Reagan and conservatives told the capitalist class a big lie which since they already had what they wanted, they never questioned. The wealthy capitalists create new wealth which provides work which enables all to prosper and so makes everyone prosper. Money is needed to make money but it is insufficient to create more of it. To make more of it the market in which wealthy people are making more of it must grow faster than the wealth is being used up. The American economy depends upon people who buy everything to be gaining more wealth so that they can buy even more of everything. If those people are unable to make more money, the overall opportunities for growth and ample returns on investments are going to diminish. Currently, almost all of the new wealth is owned by a few who since the economy is growing slowly are saving capital until their opportunities for good returns which will occur when the vast majority of people are buying more and more again. The U.S. is still the greatest economy in the world but it is because most people are still able to purchase lots of things. However, the concentration of wealth amongst the wealthy and corporations are preventing that huge market from being able to buy and thus demand more and offer more investment opportunities for the capitalists.
4
I applaud Mr. Georgescu and Mr. Langone for addressing what is the greatest challenge facing America today. These issues like Al Qaeda are side shows. Of course they have to be dealt with but they do not represent an exestential threat.
I also agree that the solution lies within the people of this country. It will require support from the media, boards of directors, shareholdres, institutional investors, company management, employees and consumers.
Sadly, as Mr. Gerogescu points out, our leaders in Washington are incapable of leading. They are operating a circus that while mildly entertaining in terms of its absurdity, is wholly incapable of governing and implementing thoughtful policy. The fine folks in Washington can only leasd from behind meaning they will have to be forced into action by a grass roots effort demanding reform.
What gets lost in all of this, especially among Republicans, is that if executed properly, the whole economic pie will expand. All will be left better off. Society will be healthier. Opportunity will return for those who have the drive and inclination. America will become a thriving and hopeful country once again.
But it will not happen without reform. As it stands we are on continuous drive to ever more extreme inequality. Wealth is becoming concentrated in fewer and fewer hands. Out of self-preservation the GOP should act to ensure it has a voting base. The haves are shrinking in number which bodes ill for them.
I also agree that the solution lies within the people of this country. It will require support from the media, boards of directors, shareholdres, institutional investors, company management, employees and consumers.
Sadly, as Mr. Gerogescu points out, our leaders in Washington are incapable of leading. They are operating a circus that while mildly entertaining in terms of its absurdity, is wholly incapable of governing and implementing thoughtful policy. The fine folks in Washington can only leasd from behind meaning they will have to be forced into action by a grass roots effort demanding reform.
What gets lost in all of this, especially among Republicans, is that if executed properly, the whole economic pie will expand. All will be left better off. Society will be healthier. Opportunity will return for those who have the drive and inclination. America will become a thriving and hopeful country once again.
But it will not happen without reform. As it stands we are on continuous drive to ever more extreme inequality. Wealth is becoming concentrated in fewer and fewer hands. Out of self-preservation the GOP should act to ensure it has a voting base. The haves are shrinking in number which bodes ill for them.
9
Mr. Georgescu, I am 28 years old and I have a liberal arts degree. Since I graduated in 2009 I have continously worked as a file clerk or scanning assistant. I have accepted at this point in time that I will never make over $40k from my labor, or get significant learning opportunities. I am now trying to be a children's book author/illustrator since money and stability are already elusive. Going back to school is too much money. I know college educated friends that work minimum wage jobs.
What makes me angry is that even within the children's publishing world, I hear it is harder to make it if one is not a celebrity. Everyone wants high margins, and big names sell. How can your plan make people think long term and with imagination, support emerging talent -both in the workplace and publishing industry? I support the idea of tax incentives but I doubt it is enough.
When I vote in stock elections, I would love to vote on more employee training, better employee pay, and less CEO pay, but these things are rarely on the ballot.
How do you think we should get away from the culture of short term thinking, moralless profit, and cultural support of greed? It makes me feel like investing is a fools errand, because I anticipate market instability. I bet your like is hoarding, waiting for the poorer fools like me to lose it all.
Thank you for bringing this issue to the fore.
hatfieldk.squarespace.com
What makes me angry is that even within the children's publishing world, I hear it is harder to make it if one is not a celebrity. Everyone wants high margins, and big names sell. How can your plan make people think long term and with imagination, support emerging talent -both in the workplace and publishing industry? I support the idea of tax incentives but I doubt it is enough.
When I vote in stock elections, I would love to vote on more employee training, better employee pay, and less CEO pay, but these things are rarely on the ballot.
How do you think we should get away from the culture of short term thinking, moralless profit, and cultural support of greed? It makes me feel like investing is a fools errand, because I anticipate market instability. I bet your like is hoarding, waiting for the poorer fools like me to lose it all.
Thank you for bringing this issue to the fore.
hatfieldk.squarespace.com
13
Ok, I know what needs to be done, but suits would not like it. We need impose average employment tax on companies. If company paying less than country average of employment taxes (that you see in paycheck and employers share of those) it has to make up the difference. The baseline value can be both profits and sales volume (as profits are easily intentionally diluted). The amount collected can be distributed to the employees of companies that paying much more than average. This way law firm, brokerage or patent holder will pay considerably more and Walmart and McDonalds will get money to give employees. On the sideline this might really bring jobs back from China, as importers will pay this underemployment penalty, and manufacturers most likely will not. Smallest companies with sales volume less than $500,000 can be excluded. Vote this....
6
The upper echelon would be mistaken to be afraid of the bottom on tier, the great mass of the under-employed, unemployed, and the like are no threat to them on their own. The truly dangerous are the declassed men of talent who, in spite of their education and training, have been cast out from their expected station either due to mistakes or bad luck. Many deserve this fate, but many also, despite their intelligence and ambition, will wind up there as a simple by-product of the capitalistic process. Capitalism rewards merit, sure, but it rewards luck all the same, and many who advance will not be the most qualified, and many who will not will have been qualified enough to do so but for some stroke of bad luck. It's the qualified losers who are dangerous to the system. Look at the leaders of the French and Russian revolutions. The leaders all came from this class. Give these sorts of frustrated men and women a receptive audience and who knows what could happen...
12
Nice summary of what is wrong with U.S.'s capitalism, and the need to level off an evermore tilted inequality...and the inequity it engenders. Otherwise, it may signify the beginning of the end of a thriving economy in a diverse society. A totally unregulated market is like a child with a box of matches and plenty of timber in an enclosed space, and trust it'll end well. As luck may have it, if not a sense of instinctual survival, some of the rich and powerful have voiced their concern. Now, if they just could muster the will to act on it, their courage and results may bear unimaginable benefits for all, but particularly for themselves. Anything short of that is like shooting themselves in the foot, and killing the goose that lays the golden eggs.
2
Under threat. Is that the motivation. Fear spreading like wildfire. Healing will come not out of fear or measured greed but from a popular movement of hope, compassion and kindness. Four decades of abuse is too much and an 80% tax increase is just the beginning. As for incentives, only businesses and corporations that by 2017 are paying their workers a liveable wage and retirement benefits tied to profit sharing will be spared from the full throttle of the change you fear. You cheapen the kindness and compassion that made your rise possible by giving back out of fear. Gravity Payments has it right. Do not soil their achievements with your fear and want of more taxpayer supported corporate incentives.
Purchasing power for the minimum wage peaked in 1968.
Not coincidentally, two monetary policy changes happened just prior and after 1968, and purchasing power has been declining ever since: First in 1965 silver was removed from coins, and in 1971 Nixon de-linked the dollar from gold.
With no asset of real value backing up our currency, the Federal Reserve and Congress have had carte blanche to print, spend, and borrow limitless amounts of "money". Not surprisingly, wealth has become concentrated in three areas:
- financial institutions like Goldman Sachs, who not only borrow from the Fed at zero interest rates, but flip Treasury bonds to the Fed at a no-risk profit
- large corporations, who get sweetheart lending deals and both overt & covert bailouts
- large-scale government contractors, especially those who supply the military, who overcharge, seldom face competition, and never see spending programs reduced or eliminated
The single largest driver of income inequality is our monetary policy under the Federal Reserve system. Restore sound money and restore purchasing power.
Not coincidentally, two monetary policy changes happened just prior and after 1968, and purchasing power has been declining ever since: First in 1965 silver was removed from coins, and in 1971 Nixon de-linked the dollar from gold.
With no asset of real value backing up our currency, the Federal Reserve and Congress have had carte blanche to print, spend, and borrow limitless amounts of "money". Not surprisingly, wealth has become concentrated in three areas:
- financial institutions like Goldman Sachs, who not only borrow from the Fed at zero interest rates, but flip Treasury bonds to the Fed at a no-risk profit
- large corporations, who get sweetheart lending deals and both overt & covert bailouts
- large-scale government contractors, especially those who supply the military, who overcharge, seldom face competition, and never see spending programs reduced or eliminated
The single largest driver of income inequality is our monetary policy under the Federal Reserve system. Restore sound money and restore purchasing power.
4
The article and most of the comments ignore natural forces.
Capitalism and it's invisible hand that has since the time of the industrial revolution created great wealth for the entrepreneur and great prosperity for workers IS A NATURAL FORCE. In tune with the human condition.
As is the NATURAL force of government to attract a political royal elite whose principal focus is to maintain power and privilege.
Any effort to take from those that have to distribute to those that don't, will fail the ones the takers in power claim to serve. Venezuela and our own sinking lower and middle classes are shining examples. Jesus, the top 10% pay 70% of all taxes now - almost twice what they did 50 years ago. We spend more on education than any others and results keep falling. Can't the Progressive elite draw a conclusion?
The Republicans are the only ones speaking to solutions that are consistent with a healthy understanding of these forces. Democrats want to tax more only to distribute to the favored. Republicans want a safety net that is not a crutch.
It is the Democrat that thinks they know better than the average guy what to do with their money, the Republican is fine with leaving the individual in charge. To fail or not.
Either put the Republicans in charge or head on down that road to Venezuela.
Capitalism and it's invisible hand that has since the time of the industrial revolution created great wealth for the entrepreneur and great prosperity for workers IS A NATURAL FORCE. In tune with the human condition.
As is the NATURAL force of government to attract a political royal elite whose principal focus is to maintain power and privilege.
Any effort to take from those that have to distribute to those that don't, will fail the ones the takers in power claim to serve. Venezuela and our own sinking lower and middle classes are shining examples. Jesus, the top 10% pay 70% of all taxes now - almost twice what they did 50 years ago. We spend more on education than any others and results keep falling. Can't the Progressive elite draw a conclusion?
The Republicans are the only ones speaking to solutions that are consistent with a healthy understanding of these forces. Democrats want to tax more only to distribute to the favored. Republicans want a safety net that is not a crutch.
It is the Democrat that thinks they know better than the average guy what to do with their money, the Republican is fine with leaving the individual in charge. To fail or not.
Either put the Republicans in charge or head on down that road to Venezuela.
Other than Einstein, and a few others (most of whom never profited greatly from their contributions to humanity), which human is worth 400 times the value of another? Why should chicanery rather than useful, productive endeavor be more valuable than 'flim-flam' and churning?
We need better ways to keep score, and more effective ways to allocate the wealth of society.
The problem is that the problem itself is not just here in the US, but global and diverse. Each individual 'center' of wealth accumulation is built on a different set of 'wealth cornering' criteria.
The problem here in the US is that our open society has produced so much excess wealth that it is freely, and often intentionally used to create 'symbols of progress' rather than progress itself.
History has shown that it is imperative that any given society redirect a 'daddy's share' of excess wealth to serve the interests of the underlying society itself, not to create mere 'symbols' of its achievements. In the end, it doesn't take many symbols to sustain social progress, and the 'hope to aspire'. Most folks can be satisfied with life, liberty, and the pursuit of happiness, including the most wealthy among us (excluding, of course, those who must suffer through 'Silas Marner syndrome', or those who are just megalo-greed mongers).
We need better ways to value both the environmentally detrimental 'costs of production' and the value of both 'business endeavors, and individual contributions.
We need better ways to keep score, and more effective ways to allocate the wealth of society.
The problem is that the problem itself is not just here in the US, but global and diverse. Each individual 'center' of wealth accumulation is built on a different set of 'wealth cornering' criteria.
The problem here in the US is that our open society has produced so much excess wealth that it is freely, and often intentionally used to create 'symbols of progress' rather than progress itself.
History has shown that it is imperative that any given society redirect a 'daddy's share' of excess wealth to serve the interests of the underlying society itself, not to create mere 'symbols' of its achievements. In the end, it doesn't take many symbols to sustain social progress, and the 'hope to aspire'. Most folks can be satisfied with life, liberty, and the pursuit of happiness, including the most wealthy among us (excluding, of course, those who must suffer through 'Silas Marner syndrome', or those who are just megalo-greed mongers).
We need better ways to value both the environmentally detrimental 'costs of production' and the value of both 'business endeavors, and individual contributions.
6
It's crazy that the GOP debate and the media re: the 2016 election has thus far almost exclusively focused on social issues. Income equality and an American economy that isn't evolving intelligently should truly be a legitimate discussion topic. Instead companies donate to the major candidates to ensure their future, and leave the public to bicker over passages of the Bible.
3
One has to read to the end to get the predictable business plan: "Government can provide tax incentives to business". A brilliant plan: Let workers subsidize their own raises. When government money goes to the poor, it takes away their incentive; when it goes to the rich, it provides incentive. We shouldn't be fooled: either alternative the author presents—revolution or leveling taxes—deserves serious consideration before going with his self-serving solution.
16
Investments in child poverty have the highest returns of any government spending.
4
To even hazard a "solution" to "Income Inequality" is to acknowledge its abnormality; to assume it is a problem; and worse to imply that the state has a legitimate role in the distribution of wealth.
An interesting graphic is obtained by writing in "Income inequality" into Google Ngram viewer.
An interesting graphic is obtained by writing in "Income inequality" into Google Ngram viewer.
So the answer is that the fat cats go to the government and ask for a tax break that they might decide to share with their workers. Is there any better illustration of how little power workers have in America?
2
Fair enough - income inequality is an issue. However, a significant portion of income inequality is due to immigration of unskilled workers, and H1-B visas. Both drive down wages, the latter keeping wages flat for high skilled workers. We might have a discussion about that.
2
socialism fever. Catch it!
Here is what your life is going to be. You'll work hard, more than forty, more than fifty, more than sixty hours per week. You'll take home manuals and other technical documents and read them till three am. You'll squeeze in time for your kids, time to mow the grass, time to wash the car. You'll do a better job-- and leave for better pay at another company.
None of these pipe dream solutions posted here are ever going to happen. Never.
Here is what your life is going to be. You'll work hard, more than forty, more than fifty, more than sixty hours per week. You'll take home manuals and other technical documents and read them till three am. You'll squeeze in time for your kids, time to mow the grass, time to wash the car. You'll do a better job-- and leave for better pay at another company.
None of these pipe dream solutions posted here are ever going to happen. Never.
1
Georgescu hits the point about needing living wages, but it has to be done by the govt. An individual company like Home Depot might attempt to do it on their own, but they will then fail because one of their competitors, paying slave wages, will be able to price more aggressively. To ensure a level playing field, all companies must be forced to pay a similar minimum wage, then they can compete on the other factors (efficiency, location choices, product mix, marketing, etc).
6
Spot on ... but it is hard to see how a crisis-driven correction could possibly be averted. One way or the other, Ronald Reagan's legacy as the unwitting Father of 21st Century American Socialism is all but assured.
3
A large civil unrest started not too long ago. It was called Occupy Wall Street.
And it was squashed in a New York minute by the police and the powers that be. Can't have none of that. They strong handily demonstrated the will of the 1%.
What happened then can perhaps have a much different outcome next time.
Our feudal overlords have their helicopters/jets on standby. Yes, they do.
And it was squashed in a New York minute by the police and the powers that be. Can't have none of that. They strong handily demonstrated the will of the 1%.
What happened then can perhaps have a much different outcome next time.
Our feudal overlords have their helicopters/jets on standby. Yes, they do.
8
I lke the revolution idea better, off with their heads they have had it hood enough too long.
2
It's good to see a business exective touching this third-rail issue. My question: how do you "turn back the clock" fifty years, to when the average executive seemed to have a sense of duty to his workers, and his country, and not *just* to himself and his stockholders? This is a moral issue as well as a business issue: recognizing that the "best interests" of a company lie in the *long-term*, not the short-term. A company that respects stakeholders, not just stockholders, is less likely to have mobs at the gates.....
8
Yes, unfortunately that's true and the wealth or income equality is really the plague of the XXI century especially with all those thousands poor migrants from Africa and the Mideast region pouring into the country. And if it leads to the revolution it will be really bloody and remorseless.
1
It is the acme of naiveté to think that an institution as corrupt and focused solely on avarice, as American and international business is, could ever be reformed.
But one connection you might consider exploring, Mr.Georgescu, is the connection between the establishment of our current corrupt corporatocracy and the adulation and idolization of American business that is so omnipresent in the US media.
But one connection you might consider exploring, Mr.Georgescu, is the connection between the establishment of our current corrupt corporatocracy and the adulation and idolization of American business that is so omnipresent in the US media.
6
I just finished your article and the thing that stood out for me was that you never pointed out Ken Langone's enormous financial political support for Chris Christie. Is that how we should support the 1 % with less taxes so that instead of reinvestment in this country they support someone who they think can do them some good in Washington. He as you were afforded opportunity in this country but I don't see what he especially has given back other than having his name plastered all over first avenue and calling NYU a verbal institution - Langone Medical Center.
I liked your article but thought it very naive and not owning up to reality...
Thank you . Ellen Gelb (erstwhile market research asst at Y&R in the 1960"s)
I liked your article but thought it very naive and not owning up to reality...
Thank you . Ellen Gelb (erstwhile market research asst at Y&R in the 1960"s)
2
The government should provide tax incentives so businesses can pay higher wages to their employees making less than $80,000 per year? We need to avoid an 80% tax rate? You prove your credentials as a result of coming to the United States as a refugee and making it. My grandfather came to the United States from Romania and made it, but I never heard him say that he needed tax incentives to pay his employees better. He just did. This just proves you aren't serious
9
I appreciate your sentiments here; however, if your solution is even MORE tax incentives for companies to pay their own employees more (so, presumably, income inequality may remain status quo at the C-suite level) you have lost the effort before it has begun.
4
The problem is 1) does not address the root cause inherent in the system which is exploitation (Thank you Shane) 2) no one will trust the Government to facilitate redistribution on this scale; and, even if they did we have learned from history that those gains prove untenable. A better path would be to introduce direct democracy into the enterprises themselves and let the workers democratically decide where, what and how to produce; and, how to distribute the surplus they create.
2
Corporate leaders should be very concerned about income inequality. Capitalism depends on a healthy middle class. If Ken Langone wants to continue to sell paint and carpet and all manner of other things sold by Home Depot, he needs to have a large middle class that can afford to remodel and do non-emergency repairs to their homes. Luxury retailers may not be hurt by a shrinking middle class, but most retailers need the middle class to keep going.
4
The author still doesn't get it.
His motivation is to avoid tax increases and he demands tax cut "incentives" to pay people a living wage.
No more government subsidies to corporate greed. No more austerity. Forgive college debt, single payer national healthcare, a New Deal like jobs program for climate change, public housing, free public education, and a stop t privatization and deregulation, no more approvals for fossil fuels, a national rail system.
Otherwsie, I'd prefer a levelling "revolution" to the author's policy prescriptions.
His motivation is to avoid tax increases and he demands tax cut "incentives" to pay people a living wage.
No more government subsidies to corporate greed. No more austerity. Forgive college debt, single payer national healthcare, a New Deal like jobs program for climate change, public housing, free public education, and a stop t privatization and deregulation, no more approvals for fossil fuels, a national rail system.
Otherwsie, I'd prefer a levelling "revolution" to the author's policy prescriptions.
11
"My friend My friend Ken Langone, a founder of the Home Depot, is scared a founder of the Home Depot, is scared"
Really? Is that why Home Depot has replaced about 40% of it workforce with part time and temporary-seasonal workers? Is that why Home Depot cuts hours of full time workers to just above the minimum requirement (33) , and immediately cuts hours of new hires after the training period to half or less of what was promised? Is that why Home Deport has rolling lay offs to reduce costs just before the quarterly reports are due?
Ken Langone and Home Depot executives and board are definitely something....but its not scared.
Really? Is that why Home Depot has replaced about 40% of it workforce with part time and temporary-seasonal workers? Is that why Home Depot cuts hours of full time workers to just above the minimum requirement (33) , and immediately cuts hours of new hires after the training period to half or less of what was promised? Is that why Home Deport has rolling lay offs to reduce costs just before the quarterly reports are due?
Ken Langone and Home Depot executives and board are definitely something....but its not scared.
14
Thank you Mr. Georgescu for your efforts. I am 58 and suffered mightily from the recession having been in sales in the construction industry for 25 years. Experts claim that the future is entrepreneurship; I myself am self-employed. How would your efforts work in a diffuse economy like the one I mention? Is growing entrepreneurship a reality? Is a new paradigm needed? Thank you again for your effort.
