards trying to work for the little people like me, the fact is they still have their own hides to look after and as such, people like Charles Schumer ends up supporting the rich in his state such as hedge fund managers, making certain they continue to pay 15% capital gains tax on their management of other people's money.

So it's not a one-pony show, but we are talking about a one trick pony show, which is to keep the wealthy very wealthy and the rich very rich.  And if, by some happenstance the Democrats can bend enough people, then perhaps a program or two for the people who cannot claim to make a million dollars in a lifetime of work.

Now I'm not saying that there aren't programs in place that are eating up more and more of our GDP, but that is somewhat the fault of the legislators for keeping rules and regulations down, and taking corporations and their wealthy benefactors far more into consideration than is good for the program such as Medicare.

In the beginning of Medicare most insurance providers would not participate, specifically under Nixon, Carter and Ford.  Only when Reagan came into office and regulations were virtually throw out the window did the major insurance companies decide they could participate in providing services to Medicare patients, for an additional fee for more service under the cost restrictions.

The idea was to provide the same services for the same price, but over time these Medicare advantage type of programs have gone up significantly without offering anything better than what Medicare itself was designed to do.

Who benefits?  The wealthy.  And the health care industry is now paying their CEOs to the tune of a couple of million dollars a year to the highest paid, which I believe is about $12 million per year.

I'm all for creating more millionaires, but hey, can I please be one of them too?

The point isn't about people becoming millionaires, however, but how the use of the political system boosts the profit earning capability of the wealthy without having any real positive impact on the other 99% of us who have had stagnated wages for 30 years and increases in the actual cost of living far exceeding even a general cost of living increase in pay.  Health care's cost increase per year is about 2.9% to 7% whilst most people might only get a 2% increase in earnings.  This has accelerated within the past two years in anticipation of the regulations imposed by the new Health Care reform law. 

It is obvious that the Congress is looking out for the health and well-being of the wealthy first, and the people if possible.

Now I admit that the most readily available people of influence are people of power and money.  They have the personal wherewithal to be able to donate a presidential term's worth of time to take positions that give them almost unparalleled power, even if their income is virtually non-existent. 

The Secretary of the Treasury talks constantly to the wealth of Wall Street, often coming from and returning to those same hallowed halls.  This, at the least, offers up tremendous job opportunities when they leave, and often has led to decisions leaning towards a particular political matter in order to garner that job.

The Secretary of Commerce talks constantly to the wealth of the manufacturing industries, amongst other, often coming from and returning to their roots when they move on.  And the same thing as the move back into the private sector applies as the above.

Just look at the list of the Cabinet and then google their publicly declared assets. 

I remember Barney Frank saying in a committee meeting that its fine if a banker comes to work for the federal government in some of these important jobs, but once they leave they can't come back.  Getting rid of the revolving door policy probably would work better than having one.

I also admit that it is possible that killing the revolving door policy may well deplete the availability of some of the brightest minds our country can use to continue to grow our country.  But we may well also be falling back on the tried and true with no new ideas these new times may require, whilst the "no return" policy would require that we bring in new people, some possibly holding new ideas.

So the question becomes whether moving between being rich and powerful to being woefully underpaid and even more powerful is a method to continue growth, particularly when the overall concern is to support the wealthy.

And that comes down to access to political power.  Let's face it, I've occasionally sent my Senator, Barbara Mikulski, suggestions or my view on votes being taken on the floor, but based upon the pre-formatted return email, I'm certain that no one is listening.

In other words, I can call her up, I can email her, but I know there is a force of people in front of me to keep me away from her.  On the other hand, I'm certain that the Maryland agricultural industry could see her today if they just showed up at her office.

This is a real problem, largely exacerbated by the Citizens United decision of the US Supreme Court, which has taken access away from the people almost in toto.  The only way to get a meeting with anyone in congress is to be able to do something for members, whether that might be a positive photo op, or to attend something that is a positive photo op, or even better, gain lots of campaign dollars.

So we have a significant number of people running for office who are rich in their own right (and yes, that is a positive), being somewhat selected by the wealthy based on what the candidates are willing to do for them, and then putting up with two or six years of that elected official doing the job for the wealthy rather than for the people.

This is no American Dream.  There are only dreamers anymore, not the least of which is exhibited by the fact that state and multi-state lotteries are growing day by day, taking money from the least able to afford to spent the money, and offering them a new way to get to that non-existent American Dream.

And the reason this is important is that America's political system no longer serves all of the American people, but only those rich or wealthy enough to make a difference.

Comments

[Bill Perkins]

Here's a shocker, Roger, many members of Congress are very successful people of business or of society repute for whatever reason. Therefore, many have made money in business, and many have married money. We don't elect paupers to legislatures in order to get them off the street, do we? Part of the reason for their success in getting nominated and then elected is demonstrated abilities in public speaking, knowledge of business/government, leadership and at least the appearance of integrity and credibility--combined with a drive to make a difference in what they do. Add to that a tremendous ego that either leads to their success or ultimate downfall.