I've heard this before - and I cannot agree more. It's not that housing and living prices are too high in the USA - it's (most) wages that are too low. I'm not optimistic, however, that anything's going to change much. Here's a similar/strong op-ed piece, "When Capitalists Cared", from…2012.
http://www.nytimes.com/2012/09/03/opinion/henry-ford-when-capitalists-ca...
http://www.nytimes.com/2012/09/03/opinion/henry-ford-when-capitalists-ca...
So a solution is for all taxpayers (and T-note buyers), through government (G), to pay business (B) via tax credits, to pay more to employees (E) (presumably by an amount equivalent to the credits' value)? G pays B to pay E, holding B harmless? How is this different from the current SNAP/Medicaid/ACA/EITC/Section 8/etc. transfer system, whereby G pays E directly? Hardly seems to get to the bottom of the problem.
(A Question)
Mr. Georgescu-
I’m truly pleased to hear you are discussing these issues with fellow very-wealthy friends and business executives. My question:
Young & Rubicam/Y&R is a marketing and communications company specializing in advertising, digital and social media, sales promotion, direct marketing and brand identity consulting.
Will Y&R commit to a pro-bono multi-year campaign to educate business leaders, elected officials and the public about the need, and ways, to return to “a fair and responsible free enterprise system” that would allow “the capitalist engine that brought us great economic success and our way of life” to continue in this country?
Mr. Georgescu-
I’m truly pleased to hear you are discussing these issues with fellow very-wealthy friends and business executives. My question:
Young & Rubicam/Y&R is a marketing and communications company specializing in advertising, digital and social media, sales promotion, direct marketing and brand identity consulting.
Will Y&R commit to a pro-bono multi-year campaign to educate business leaders, elected officials and the public about the need, and ways, to return to “a fair and responsible free enterprise system” that would allow “the capitalist engine that brought us great economic success and our way of life” to continue in this country?
2
This reminds me very much of a point JFK made: "Those who make peaceful revolution impossible will make violent revolution inevitable." Taking private property, one of our early founders said, "...could occur suddenly and violently by the poor, or slowly and legally by the rich."
2
The lack of investment by both government and private business in the future shows that the elites in this country both political and business don't see a good future to invest in. Roosevelt rightfully called it fear and it's very destructive
A bleak future means unrest and war. It's already here and arriving at the shore of the first world on a daily basis. Guns are being purchased at record levels and government sequester is going to be broken over greater spending on defense, hyper security and offensive weapons.
Government needs to rebuild our infrastructure and increase investment in future technology. Public companies should be reinvesting in their businesses instead of buying back shares and paying dividends. The fact that both the public sector and the private sector aren't doing it tells me they don't see a very bright future.
I think what we need more than good tax policy is public and private leadership that has a different vision for the future and the will to start shaping it.
Shaping behavior through tax policy isn't going to change the fear among the elites and the devastation it's having on everyone else. It's marginal grease or friction the problem is much greater than a little lubricant.
A bleak future means unrest and war. It's already here and arriving at the shore of the first world on a daily basis. Guns are being purchased at record levels and government sequester is going to be broken over greater spending on defense, hyper security and offensive weapons.
Government needs to rebuild our infrastructure and increase investment in future technology. Public companies should be reinvesting in their businesses instead of buying back shares and paying dividends. The fact that both the public sector and the private sector aren't doing it tells me they don't see a very bright future.
I think what we need more than good tax policy is public and private leadership that has a different vision for the future and the will to start shaping it.
Shaping behavior through tax policy isn't going to change the fear among the elites and the devastation it's having on everyone else. It's marginal grease or friction the problem is much greater than a little lubricant.
Mr. Georgescu – I was applauding you until I read "Government can provide tax incentives to business to pay more to employees making $80,000 or less." If you feel passionate about inequality, then encourage businesses / corporations to suck it up and do the right thing – trade short-term earnings reports for long-term growth. If you ask for tax incentives, aren't you basically putting the tax burden back on the people you profess to want to help? If businesses don't pay their share, somebody has to make up the difference on the nation's tax bill.
3
You seem to miss the point that you business leaders have been the drivers of the greed. It really started in 1971 with the Lewis Powell letter to the Chamber of Congress. I hear the Koch's talking a good game but their action make lies of their words.
Business led the way on the downward pressure on wages because they don't want the people to share the wealth, they want it all.
You are giving us words but business hostilely opposes government involvement to help the people. They want to keep crushing the people.
Business led the way on the downward pressure on wages because they don't want the people to share the wealth, they want it all.
You are giving us words but business hostilely opposes government involvement to help the people. They want to keep crushing the people.
2
Income inequality plus tax inequality produces wealth inequality and despair. Family wealth has been shifting for more than 20 years with the top 10% of the population having 74% of the wealt. The next 40% of the population (the middle class) has 24% - down from 27% 20 years ago. The poorer half of the population (62 million families) had their share reduced from a small 4% share to just 1%. Young adults at the bottom are desperate and can't afford to marry or make babies. They try hard but they don't have the IQ or top physical talents that will move them into the middle class.
We need full employment so market forces will increase wages at the bottom. It can be achieved by replacing the 15.3% payroll taxes with a 4% VAT (not the 14.25% Rand Paul wants or the 30% sales tax Gov. Huckabee wants) and elimination of business tax expenditures. The article suggests a solution that goes in the wrong direction by giving tax incentives to businesses that already have way too many tax incentives. Payroll tax replacement gives workers an immediate 7.65% increase in take home pay and encourages consumer spending which stimulates the economy from the bottom up.
Near full employment can be supplemented by transitional jobs with charities that can be paid by simply restricting the $40 billion charitable deduction to service charities that put people to work.
Creating full employment can be done through revenue neutral tax reform for a sustainable boost to the economy.
We need full employment so market forces will increase wages at the bottom. It can be achieved by replacing the 15.3% payroll taxes with a 4% VAT (not the 14.25% Rand Paul wants or the 30% sales tax Gov. Huckabee wants) and elimination of business tax expenditures. The article suggests a solution that goes in the wrong direction by giving tax incentives to businesses that already have way too many tax incentives. Payroll tax replacement gives workers an immediate 7.65% increase in take home pay and encourages consumer spending which stimulates the economy from the bottom up.
Near full employment can be supplemented by transitional jobs with charities that can be paid by simply restricting the $40 billion charitable deduction to service charities that put people to work.
Creating full employment can be done through revenue neutral tax reform for a sustainable boost to the economy.
When capitalists rise to save the proletariat, it must be really bad.
1
Why do you refer to "punitive taxation"? Taxation is not meant to punish. It's meant to raise money from the people who can most afford to provide it. Seems like part of the problem is that rich people think they're being "punished" when they're really just being asked to help out since they can afford it more than people who don't have as much.
An 80% tax rate would, as you say, apply only to income over $500,000. The first $500,000 you make would be taxed at a lower rate. If you make $570,000, only $70,000 would be taxed at 80%. Who on earth makes $500,000 anyway?
An 80% tax rate would, as you say, apply only to income over $500,000. The first $500,000 you make would be taxed at a lower rate. If you make $570,000, only $70,000 would be taxed at 80%. Who on earth makes $500,000 anyway?
4
I agree we must do something about income inequality. Take Robert Reich as an example. He got $250,000 to teach one class at UC Berkeley. A professor at a 2 year college would only get $5 to teach a similar course. Or Elizabeth Warren, she got $350,000 to teach one class at Harvard. That is about $6000 an hour to deliver a canned presentation. Or the Clintons getting $100,000 to $250,000 plus expenses to make speeches. This all has to stop
1
I was sailing happily along, enjoying Mr. Georgescu’s accurate definition of the fatal flaw in modern capitalism, when I suddenly hit the sand bar of his one proposed solution: tax incentives for businesses to pay a living wage to their employees. Question: If better wages serve the interests of the business, why do they need a tax incentive to pay them? Simply giving the money directly to the employees, as one reader has suggested, seems more sensible. But I have a better idea: while businesses on their own raise employees’ salaries, let government take the money it would have lost to those tax incentives and invest it in rebuilding America’s crumbling infrastructure. That way, both the private sector and government are playing their proper role in building a better America, without further complicating an already overburdened tax code.
It seems unlikely that Capitalism will save Capitalism. The one-percent may not be pleased with feeble talk of revolution but their privileged existence can be transported anywhere governments can be bought and local police made their private security force. As sophisticated robotics remove more low-skilled, middle-class and professional jobs from the market, more articulate revolutionaries will emerge to challenge the existing capitalistic system that allows greed to be the highest virtue. A guaranteed annual wage for everyone is a start but will only maintain a consumer economy to the further enrichment of the few.
The poor and unskilled, are like the animals the vegan movement wants to reduce in numbers by attrition and breeding to live in manageable sheltered reserves.
The poor and unskilled, are like the animals the vegan movement wants to reduce in numbers by attrition and breeding to live in manageable sheltered reserves.
3
I was always under the impression that requiring money (i.e. tax breaks) to stop abusing individuals was called extortion. Your motivation is clearly a worry about a high tax rate, which could easily be bourn by the rich. Should it not be considered a moral issue that you have finally come to realize? What a self-serving opinion you expound.
2
When the author arrived in the US in 1954, the top marginal tax rate was 91%, as it had been since 1946. That rate was not lowered until 1964. It became 70% from 1965 to 1981 on income over $200,000 (inflation adjusted, $200K is now $1.5 million). So AMERICA'S OWN HISTORY does not suggest that a roughly 80% top marginal tax rate is inconsistent with a country where hard work is rewarded and capitalism is strong.
8
Private, for profit companies should pay their employees a living wage or go out of business. Government subsidies should be given to non-profit firms or individuals that provide services that are necessary for society to function, but which most people cannot afford, such as day care centers, home healthcare agencies, nursing homes.
3
Home Depot, really, one of the major US corporations consistently on the 10 worst companies to work for list as an example of treating workers fairly. No dear professor we need to jar the oligarchs and the Wall Street sharks into action by reintroducing the tax rates prevalent in the Eisenhower era, period. The rest is al malarkey.
6
"I’M scared. The billionaire hedge funder Paul Tudor Jones is scared. My friend Ken Langone, a founder of the Home Depot, is scared. So are many other chief executives. ... We are afraid where income inequality will lead."
Time to throw some crumbs to the masses. Arthur Hugh Clough said it best in Dipsychus:
"I sit at my table en grand seigneur,
And when I have done, throw a crust to the poor;
Not only the pleasure, one’s self, of good living,
But also the pleasure of now and then giving. 10
So pleasant it is to have money, heigh ho!
So pleasant it is to have money.…"
Time to throw some crumbs to the masses. Arthur Hugh Clough said it best in Dipsychus:
"I sit at my table en grand seigneur,
And when I have done, throw a crust to the poor;
Not only the pleasure, one’s self, of good living,
But also the pleasure of now and then giving. 10
So pleasant it is to have money, heigh ho!
So pleasant it is to have money.…"
the evolution of the economy might start by choosing political candidates more wisely. It might start by evaluating the sharing economy to see which of the new ideas support the workers and which support the CEOs. The author is about my age which means he and I are from a different culture from the millenial generation and I don't mean whether they are minorities or different ethnically.
"Government can provide tax incentives to business to pay more to employees making $80,000 of less."
So, as a taxpayer, I'm supposed to help pay employees of private corporations, even though, as noted, these employees have helped earn for their employers with an 80% increase in production over the past several years?
This suggestion came in the 20th paragraph of a 23-paragagraph column. My question: Mr. Georgescu...what took you so long?
So, as a taxpayer, I'm supposed to help pay employees of private corporations, even though, as noted, these employees have helped earn for their employers with an 80% increase in production over the past several years?
This suggestion came in the 20th paragraph of a 23-paragagraph column. My question: Mr. Georgescu...what took you so long?
4
Yet another gob smacking example of the socially tone deaf ruling class offering "hair of the dog that bit us" solutions to problems that they created.
Disgraceful indeed, that the "paper of record" would publish such drivel instead of providing an outlet for the voices of the many disenfranchised by the wealthy. Alas the age of investigative journalism has long since past with the coming of income inequality that makes the Gilded Age blush.
The only accurate statement in this shamefully self-serving column is that the ruling class should indeed be afraid, be very afraid. For they have long ago left the masses without any hope- and hope for a better tomorrow is what keeps the working class peacefully , compliantly productive on behalf of the 1%.
Ruling class greed has literally strangled the golden goose that once provided a decent life and middle class opportunity to millions. A growing number of Americans realize that the economic model is fundamentally flawed and must be replaced with a more humane, equitable and sustainable system- and that spells bad news for the wealthy 1% who would be expected to actually contribute fairly to the society that has provided them with so much.
As Bob Dylan aptly observed: "When you got nothin' you got nothin' to lose."
This also explains why Bernie Sanders draws the biggest crowds yet receives no legitimate coverage from the corporatist media.
Disgraceful indeed, that the "paper of record" would publish such drivel instead of providing an outlet for the voices of the many disenfranchised by the wealthy. Alas the age of investigative journalism has long since past with the coming of income inequality that makes the Gilded Age blush.
The only accurate statement in this shamefully self-serving column is that the ruling class should indeed be afraid, be very afraid. For they have long ago left the masses without any hope- and hope for a better tomorrow is what keeps the working class peacefully , compliantly productive on behalf of the 1%.
Ruling class greed has literally strangled the golden goose that once provided a decent life and middle class opportunity to millions. A growing number of Americans realize that the economic model is fundamentally flawed and must be replaced with a more humane, equitable and sustainable system- and that spells bad news for the wealthy 1% who would be expected to actually contribute fairly to the society that has provided them with so much.
As Bob Dylan aptly observed: "When you got nothin' you got nothin' to lose."
This also explains why Bernie Sanders draws the biggest crowds yet receives no legitimate coverage from the corporatist media.
10
You speak of a culture of greed. Believe me, you and your friends are entirely responsible for that greed. The rest of us live in a culture of fear. Survival is all we have managed along with untenable debt just to send our kids to state University.
Funny how, now that your buds have taken everything the rest of us had, now you feel badly? You people are enemies of the middle class and have made this country weaker. We are your camp friends. We are your friends from Brownies and Cub Scouts. We are the kids that always included you despite some opposition. But you don't know us and never really did.
We are the ones who worked after school while you watched TV. We are the ones who ONLY shop sales and not for bragging rights. We are the ones who hear all about your fabulous vacations but never get to take one. Sure, the stock market soars. Not our portfolios. No, we defy gravity. Then come more fees for the work that was never done.
Do you think we are stupid, too? We are well educated with then debt to prove it. We work harder than you do. Did you know a Pew survey found that people like you actually believe that poor people have it too easy, what with all those food stamps. You people also told a study that poor people don't work hard enough and if they did, they, too, would be wealthy.
DOES MONEY MAKE YOU ALL STUPID?
Funny how, now that your buds have taken everything the rest of us had, now you feel badly? You people are enemies of the middle class and have made this country weaker. We are your camp friends. We are your friends from Brownies and Cub Scouts. We are the kids that always included you despite some opposition. But you don't know us and never really did.
We are the ones who worked after school while you watched TV. We are the ones who ONLY shop sales and not for bragging rights. We are the ones who hear all about your fabulous vacations but never get to take one. Sure, the stock market soars. Not our portfolios. No, we defy gravity. Then come more fees for the work that was never done.
Do you think we are stupid, too? We are well educated with then debt to prove it. We work harder than you do. Did you know a Pew survey found that people like you actually believe that poor people have it too easy, what with all those food stamps. You people also told a study that poor people don't work hard enough and if they did, they, too, would be wealthy.
DOES MONEY MAKE YOU ALL STUPID?
7
Good to hear that corporate leaders are waking up to the world around them. But why do they need a government incentive to do the right thing for employees, shareholders and the community? As effectively argued in Zeynep Ton's, The Good Job Strategy, companies can pay employees well and earn strong profits if they invest in their people and run effective operations. As she argues, creating good jobs is a strategic decision on how to run a business and so is providing poor paying jobs and lousy working conditions. Do business really need need another government subsidy to do what they should be doing all along?
The best solution is just to get rid of your class altogether. Have workers own their companies and share the profits and loss. Managers would be hired just like everyone else. Why do we need your class, even well intention ones like yourself.
2
$250,000 a year is the amount of income needed to meet the same obligations that were easily met in 1950s by a single worker per household working a 40 hour week with defined benefit pension and health care. A factory worker.
Today, that is the top 1% of wage earners. The top 20% is cut off at less than $100,000 without benefits.
It was not "the capitalist engine" that brought "us" great economic success, it was thoughtful politicians who fixed the "boom and bust" banking world in the 1930s.
It took Wall Street many decades to "buy" Washington and leave Main Street impoverished.
To suggest that anyone in the top 1% of this country would not thrive on $500,000 is ridiculous. That class of people would benefit by sharing the wealth of money in exchange for a wealth of compassion and time with their loved ones.
Society intervenes on behalf of individuals who suffer from excess. Addicts of every ilk benefit by intervention. Food, power, drugs, money, sex, guns, violence are just some of the substances that people abuse.
It is the abusers of freedom that cry and pay for unlimited freedom to exercise their right to visit violence and abuse on the rest of society.
Government by the people and for the people means that the distribution curve regulates the common good. Individual excesses have to be reigned in.
Today, that is the top 1% of wage earners. The top 20% is cut off at less than $100,000 without benefits.
It was not "the capitalist engine" that brought "us" great economic success, it was thoughtful politicians who fixed the "boom and bust" banking world in the 1930s.
It took Wall Street many decades to "buy" Washington and leave Main Street impoverished.
To suggest that anyone in the top 1% of this country would not thrive on $500,000 is ridiculous. That class of people would benefit by sharing the wealth of money in exchange for a wealth of compassion and time with their loved ones.
Society intervenes on behalf of individuals who suffer from excess. Addicts of every ilk benefit by intervention. Food, power, drugs, money, sex, guns, violence are just some of the substances that people abuse.
It is the abusers of freedom that cry and pay for unlimited freedom to exercise their right to visit violence and abuse on the rest of society.
Government by the people and for the people means that the distribution curve regulates the common good. Individual excesses have to be reigned in.
2
Who do you think you are fooling? Again, you start with TAX INCENTIVES that YOU need to pay employees better. Placing the pay increases on the tax payer. How about this: you and the board take pay cuts, pay higher taxes and set up education benefits. Start with 15.00 per hour for your employees of three years or more and so on. Stop patting your self on the back and get to some REAL solutions.
3
Addressing income inequality is clearly one of the most pressing problems of the 21st Century. But I found myself marveling at the hypocrisy here. Increasing progressive taxes (the traditional route to addressing income inequality) is bad. But actually we need to use the tax code to address income inequality. We need to address income inequality and business people need to get on board that reforming the tax code progressively (that means the rich pay more) is part of the solution
1
Good analysis and excellent ideas except one. Why does it have to be a 'tax incentive (read break)' to motivate this behavior? This seems to be taking from the organization that has the duty to work for the common good. Once again this is an opportunity to make the system more simplier and increase the tax on the accumulated wealth, either individual or organization. Pay back to society up front or pay back in arrears.
Good Morning: Perhaps this is a bit of an outlier sentiment, but what I appreciated most about this article was the extent to which Mr. Georgescu gave credit to others who helped him in his life.
Once again a cogent understanding of what is happening in America by a person who has the connections to make a real difference ends with the usual private sector request for government handouts to themselves because these titans of business don't have the ability to tell their boards and shareholders that maximizing short-term returns are bad for their business and America. When Henry Ford realized that his employees could not afford to buy his cars he raised their wages. He did not wait for government to provide tax incentives to do it.
2
This article is an in depth explanation of why Bernie Sanders has the platform he does. Bernie is fighting for a progressive economic agenda that creates jobs, raises wages, protects the environment and provides health care for all. Call it socialism or not, it is what the US citizens need.
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6
Society needs income redistribution, and the redistribution we need is simple: work has to pay more.
1
The emergence that it is has to be accepted as such and taken seriously by those with multi-million salaries and bonuses, approved by boards insistent on ever-higher returns.
That turn to greed at all cost, and rewarding the greatest at amassing the most, has fundamentally changed our society for the worse.
You're right---either legislation for 80% tax rate or serious social unrest a la French Revolution will be the result. You can keep telling the increasingly poor, formerly middle class, to try harder, work harder, get a different degree.
The 1% is seen for what it is---naked greed, acquisition for its own sake, people even countries as collateral damage.
Mr. Peter this is global. Don't ask US taxpayers to help you out after you've bled us dry.
That turn to greed at all cost, and rewarding the greatest at amassing the most, has fundamentally changed our society for the worse.
You're right---either legislation for 80% tax rate or serious social unrest a la French Revolution will be the result. You can keep telling the increasingly poor, formerly middle class, to try harder, work harder, get a different degree.
The 1% is seen for what it is---naked greed, acquisition for its own sake, people even countries as collateral damage.
Mr. Peter this is global. Don't ask US taxpayers to help you out after you've bled us dry.
2
"Government can provide tax incentives to business to pay more to employees making $80,000 or less."
This says: tax me the worker bee so you can pay me more, if the tax is not falling on the very rich, because somebody has to cover the cost of the tax incentives. They do not come out of thin air. Or maybe you just want to "starve the beast." No thank you, Grover Norquist.
This make ZERO sense mathematically.
The right answer is to take the tax structure to where in was in the 1950s - 91% on top earners, 50%+ on business profits. Don't want to pay the tax? INVEST some of your profits back into your business and reduce your net profit. Otherwise, put your profits in your pocket and pay the tax man. Your choice.
This says: tax me the worker bee so you can pay me more, if the tax is not falling on the very rich, because somebody has to cover the cost of the tax incentives. They do not come out of thin air. Or maybe you just want to "starve the beast." No thank you, Grover Norquist.
This make ZERO sense mathematically.
The right answer is to take the tax structure to where in was in the 1950s - 91% on top earners, 50%+ on business profits. Don't want to pay the tax? INVEST some of your profits back into your business and reduce your net profit. Otherwise, put your profits in your pocket and pay the tax man. Your choice.
2
No one paid that back then. There were quite liberal write-offs.
It sounds great and I am glad that some are beginning to realize the harm that the greed is causing our country. But most of your people oppose paying more, are fighting to stop pay from increasing, and are talking about how full employment is hurting their bottom line so they want brakes applied to the economy.
Sorry, I don't think that you can pull it off against the heavy opposition of the rest of your class. They like us being poor, makes their wealth more powerful over us. It's going to take a revolution. There will be no heavy taxes put into place because the rich are buying the politicians to stop such things from happening. They will pass laws to hurt us more until the dam bursts and then the rich will cry for mercy they are not willing to give the rest of us.
Sorry, I don't think that you can pull it off against the heavy opposition of the rest of your class. They like us being poor, makes their wealth more powerful over us. It's going to take a revolution. There will be no heavy taxes put into place because the rich are buying the politicians to stop such things from happening. They will pass laws to hurt us more until the dam bursts and then the rich will cry for mercy they are not willing to give the rest of us.
It is a very thoughtful piece of writing. I agree with the fact that the pay scale has to rise for 80 % to make the economy humming again like it was before the great recession.
I have had the same thought for a long time about social unrest and had my friends laughing at me for the same. The taxes need not be increased but the so called independent boards need to treatise that inequality will bite them in the rear. Independent boards are a result of the appointment of the "board" by the CEOs etc. of of the companies and that is where the fly in the ointment is and the cameos and other stakeholders need to appoint really independent baords that peruse the Ceos pay and other benefits and early be a rubber stamp for whatever the oligoachs want.
A real reform is needed in the governance of privately held companies. the reforms there will benefit not only the shareholders but the employees.
I have had the same thought for a long time about social unrest and had my friends laughing at me for the same. The taxes need not be increased but the so called independent boards need to treatise that inequality will bite them in the rear. Independent boards are a result of the appointment of the "board" by the CEOs etc. of of the companies and that is where the fly in the ointment is and the cameos and other stakeholders need to appoint really independent baords that peruse the Ceos pay and other benefits and early be a rubber stamp for whatever the oligoachs want.
A real reform is needed in the governance of privately held companies. the reforms there will benefit not only the shareholders but the employees.
20 years ago while on a stdy assignment at Wharton, I attended a lecture by Jeremy Rifkin about the points raised in his 1994 book, 'The End of Work'. At the time I wrote it off as a pipe-dream by a radical leftist academic. But today many of his predictions have come true. A talented elite does the important work, and others are relegated to service jobs or leisure (welfare or unemployment). Rifkin had no solutions. Whether tax incentives would work might be interesting to test, but at least it's practical to try as opposed to raising taxes, something that inevitably has negative unintended consequences.
1
How about raising taxes first and then giving deductions to those businesses that actually raise wages? Otherwise this is just another case of corporate welfare.
73
census.gov/people/wealth/files/Wealth%20distribution%202000%20to%202011.pdf
Scroll to page 7. Read it.
It says that except for retired people, most of us are living on less than we did 15 years ago. This means two things. Social Security works. And America cannot afford the rich. Not because they are rich. There is nothing wrong with being rich. Everyone wants to be rich. But because they are cutting the rest of us off at the knees.
Scroll to page 7. Read it.
It says that except for retired people, most of us are living on less than we did 15 years ago. This means two things. Social Security works. And America cannot afford the rich. Not because they are rich. There is nothing wrong with being rich. Everyone wants to be rich. But because they are cutting the rest of us off at the knees.
5
Cheaters gonna cheat. There's too much tinkering with these complicated solutions and too much opportunity for end-runs around any safeguards you can build into these complicated systems that people think might help. Why not go with the simple and clean solution of the Financial Transaction Tax also known as the Tobin Tax? Our sunk bureaucratic costs are immense and still don't stop thieving banks and money launderers. Just take it off the top with the FTT at a measly 1/10th of 1% and then revitalize the public purse that way instead.
1
You want to know what business leaders can do? They can stop trying to tilt the playing field to their advantage. Stop with the "right to work" laws, which are a blatant attempt to diminish worker bargaining power. Stop pretending to be naive about the consequences of business support for the political party that reliably looks out for the interests of businesses and wealthy individuals. This is the party whose hand-picked Supreme Court justices support few limitations on the amount of money - favor-seeking contributions - permitted to fund political speech.
While the ratio of corporate profits to GDP is near a record high and the ratio of wages to GDP is near a record low, why can't business leaders stop trying to run up the score on the vast majority of Americans, often by ensuring that our laws, and the enforcement of those laws, are highly favorable to those who are already doing fabulously well?
While the ratio of corporate profits to GDP is near a record high and the ratio of wages to GDP is near a record low, why can't business leaders stop trying to run up the score on the vast majority of Americans, often by ensuring that our laws, and the enforcement of those laws, are highly favorable to those who are already doing fabulously well?
61
First off, I'd just like to congratulate Mr. Georgescu on a brave and wise article.
A quick prelude is that I fear that our capitalist model is in danger. In the early days of capitalism (here in the US and elsewhere) companies were mostly family owned and run even for generations. Now we have the 'board, stockholders and CEO model, which appears very flawed. The stockholders often are just looking for short term gain, the board has no real ties to or 'skin' in the company, and the CEO is often colluding with the stockholders for short term gain.
After that long-winded lead in, do you share those fears? Any thoughts on improving the current public corporate model? How about the German system of requiring public corporations to have a union representative on the board?
A quick prelude is that I fear that our capitalist model is in danger. In the early days of capitalism (here in the US and elsewhere) companies were mostly family owned and run even for generations. Now we have the 'board, stockholders and CEO model, which appears very flawed. The stockholders often are just looking for short term gain, the board has no real ties to or 'skin' in the company, and the CEO is often colluding with the stockholders for short term gain.
After that long-winded lead in, do you share those fears? Any thoughts on improving the current public corporate model? How about the German system of requiring public corporations to have a union representative on the board?
27
If this is truly a concern among some top executives, how come we are seeing several republican state governors under fund education at a time when income disparity is at a record high? Education is the great income equalizer. It also makes citizens comply with day-to-day civic obligations but instead what many of them are getting these days is a short version of what education used to be. And certainly education seems it has lost its mass appeal and value even when it has allowed the nation to reach its peak in many fields.
Workers in generally need a better pay to be able to increase their wellbeing but they also need high quality affordable education to be able to make significant contributions to society and have a sense of purpose in life.
As correctly pointed in the article the options are: more taxes to the super-rich since the middle class and the poor have little or nothing to spare; or social unrest similar to what is happening in Greece. Thus, far the super rich ("job creators") think none of those two things can happen and continue concentrating their wealth and sucking state and federal dollars in different forms with help from the politicians in turn.
Workers in generally need a better pay to be able to increase their wellbeing but they also need high quality affordable education to be able to make significant contributions to society and have a sense of purpose in life.
As correctly pointed in the article the options are: more taxes to the super-rich since the middle class and the poor have little or nothing to spare; or social unrest similar to what is happening in Greece. Thus, far the super rich ("job creators") think none of those two things can happen and continue concentrating their wealth and sucking state and federal dollars in different forms with help from the politicians in turn.
Stockholders are the priority. That's how capitalism has developed. This being the case, shouldn't workers become, or at least treated as, stockholders? Perhaps workers should be entitled to some sort of bonus for stock performance? Perhaps workers should be given a certain amount of stock each quarter. Long-time employees would gain more and more of a stake in the company. The fact that workers have been left out of capitalism is a quirk of history– a vestige of the 19th-century caste system (which includes slavery, share cropping, and so-called "poor laws"). We should have moved beyond this state of affairs, but haven't. The Man has managed to keep all profits to Himself and disguise the caste system by semantically eliminating salvery, share cropping, and poor laws, even though the reality has not changed very much.
1
The writer states the obvious: Congress is paralyzed and is unwilling to play a part in addressing income equality. When the GOP House and Senate can wean themselves from the teat of the 1%, when they can stop relying on voter suppression and fear-mongering to maintain their political power, when they grow a moral conscience, and when the stop trying to destroy government and unions, this country will have a chance to become great again. If you're holding your breath in anticipation, it better have been a really big breath, because until the GOP's base dies out and political power is distributed based on the demographics that truly exist in this country (and that are trending in directions the current GOP abhors), this country has no shot at improving the lot of the middle class (what's left of it) and our youth.
Here's a suggestion that has been made elsewhere: the companies should be billed for the food stamps, lunches, section eight and other programs that the taxpayers spend to save the lives of their full-time employees.
I just read in another article that full time professional employees of Verizon need section eight to survive. (Yes, the professionals who answer the phone and help you with your bill and technical problems need government programs to survive. And this is in Missouri, which has a low COL)
This would not be a tax, it would be a bill, as in 'we found your full-time employees starving and homeless, here's what it cost to rescue them.'
We could bill separately for programs designed to save citizens who lost their job when the call centers are sent overseas.
I just read in another article that full time professional employees of Verizon need section eight to survive. (Yes, the professionals who answer the phone and help you with your bill and technical problems need government programs to survive. And this is in Missouri, which has a low COL)
This would not be a tax, it would be a bill, as in 'we found your full-time employees starving and homeless, here's what it cost to rescue them.'
We could bill separately for programs designed to save citizens who lost their job when the call centers are sent overseas.
3
I don't mind them being rich; but, I do mind them contaminating our political system with their ill gotten billions. I am so mad that NOT ONE banker went to jail during or after The Great Recession that I have lost all respect for the system. It is time for change, and if that means unrest and revolution, so be it. We must show this billionaire class that America isn't for sale, and those who try to buy her might end up on a lamp post somewhere all Wall Street.
1
Tax incentives are not the answer. While they might put more money in the hands of workers it only reduces the already record low tax rate for large corporations.
When corporate and income tax rates were high in the 1950's and 60's we had growth and rising standards of living. But when we globalized capital transfers we are now asking American workers to compete with third world workers while trying to live with modern industrial nation expenses.
Workers wages have to increase and to accomplish this there are only two options. Workers must profit share, which means investors have to be willing to share their windfall, or corporate taxes, including the billions off shore must increase and those revenues must translate into public services like transportation that workers now pay for. Either put more dollars in the workers pocket or reduce the cost of municipal services that they rely on.
When corporate and income tax rates were high in the 1950's and 60's we had growth and rising standards of living. But when we globalized capital transfers we are now asking American workers to compete with third world workers while trying to live with modern industrial nation expenses.
Workers wages have to increase and to accomplish this there are only two options. Workers must profit share, which means investors have to be willing to share their windfall, or corporate taxes, including the billions off shore must increase and those revenues must translate into public services like transportation that workers now pay for. Either put more dollars in the workers pocket or reduce the cost of municipal services that they rely on.
While reading this piece & thinking back over my 5+ years of at Home Depot, I considered sending a link to the new CEO, to ask if he was in sync with Mr. Langone on this, as well he should be. Then I got to the part about "Home Depot, Costco Wholesale, Whole Foods, Publix, Qualcomm, Starbucks and Gravity Payments are taking small steps, and compensating employees more."
At that point I saw this article as part of a right wing plot to spin Home Depot as somehow aligned with the genuinely progressive spirit of the other companies mentioned.
A core goal of The Home Depot is STILL to hire at the lowest wage possible & endeavor to increase "associate" pay at a rate less than increases in the cost of living. Perhaps the fact the the Home Depot was born in Georgia, a "right to work for less" state has something to do with this, but that is no excuse. During the great recession Home Depot worked that approach obsessively, and is now losing valuable employees in droves as the economy recovers.
It is ludicrous to paint Home Depot as even remotely progressive. It's an old school company struggling with an obsolete business model that they are trying to sustain despite the surging awareness of an enlightened population with far more respect for itself and far higher expectations in the workplace. So let's have this discussion, but let's have it with eyes wide open and respect for the readers of this remarkable newspaper.
At that point I saw this article as part of a right wing plot to spin Home Depot as somehow aligned with the genuinely progressive spirit of the other companies mentioned.
A core goal of The Home Depot is STILL to hire at the lowest wage possible & endeavor to increase "associate" pay at a rate less than increases in the cost of living. Perhaps the fact the the Home Depot was born in Georgia, a "right to work for less" state has something to do with this, but that is no excuse. During the great recession Home Depot worked that approach obsessively, and is now losing valuable employees in droves as the economy recovers.
It is ludicrous to paint Home Depot as even remotely progressive. It's an old school company struggling with an obsolete business model that they are trying to sustain despite the surging awareness of an enlightened population with far more respect for itself and far higher expectations in the workplace. So let's have this discussion, but let's have it with eyes wide open and respect for the readers of this remarkable newspaper.
6
Okay, it's not all bad that a bunch of CEOs recognizing widening inequality as a problem. But this proposal's (predictably) about what's in it for them. Since the labor market's strenthening, businesses, especially retailers like Home Depot, are having to pay more to compete for workers. Now that the pressure's on, corporate America wants a helping hand to pay the wages that generate their profits. How about direct help in the form of lower deductibles on Obamacare medical care for the working- and middle-class. Or how about more help with Section 8 housing vouchers (see NYTimes today)? Or perhaps more money for the Houston non-profit that's working miracles there (also NYT today)? The last thing this country needs is more subsidies to the world's largest corporations. And how would we verify this money went to workers, rather than to profits or CEO pay? Sheesh.
4
If a company is not paying its workers a solid living wage with commensurate raises, then its business model is defective. The company is cutting corners and cheating. Paying employees properly is as intrinsic to doing business as making a good product or providing a valuable service. Why should the government subsidize companies to cajole them into doing what it is their job to do in the first place?
5
Before that happens , as far as the fundamentally flawed economic system is concerned the worst is yet to come and soon enough, all hell will break loose.
1
Fascinating and revealing piece. The author says every institution can help reverse the perverse income inequality that he knows threatens the very rich as much as the very poor, "even government." Knowing that his despised government is really the only counter to the greed that always holds sway in its absence, his only recommendation is, yep, government incentives for businesses that behave as if their workers had a smidgen of human dignity.
I do applaud the acknowledgment that the very rich and their blessed fortunes are at risk today, that their walls, armed guards, electrified fences, and fabulous wealth will not transport them to another planet when enough people have nothing left to lose.
I do applaud the acknowledgment that the very rich and their blessed fortunes are at risk today, that their walls, armed guards, electrified fences, and fabulous wealth will not transport them to another planet when enough people have nothing left to lose.
1
Question: Is it hubris that you think gives you the ability to address inequality via providing more incentives for Corporations? (That one is rhetorical). My real question is what CJ Koz asked you on the New York Times opinion page.
I would rather feel the pain of revolution than to have these so-called Captains of Industry provide even a single idea how to correct the course this nation is on. It defies belief that Georgescu can write about how thankful he and Langone are to live in this country yet willingly and I suspect, with all candor, joyfully pay sub-standard wages.
What is a sub-standard wage? Langone is worth appr. 2.8 billion. The 'expected' rate of return for high-wealth individuals is roughly 6-7%+ at 6% he stood to make $168,000,000.00 off of interest alone last yr. Cannot pay living wage? Provide better benefits? Pay more taxes? Laughable.
Georgescu used his considerable skills in marketing to help usher in a never before seen level of economic divide for decades and Americans should listen to these men? Because they were successful? I'm sorry but that's ridiculous. They helped create the model that has gutted the poor & middle-class, destroyed opportunity, and did so via their efforts. Now they have concerns? If you want absolution for your sins go somewhere else. You will get none of my compassion, respect, nor appreciation. Zero.
The 1% bully's are worried we'll dirty their playground.
I think the 99% should remove them and their voices from it now.
I would rather feel the pain of revolution than to have these so-called Captains of Industry provide even a single idea how to correct the course this nation is on. It defies belief that Georgescu can write about how thankful he and Langone are to live in this country yet willingly and I suspect, with all candor, joyfully pay sub-standard wages.
What is a sub-standard wage? Langone is worth appr. 2.8 billion. The 'expected' rate of return for high-wealth individuals is roughly 6-7%+ at 6% he stood to make $168,000,000.00 off of interest alone last yr. Cannot pay living wage? Provide better benefits? Pay more taxes? Laughable.
Georgescu used his considerable skills in marketing to help usher in a never before seen level of economic divide for decades and Americans should listen to these men? Because they were successful? I'm sorry but that's ridiculous. They helped create the model that has gutted the poor & middle-class, destroyed opportunity, and did so via their efforts. Now they have concerns? If you want absolution for your sins go somewhere else. You will get none of my compassion, respect, nor appreciation. Zero.
The 1% bully's are worried we'll dirty their playground.
I think the 99% should remove them and their voices from it now.
4
You need an incentive, a tax break from the government, to pay a FAIR livable wage?
Excuse me if I sound bitter, but I still remember begging my boss for a 25 cent ... which I never received although he promised he would 'consider' it and get back to me.
Why is it so difficult to convince your fellow businessmen to quit EXPLOITING others through slave wages? Pay a worker a fair wage. Quit beseeching the government to give you an "incentive" when you already have millions and billions of dollars.
Excuse me if I sound bitter, but I still remember begging my boss for a 25 cent ... which I never received although he promised he would 'consider' it and get back to me.
Why is it so difficult to convince your fellow businessmen to quit EXPLOITING others through slave wages? Pay a worker a fair wage. Quit beseeching the government to give you an "incentive" when you already have millions and billions of dollars.
3
Money is like fertilizer spread it around everything grows dump it in one spot everything dies. I love how the wealthy and the corporations talk about free-market capitalism after they have bribed excuse me lobbied the lawmakers to write laws that only benefit them and circumvent the free-market that they tell us to worship. They spend millions using the government to interfere in the market on their behalf and then tell us that's free that's fair and that's capitalism when all it is is welfare for the rich they are the true welfare queens and this whole economy is a sham and we all see it - there is a slow train coming for the wealthy of this society and it's not going to be pretty
3
Corporations are sitting on huge piles of cash with little incentive to invest in long term growth strategies and product development ( real value added investment with good job creating potential) because of the expense of research and development, the risk of failure and the length of time to gain a return on investment. It is much easier to game the system through the financial sector. The easy days of 10% return in an economy which grows at 2% are un-sustainable.
This guy leaves me speechless! A heart-warming clarion call for companies to do the decent thing, and pay their employees a fair wage after 40 years of back-sliding. His tone is so earnest. But, er, would it be OK if the government funded the pay increases for five years, because actually or shareholders would not be very keen on direct increases. If companies cannot pay fair wages and still make a reasonable profit, their business model is a hallucination.
I worked for 21 years in a private manufacturing company outside of the US, which paid good wage rates, and ALSO ran an excellent profit-sharing scheme which rewarded employees up to an extra 5% when productivity was above a set standard. (OK, wash my mouth out with soap and water.) The result of course was a win all round, with both the employees benefiting substantially and the company's bottom line thriving. Talk about motivation..
I worked for 21 years in a private manufacturing company outside of the US, which paid good wage rates, and ALSO ran an excellent profit-sharing scheme which rewarded employees up to an extra 5% when productivity was above a set standard. (OK, wash my mouth out with soap and water.) The result of course was a win all round, with both the employees benefiting substantially and the company's bottom line thriving. Talk about motivation..
80
A wise and very prudent essay on the way forward. A system of redistribution, enforced at the point of a government law, does not rehabilitate the human heart. And it never has done so.
Mr. Georgescu has written an eloquent appeal that we must move forward, and leaders as well as individual citizens need to embrace a "you first" ethos that is self-denying rather than cynical procrastination.
I am hopeful that more transparency, on pay rates and the way in which our citizens live, will pull more citizens to hold companies to higher account and themselves to greater generosity.
If it is possible to ingrain a culture of greed, can we not bring about a society of generosity?
Mr. Georgescu has written an eloquent appeal that we must move forward, and leaders as well as individual citizens need to embrace a "you first" ethos that is self-denying rather than cynical procrastination.
I am hopeful that more transparency, on pay rates and the way in which our citizens live, will pull more citizens to hold companies to higher account and themselves to greater generosity.
If it is possible to ingrain a culture of greed, can we not bring about a society of generosity?
1
Wonderful discussion. More! More! More! It's nice to reaffirm that thoughtful people abound all across America.
Finance is the death of Capitalism. Until we curb the pump and dump zero sum insider trading game of Hedge funds and activists investors, there will be no incentive or ability to innovate and start new business.
Income inequality is the most important issue facing all politicians in this decade. Some recommendations that you over looked are
1. Universal health insurance provided by government through Medicare paid for by employers for all employees and their families
2. Social Security tax cap dropped to insure social security is safe for all retirees and reasonable amounts paid. People will be able to retire from the work force at an appropriate retirement age opening opportunities for younger workers.