Of the top 50 wealthiest in Congress, 27 are Democrats and 23 are Republicans. So it's nothing unique to either party. It just makes sense if you think about it.

Plus, winning elections take a lot of money, but using tremendous amounts of personal money is not necessarily going to win for you. Look at Romney in 2008 or Meg Whitman in 2010.

Obama's wealth has come from the sale of books, which is true for many present and former political celebrities. So what? He's making $400k/ year, which is a good salary that puts him in the top 1% for that alone. But most Congressman and Senators make less than $200K from their position, and then have to then maintain a Washington DC and their home state residence. If they didn't have other resources, you couldn't survive. Some of the current freshman were actually living out of their offices for a while. I don't know if they continue to, but it's not an easy life.

The candidates are the choice of the caucuses or primary elections we all vote for. The parties try to put their best candidates forward in each cycle. But then its you and I and everyone else who bothers to vote that selects the winning candidates. These are not just the choice of the wealthy.

Citizen United has done nothing to take away access or your influence on your representatives. I've met my representatives here in their town hall meetings, shook there hand and looked them in the eye while I bitched about this or that. If your reps don't have local electorate discussions, then ask them to do so. By the way, most Wall Street fat cats are democrats, vote democrat, and in 2008, were among BO's largest contributors, along with the unions, trial lawyers, etc. I believe corporate lobbyists perform an important function keeping reps aware of the impact of the sometimes senseless, politically motivated crap that gets passed. We probably share the idea that all corporate subsidies s/b dropped. I further believe corporate taxes are just pass through taxes to the consumer, masking the real rate of taxes our bloated government demands, and should be eliminated.

What is it you want government to do for you Roger? How about JFK's request that you ask what you can do for your country and not the other way around? The fed and states are providing generous unemployment compensation, medicare for families up to about $65K for a family of four, food stamps, free meals for kids at schools, WIC, subsidized loans for education, government subsidized housing loans---the list is endless, but unfortunately our assets are not.

"I'm all for creating more millionaires, but hey, can I please be one of them too?" Millionaires aren't "created" except for inherited wealth. You and I are on the short end of that gene pool lottery it seems. Nor do they just get lucky, or simply more fortunate. They worked their brains and/or their butts off for many, many years in most cases. As a result, they employ millions. If government leaves them alone, they'll figure out how to grow their wealth and employ millions more.

[Roger W. Norman]

Lots to work with and the meds are kicking in.

If you don't mind, let me address this tomorrow.

"What is it you want government to do for you Roger?", you asked.

This I might be able to address. I require nothing from my government for me. I'm lucky to be alive and stepping into my own golden years, so what's to ask?

Cure me for a year at ridiculous cost? Why? Yeah, I'm ready to answer that question.

But how about when my grandchildren live the lives of indentured servants because wages haven't done much but help move money up the totem pole.

But I require nothing from my government for me.

I do require that we, as a people, have the desire and ability to help those less well off than we. Bill Gates set up the Bill and Melinda Foundation, focusing on a lot of other countries, and yet where's the help here?

I'm not blaming Bill. He has an agenda and it requires some tough decisions. But hey, how about something that help those least able to help themselves in our own country. Why do people have to walk 15 miles in depressed counties in order to get free medical examinations by volunteer doctors?

We have become unbalanced in our political ideologies, and some where the least able to defend themselves with ads to support a specific philosophy, leaves us with nothing.

Roger W. Norman

[Bill Perkins]

Roger, there is nothing new about our circumstances. Do you think there was no alcoholism, drug addiction, poverty, crime, unemployment, child abuse, illegitimacy, or social upheaval in the 17th, 18th, and 19th centuries in this country? What has changed is that family, friends, neighbors and especially the church no longer have the roles they did even in the early 20th century. It has become easier to let the government take care of it so we don't have to be bothered. I recommend you read Olasky's "The Tragedy of American Compassion". But we've moved away from those solutions which frankly are more compassionate, especially the church, because it looked very unemotionally at people in some respects. That is, unless you were mentally or physically disabled, you had to work to get food or shelter.

Your grandchildren will become what they decide to become, as will mine. We are all responsible for our condition, not some rich guy down the road, and if I accomplish nothing else, that's the best view of life I can pass to them. This country still offers opportunities to move up the ladder and raise a family with a much easier life than 100 years ago. You may have heard your grandfather's stories about farm life before tractors were available, trying to grow your own food, etc.

We already have the desire and the ability to help those less well off than we. You can give away every penny you have to whomever you wish to help. As can I. Are we likely to agree on who to help--highly unlikely. What I don't want is you or this government "requiring" me to support people whose condition I know nothing about. What I require is that we take care of our family. And if you don't have that ability, then for Pete sake don't have more family expecting someone else to take care of them.