3. Universal high education paid for through taxes on corporations. Associate degree, technical training, undergraduate college degrees and professional degrees available to all students who are qualified. Stop the brain drain to Wall Street and put graduates back in teaching, engineering, plumbing, air plane technicians. Debt free education benefits corporations as well as employees.
4.Living minimum wage If you have to start at the bottom you should be able to start at the bottom and support your self on one job's wages. You should not have to work 3 jobs to afford rent.
5. Free child care or child care tax breaks/credits that really cover the cost of child care for working families which now approaches over $1500-$2000 a month for one child in some cities.
There are many more simple items that could be added to this list to end income inequality but these 5 items would give all employees a chance to move up the ladder and at the same time benefit corporations bottom line.
1. Universal health insurance provided by government through Medicare paid for by employers for all employees and their families
2. Social Security tax cap dropped to insure social security is safe for all retirees and reasonable amounts paid. People will be able to retire from the work force at an appropriate retirement age opening opportunities for younger workers.
3. Universal high education paid for through taxes on corporations. Associate degree, technical training, undergraduate college degrees and professional degrees available to all students who are qualified. Stop the brain drain to Wall Street and put graduates back in teaching, engineering, plumbing, air plane technicians. Debt free education benefits corporations as well as employees.
4.Living minimum wage If you have to start at the bottom you should be able to start at the bottom and support your self on one job's wages. You should not have to work 3 jobs to afford rent.
5. Free child care or child care tax breaks/credits that really cover the cost of child care for working families which now approaches over $1500-$2000 a month for one child in some cities.
There are many more simple items that could be added to this list to end income inequality but these 5 items would give all employees a chance to move up the ladder and at the same time benefit corporations bottom line.
1
I don't think anything will seriously change on this topic until those in America that think they are well off realize just how wealthy the truly rich in America really are and they are not it. What a sad day this will be when the illusion of identity with the rich is broken and reality strikes. The civil unrest that could bring about change will not happen until this large group of corporate white collar workers by the millions realize that just because they work in air conditioning and drive a shiny import they are not "the well to do" but rather 90% of men and women between 25 and 65 years old working in corporate america are really the "Lunch bucket Joe's" of their generation. The illusions of an expense account and the frequent flier card are just that "illusions" and they are not bank accounts with cash. They are woefully unaware of miles of 50 plus foot yachts that make up the marinas of Brevard County Florida. The rich are those in the board room of the thousands of companies that employ America that have 5 to 6 homes scattered across the US and the southern countries of Europe they enjoy 3 or more boats over 50 feet long. Yes, they live in a different world of as "lunch bucket joe" who covets his state college degree in Business Administration. No doubt the cast system is already hard at work here in the US the only problem is that those disgruntled workers shacking the iron at the gates still have plenty of cake to eat.
52
I'm scared of TPP, and its sequels--TTIP, and the deadly TISA.
US involvement in these international corporate pacts would confer as yet untold power to global multinational corporations, and will greatly widen the wealth inequality gap in the U.S.
That is why well over 2,000 American groups, organizations and unions across the occupational spectrum have signed a letter to our misguided administration urging defeat of TPP. Many more good-paying U.S. jobs will be lost, even whole occupations will dry up, (e.g. family farms totally giving way to Big Ag) and our way of life will be fundamentally changed (e.g. consumer protections we have long fought for) if these international corporate power grabs are approved by Congress.
Please address this looming threat to the goals you articulate, Mr. Georgescu. Thank you.
US involvement in these international corporate pacts would confer as yet untold power to global multinational corporations, and will greatly widen the wealth inequality gap in the U.S.
That is why well over 2,000 American groups, organizations and unions across the occupational spectrum have signed a letter to our misguided administration urging defeat of TPP. Many more good-paying U.S. jobs will be lost, even whole occupations will dry up, (e.g. family farms totally giving way to Big Ag) and our way of life will be fundamentally changed (e.g. consumer protections we have long fought for) if these international corporate power grabs are approved by Congress.
Please address this looming threat to the goals you articulate, Mr. Georgescu. Thank you.
1
"There is a way to start. Government can provide tax incentives to business to pay more to employees making $80,000 or less."
So, you still don't want to spend any of your incalculable wealth to help your employees. You want the government to do it for you. The hypocrisy in this article is breathtaking. Stop pretending that you care. If you cared you would do something instead of wringing your hands in fear and whining about how everybody misunderstands you.
So, you still don't want to spend any of your incalculable wealth to help your employees. You want the government to do it for you. The hypocrisy in this article is breathtaking. Stop pretending that you care. If you cared you would do something instead of wringing your hands in fear and whining about how everybody misunderstands you.
4
Since the author wrote as he did he may simply be giving a nod to other recalcitrants and their stockholders.
Jeff Bezos made over $7bn recently. In one day. When the quarterly earnings at Amazon were announced.
How many of his employees, both working minimum wage in overheated warehouses or stacked in high density seating in Seattle or Bangalore stand to make a hundredth of that in their lifetime working for him?
Not to pick on Amazon in this respect. Walmart, GM, Facebook ... creating billionaires who simply because of their position in their corporate hierarchy are rewarded on a logarithmic scale that it is questionable that they could ever correlate to the value they deliver to the company or stockholders. How many of these Execs earning their millions in cash and stock have left, and it had significant impact on the companies fortunes?
"trickle down" is a joke, but there's no hope of the folks who've clawed their way to the top ever allowing meaningful reform to ever dig the country out of the pit it is digging for itself.
How many of his employees, both working minimum wage in overheated warehouses or stacked in high density seating in Seattle or Bangalore stand to make a hundredth of that in their lifetime working for him?
Not to pick on Amazon in this respect. Walmart, GM, Facebook ... creating billionaires who simply because of their position in their corporate hierarchy are rewarded on a logarithmic scale that it is questionable that they could ever correlate to the value they deliver to the company or stockholders. How many of these Execs earning their millions in cash and stock have left, and it had significant impact on the companies fortunes?
"trickle down" is a joke, but there's no hope of the folks who've clawed their way to the top ever allowing meaningful reform to ever dig the country out of the pit it is digging for itself.
4
Why then does Ken Langone support Chris Christie, whose policies have advantaged the wealthy in New Jersey and disadvantaged the middle and loeer classes, not least in its pricing of train and bus fares, but also in allowing the infrastructure to crumble?
4
Mr. Georgescu,
What do business leaders think of an Unconditional Basic Income? In many ways it seems like the ideal solution to the tragedy of commons problem that befalls business and prevents individual actors from making the first move. In this way, each member of society is equally footing the bill to collectively solving income inequality.
What do business leaders think of an Unconditional Basic Income? In many ways it seems like the ideal solution to the tragedy of commons problem that befalls business and prevents individual actors from making the first move. In this way, each member of society is equally footing the bill to collectively solving income inequality.
As a small business owner, I agree that income inequality is the #1 public enemy in America today.
All of the clients of my firm have a disability and are referrals from the state - and the state pays us to help them find jobs and keep jobs. What is disheartening is the wage rate workers can expect to receive and the fact that most jobs now have NO employer paid benefits.
If we (our society) could provide support (monetary or other services) to low wage workers to keep them in the workforce, with out taking away 'entitlement' spending before they can stabilize their living situation (e.g earn enough to have shelter, food, child care and transportation), we might reasonably expect to have fewer workers dependent on 'entitlements' in the long run.
As a moral decision, I make about 50cents per hour more than my highest paid employee. I pay more than any other company in the area that does the work we do, and have generous paid benefits. Why? because it is the right thing to do for my employees and their families. We ARE all in this together. I grieve that our society has devolved to allow the incredible selfishness and meanness evidenced by the 'top business leaders' in our country to become the standard.
All of the clients of my firm have a disability and are referrals from the state - and the state pays us to help them find jobs and keep jobs. What is disheartening is the wage rate workers can expect to receive and the fact that most jobs now have NO employer paid benefits.
If we (our society) could provide support (monetary or other services) to low wage workers to keep them in the workforce, with out taking away 'entitlement' spending before they can stabilize their living situation (e.g earn enough to have shelter, food, child care and transportation), we might reasonably expect to have fewer workers dependent on 'entitlements' in the long run.
As a moral decision, I make about 50cents per hour more than my highest paid employee. I pay more than any other company in the area that does the work we do, and have generous paid benefits. Why? because it is the right thing to do for my employees and their families. We ARE all in this together. I grieve that our society has devolved to allow the incredible selfishness and meanness evidenced by the 'top business leaders' in our country to become the standard.
8
I believe income inequality to be partly fact - that technology has been its enabler. Those who have harvested its forces are to receive its gains, namely financial and anything data intensive and transactional. I believe that it is not sustainable. Technology is can be mass produced, mass replicated, eventually giving power back to the mainstream, becoming cheaper and more powerful at the same time. In other words, having market leverage based on technology alone has its narrow window of opportunities. As technology becomes more conventional, standardized, there is nothing that will stop the 99% from doing via technology what the 1% was doing to them the decade before. Technology is only a tool. It is not the final product, nor it is branding like Disney. By having an economic engine fully dependent on technology and data, America will loose its greatest beacons - innovation and risk taking. I believe income inequality is also a generational choice. The war generations, having the advantage of longevity and modern healthcare, have become more of the "I" generation as they aged. The millenniums extending through the baby-boomers, having to live in one of the longest global peace period in history, and also are about to receive the largest transfers of equity in history, are more of a "we are the world" generation. Their choices through political maneuvering will bring more equality, empathy and love - unless there will be famine, global natural catastrophes, and World War 3.
Capital has never driven economic growth. Capital follows economic growth. Consumers drive economic growth. We are a "Bubble Up Economy" not a trickle down economy.
1
Dan would have loved your article. Excellent points. I can't wait to read more. Best, Tracey
>
I'm not going to hold my breath.
I'm not going to hold my breath.
1
The article simply reflects surprise over the evaporation of the artificial socio-economic culture of 1946-1989, the era of the cold war when the West was trying to show that it was more fair and more just than the USSR, when of course it never was. Now that there is no socialist regime to pressure the West towards moral behavior, all the stops are pulled out as we are returned to the early 20th century and wild rapacious capitalism devouring the planet.
3
The "shiny bosses" of the recent economic forum in Davos, have set as maximum priority the problem of inequality. They have been accused for hypocrisy by many people, but the truth is that their concern about global inequality is not hypocritical. Indeed, economic elites worry about the phenomenon of inequality, but this is a specific type of inequality and they have their own reasons, of course, to worry about.
http://failedevolution.blogspot.gr/2014/02/a-more-simple-model-in-favor-...
http://failedevolution.blogspot.gr/2014/02/a-more-simple-model-in-favor-...
One simple starting point - make taxes more progressive as they were during the high growth period which ended approximately 40 years ago, including FICA and Medicare taxes on all income, no limits, no exclusion for unlearned income. This would allow the US (that is, we the people) to adequately fund programs ranging from highways (the interstates began under Eisenhower) to education to social programs.
4
So basically you're saying: In our "enlightened self-interest," we of the wealthy, corporate class should get the government to pay us to increase worker salaries. Seriously?
6
We need to stop favoring capital over labor. The tax benefit we give to 'unearned' income is absurd.
6
What is happening now is unsustainable. You will have a huge dispossessed landless class. This is a tinderbox that an explode in a putsch or an internal war of the have-nots vs. the haves. Considering how heavily armed this country is, such an explosion is not far-fetched. The rich have pummeled the middle class and bled it white. Just keep going and see how long the palmy times last..
2
Mr. Georgescu says: "There is a way to start. Government can provide tax incentives to business to pay more to employees making $80,000 or less. "
Question: Sir, how do you propose paying for that tax cut? Higher debt and deficits? How about instead paying for it by eliminating some of the tax giveaways that accomplish little or nothing and are used mostly by those taxpayers who already very well off?
Question: Sir, how do you propose paying for that tax cut? Higher debt and deficits? How about instead paying for it by eliminating some of the tax giveaways that accomplish little or nothing and are used mostly by those taxpayers who already very well off?
2
Tax credits to large businesses as an insentive to better pay their workers...(most major coroporations don't pay taxes as it is)...then who makes up the difference to the State? Those workers who just got the raise.
1
One only wonders whether this conversation is too little, too late. What we see today hasn't been seen in the English-speaking world since the late Elizabethan- Jacobean period, 1570 - 1640s. The Cecils and other new merchant-based aristocracy changed the economic rules of English society to their advantage, set off the largest uprooting and crushing of peasantry well-being in centuries, which included the enclosure movement, the Poor Laws, and eventually contributed to the revolution against the Stewarts, and the large scale killing of magnates.
This new historical analogue will end one way or the other. Will it be the restoration of a broad-based economy and end to punishing the poor, or will it be revolution and the gibbeting of the new magnates?
This new historical analogue will end one way or the other. Will it be the restoration of a broad-based economy and end to punishing the poor, or will it be revolution and the gibbeting of the new magnates?
1
Home Depot only pays $9.50 per hour and you need to guarantee your weekends are available for them. Let the revolution begin!
8
The fear motivating the author and some of his CEO colleagues is that - God forbid - our nation's countless have-nots might use our democracy to impose a tax system that actually began to equalize excessive inequalities of income.
If corporations are to truly change the trends of the last 40 years, though, pay for regular folks will have to rise. And the most sensible funding source for such increases would be the excessive funds corporate boards currently put into c-suite salaries and perks, directors' comp packages, excessive dividends - in brief, the overcompensation of the .1 percenters.
Fairer distribution of corporate profits would not be a terrible thing. Corporate earnings have been high enough since the Great Recession to allow for better pay for main-line employees without forcing c-suite executives to sell their second (or third or fourth) homes.
Such change will require leaders who put their money where their mouths are - like the CEO at Gravity - rather than folks who talk about modest new tax incentives at a time when our Congressional and Presidential elections are dominated by funds from billionaires who share none of the author's good intentions.
We need change. We also need leadership. Let us hope that the author and his friends recognize these needs and take direct action - rather than proposing tax incentives which, though modest, would never be enacted by our feckless Congress.
If corporations are to truly change the trends of the last 40 years, though, pay for regular folks will have to rise. And the most sensible funding source for such increases would be the excessive funds corporate boards currently put into c-suite salaries and perks, directors' comp packages, excessive dividends - in brief, the overcompensation of the .1 percenters.
Fairer distribution of corporate profits would not be a terrible thing. Corporate earnings have been high enough since the Great Recession to allow for better pay for main-line employees without forcing c-suite executives to sell their second (or third or fourth) homes.
Such change will require leaders who put their money where their mouths are - like the CEO at Gravity - rather than folks who talk about modest new tax incentives at a time when our Congressional and Presidential elections are dominated by funds from billionaires who share none of the author's good intentions.
We need change. We also need leadership. Let us hope that the author and his friends recognize these needs and take direct action - rather than proposing tax incentives which, though modest, would never be enacted by our feckless Congress.
1
", how can we move more businesses and chief executives to act now? We really don’t want civil unrest or an 80 percent tax rate to jar us into action. There is a way to start. Government can provide tax incentives to business to pay more to employees making $80,000 or less." this is a truly dreadful proposal. it calls for yet more government intervention to correct income inequality (and it assumes for no apparent reason that there is something inherently wrong with income inequality per se). the solution is much simpler. eliminate ALL deductions for everyone. the wealthy executive benefits far more from deductions than do the less wealthy worker. a flat tax would be optimum in terms of fairness but a progressive no-deductions tax system would also work. let's give that a try for a few years and see what happens before having the government provide "incentives" to businesses. increased simplicity is better than increased complexity becuase the wealthy (with their accountants, financial advisors and lawyers) will always find a way to manipulate any complicarted scheme to their own advantage.
1
Proposals like yours pretend that society at large has no interest in how individuals live. But that is not so.
part 2
Previously I tried to set the stage for a more complete list of capital that deserve considerations in our economic and social policies. Since Adam Smith and others, economic thought has largely been dominated by ideological perspectives of those at the top of the economic pyramid. As a result, the so-called Capitalism we all suffer under is a mere shadow of a potentially more robust system--one that gives all kinds of capital their proper consideration. And I had begun to list other kinds of capital that have been recognized since Smith and other theorists lived. ...
No one in 1776 recognized the limitations of ecosystems. Certainly these must be considered as capital. Nor had social science developed the insights that society itself and the various institutions that humans have created such as education, law, culture--must also be considered as capital.
All these and more require invention, maintenance, and re-creation in order to carry out their role in civilization. Such actions require matter and energy to create them and to keep them going, and thus, must be provided to them out of the so-called 'profits' now literally stolen by our phony capitalist class. I say Phony, because all these other kinds of capital have to be maintained out of production. When ecosystems, families, social solidarity are not sustained out the production, but such revenues are unjustifiably claimed and spent by the power elite, the whole economic apparatus must collapse
Previously I tried to set the stage for a more complete list of capital that deserve considerations in our economic and social policies. Since Adam Smith and others, economic thought has largely been dominated by ideological perspectives of those at the top of the economic pyramid. As a result, the so-called Capitalism we all suffer under is a mere shadow of a potentially more robust system--one that gives all kinds of capital their proper consideration. And I had begun to list other kinds of capital that have been recognized since Smith and other theorists lived. ...
No one in 1776 recognized the limitations of ecosystems. Certainly these must be considered as capital. Nor had social science developed the insights that society itself and the various institutions that humans have created such as education, law, culture--must also be considered as capital.
All these and more require invention, maintenance, and re-creation in order to carry out their role in civilization. Such actions require matter and energy to create them and to keep them going, and thus, must be provided to them out of the so-called 'profits' now literally stolen by our phony capitalist class. I say Phony, because all these other kinds of capital have to be maintained out of production. When ecosystems, families, social solidarity are not sustained out the production, but such revenues are unjustifiably claimed and spent by the power elite, the whole economic apparatus must collapse
Any capitalist who says all the "right" things, but ends with "give me and my friends money and good things will happen," is not to be taken seriously in my opinion. This is just the old failed "trickle down" theory in a new wrapper.
2
Not only should the top rates be raised but also many loopholes should be closed.
Hedge fund operators only pay income tax at capital gains rates. Heirs to multi-million dollar estates should as a minimum pay the capital gains tax on the estates. All most of them did to earn it was to be born in the right family.
Hedge fund operators only pay income tax at capital gains rates. Heirs to multi-million dollar estates should as a minimum pay the capital gains tax on the estates. All most of them did to earn it was to be born in the right family.
1
So....
The solution to an economy choked with government excess is....
more government? Take money from taxpayers and give it to businesses in the hope that they will let some of it trickle down to their employees?
I'm thinking that such a program will do for business what the ACA did for medicine....
The solution to an economy choked with government excess is....
more government? Take money from taxpayers and give it to businesses in the hope that they will let some of it trickle down to their employees?
I'm thinking that such a program will do for business what the ACA did for medicine....
If Mr. Georgescu thinks that an 80% tax on the highest income levels represents "oppressive taxation" he fails to understand how deeply implicated he is in the problem he claims to find troubling. If his buddy Langone is so disturbed by this situation, why does he continue to play sugar daddy to political candidates who express not the slightest alarm at or awareness of this crisis? Talk is cheap.
1
There was never a guarantee that America, as we envision it, would last forever. If we don't do something, and soon, I'm afraid too.
Capitalism is a paradigm in which the economy is market driven. Purveyors of goods and services determine how much they want for their goods and services and the consumers of those goods and services determine how much the are willing to pay. It is this dynamic, together with the dynamics of supply and demand; not the government, that determines the price of goods and services; including labor.
The lower the qualifications for a position the higher the number of qualified candidates. This high supply lowers the demand and correspondingly the wage for that position.
For example, a "bat boy" performs a necessary task for a ball club but the number of people who can perform that task is infinite. therefore the "bat boy's" compensation will have no bearing on the compensation the coach receives; and vice versa.
A system in which the government micromanages businesses is the type of system that exist in Cuba.
Having enriched one's self by running a business in a capitalist society does not make one a capitalist.
A capitalist would never advocate attempting to preempt government oppression by capitulating before the fight begins; nor would a capitalist consider the notion. Capitalists may become concerned but they do not act out of fear.
The US government actually has no constitutional founding for micromanaging American businesses and a ridiculous 80% tax rate; exponentially higher than any tariff ever paid by any country would ensure companies would relocate outside the US.
The lower the qualifications for a position the higher the number of qualified candidates. This high supply lowers the demand and correspondingly the wage for that position.
For example, a "bat boy" performs a necessary task for a ball club but the number of people who can perform that task is infinite. therefore the "bat boy's" compensation will have no bearing on the compensation the coach receives; and vice versa.
A system in which the government micromanages businesses is the type of system that exist in Cuba.
Having enriched one's self by running a business in a capitalist society does not make one a capitalist.
A capitalist would never advocate attempting to preempt government oppression by capitulating before the fight begins; nor would a capitalist consider the notion. Capitalists may become concerned but they do not act out of fear.
The US government actually has no constitutional founding for micromanaging American businesses and a ridiculous 80% tax rate; exponentially higher than any tariff ever paid by any country would ensure companies would relocate outside the US.
A pipe dream. The greed driving the corporate elites, Wall Street, And the banking sector is insatiable. In our history, the only time workers achieved anything like economic security and a true living wage was when labor organized. With the fall of the unions we have returned to an era of mass exploitation with no limiting forces. Your class is hard wired to gouge every penny they can from their customers and employees. Change will never come willingly.
86
I’m concerned, too, Mr. Georgescu, and not just about capitalism. I’m concerned about capitalism and its two sidekicks, corporatism and consumerism the three of which, driven by your fellow hucksters in the world of advertising, have taken us to the brink of ecocide.
But Mother Nature bats last and she will keep on hitting until we realize that the past two hundred years were facilitated by cheap and plentiful energy that drove the industrial revolution and led, eventually, to global corporate hegemony. Now everyone wants to live like we do and buy their way to happiness with toss-away consumerism, ephemeral gadgets, and planned obsolescence.
Some of us have learned that things don’t go better with Coke, in fact, they go worse (diabetes, obesity and megatons of greenhouse gas emissions.) Some of us have learned that we can find happiness with fewer material goods, a less harried lifestyle and a renewed commitment to community, local production, and sharing.
Yes there’s a problem with income inequality. But that’s just one very visible and inevitable result of the three C’s – consumer corporate capitalism. It’s not a system worth saving. And the longer we try to save it, the greater the price Mother Nature will exact as the planet warms, the climate grows hostile and resources deplete.
But Mother Nature bats last and she will keep on hitting until we realize that the past two hundred years were facilitated by cheap and plentiful energy that drove the industrial revolution and led, eventually, to global corporate hegemony. Now everyone wants to live like we do and buy their way to happiness with toss-away consumerism, ephemeral gadgets, and planned obsolescence.
Some of us have learned that things don’t go better with Coke, in fact, they go worse (diabetes, obesity and megatons of greenhouse gas emissions.) Some of us have learned that we can find happiness with fewer material goods, a less harried lifestyle and a renewed commitment to community, local production, and sharing.
Yes there’s a problem with income inequality. But that’s just one very visible and inevitable result of the three C’s – consumer corporate capitalism. It’s not a system worth saving. And the longer we try to save it, the greater the price Mother Nature will exact as the planet warms, the climate grows hostile and resources deplete.
77
Education, education, education. So said my Lithuanian father-in-law. For decades and at every meal the famly shared. at least once. To truly deal with income inequality we need to include the lower 40% now not with yet another promise that will most likely not be fulfilled. Those businesses who are willing to begin facing the situation will need workers with new skill sets for jobs yet to be created or even designed. There is no reason business canoot also build schools. We all need new solutions. It is time to end the tyrrany of quarterly lreports--a good place to start. But that is not enough. We need new business strategies, top to bottom. We are facing robot driven factories, big pharm and big agra and a global enterprise system. America can lead, if the leaders will lead. Let the business men and women start this revolution just as they did the one that founded our country.
The solution is not either/or it is both/and. There is one either or that is true here: either the businesses take comprehensive action now or the taxes and civil unrest commeth.
The solution is not either/or it is both/and. There is one either or that is true here: either the businesses take comprehensive action now or the taxes and civil unrest commeth.
1
There is no such thing as "trickle down" economics...that has been the
poison which has eroded laissez-faire...and decimated the middle class
upward mobility..
Henry Ford..had the right idea....make a produce (cars) which your employees
can buy.
What company can say this now...the moguls whose slave labor has afforded
them untaxed wealth ...these hoarders of money...and slave masters have
bought our government with PACs...and keep evading taxes...
Trickle-Down ...is just a snake salesman's way of getting your vote
The Middle Class is Decimated...due to Corporate Greed and Citizens United.
Just write about it Editors...do the right thing....expose the corruption
and perhaps someone like Bernie Madoff will be insignificant by comparison
to say...the Koch Brothers et al...
poison which has eroded laissez-faire...and decimated the middle class
upward mobility..
Henry Ford..had the right idea....make a produce (cars) which your employees
can buy.
What company can say this now...the moguls whose slave labor has afforded
them untaxed wealth ...these hoarders of money...and slave masters have
bought our government with PACs...and keep evading taxes...
Trickle-Down ...is just a snake salesman's way of getting your vote
The Middle Class is Decimated...due to Corporate Greed and Citizens United.
Just write about it Editors...do the right thing....expose the corruption
and perhaps someone like Bernie Madoff will be insignificant by comparison
to say...the Koch Brothers et al...
1
Capitalism while a great idea is not a robust system that takes all kinds of capital into consideration. Moreover, it to begs all sorts of questions, particularly just what purpose an economy actually serves?
Most would posit that human welfare is the ultimate purpose of an economy. No deep thought here for sure, but then, how should we measure such welfare? And we have invented various measures at both the macro and micro economic level. Unfortunately such measures have been premature: that is, we have developed measures before more important work has been done. To wit: we have failed to first identify what capital is and further to parse out all the kinds of capital that exist.
For example, while economic classes today usually contrast Capital--investments in production and distribution and service; with Labor--self evident; early economists such as Adam Smith made no such distinction. He saw machine capital and labor capital. Both were capital in his view. Current economics teaching reflects ideological perspectives that over emphasize the role of machine capital (as it were) in order to dominate labor and social order and falsely justify the resulting mal-distribution of wealth.
In other words there is no logical or material contradiction between capital and labor: both represent different kinds of capital and should receive equal treatment in law and policy.
(to be continued)
Most would posit that human welfare is the ultimate purpose of an economy. No deep thought here for sure, but then, how should we measure such welfare? And we have invented various measures at both the macro and micro economic level. Unfortunately such measures have been premature: that is, we have developed measures before more important work has been done. To wit: we have failed to first identify what capital is and further to parse out all the kinds of capital that exist.
For example, while economic classes today usually contrast Capital--investments in production and distribution and service; with Labor--self evident; early economists such as Adam Smith made no such distinction. He saw machine capital and labor capital. Both were capital in his view. Current economics teaching reflects ideological perspectives that over emphasize the role of machine capital (as it were) in order to dominate labor and social order and falsely justify the resulting mal-distribution of wealth.
In other words there is no logical or material contradiction between capital and labor: both represent different kinds of capital and should receive equal treatment in law and policy.
(to be continued)
What is most promising is that there are serious men and women at the top who now acknowledge the "end game" if the direction of our economy in relationship to wealth accumulation is not reversed. Post haste. A French Revolution Redux. A.K.A. The Reign of Terror.
I hope we have not passed the dreaded "tipping point". Because the inevitable social unrest that the author has alluded to is something I have been predicting since the 2008 Global Financial Crisis. Unfortunately, the likes of Wall Street Bankers Jaime Dimon and Lloyd "We are doing God's work" Blankfein, as well as other self-proclaimed "Capitalists" stand in the way of the kind of transformation necessary to change the system.
The paradox is that these men (and some women) don't really understand that Adam Smith's vision of Capitalism in 1776 did not picture such concentration of power in the hands of a few. To the contrary. It was the center of wealth and power of the British Aristocracy and King George III that Smith was railing against; that by divesting them of their monopolies/oligopolies, the average wage earner's lot in life would be vastly improved.
Rather ironic how such an elegant theory as Capitalism could be high-jacked in the 21st Century by the very greed that Adam Smith was so intent on bridling and harnessing in order to lift the rest of humanity upwards. It all seemed so promising until 1981.
Is the significance of that year lost on anyone?
I rest my case . . .
I hope we have not passed the dreaded "tipping point". Because the inevitable social unrest that the author has alluded to is something I have been predicting since the 2008 Global Financial Crisis. Unfortunately, the likes of Wall Street Bankers Jaime Dimon and Lloyd "We are doing God's work" Blankfein, as well as other self-proclaimed "Capitalists" stand in the way of the kind of transformation necessary to change the system.
The paradox is that these men (and some women) don't really understand that Adam Smith's vision of Capitalism in 1776 did not picture such concentration of power in the hands of a few. To the contrary. It was the center of wealth and power of the British Aristocracy and King George III that Smith was railing against; that by divesting them of their monopolies/oligopolies, the average wage earner's lot in life would be vastly improved.
Rather ironic how such an elegant theory as Capitalism could be high-jacked in the 21st Century by the very greed that Adam Smith was so intent on bridling and harnessing in order to lift the rest of humanity upwards. It all seemed so promising until 1981.
Is the significance of that year lost on anyone?
I rest my case . . .
1
No one ever mentions those of us who can't work and rely solely on the government for our survival, who live on less than half the official poverty line, and who would not benefit at all even if the top tax rate did go to 80% because no one even suggests that perhaps some of those benefits should not only be retained but enhanced. Does anyone who reads the Times know what it's like to live on $743/month and $145 in Food Stamps? The poor are officially invisible- even those of us who vote.
2
It's nice that Peter Georgescu remembers his past and I am also glad that he has posed right questions. Only thing is that rest of his business community does' think that way barring a few and a serious gap surely persists in this direction. The caste system, he fears, exits 100 % for sure.
Hardworking Americans deserve better treatment. Frankly speaking they are not at all asking for the sky. In fact they are asking for the bare minimum benefits, which already exist in countries like India, not at all a great deal.
Can't a hardworking American expect annual increment ? Can't employees expect maternity leave if not paternity leave ? Can't there be minimum wage hike as is already done in the case of Seattle ? Can't there be leave encashment ? Can't there be leave travel allowance or leave travel reimbursement ? Can't there be House rent allowance ? Can't there be a city allowance ? Can't there be dearness allowance to compensate for the ever rising cost of living ?
Americans are not even asking for all of those, which exist in India but only asking for hike in minimum wages, provision of maternity leave and sick leave that's all ? Is it that a big deal ? Well to do businessmen should act fast else, perhaps, things may go out of hand, which could have happened already in any part of the world but for the extreme patience of Americans.
Hardworking Americans deserve better treatment. Frankly speaking they are not at all asking for the sky. In fact they are asking for the bare minimum benefits, which already exist in countries like India, not at all a great deal.
Can't a hardworking American expect annual increment ? Can't employees expect maternity leave if not paternity leave ? Can't there be minimum wage hike as is already done in the case of Seattle ? Can't there be leave encashment ? Can't there be leave travel allowance or leave travel reimbursement ? Can't there be House rent allowance ? Can't there be a city allowance ? Can't there be dearness allowance to compensate for the ever rising cost of living ?
Americans are not even asking for all of those, which exist in India but only asking for hike in minimum wages, provision of maternity leave and sick leave that's all ? Is it that a big deal ? Well to do businessmen should act fast else, perhaps, things may go out of hand, which could have happened already in any part of the world but for the extreme patience of Americans.
1
The solutions as proposed by Mr.Georgescu to income inequality will not correct the problem but will in in fact enable the system to continue while at the same time taking away valuable tax dollars from other programs. To fix income inequality the playing field needs to be leveled, which means that the rich need to pay their share in taxes and companies should not be given tax incentives to ship jobs overseas which helps keep wages low.
1
I am just glad Mr. Georgescu will be reading the comments. Looking forward to hearing from him about what he thinks about Mr. Langone's political positions...
2
Sorry but Mr. Georgescu appears to me as just another Plutocrat with a non solution to an inequality problem that is so immense they, as much as they want to, can no longer ignore it. So better to give it some lip service. Any body else shocked that his proposed solution is to incentivize the "job creators" with government support to pay their employees a living wage? No mention of the total money-corrupted political process that has enabled the Plutocrats to rig the business environment so far in their favor. Having successfully built barriers to entry in an ever growing crony-cartel corporate model, they feign distress at the unsustainable and predatory capitalist mutation they have created. Having successfully purchased their entitled status from corrupt politicians they, hypocritically, deny a reformed government is capable of providing solutions. God forbid they lose control of the universe by permitting a reformed government responsible to the PEOPLE and no longer to just the financial elites.
2
A good start is drowning Grover Nordquist's group in a bathtub (figuratively speaking, of course). He is your arch enemy in this fight.
Good luck.
Good luck.
1
None of this will work unless you take into account the continuing pernicious effects of racism and sexism. And anyway, your single proposal is "cut taxes and we'll pay people more." Is there some reason that I should believe that will work? There appears to be no connection between tax cuts and higher wages.
Basically, the rich should be paying higher taxes and so should well-off business that have millions or billions in the bank and are just sitting on that money.
Higher taxes could mean, say, fixing US infrastructure (schools, roads, hospitals), providing health care to the poor, etc.
Basically, the rich should be paying higher taxes and so should well-off business that have millions or billions in the bank and are just sitting on that money.
Higher taxes could mean, say, fixing US infrastructure (schools, roads, hospitals), providing health care to the poor, etc.
I'm required to set goals every year for my low level desk job, and I do so in good faith, even knowing full well that I'll be told at the end of the year that I'm making "too much" to receive an average increase (I'm way under your $80,000 mark). Even if I achieve my challenging goals and get high marks in customer feedback, my raise will in no way cover the increasing costs of my health care, groceries, and everything else I need to live, all while I try to save for my imaginary retirement.
Do you think I should take a challenging round of goals to my supervisor this year and say to him, "I promise to do all of these great things for the company. How about you give me a fair raise right now, and then you can come back in three to five years to see if I deserved it?"
Does that seem like a good plan? What do you suppose he'll say?
Do you think I should take a challenging round of goals to my supervisor this year and say to him, "I promise to do all of these great things for the company. How about you give me a fair raise right now, and then you can come back in three to five years to see if I deserved it?"
Does that seem like a good plan? What do you suppose he'll say?
3
So Mr. Georgescu's solution for the massive income inequality is calling for more TAX Incentives to support employees whose income is less $ 80000 per year. Mr. Georgescue fears that sooner or later he his friends will have to pay higher taxes. So he is proposing to rob Treasuery with further tax incentives and supplmemting the income of small fraction of workers while the rest of 99% continue to support Mr. Georgescu and his 1% friends.
3
I would start with managing possession inequality. After all, income is income, at least if there is work behind it.
Somehow, when all these billionaires get together to lament income inequality, I doubt it's in a luncheonette.
3
aren't you the same ceo that walked away with millions after young & rubicam
went public? and the riches were only shared by a very few.
went public? and the riches were only shared by a very few.
3
Nice to see a 1%er with a bit of a moral compass, however, I have heard and seen his kind in action. Capitalists consider morality a weakness. It undermines profits. They will not share in their success until they are forced to do so. The lower classes are starting to rumble, and Mr Georgescu smartly knows his history. People can't get decent jobs that pay a living wage. That means food, shelter, and medicine for our children is getting too expensive whilst you take several vacations a year in the Hamptons. Yep, you guys better start using your little Ivy League brains to figure it out. The people are losing their patience. Appreciate the acknowledgement, good luck convincing your associates.
4
A start might be to deal in 'capitalism' which by definition would not be hoarding.
"Before the early 1970s, wages and productivity were both rising. Now most gains from productivity go to shareholders, not employees...."
Here's an honest writer who at least isn't claiming wages stopped rising on Election Day, 1980. Maybe someone will recognize the manufacturing jobs engine that was responsible for the that Post-War Golden Age. You can then understand what started its demise. Hint: It's related to the products, primarily durable good, that US consumers decided to purchase. Off-shoring by is a symptom of the problem in that US manufacturers are trying to match the cost of the imported goods.
You can't build components in Indiana at union labor rates and stay competitive with imports or transplants. And save your union pep-talk for your true believers.
Here's an honest writer who at least isn't claiming wages stopped rising on Election Day, 1980. Maybe someone will recognize the manufacturing jobs engine that was responsible for the that Post-War Golden Age. You can then understand what started its demise. Hint: It's related to the products, primarily durable good, that US consumers decided to purchase. Off-shoring by is a symptom of the problem in that US manufacturers are trying to match the cost of the imported goods.
You can't build components in Indiana at union labor rates and stay competitive with imports or transplants. And save your union pep-talk for your true believers.
Here's the Times for you: Plutocrats for equality?
Oh really?
Oh really?
1
Capitalism needs competition to function as it should. When a seemingly viable Communist system provided that spur between 1930 and 1970 the American worker was treated with grudging respect by business and supported by a legal system (i.e. government) that gave organized labor a chance for economic power parity with business. But when it finally became clear that Communism was a poor means to effectively mobilize a nation's assets to provide for its population and lost all economic respect, that all changed and led to the situation it which we now find ourselves. Communism may have been very rough on Mr. Georgescu, but it was the best friend the American worker ever had.
3
I'm glad you're scared.
Hopefully, you and your colleagues are scared enough to do something truly radical: share the wealth. Poverty breeds violence, hopelessness and death.
We could use a few less billionaires and a LOT more income security. So shed some billions, retool your shareholder thinking to long-term investment rather than short-term profits, and invest in your community and your nation by helping people earn a livable wage.
Wealth will still trickle up... in increased spending from all across the layers below, down to the bottom.
Change the "rabid capitalist" paradigm to "reasonable capitalist" and give the rest of the world a chance to breathe.
#WeAreOne
Hopefully, you and your colleagues are scared enough to do something truly radical: share the wealth. Poverty breeds violence, hopelessness and death.
We could use a few less billionaires and a LOT more income security. So shed some billions, retool your shareholder thinking to long-term investment rather than short-term profits, and invest in your community and your nation by helping people earn a livable wage.
Wealth will still trickle up... in increased spending from all across the layers below, down to the bottom.
Change the "rabid capitalist" paradigm to "reasonable capitalist" and give the rest of the world a chance to breathe.
#WeAreOne
10
I'm scared too. Of not having enough money upon retirement, of the folks who want to gut Medicare and the governors who won't even accept federal money for Medicaid, of the untreated mentally ill who have easy access to automatic weapons, of crime and broken bridges and the unemployed, especially among the young, who think they have no future.
Many other developed countries do not have these problems because they've enacted policies to prevent them. "Not acting," just as Mr. Georgescu says, "would be far more costly."
Many other developed countries do not have these problems because they've enacted policies to prevent them. "Not acting," just as Mr. Georgescu says, "would be far more costly."
13
Georgescu seems to be forgetting that the great capitalistic machine which built America was contingent on racialised oppression. Slavery. Racialised oppression continues today internationally coercively through wars and trade agreements and restructuring as coerced by the World Bank and IMF. It continues domestically through the exploitation of racialised bodies in the workforce and through the prison industrial complex. To address the problem of wage inequality means also to address the race problem, hence Georgescu's argument breathes through false axioms.
1
How about privatizing the interstate highway system? (1)It would stop the current misallocation of highway resources, (2)It would provide an immediate and long run job stimulant primarily to the middle class, (3)By selling the interstate system to private enterprise, the generated funds would be used to have a high-impact reduction on our national debt level, (4)Instead of a tax consumer, the privatized system would be a tax payer. (5) Although not likely, Congress could then eliminate the federal gas tax. The private corporation would be regulated as a public utility in setting tolls. It would rationally match highway capacity with highway demand thus benefiting all of America.
Let's privatize the hallway in your house instead. See how you like it. Privatizing of public assets is destroying my country.
Your 1st point would not do anything but hurt the most of the people with the least amount of money. The rich can afford to pay tolls, but can the truck drivers and many others afford to pay them? No they can't. I can't even see point 2 happening at all, the money will just be given to the rich in tax cuts.
Point 3 would be temporary at best and I can't see enough being made to pay off but a small portion of the debt. Point 4, complete nonsense, those are the people who don't have to pay taxes. They would make sure that any deal makes it so. Just like all the states offering tax free havens to big business now.
Point 5 the gas tax is about 18 cents on the gallon, not enough to help the poor to pay for gas. The point of those private corporations being regulated is a joke, the whole push by the right is to kill all regulations, rules, and laws affecting corporate behavior. So they would be free to gouge us even more.
The highway system was paid by us and I would bet that we would get back pennies on the dollar. Not a worthwhile idea at all.
Point 3 would be temporary at best and I can't see enough being made to pay off but a small portion of the debt. Point 4, complete nonsense, those are the people who don't have to pay taxes. They would make sure that any deal makes it so. Just like all the states offering tax free havens to big business now.
Point 5 the gas tax is about 18 cents on the gallon, not enough to help the poor to pay for gas. The point of those private corporations being regulated is a joke, the whole push by the right is to kill all regulations, rules, and laws affecting corporate behavior. So they would be free to gouge us even more.
The highway system was paid by us and I would bet that we would get back pennies on the dollar. Not a worthwhile idea at all.
1
Here is my question for Mr. Georgescu:
If you and your high-placed friends honestly want to address inequality in this country, why aren't you all working as hard as you can to elect Bernie Sanders? Having held elective office as a mayor, U.S. Congressional Representative and U.S. Senator, he is smart, experienced, amply qualified, has not been the subject of scandal and has never enriched himself at the public trough. Of how many corporate CEO's can you say the same?
If you and your high-placed friends honestly want to address inequality in this country, why aren't you all working as hard as you can to elect Bernie Sanders? Having held elective office as a mayor, U.S. Congressional Representative and U.S. Senator, he is smart, experienced, amply qualified, has not been the subject of scandal and has never enriched himself at the public trough. Of how many corporate CEO's can you say the same?
14
If you think taxpayers should subsidize the wages you pay, you're out of your mind. You should pay a living minimum wage, period. Finance it with cuts in exorbitant executive pay and the massive profits that you park overseas in tax havens.