I want the government to give us an environment where we can POTENTIALLY be self-reliant individuals, with the reasonable rights of our bill of rights, if we make a few right decisions. I do not want cradle to grave gimme's that continue to destroy us as a people and bankrupt us in the process.

[Roger W. Norman]

Bill Perkins wrote: "You may have heard your grandfather's stories about farm life before tractors were available, trying to grow your own food, etc."

In fact I've written extensively about just this subject, and for every question you bring forth on how government shouldn't be an answer I can bring forward examples of just how well government responded with answers.

And since this idea is as good as any other for conversation, with the advent of the tractor, fields were plowed, foods were grown, new machines were developed to help harvest all that extra food and we were on our way to both an economical boom and bust all at the same time. Manufacturing increased to make those farming machines, but also to extend the rail system to move that product to markets further away.

But we didn't understand the ultimate fallacy of our own growth, which is that every action has an equal and opposite reaction. Therefore we stripped the soil bare, killed off the enzymes, and created (yes, created) a dust bowl that ended up exasperating the economic downturn of the 30s.

It actually took the Dept. of Agriculture, expanded mandate by the Hatch Act (1884) to move into agricultural research, to establish many of then new techniques in crop rotation, allowing selected amounts of land to go fallow with subsidies for what you were not growing, etc.

These are the things that have been essentially stolen from the American people by special exemptions for larger and larger farming corporations who now ply the fields with vast quantities of both fertilizers (keeping fuel costs high) and pesticides/herbicides. The land can't support the growth anymore. We're headed for a new dust bowl because corporations are leeching the life from the soil and getting massive subsidies in doing so.

So whilst you may argue, the government had the answers, the people prospered, and then corporations, seeing money to be made, came in and have created a potential dust bowl that will adversely effect billions of people.

That's your potential to grow, taken from your hands by the few and as long as everything is fine, then fine. But once it goes bad they'll be gone and we'll be screwed.

Roger

[Bill Perkins]

"We'll be screwed". Like the last 10 generations of Americans have been nothing but screwed. Never mind that we live better, more cheaply and have living standards unmatched in our history. We're just doomed because some guy somewhere is going to make a profit.

What a pathetic, defeated attitude. I thought you had something to say worth listening to but I'll leave you to your "woe is me" garbage.

[Roger W. Norman]

Well, you can continue to try to make sense of all of this or simply let the door hit you on the ass when you leave.

Woe is me isn't exactly what I was thinking, but I'll leave it to you. Like one of the callers into C-Span's The Washington Journal the other day who complained that his Dad only paid $13k into Social Security but ended up, after 50+ years, taking $300k out, I'd say that Social Security was a pretty safe investment. And I must say that this man did not seem to have the wherewithal to know just how much was placed into Social Security.

If you put $10k into an investment and waited 50 years, what would you expect as a return? Oh, and didn't anyone tell this man about the valuation of a dollar and inflation and a number of other factors?

Sorry Bill, but if you can't stand the heat, don't come into the kitchen. I'm always here.

Roger

[Bill Perkins]

That's the problem, Roger, you don't bring heat. Nonsense doesn't create heat.

Take your Social Security analysis. (1) SS money is not "invested", it's spent immediately in the general fund. SS is a ponzi, resulting in 13K being paid back in the form of $300K out of the pockets of other taxpayers. You know that, but for some reason you're willing to ignore it. (2) No investment, no return, you can't even apply inflation to it as earnings because it's spent immediately. (3) To prove it, if you die, what do you get from your SS "investment"? Your contribution plus interest? No. $250. (4) If we were to privatize all or part of SS, which must happen if it's to survive in any sustainable form, give people an account in THEIR name which cannot be forfeited, is invested in routine investment options like many other plans, and can be passed on to family. (2) But what will happen? The Democrats will means test it and transfer available funds to, frankly, the less deserving. Obama just admitted it this week. That's what income redistribution is all about. Also, your 401k/private pension/profit sharing--they will come after that too, unless you're in a union of course.

The main benefit of SS was to our working-class parents. My Dad retired early because he figured out that with his pension and SS, he made more than he ever did working. It enabled them to be completely independent. It has also let us boomers off the hook of helping our parents while we foist this ponzi off on to our children and grandchildren, and we have the nads to actually expect them to pay it. "But I paid into it!" the boomers cry. What bunk. What a disaster for the next generations.

Roer, why is the free market good enough for every other retirement plan, including union pension plans and the Congress's retirement plan, but not SS? Simple, because the government has to have that cash flow to keep itself from crashing.

Your statement would be exactly right, though, if SS were privatized in some fashion. As it is, your comments don't match reality. My perception of your view is that the only way is the government way, and then you make up scenarios to support that view. Unfortunately, they have no basis in reality.