You will of course, get a deduction for wages on corporate income taxes, but the loopholes that allow you to book U.S. profits overseas and avoid taxation should be closed forthwith.
You will of course, get a deduction for wages on corporate income taxes, but the loopholes that allow you to book U.S. profits overseas and avoid taxation should be closed forthwith.
19
These are the class of people who have advocated for the lower and lower tax rates. These are some of the hedge fund managers who support charter -- i.e. privatized schools that take public money but are not held accountable to the public -- because of the profit potential. These are the people who do not believe in the public commons.
8
That Peter Georgescu, Ken Langone and others like Warren Buffet and Nick Hanauer highlight the harmful effect of excessive income inequality on democratic capitalism is refreshing and laudable, but aren't many of the proposed solutions focused on symptoms rather than root cause?
Mr. Georgescu, what incentives do most business have today to "invest aggressively in their own operations"? Mergers in health care and media and entertainment abound, driving greater returns through relatively low-risk cost-cutting. How do we pay for tax breaks to incentivize companies to invest for long-term profit rather than acquire for short-term gain?
Incentivizing companies to invest is a helpful tactic, as are increasing minimum wage and imposing higher income tax rates on top earnings, but don't these steps miss the fundamental problem?
Doesn't it seem that the US has become complacent about refereeing fair competition to ensure truly free enterprise? Perhaps driven by globalization pressures, we have come to accept monopolies, having as few as two or three companies dominate every large industry.
Until we re-establish ground rules around fair competition, starting with greater restrictions on the market share individual companies can control, the 1% (or fewer) will inevitably race upwards, amassing great fortunes that translate to political influence for perpetuating their gains, while everyone else sinks to the point that we all, as Mr. Georgescu notes, careen toward social unrest.
Mr. Georgescu, what incentives do most business have today to "invest aggressively in their own operations"? Mergers in health care and media and entertainment abound, driving greater returns through relatively low-risk cost-cutting. How do we pay for tax breaks to incentivize companies to invest for long-term profit rather than acquire for short-term gain?
Incentivizing companies to invest is a helpful tactic, as are increasing minimum wage and imposing higher income tax rates on top earnings, but don't these steps miss the fundamental problem?
Doesn't it seem that the US has become complacent about refereeing fair competition to ensure truly free enterprise? Perhaps driven by globalization pressures, we have come to accept monopolies, having as few as two or three companies dominate every large industry.
Until we re-establish ground rules around fair competition, starting with greater restrictions on the market share individual companies can control, the 1% (or fewer) will inevitably race upwards, amassing great fortunes that translate to political influence for perpetuating their gains, while everyone else sinks to the point that we all, as Mr. Georgescu notes, careen toward social unrest.
2
Excellent and overlooked point! How about the recent merger of Office max and Office depot? Why was this not prevented-- it's a monopoly. Locally, Cerberus owned Albertsons "bought" Safeway-- result has bee immediately higher prices-- eggs now at $7.00 per dozen. Who did these two mergers serve? Not the employees who are struggling to bring good customers service, not the consumer.
There is nothing "oppressive" about income tax rates of 80%.
This merely would bring us back to the income tax rates of the Eisenhower era....when the US economy was humming and when US capitalism worked for all rather than just for a few.
This merely would bring us back to the income tax rates of the Eisenhower era....when the US economy was humming and when US capitalism worked for all rather than just for a few.
26
I had the pleasure of working for Mr. Georgescu at Y&R and I found him to be an intelligent and inspirational leader. However, his solution is only a band-aid on a wound that requires major surgery.
1. The real problem is the skewed distribution of wealth, not income. The middle class cannot save anything at their level of income while the very wealthy benefit from (excessively high) incomes, rents, interest, dividends et al – enabling them to save an increasing amount each year, accelerating the wealth gap.
2. While researching for a book on baby boomers, I was shocked to discover that the average 401K for boomers in their mid-fifties in pre-meltdown 2008 was $60K. Quite simply, those boomers will outlive their money. While the shift from defined benefit to defined contribution retirement plans has benefited corporate America, it has hung the working class out to dry.
3. Wall St. has destroyed the economy using tools like LBOs and derivatives. Yet, we still haven't reinstated Glass-Steagall.
While I applaud Mr. Georgescu’s recognition of the problem, his solution is only a partial one. When he was beginning his career, the top tax rate was 90%, we invested heavily in infrastructure, a CEO “only” earned 40 times the average employee's salary, and most companies displayed loyalty to their employees and communities as opposed to today’s loyalty to Wall St., their stock valuation and their global quest for lower taxes and cheap labor.
Perhaps we can learn from the past.
1. The real problem is the skewed distribution of wealth, not income. The middle class cannot save anything at their level of income while the very wealthy benefit from (excessively high) incomes, rents, interest, dividends et al – enabling them to save an increasing amount each year, accelerating the wealth gap.
2. While researching for a book on baby boomers, I was shocked to discover that the average 401K for boomers in their mid-fifties in pre-meltdown 2008 was $60K. Quite simply, those boomers will outlive their money. While the shift from defined benefit to defined contribution retirement plans has benefited corporate America, it has hung the working class out to dry.
3. Wall St. has destroyed the economy using tools like LBOs and derivatives. Yet, we still haven't reinstated Glass-Steagall.
While I applaud Mr. Georgescu’s recognition of the problem, his solution is only a partial one. When he was beginning his career, the top tax rate was 90%, we invested heavily in infrastructure, a CEO “only” earned 40 times the average employee's salary, and most companies displayed loyalty to their employees and communities as opposed to today’s loyalty to Wall St., their stock valuation and their global quest for lower taxes and cheap labor.
Perhaps we can learn from the past.
18
"The middle class cannot save anything at their level of income while the very wealthy benefit from....."
The middle class does not save anything because the Federal Reserve allows our political class to spend money like drunken sailors. There's no point in saving when inflation will destroy every dollar you have, year after year.
The Federal Reserve is not required - check the history of Banking, especially the Suffolk Bank in New England during the 1800s.
The middle class does not save anything because the Federal Reserve allows our political class to spend money like drunken sailors. There's no point in saving when inflation will destroy every dollar you have, year after year.
The Federal Reserve is not required - check the history of Banking, especially the Suffolk Bank in New England during the 1800s.
After witnessing the spectacle of Donald Trump, Sheldon Adelson and the Koch Brothers, don't bother. We will eventually just take it. Just wait.
4
Mr. Georgescu - can we count on your group to quit talking about this and start getting the ball rolling? The first steps would be easy enough:
1. Bring jobs back to this country.
2. Pay employees a living wage with benefits, so they can afford your products. Let them have a reasonable work-life balance. You don't need further tax relief to do this and your productivity will not suffer.
2. Advertise what you're doing until the message is seen repeatedly by everyone - worker, investor, politician and CEO alike. It needs to become an expectation for Main Street and a mindset for Wall Street.
You can either lead the way or continue to focus-group this ad infinitum.
There is a new generation of civil unrest coming, so you'd better get started soon.
1. Bring jobs back to this country.
2. Pay employees a living wage with benefits, so they can afford your products. Let them have a reasonable work-life balance. You don't need further tax relief to do this and your productivity will not suffer.
2. Advertise what you're doing until the message is seen repeatedly by everyone - worker, investor, politician and CEO alike. It needs to become an expectation for Main Street and a mindset for Wall Street.
You can either lead the way or continue to focus-group this ad infinitum.
There is a new generation of civil unrest coming, so you'd better get started soon.
12
How about fair tax first? Stop letting the 1% and corporations pay lower tax rate than the middle class.
7
How about a flat tax? Experience should have taught you that the more rules there are, the more possible ways there are to take advantage of loopholes. With one rule - everyone pays 10% on all the income they earn - no loopholes exist. And a flat tax would be almost impossible to see its value change, because no politician's career would survive his telling his constituents that he proposed to increase their burdens.
Liberals hate flat tax, because there is no way for them to "game the system" and get something for nothing.
Put your money where your mouth is, and support a flat tax for all people. Note I said people, not corporations. Businesses should be allowed to operate tax-free, because guess what? They don't sit on piles of cash when they can use it to expand operations. And that means jobs - the income of which will be taxed. Apparently, Liberals hate employment.
Liberals hate flat tax, because there is no way for them to "game the system" and get something for nothing.
Put your money where your mouth is, and support a flat tax for all people. Note I said people, not corporations. Businesses should be allowed to operate tax-free, because guess what? They don't sit on piles of cash when they can use it to expand operations. And that means jobs - the income of which will be taxed. Apparently, Liberals hate employment.
I see a bigger problem on the horizon.. Technological unemployment, due to a whole new form of automation.
We're about to hit a serious turning point in automation technology, instead of just automating with mechanical muscles, industries are soon going to start automating with mechanical brains. This is something that has never happened before. It's going to cause mass unemployment, which wont be solvable by paying employees more, tax breaks, or praying that automation somehow creates more new jobs. None of that will work. After this point in technology, industries will never be able to create enough new jobs to employ all the people displaced by automation. Period.
Rather than giving companies tax breaks, in hopes that they pay their employees more (which sounds a lot like trickle-down, and does not work), why not give money directly to the citizens, through something like an Unconditional Basic Income system. The benefits could be huge, and improve our society in ways far beyond anything we've ever seen before.
If you don't know much about basic income, I suggest doing research on it. It's a very interesting idea, and changes many things at the foundation of capitalism, while still keeping capitalism strong. Employees and employers have better bargaining powers with each other, you don't need minimum wage laws anymore, and you don't need most of the other entitlement programs anymore, and thus you save a ton of money. And it doesn't require increasing taxes much.
We're about to hit a serious turning point in automation technology, instead of just automating with mechanical muscles, industries are soon going to start automating with mechanical brains. This is something that has never happened before. It's going to cause mass unemployment, which wont be solvable by paying employees more, tax breaks, or praying that automation somehow creates more new jobs. None of that will work. After this point in technology, industries will never be able to create enough new jobs to employ all the people displaced by automation. Period.
Rather than giving companies tax breaks, in hopes that they pay their employees more (which sounds a lot like trickle-down, and does not work), why not give money directly to the citizens, through something like an Unconditional Basic Income system. The benefits could be huge, and improve our society in ways far beyond anything we've ever seen before.
If you don't know much about basic income, I suggest doing research on it. It's a very interesting idea, and changes many things at the foundation of capitalism, while still keeping capitalism strong. Employees and employers have better bargaining powers with each other, you don't need minimum wage laws anymore, and you don't need most of the other entitlement programs anymore, and thus you save a ton of money. And it doesn't require increasing taxes much.
5
A good place to start fighting inequality would be for businesses to pay the taxes that they should, not the ones after you've found every loophole in every corner of the Federal tax code.
20
Ironically (NOT!), the business leaders the writer champions (his friends) viciously oppose the most effective anti-poverty device ever created: trade unions. No other force in society was more responsible for creating livable wages, secure retirement, education opportunities, and other vital benefits. Perhaps the welfare of their employees is not as important as eliminating the only threat to unchecked profits (since government seems unwilling to redistribute wealth more equitably through progressive taxation): worker organization.
25
"No other force in society was more responsible for creating livable wages, secure retirement, education opportunities, and other vital benefits. "
Wrong. Study the late 19th century, post-Civil War to 1913, to understand how close we came to laissez-faire capitalism, which is what created livable wages, secure retirement, education opportunities, and prosperity.
Liberals want freedom for everyone except people owning, operating, and working at businesses. In a self-reliant society - which has been under attack by Liberal midgets such as FDR and LBJ - no one is guaranteed success, but everyone is free to try, to succeed and keep the results of their success, or to fail and live and learn from their failure.
Read Don Watkins' "Rooseveltcare" if you want to compare and contrast the self-reliant society we had before FDR, and the welfare entitlement state we have now.
Wrong. Study the late 19th century, post-Civil War to 1913, to understand how close we came to laissez-faire capitalism, which is what created livable wages, secure retirement, education opportunities, and prosperity.
Liberals want freedom for everyone except people owning, operating, and working at businesses. In a self-reliant society - which has been under attack by Liberal midgets such as FDR and LBJ - no one is guaranteed success, but everyone is free to try, to succeed and keep the results of their success, or to fail and live and learn from their failure.
Read Don Watkins' "Rooseveltcare" if you want to compare and contrast the self-reliant society we had before FDR, and the welfare entitlement state we have now.
It is understandable that the wealthy would prefer to manage inequality in their own interest, which at this point, as Peter Georgescu rightly understands, means spreading the wealth concentrated at the top further down the wealth distribution before the choking reality of plutocracy becomes too stark to ignore and revolt breaks out. But for the rest of us, relying on the self-interest of plutocrats is not the answer. We either need campaign finance reform that reduces the power of money to dominate our political system or we need some sort of revolution. Are Peter Georgescu and his friends willing to use their plutocratic power to undermine that power, or will their efforts be limited to adjusting the spigot so a little more of the national wealth trickles down?
2
A revolution will fail because our police state will tromp it down, and kill multitudes in the process.
I didn't say it would be successful, but it would most likely not be the kind of revolution you expect (less like the French Revolution with people attempting to chop off the king's head and then presuming to take the king's place, and more like the collapse of the Mayan empire, as the masses of people withdraw from overclass-run systems and set up alternatives resistant to elite domination), so predictions of success or failure are pretty meaningless.
So now Peter Georgescu, Ken Langonne and the likes are scared? After all these years of amassing great fortunes, it suddenly dawns upon them that this greed might have dire social consequences (aka 'Revolution'). To be sure, they didn't sound the alarm years ago when it could have mattered. They are now raising the issues of inequality when they are on their way out of business and retiring.
They prospered under the unequal conditions they in-part helped create and perpetuate, now, on their way out from the backdoor, they say that the system has to be changed, how brave.
Don't be fooled by this Machiavellian piece. In business, timing is everything and they understand that now is the time to try to save themselves, before it's really too late.
They prospered under the unequal conditions they in-part helped create and perpetuate, now, on their way out from the backdoor, they say that the system has to be changed, how brave.
Don't be fooled by this Machiavellian piece. In business, timing is everything and they understand that now is the time to try to save themselves, before it's really too late.
22
I enjoy the progressive tone employed in your piece. But unfortunately Your fear of civil/social unrest or progressive taxation is simply self preservation. Using the words "punitive taxation" says all we need to know.
As an "adman" (and I know from whence I speak) you're just better at propaganda and deflection. Not unlike your St. Ronnie and GOP acolytes. I suggest you beef up security at your home compound...
As an "adman" (and I know from whence I speak) you're just better at propaganda and deflection. Not unlike your St. Ronnie and GOP acolytes. I suggest you beef up security at your home compound...
5
There's a fundamental flaw to this argument and it's not with the just the greedy "CEO's and executives." Look at what's happening right now - never have some many large corporations been in the cross hairs of billionaire hedge funds. Those hedge funds see any decent employee compensation as "fat" to be cut and "value" that should go to their hedge fund. And unfortunately they have the cash and power to throw their weight around. So the greater question is - how do you curb the Ackman's, Loeb's and Romney's of the country from skinning America's middle class down to the bone?
11
So a wealthy business owner proposes the government give big business another tax break, increasing the debt that future generations will have to pay down. That 80% tax tier sounds a lot more reasonable and sensible.
8
Seattle's Nick Hanauer presents this topic vividly in his TED Talk, "the Pitchforks are Coming".
http://www.ted.com/search?cat=ss_all&q=the+pitchforks+are+coming
http://www.ted.com/search?cat=ss_all&q=the+pitchforks+are+coming
3
A fair and responsible free enterprise system will remain fair and responsible only as long as an external force (unions or governments) keep it so. Cheating and scamming, conspiring to suppress competition, and achieving monopoly power are sure roads to profitability unless they are prohibited.
When businesses compete against each other, only the best make money, the others risk failure, and the consumer benefits. When businesses work together to compete against the consumer, they all make money and the consumer is shafted. So the free enterprise system will self-destruct if left to its own devices, turning into oligopoly. Similarly, a professional sport will self-destruct if referees can be bought or ignored.
Standard Oil was the natural result of free enterprise in the oil industry. The government executed and dismembered it, destroying this great product of free enterprise so that free enterprise could survive. This destruction set a precedent that businesses hated. We should have pleaded with Rockefeller to let some of his competitors survive and prosper just a bit, or gotten the government to bribe him to let them in on a piece of the action.
Successful businessmen expect us to believe that they do not know how free enterprise works. Actually, however, they do not. Our financial wizards did not see the collapse coming, or quietly arranged to make money from it rather than preventing it. Henry Ford was hated and called a communist.
When businesses compete against each other, only the best make money, the others risk failure, and the consumer benefits. When businesses work together to compete against the consumer, they all make money and the consumer is shafted. So the free enterprise system will self-destruct if left to its own devices, turning into oligopoly. Similarly, a professional sport will self-destruct if referees can be bought or ignored.
Standard Oil was the natural result of free enterprise in the oil industry. The government executed and dismembered it, destroying this great product of free enterprise so that free enterprise could survive. This destruction set a precedent that businesses hated. We should have pleaded with Rockefeller to let some of his competitors survive and prosper just a bit, or gotten the government to bribe him to let them in on a piece of the action.
Successful businessmen expect us to believe that they do not know how free enterprise works. Actually, however, they do not. Our financial wizards did not see the collapse coming, or quietly arranged to make money from it rather than preventing it. Henry Ford was hated and called a communist.
4
I think Mr. Georgescu and his friends should be scared. There's a lot of anger and hopelessness amongst the 80%. Most adult Americans have been witness to the steep decline of the American way of life compared to their parents and even their grandparents. Particularly in the last couple of decades. I don't know what the spark will be that sets it off, but that there will be one is inevitable without significant change.
10
Great column, but am I the only one laughing at his proposed solution?
In order to fight inequality, we need to give businesses even bigger tax breaks? So who pays the giant cost of these tax cuts? Higher taxes on capital gains and high earners? Hmm, doesn't sound like it, given the author's fear of an "80% tax rate." Or more likely, massive cuts to government, and so even further decimating the few redistributive efforts that do exist and that do address inequality.
In order to fight inequality, we need to give businesses even bigger tax breaks? So who pays the giant cost of these tax cuts? Higher taxes on capital gains and high earners? Hmm, doesn't sound like it, given the author's fear of an "80% tax rate." Or more likely, massive cuts to government, and so even further decimating the few redistributive efforts that do exist and that do address inequality.
11
"Capitalists, arise: we need to ask the government to solve the problems we created."
5
I have been fortunate enough to be an employee owner in an employee-owned company. And I would suggest that business model for any business wishing to more equitably share the profits. The rewards for the employee are obvious, and the rewards for the business are having a very dedicated, and business savvy employee base.
I would also suggest that the government encourage a more equitable compensation arrangement by reserving the 80% tax rate for those executives who make more than 20 times the salary of the lowest level full time employee. And that would include stock options, etc.
I would also suggest that the government encourage a more equitable compensation arrangement by reserving the 80% tax rate for those executives who make more than 20 times the salary of the lowest level full time employee. And that would include stock options, etc.
8
I don't know if you realize it, but that was one of the solutions proposed by Marx. That employees own a part of a business and share in the profits. By sharing, they would work hard to make more money because it would be in their best interest as they received more money.
I don't disagree with your idea, it is just that most people will cry socialism if it was widespread.
I don't disagree with your idea, it is just that most people will cry socialism if it was widespread.
You were doing so well... right up to the last two paragraphs. Seriously? The way to bring about a fairer income distribution is by cutting corporate taxes? When your own statistics cite the fact that productivity has increased by 80 percent, but wages, have stayed flat (which, given rising costs means that spending power has decreased), and when executive pay has skyrocketed to something like 200% of what the average worker earns, please explain how giving corporations more money to distribute to shareholders is going to inspire wage increases? Really. Explain to me how paying less tax is going to reverse what has become an entitlement mindset among businesses. Now, perhaps if you'd recommended increasing taxes on investment income to a level commensurate with those on wages, or taxing profits "earned" (read: transferred) out of the US, or putting a cap on executive pay (including all forms of perks that top off what is reported as salary), that would put a damper on the rush to inflate shareholder returns. I'm waiting.....
17
Yes, this trend of more and more money going to fewer and fewer people helps no one. The few that are raking in the bucks don't need it and don't spend it, dragging the economy down. Does it make them work harder? Does it make them happier? I doubt it, but I can't comment from first-hand experience.
Solutions are tougher. Increasing minimum wage would a start, and reducing the difference between taxes on earned and unearned income (e.g., capital gains) would be another. But not much progress will be made until we close the floodgates of poltical contributions from corporate "persons", and get a whole lot more people voting.
Solutions are tougher. Increasing minimum wage would a start, and reducing the difference between taxes on earned and unearned income (e.g., capital gains) would be another. But not much progress will be made until we close the floodgates of poltical contributions from corporate "persons", and get a whole lot more people voting.
5
You are the problem sir. The billionaire hedge funder Paul Tudor Jones is the problem. And your friend Ken Langone is the problem. Here is my question to you, and I hope you will respond to it: how do you live with yourself?
12
My question for Georgescu:
Given that we now have a globalized market, with the U.S. being only 5% of world population, with most of the rest of the world growing at much higher rates than the U.S., won't businesses be compelled to follow the money, population and growth, and invest overseas to get the profits that investors demand? China now produces more cars than the U.S. for example.
Given that we now have a globalized market, with the U.S. being only 5% of world population, with most of the rest of the world growing at much higher rates than the U.S., won't businesses be compelled to follow the money, population and growth, and invest overseas to get the profits that investors demand? China now produces more cars than the U.S. for example.
1
You briefly mention that government is the first logical place to get the ball rolling, but "the current Congress has been paralyzed." Yes it has, by big business concerns that don't want to admit that government has a meaningful part to play in making business better.
If you really mean what you say, then you, as a big business magnate, must take part of the blame for creating this paralysis. You must also admit that the people big business support create and intensify this paralysis by supporting predominantly Republicans who want to crush programs for the little guy (customers) and give all the money to the big guys.
If you really want to make a difference go after ALEC, the Heritage Foundation, the Koch Brothers, and others like them. If you are really serious about changing the picture, get behind political candidates and policies that help your customer not hurt them. That might mean voting Democratic. That might mean not supporting the Chamber of Commerce. That might mean getting your hands a little dirty.
I will believe your good intentions when I see actions like these, not just words in a NY Times editorial. I want to believe you. Do you believe you?
If you really mean what you say, then you, as a big business magnate, must take part of the blame for creating this paralysis. You must also admit that the people big business support create and intensify this paralysis by supporting predominantly Republicans who want to crush programs for the little guy (customers) and give all the money to the big guys.
If you really want to make a difference go after ALEC, the Heritage Foundation, the Koch Brothers, and others like them. If you are really serious about changing the picture, get behind political candidates and policies that help your customer not hurt them. That might mean voting Democratic. That might mean not supporting the Chamber of Commerce. That might mean getting your hands a little dirty.
I will believe your good intentions when I see actions like these, not just words in a NY Times editorial. I want to believe you. Do you believe you?
13
Peter, I wish you the best of luck. Ultimately, you are working against human nature. Ask yourself how often in the history of this country have corporations (CEO's and shareholders) opted to increase the percentage of profits yielded to labor on the basis of political good will, or even long term gain? And it's not like we as a nation haven't been here before. Before the most recent "Great Recession", solving this basic problem was the herculean task facing both Roosevelts, and required massive government intervention to limit corporate power, re-establish the middle class, and incubate the US labor movement to balance the political power wielded by organized politically motivated capitalists. This behavior (on both sides) isn't evil, it's predictably self-serving. It only took 30 years of cultural and political manipulation to undo most of the labor protections put in place during that time. If there is one thing we should all agree on, it's that in capitalism, the market dictates. Right now, there is nothing in the political power market that can offset the power of organized capitalists. Until organized labor recovers, or the government intervenes, nothing will change.
3
We listen to the Western version of the "call to Allah" (at least) 5 times a day. It's broadcast on WSJ, CNN, NBC, & public radio. What is this cry, that is so important that we all must stop what we are doing to acknowledge it? It's the DOW Jones report on the stockholder & Wall Street pillaging of the economy. Who is a stockholder? Typically a very wealthy person. Yes, some middle income Americans have disappearing pensions, but studies have shown that profit sharing/ mututal fund plans are so riddled with Wall Street fees that a worker may be better off shoving the money in the mattress. So when I hear the "call to DOW", I can only think of pervasive American vulture capitalism, and wonder how many people lost their jobs when the talking heads excitedly announce the DOW is UP!
5
This perspective is a good start for business people, and consistent with the analyses of persons who bridge politics, economics, and ethics, such as Yochai Benkler and Jeffrey Sachs. When opportunities for people without money to move forward in their lives become restricted as they are today, the pool of potential talent is reduced. This hurts all human endeavors, both business and labor, and most of all, the children who are our future.
1
The working class needs to build guillotines!
2
Actually the middle class is doing just fine. The problem is at very lowest end of the scale and only proposals like raising the minimum wage seem to have much chance of helping with that issue. I am not saying solving the problem but merely helping out somewhat. Best we can do at this stage I fear.
No Ed, the middle class is not "doing fine." The middle class has vastly shrunk, sending many of its members down the rung. So the number of people not doing fine has actually grown.
How do you square your friend Ken Langone's apparent concern about income inequality with his financial support to Republican candidates? Where in the Republican establishment do you find any serious concern that income inequality (and, by the way, wealth inequality) is a serious social issue not to speak of any rational policies to deal with it?
11
As someone who has never been a millionaire and has no realistic hope of being one (and that's fine with me, since I never wanted to go into any of the most lucrative professions, so don't tell me I suffer from "class envy"), I wonder why the super-rich of this country are so afraid of higher taxes.
After all, the 80% rate that Mr. Georgescu mentions is not an 80% rate on all income, but a MARGINAL rate, an 80% tax on all income above a certain very high level. (Even a flat 80% rate on someone with a $10 million annual income would leave $2 million per year to live on, 40 years' worth of this country's average annual household income, so it's hard for me to feel sympathetic.)
Multimillionaires hire very few people with their personal fortunes, so an 80% marginal rate on incomes over $5 million (the rough equivalent of 1950s rates) would have no effect on job growth.
Coupled with a sharp dialing back of our military establishment to actual defensive (not meddling) needs, this revenue could fund infrastructure projects (especially urban mass transit and intercity rail), expansions of Social Security and Medicare, debt relief for students, and transitions to clean energy.
After all, the 80% rate that Mr. Georgescu mentions is not an 80% rate on all income, but a MARGINAL rate, an 80% tax on all income above a certain very high level. (Even a flat 80% rate on someone with a $10 million annual income would leave $2 million per year to live on, 40 years' worth of this country's average annual household income, so it's hard for me to feel sympathetic.)
Multimillionaires hire very few people with their personal fortunes, so an 80% marginal rate on incomes over $5 million (the rough equivalent of 1950s rates) would have no effect on job growth.
Coupled with a sharp dialing back of our military establishment to actual defensive (not meddling) needs, this revenue could fund infrastructure projects (especially urban mass transit and intercity rail), expansions of Social Security and Medicare, debt relief for students, and transitions to clean energy.
9
Question for Mr. Georgescu; To what extent does the creation of overseas consumer markets allow American manufacturers and businesses to not care about how much American workers have to spend, and therefore have no reason to worry about low wages and no real incentive to raise wages?
8
I think you can compare our journey down the road of capitalism to simply a journey down a road. The first thing you may realize when you get on I-80 is the diversity of these travelers. From tourists to families moving to a new start somewhere to the long haulers. Now the long haulers are out there going coast to coast picking up and delivering all the goods and services we all need and want. You settle into and adjust to the ebb and flow of the tides of traffic when all of a sudden you , and all those around you , have a Me Firster come speeding and weaving thru traffic. Now most times you just grimace and get out of their way, but quite often they cut a tourist or one of the long haulers off, causing a 50 vehicle pile-up. Some are killed, some are injured and I-80 comes to grinding stop. The Me Firsters don`t care as they speed and weave away from the destruction they leave behind. Who are these M Firsters on the road of capitalism? They are the short term thinking/only quarterly profits matter and profits at all costs wall street, CEO`s and shareholders.
6
Meanwhile the guys flying overhead in their private jets see a blur, ants, or nothing because the shades are drawn and they are reading quarterly reporys.
1
For the people who don't understand the meaning of the term "income inequality", would you define it for us? I think the way to start to get fairness
of opportuniy into the picture at all, is to explain what, exactly, the term means and what it implies. Thank you.
of opportuniy into the picture at all, is to explain what, exactly, the term means and what it implies. Thank you.
4
Income inequality means that people do not receive equal amounts of income.
Next question?
Next question?
Here's a question: Would richly paid CEOs reduce their effort if their income was halved? How would someone making $50 million per year reduce his/her effort if the only positions available were for $25 million per year? Would it even matter?
11
The sentiment of the article clings to the desperate fantasy that a moral appeal to corporations will change anything. Corporations are amoral entities within a system that forces them to get productivity out of humans.
A corporation will never employ anyone if it can't possibly be avoided. The system is geared towards profit maximization, helping anyone on the way is purely collateral.
The goal is profit. Not caring for the environment, not caring for people on the street, children or the elderly. Not educating people or making the world a better place to live, all of which is achieved by public institutions. So don't wonder why the only thing that is achieved is profit, if all you care for is dismantling the only institutions that don't.
Don't ask something of corporations they are innately incapable of, compassion.
A corporation will never employ anyone if it can't possibly be avoided. The system is geared towards profit maximization, helping anyone on the way is purely collateral.
The goal is profit. Not caring for the environment, not caring for people on the street, children or the elderly. Not educating people or making the world a better place to live, all of which is achieved by public institutions. So don't wonder why the only thing that is achieved is profit, if all you care for is dismantling the only institutions that don't.
Don't ask something of corporations they are innately incapable of, compassion.
11
Everything I was taught at business school and my subsequent experience in the workplace has convinced me of one thing.
American and British executives will never consent to anything that even hints at reducing inequality or perhaps redistributing profits or income.
An immense amount of money and effort goes into lobbying for an intensification of the policies that increase inequality and wage stagnation and decrease social mobility.
As far as they're concerned, the present situation is still far too "redistributionist to be borne. There's far too much protection for workers (both physically and otherwise) and the country doesn't appreciate how generous they are by having employees at all.
Without some sort of countervailing power forcing a compromise on companies and executives, inequality will continue to grow and social mobility will keep going down.
American and British executives will never consent to anything that even hints at reducing inequality or perhaps redistributing profits or income.
An immense amount of money and effort goes into lobbying for an intensification of the policies that increase inequality and wage stagnation and decrease social mobility.
As far as they're concerned, the present situation is still far too "redistributionist to be borne. There's far too much protection for workers (both physically and otherwise) and the country doesn't appreciate how generous they are by having employees at all.
Without some sort of countervailing power forcing a compromise on companies and executives, inequality will continue to grow and social mobility will keep going down.
13
Any business that pays an employee a full time wage should be responsible for reimbursing the government for any government assistant that employee needs. So if an employee at Walmart gets food foodstamps, Walmart would reimburse the government for the total cost of that assistance.
Any employee that works full time deserves a living wage above the poverty line, even the 16 or18 year old working at Burger King.
People who garner an income that allows them to live 100 liftimes in oppulance should be taxed accrdingly .
Any employee that works full time deserves a living wage above the poverty line, even the 16 or18 year old working at Burger King.
People who garner an income that allows them to live 100 liftimes in oppulance should be taxed accrdingly .
16
If it is tied to full-time workers, it is too easy to cut hours. Benefits such as health care should be proportionally allocated to the hours worked.
You're right! Income equality Must occur or this country will be a has been.One way to achieve this goal is to stop going to War frequently.
2
But then how would the warrior elite--Cheney and Rumsfeld--pay their rent?
Yes, let's help the poor by giving the extremely wealthy more tax dollars in hopes that it will trickle down. I have no doubt this guy is sincere and he is to be commended for sticking his neck out and voicing his concern, but like most wealthy people he just doesn't get it. The 0.1 percent are a big part of the problem. They rig the game. That is what must end and his suggestion does nothing to change that.
BTW very few economists argue for a top marginal tax rate of 80 percent, although a number I think have made empirical arguments that it could safely be as high as 70 percent without causing decreased growth and increased inefficiency. Moreover, they generally do not advocate that this rate start at 500K either.
BTW very few economists argue for a top marginal tax rate of 80 percent, although a number I think have made empirical arguments that it could safely be as high as 70 percent without causing decreased growth and increased inefficiency. Moreover, they generally do not advocate that this rate start at 500K either.
6
In America today, wealth is power. And unfortunately, power corrupts and absolute power corrupts absolutely. It was so in 1789 in France, in 1918 in Russia, and it is so now. The writer is asking the absolutely corrupt to change voluntarily. I am afraid that he is tilting at windmills; the absolutely corrupt cannot change. And the politicians who have been absolutely corrupted along with them will never do the job either. Only when the barricades are erected outside their golden palaces, will they, maybe, understand that living with a little less is the only alternative. It may not happen in my generation, but it will happen.
12
The sentiment to revolt will be there, but the police state will destroy any attempt at revolution. Look at the violence that was rendered to the very innocent Occupy protesters.
You are joking, right? Ken Langone gave huge sums to the election campaign of Mitt Romney, the very personification of anti-tax, greed laden multimillionaires.
Isn't if strange, even funny if not for the absurdity, how the greedy tend to favor change once they've made their fortunes off the backs of those they paid the least they could get away with?
It may be true that hypocrisy is fodder for humorists, but it's time to stop laughing and do something substantive. There comes a time when the hypocrites must take responsibility for the system they now claim to want to change.
The real change needed, should it have been implemented already, would have rendered Ken Langone, and other obscenely wealthy people, to be your good neighbors, not "scared" (your word) rich people hiding behind closed gated communities with armed guards at the ready. You live like the oligarchs you tried to escape.
Isn't if strange, even funny if not for the absurdity, how the greedy tend to favor change once they've made their fortunes off the backs of those they paid the least they could get away with?
It may be true that hypocrisy is fodder for humorists, but it's time to stop laughing and do something substantive. There comes a time when the hypocrites must take responsibility for the system they now claim to want to change.
The real change needed, should it have been implemented already, would have rendered Ken Langone, and other obscenely wealthy people, to be your good neighbors, not "scared" (your word) rich people hiding behind closed gated communities with armed guards at the ready. You live like the oligarchs you tried to escape.
14
How about punitive taxes for those who pay their workers less than a living wage? Taxpayers are already forced to subsidize minimum wage workers with food stamps, health care, and earned income tax credits. Why should we be using more tax dollars to make the miserly big corporations richer? This is yet another example of privatizing the profit and socializing the cost.
Get real. Raise the top tax rates.
Get real. Raise the top tax rates.
20
So many of us work in organizations where our wages have been cut and hours reduced to improve the bottom line. People have become the less valued part of the economy and with advances in technology, I think this is going to continue. We need our power back which means we need strong unions and union advocates. We need voices at the national line who can speak articulately and with passion about the dangers of an unbalanced economy. It is wonderful to read these editorials but basically we are all talking to ourselves. There are millions of working class people held sway by the negative rhetoric of the GOP. What if those people could be reached with new messages about the need to join forces. Yes, all sorts of working people from all belief backgrounds and political persuations. We have a common cause. There have to be politicians out there who can take advantage of the vacuum that's been created. I am willing to ring a thousand door bells, make a thousand calls. And I am sure I am not alone.
4
Much has lately been written on the growing inequality. But this article is from the wealthy’s selfish viewpoint. It's not that they don't know what to do about cutting inequality to size but that they have been unwilling to embark on that UNPLEASANT journey. This theme could be a powerful impetus. When self-preservation is threatened, anyone would act.
The best way is to follow Piketty's line of recommendations. I wouldn't propose an "oppressive taxation" of 80% on over $500K, which was actually not far from the pre-Reagan era top marginal rates - in 1981 a top rate of 70% was imposed on >$563K. Before 1964 it was 91% on >$3M or so, both in 2014 dollars.
I would propose a 70% tax on over $25M & 50% on >$5M; the top 15% in incomes should pay at Clinton era level. This would be quite fair. The problem with too drastic changes is that it can’t last. Reagan revolution was a reaction to the confiscatory taxation of the Eisenhower era. The Scandinavian taxation is about ideal, and enacted by consensus, not imposed on them.
The additional revenue, which would be, guessing, about $3 trillion in 10 yrs., should be used to subsidize minimum wage of $15 at 2014 dollars for adults who’ve paid in 4 quarters in payroll tax & to be adjusted for inflation. More liberal earned income tax credits as well. Payroll tax should be reduced to 1% for the first $10K & 2% for the next $10K. Payroll tax cap should be eliminated but reduced to 2% on >$500K & 1% on >$1M.
The best way is to follow Piketty's line of recommendations. I wouldn't propose an "oppressive taxation" of 80% on over $500K, which was actually not far from the pre-Reagan era top marginal rates - in 1981 a top rate of 70% was imposed on >$563K. Before 1964 it was 91% on >$3M or so, both in 2014 dollars.
I would propose a 70% tax on over $25M & 50% on >$5M; the top 15% in incomes should pay at Clinton era level. This would be quite fair. The problem with too drastic changes is that it can’t last. Reagan revolution was a reaction to the confiscatory taxation of the Eisenhower era. The Scandinavian taxation is about ideal, and enacted by consensus, not imposed on them.
The additional revenue, which would be, guessing, about $3 trillion in 10 yrs., should be used to subsidize minimum wage of $15 at 2014 dollars for adults who’ve paid in 4 quarters in payroll tax & to be adjusted for inflation. More liberal earned income tax credits as well. Payroll tax should be reduced to 1% for the first $10K & 2% for the next $10K. Payroll tax cap should be eliminated but reduced to 2% on >$500K & 1% on >$1M.
6
As a director of Yum Brands, Mr. Langone could advocate for higher wages at KFC and other fast food brands and support efforts to raise the minimum wage. He could also advocate for lower CEO pay to boost shareholder returns and employee pay. As a large Republican donor, My Langone supports the party that has consistently opposed raising the minimum wage or providing transparency for executive compensation. Remember the large pay outs for the Home Depot CEO who failed shareholders and employees? While both these gentleman have generously supported many worthwhile charities, why not start changing the growing income gap with their own lives and many corporate connections?
5
Isn't it obvious how to deal this this issue? Don't we already have a representative system of government that we select to run our affairs?
The rich control the political system - this has been demonstrated by political scientists and even before then it was obvious to anyone.
Get the money out of politics and reduce the power of the rich to one vote per person and let the political system deal with this. Let the political system represent the interests of the average person and see where it goes. We might not need to do anything at all other than use existing tools in a way that allows for broad agreement.
Specifically, Peter, why don't you get your rich buddies to fight for an end to corporate personhood; the public financing of campaigns; the end of corporate lobbying; and then wait and watch what happens. I have no doubt that this problem which scares you - and a dozen others - will quickly be solved in a generally agreeable way to the public.
The rich control the political system - this has been demonstrated by political scientists and even before then it was obvious to anyone.
Get the money out of politics and reduce the power of the rich to one vote per person and let the political system deal with this. Let the political system represent the interests of the average person and see where it goes. We might not need to do anything at all other than use existing tools in a way that allows for broad agreement.
Specifically, Peter, why don't you get your rich buddies to fight for an end to corporate personhood; the public financing of campaigns; the end of corporate lobbying; and then wait and watch what happens. I have no doubt that this problem which scares you - and a dozen others - will quickly be solved in a generally agreeable way to the public.
6
time to slaughter the hogs. . .
1
Here's my question to Mr. Georgescu: "Do you remember John F Kennedy (JFK) who, along with Martin Luther King and Bobby Kennedy, ignited hope in a better America in the minds and hearts of the young and old? Do you remember when he said, during his inauguration speech, "Ask not what your country can do for you - ask what YOU can do for your country." Do you remember the shock and hopelessness when all three of these great men were assassinated because they had a dream of a better America? Some of us do and many more are learning about it. YOU and your buddies in the top 1% global financial elite have tried to kill that dream and hope and WE will not let you go any further. President Kennedy was part of the top 1% global financial elite and he wanted a BETTER, STRONGER AMERICA. His is the kind of America the vast majority of us want. Readers, please take a moment to watch his inaugural speech.
http://www.c-span.org/video/?c4474170/president-kennedy-inaugural-address
http://www.c-span.org/video/?c4474170/president-kennedy-inaugural-address
2
"We business leaders know what to do"
And so do, if I may so incorporate myself; "we historians": escort the United States, and the world before which it once stood for a time like a colossus, through a world war, a world-shaking foreign revolution of rather more than ten days, a worldwide depression, bloody labor struggles, the collapse of democracy across the whole of a continent and another world war ended amid the mighty light of ten thousand suns, and follow up with a long, twilight struggle of forty-five years unto death, whirled without end, between two powers balanced in terror of mutual annihilation.
Not only can you not make an omelet without cracking a few good yolks, but you can't create the sort of relative equality of income, and the allied cross-class social solidarity, that obtained within these shores c. 1941-1973, without the very sorts of tragic and titanic conflict that drew for them their curve of binding energy. Raising class consciousness among the plutotariat and passing the act of Congress resulting is too easy by undismembered halves, but not to worry if you'll just be patient: what's past in history, however calm in the decades before the next storm, is prologue often enough.
And so do, if I may so incorporate myself; "we historians": escort the United States, and the world before which it once stood for a time like a colossus, through a world war, a world-shaking foreign revolution of rather more than ten days, a worldwide depression, bloody labor struggles, the collapse of democracy across the whole of a continent and another world war ended amid the mighty light of ten thousand suns, and follow up with a long, twilight struggle of forty-five years unto death, whirled without end, between two powers balanced in terror of mutual annihilation.
Not only can you not make an omelet without cracking a few good yolks, but you can't create the sort of relative equality of income, and the allied cross-class social solidarity, that obtained within these shores c. 1941-1973, without the very sorts of tragic and titanic conflict that drew for them their curve of binding energy. Raising class consciousness among the plutotariat and passing the act of Congress resulting is too easy by undismembered halves, but not to worry if you'll just be patient: what's past in history, however calm in the decades before the next storm, is prologue often enough.
2
No need to worry, billionaire-friended Mr. Georgescu. As you well know, the hi-tech surveillance security state is right now actively and effectively arming itself to forever protect Property - yours - against People - the rabble. Its willingness to follow Orders - yours - against anyone lower on the s.e. scale is clearly demonstrated so often as to be boring were it not tragic for those thereby savaged. And the propaganda arms of major ad agencies will be used in perpetuity to assure the rabble of their need for such protection. Further subsidies to you and yours will be provided as requested by politicians purchased for that purpose.
3
And the police state-- managed by the bought and paid for politicians-- will be there to quash, maim, kill anyone who attempts a revolt. It is all in place already. The killing of black men for stealing cigarettes is just target practice.
"Government can provide tax incentives to business to pay more to employees making $80,000 or less. "
So you want to be "incentivized" to do what you should be doing anyway? And your version of incentives would be funded by the very taxpayers to whom you refuse to pay a living wage.
Enough carrots -- it's long past time we started wielding a stick. We've tried thirty-plus years of giving business carrots and it's resulted in rock-bottom wages, fewer benefits, and a return to the Gilded Age.
Here's my prescription: Government and should can levy punitive taxes on businesses that do not pay a living wage plus retirement and health care benefits. Those of us who work for a living and create your wealth can no longer afford to carry you on our shoulders.
So you want to be "incentivized" to do what you should be doing anyway? And your version of incentives would be funded by the very taxpayers to whom you refuse to pay a living wage.
Enough carrots -- it's long past time we started wielding a stick. We've tried thirty-plus years of giving business carrots and it's resulted in rock-bottom wages, fewer benefits, and a return to the Gilded Age.
Here's my prescription: Government and should can levy punitive taxes on businesses that do not pay a living wage plus retirement and health care benefits. Those of us who work for a living and create your wealth can no longer afford to carry you on our shoulders.
14
I empathize the personal stories of the writer, and it's all very true, that most of us get our start because someone gave us an opportunity at some point in our life, that someone who believes in us way before we know it ourselves.
The proposed solutions though, seem a hyperbole. Don't get me wrong, it's all talking points for so long now, it almost feels old, eg. spend more on education, on R&D, on paying more to employees, on government doing more, on fixing taxation. Everyone from far left to far right has been talking the SAME things, why no actions? Because even if everyone knows those are areas to be fixed, there is no conclusive solution on what the actions actually should be. Far right conservative and GOP would tell you to get the government out and let markets do the magic, left leaning liberals want government to do more.
Fact of the matter is, for-profit companies are not going to do philanthropy work. If there's excess supply of labor in market, why would they choose to pay more? Yes, they will invest in technology but they would only exacerbate the reduction in employees in doing manual work. (Think the path Amazon is taking in using robotics in warehouse, for example.) Meanwhile those fields that are still paying high salary still see tight labor supply (eg. startups in the Bay Area). Government can't do much to that.
Education, particularly early childhood, is one area that government can shine. Start with that, we'll go a long way.
The proposed solutions though, seem a hyperbole. Don't get me wrong, it's all talking points for so long now, it almost feels old, eg. spend more on education, on R&D, on paying more to employees, on government doing more, on fixing taxation. Everyone from far left to far right has been talking the SAME things, why no actions? Because even if everyone knows those are areas to be fixed, there is no conclusive solution on what the actions actually should be. Far right conservative and GOP would tell you to get the government out and let markets do the magic, left leaning liberals want government to do more.
Fact of the matter is, for-profit companies are not going to do philanthropy work. If there's excess supply of labor in market, why would they choose to pay more? Yes, they will invest in technology but they would only exacerbate the reduction in employees in doing manual work. (Think the path Amazon is taking in using robotics in warehouse, for example.) Meanwhile those fields that are still paying high salary still see tight labor supply (eg. startups in the Bay Area). Government can't do much to that.
Education, particularly early childhood, is one area that government can shine. Start with that, we'll go a long way.
3
I remarked to one of the salutary posts here below something that i believe generally applies as a partial, but coherent, criticism of the very underpinnings of this "opinion" article:
[some of the commenters don't say it in words, but they have observed the fecklessness of this "opinion" from a selfmade man.
the article itself,
is all about defending a supposed model of economic structure, called Capitalism.
the thinking behind this 'opinion' simply appears ignorant of alternative kinds of analysis, analyses intending to address causes for the outlandish inequalities in our whole society, that are traceable right to the doorsteps of our latterday Capitalism.
However, it's against the lucky immigrant's uuuh, whole worldview (a way of believing and thinking born in the 50s, and then cultivated in the coldwar era of some decades onward) that takes America and its capitalism as ne plus ultra--the Savior--that only needs jiggering and tinkering to make it work forever.
well, it's not true. as Piketty in some wise gives us credible notice; there is a different structural economic, or socioeconomic proposition to consider: however--it's called Socialism, i should put that with a small S,
because if understood in its mechanics, it does overcome some of the preposterous premises of our fifty's grateful uuuh, well, capitalist.
irony abounds.
[some of the commenters don't say it in words, but they have observed the fecklessness of this "opinion" from a selfmade man.
the article itself,
is all about defending a supposed model of economic structure, called Capitalism.
the thinking behind this 'opinion' simply appears ignorant of alternative kinds of analysis, analyses intending to address causes for the outlandish inequalities in our whole society, that are traceable right to the doorsteps of our latterday Capitalism.
However, it's against the lucky immigrant's uuuh, whole worldview (a way of believing and thinking born in the 50s, and then cultivated in the coldwar era of some decades onward) that takes America and its capitalism as ne plus ultra--the Savior--that only needs jiggering and tinkering to make it work forever.
well, it's not true. as Piketty in some wise gives us credible notice; there is a different structural economic, or socioeconomic proposition to consider: however--it's called Socialism, i should put that with a small S,
because if understood in its mechanics, it does overcome some of the preposterous premises of our fifty's grateful uuuh, well, capitalist.
irony abounds.
3
So, you suggest cutting taxes for "middle class' workers and directing some of the excessive profits into productivity - where it will yield tax benefits for owners. Really? This is your answer to the problem? Still not talking about cutting the greed at the top nor adding hefty taxes on those making millions every year! Sorry, to effect wealth redistribution, you need to reduce the top $ and increase the bottom. Tax reduction for all!!! is not a plan.
2
Peter, you raised the fundamental question - why so much greed in our culture. Look to the early research on capitalism - social scientist defined the capitalism by Protestant individualism and work ethics. Webber and Mark wrote that capitalism will not work in China and India because those countries are not Christian. History proved that analysis is wrong.
The Capitalism has come to a cross road in Western culture - individual greed is found a strong destructive force and it has to be replaced by individual and societal duty and responsibility.
Inequality is the symptom of this problem - the real problem is the degeneration of society - destruction of family and marriage system, two distinctl cast system with different culture, a government with $61 Trillion on Debt and $141 trillion on unfunded commitment.
The challenge is very big - the band - aid approach of few liberal minded billioners can not solve it. We need systematic approach to change the education cariculum to teach responsibility and duty over individualism, train to accept contradictions in life by over arching philosophical thoughts that is not linked to Christianity and Greek thoughts of rationality. I am not asking to abandon rationality - we have to go beyond. The time of linear Western rationality is over - science has removed the cloths of Emperior - the contradictions can now live side by side.
The Capitalism has come to a cross road in Western culture - individual greed is found a strong destructive force and it has to be replaced by individual and societal duty and responsibility.
Inequality is the symptom of this problem - the real problem is the degeneration of society - destruction of family and marriage system, two distinctl cast system with different culture, a government with $61 Trillion on Debt and $141 trillion on unfunded commitment.
The challenge is very big - the band - aid approach of few liberal minded billioners can not solve it. We need systematic approach to change the education cariculum to teach responsibility and duty over individualism, train to accept contradictions in life by over arching philosophical thoughts that is not linked to Christianity and Greek thoughts of rationality. I am not asking to abandon rationality - we have to go beyond. The time of linear Western rationality is over - science has removed the cloths of Emperior - the contradictions can now live side by side.
What exactly is meant by "inequality"? A brain surgeon makes alot more money than a plumber. Is that "inequality"? If so, I am very much in favor of "inequality". Some definitions are required for "inequality".
Or, is this just the latest buzzword to sell newspapers?
Or, is this just the latest buzzword to sell newspapers?
I think a plumber frequently is more valuable than a brain surgeon. My father gave the go ahead for surgery on a glioblastoma for the purpose of gaining a little quality time before he died. He got very, very little. No warranty. No refunds. I assume the surgeon made a nice bit of income from the surgery. Plumbers usually fix things right and the repair lasts longer.
1
Let's take a step backwards. What are the drivers of inequality? First there is increasing technology that acts to cut back and/or eliminate working class (and increasingly middle class) jobs. Second is the transformation of what once was a Western world economy to a truly world economy. China, Southeast Asia, India and now Africa are part of the action.
The article (that I mostly agree with) does not grapple with these root causes. Neither does either political party.
The article (that I mostly agree with) does not grapple with these root causes. Neither does either political party.
2
I almost took this article seriously until I saw the request for tax cuts as incentive to pay workers what they deserve. Clearly that shows that even those Capitalists who recognize that our current system is not working, will do nothing about it without even more money to fill their own coffers. This article proves to me that our so-called Free Market, finance-driven system needs to be dismantled and thrown into the dustbin of history for the failure that it is. Greed is the word we are looking for here where a shrinking number of people horde more and more of our limited resources and then ask for a tax incentive to hand out a bit of cake.
6
This is all very reasonable, something that has been suggested by many, something long overdue. But who with power and influence will heed what Mr. Georgescu?
Thank you. Common sense from business leaders would go a long way in moving politicians forward.
I have a better idea, why don't we tax corporate savings on overseas labor so it equals paying a living wage to employees here at home. That way maybe you lords of capital will really do what you're always saying you do - create jobs for Americans.
Then I recommend we also tax a corporation for the sum the taxpayers must pay for the social services their employees seek in order to be able to eat, afford rent and medical care.
When you guys are forced to take responsibility for the problems you've caused for the middle and lower class, maybe then you'll decide it's a better idea to share some of those productivity profits.
Give you more so you can do what you should have been doing all along? Ha!
Then I recommend we also tax a corporation for the sum the taxpayers must pay for the social services their employees seek in order to be able to eat, afford rent and medical care.
When you guys are forced to take responsibility for the problems you've caused for the middle and lower class, maybe then you'll decide it's a better idea to share some of those productivity profits.
Give you more so you can do what you should have been doing all along? Ha!
12
There's no such thing as capitalism in the US. Capitalism requires a level playing field, not one where those with the most money pay to write law favorable to them, excluding those with little or no money. This distortion includes individual tax law defining different kinds of income as taxable at different rates. Today's Congress works for the moneyed few, taking away from the remainder. It's called oligarchy.
7
I have a question Mr. Georgescu:
Do you think that capitalism as practiced in the US can successfully address income inequality without significant government intervention (e.g. as in civil rights)?
Do you think that capitalism as practiced in the US can successfully address income inequality without significant government intervention (e.g. as in civil rights)?
2
Mr. Georgescu seems to forget that the reason we have the level of income inequality that we do today is because he and his fellow business leaders have engaged in a systematic campaign over the last 30-40 years to get us here.
As for an "oppressive" tax of 80% on income over $500,000; I'm sure that most struggling Americans would be thrilled beyond all measure to face the kind of oppression entailed in earning, say $600,000 a year and having to pay 80% in taxes on the amount over $500,000.
As for social unrest, Mr. Georgescu need not worry so much; as long as the police have the ability to kill anyone they want to with impunity, he and his fellow overlords will be able to keep social unrest under control.
As for an "oppressive" tax of 80% on income over $500,000; I'm sure that most struggling Americans would be thrilled beyond all measure to face the kind of oppression entailed in earning, say $600,000 a year and having to pay 80% in taxes on the amount over $500,000.
As for social unrest, Mr. Georgescu need not worry so much; as long as the police have the ability to kill anyone they want to with impunity, he and his fellow overlords will be able to keep social unrest under control.
14
Very nice sentiments. But the suggestion to take corrective action outside the political process because "the current Congress has been paralyzed" is a transparent and specious dodge. It's not "the current Congress" that stands in the way of correction. It's the Republican Party, which follows the donor dollar. Defund the GOP and change will come.
3
I think it is good that at least some of the 1 percent are thinking like this, but it is not enough. The people cannot rely for their sustenance on the benevolence of the oligarchy. Higher taxes on corporations and the rich are not "punative". They are a necessary part of a capitalistic system that works for everyone. During the best economic years of this country's history, (WWII) - 1963), the top income tax rate was 90 percent and business paid over 50 percent of the federal tax burden. Labor unions flourished, and the middle class and small businesses burgeoned, along with major corporations. Today the wealthy pay a tax rate of 15 percent, when they pay at all, and business shoulders a paltry 6 percent or less of federal taxes. Should we be grateful when the richest family in the country grudgingly assents to pay the employees who make their obscene wealth possible a little more, but still not a living wage? The workers are the true wealth creators. They need, not a handout, but what they have rightfully earned.
4
50 some years ago, the United States government, at the urging of heads of manufacturing corporations and business organizations like the U.S. Chamber of Commerce, determined that the transfer of the majority of U.S. manufacturing from within the United States to poor foreign countries would promote higher corporate profit levels without causing economic damage to the citizenry of the United States, The transfer was promptly executed - and expanded.
Is the United States the only country in the history of mankind the first to essentially surrender the source of its wealth to others without a single effective defensive action?
Do you believe that these same corporations, corporate organizations, and government leaders who have tremendously profited from this transfer of wealth will willingly alter an action that has proved to be of tremendous benefit to themselves?
Is the United States the only country in the history of mankind the first to essentially surrender the source of its wealth to others without a single effective defensive action?
Do you believe that these same corporations, corporate organizations, and government leaders who have tremendously profited from this transfer of wealth will willingly alter an action that has proved to be of tremendous benefit to themselves?
3
I applaud Mr. Georgescu for his common sense! The 10% have gone from "greed is good" to becoming parasites! How long can you bleed us before your food supply dies. It's time to start sharing with your employees because without their productivity, you wouldn't have made all that money in the first place. OR you can continue to ignore them and thanks to the NRA, no amount of security or private island will protect you. Many of those unemployed or underemployed are pretty computer savvy meaning we're NOT stupid, we're BROKE with nothing to lose and when that anger outweighs the fear,don't act surprised when an army of the poor with a whole lot of guns WILL find you. I don't like the sound or the dystopian like vision of the latter, so being that most of you have ten cents less than God, I mean come on, just FOUR of the Walton's have a net value of 161 BILLION!! Would they REALLY miss some of that money to make their stores a place you'd WANT to work? Or do they really hold that much contempt for the very people who made that money for them? Who knows - people might even want to go to work instead of thinking of their job of as a life sucking portion of their day.
3
thank you for the article. If business wants to do their part to alter the inequality of our system, they can begin by supporting politicans who also want to address the issue. too many politicians are owned by the financial services who have led the charge towards income inequality. As I have said often, unfetterred capitalism, like the game of monopoly , ends with one person owning everything. Use your political capital and finance those who would make our country more equal, and you will have done well. To wring your hands about it, when you actually have the real (financial ability to influence government, is just not enough.
2
"A fair and responsible free enterprise system is still the best engine ever invented to create opportunity and a higher standard of living." I could not agree more.
My question: Do you think any super-rich people owe the federal government more in taxes, because they hid income and wealth in tax havens, or because they used inside information to enrich themselves or their families and friends?
The tax rate was 92% in 1952 and 1953. We should bring it back. Adjusted for inflation, that rate affected income over about $2,600,000 and the rate declined for lower levels of income. Also, back in the 1950s, we had higher tariffs, so we had more jobs and greater competition for labor, so CEOs made only 30 times the median wage, and not several hundred times - as it is today.
The free enterprise system worked better in the 1950s because the federal income tax was higher for very high incomes, and that discouraged corporate boards from paying their CEOs stratospheric compensation. Also, unearned income such as dividends and capital gains were taxed at much higher rates than today.
Changing just these two policies (taxes and tariffs) would fix the income inequality problem, and the free enterprise system would take care of the rest.
My question: Do you think any super-rich people owe the federal government more in taxes, because they hid income and wealth in tax havens, or because they used inside information to enrich themselves or their families and friends?
The tax rate was 92% in 1952 and 1953. We should bring it back. Adjusted for inflation, that rate affected income over about $2,600,000 and the rate declined for lower levels of income. Also, back in the 1950s, we had higher tariffs, so we had more jobs and greater competition for labor, so CEOs made only 30 times the median wage, and not several hundred times - as it is today.
The free enterprise system worked better in the 1950s because the federal income tax was higher for very high incomes, and that discouraged corporate boards from paying their CEOs stratospheric compensation. Also, unearned income such as dividends and capital gains were taxed at much higher rates than today.
Changing just these two policies (taxes and tariffs) would fix the income inequality problem, and the free enterprise system would take care of the rest.
6
"Give a tax break to corporations and they will fix income inequality"...really? Have we learned anything from the past? Do you remember being told that globalism would solve the world's economic problems and end all wars.
Corporations have been doing well and no one has been preventing them from sharing the rewards of productivity except the people running them. Listen to Thomas Piketty as mentioned in the article. The high tax rate would discourage the corporate leaders from managing for the short term economic benefit because the high tax rate would take a large bite from their huge salaries if they withdraw the money. It would force corporations to manage for the the long term and lower taxed income from capital gains.
We need strong government, stronger than corporations, in order to keep them in line. Government is "by the people for the people.....etc." and getting rid of government is getting rid of the power of the people.
Corporations have been doing well and no one has been preventing them from sharing the rewards of productivity except the people running them. Listen to Thomas Piketty as mentioned in the article. The high tax rate would discourage the corporate leaders from managing for the short term economic benefit because the high tax rate would take a large bite from their huge salaries if they withdraw the money. It would force corporations to manage for the the long term and lower taxed income from capital gains.
We need strong government, stronger than corporations, in order to keep them in line. Government is "by the people for the people.....etc." and getting rid of government is getting rid of the power of the people.
5
Yes, well put, except how do even inspired and motivated chief executives unleash themselves from the 900-pound gorilla: Wall Street?
1
Most of the folks in a position to effect any sort of positive change have arrived where they are through nepotism. In a world where ignorance protects ignorance who will lead the way as many of the folks pulling all the strings are amongst lowest forms of consciousness.
2
Might I suggest injecting come capital into Gravity Payments that has taken a hit from hardliners to get the company through the slump until those who agree receipts kick in to the bottom line?
I am very pleased that these discussions are taking place in the C-suite and that you can report that many executives do see where this extreme inequality leads. They should be frightened. They should also be acknowledging their profound responsibility for the crisis.
What troubles me, though, is their excuse that they need to see other CEOs going the same direction before they can act. They need "support" to shelter them from their boards (and what percent of those members did they, themselves, pick?) and the dreaded Wall Street obsession with quarterly returns. Are these CEOs not the same ones who, at shareholders's meetings, at conferences, on earnings reports, on CNBC, etc. present themselves as hard nosed, independent, realistic Captains of Industry, afraid of nothing and no one, determined to do the best for their company and, by extension, the nation (if not the world)?
Should we believe their professions of concern, or just take it as lip service if they do not have the courage to face their fears?
What troubles me, though, is their excuse that they need to see other CEOs going the same direction before they can act. They need "support" to shelter them from their boards (and what percent of those members did they, themselves, pick?) and the dreaded Wall Street obsession with quarterly returns. Are these CEOs not the same ones who, at shareholders's meetings, at conferences, on earnings reports, on CNBC, etc. present themselves as hard nosed, independent, realistic Captains of Industry, afraid of nothing and no one, determined to do the best for their company and, by extension, the nation (if not the world)?
Should we believe their professions of concern, or just take it as lip service if they do not have the courage to face their fears?
96
What are the suggestions to correct the system? Just waiting for a politician to design a solution is looking for more of the same.
While I applaud Mr. Georgescu's desire to do something about income inequality, if he can describe a tax of 80% on incomes of $500,000 or higher as "oppressive," he does not truly understand that it is income inequality itself that is oppressive, not higher taxation on the highest incomes. As long as the 1% consider progressive taxation to be a form of oppression, there is no hope: they will continue to think of themselves as uniquely deserving of their vast wealth and see themselves as victims rather than as the oppressors--which they in fact are.
167
How is income inequality itself oppressive? Is there not a vast difference in contribution? Is human nature not connected to motivation and reward, wanting to have a better car, an extra bedroom, a nicer vacation?
Meanwhile while those at the bottom of the economic pile wait for change from the time, immigrants by the millions are joining in small groups, saving what they can every week - often $100 - building up a cushion of savings to avoid PayDay loans, buying a car to get to work, paying rent and utilities ahead to avoid homelessness as seasonal jobs end. I agree tax the rich - my father paid 70% of his income in taxes and we did well - but also understand and nudge along what the poor are doing for themselves. See my book on this topic at www.intheirownhands.com "In Their Own Hands: How Savings Groups are Revolutionizing Development."
Economists studying the issue have proposed that the optimal marginal tax rate for the highest level of income is about 73%, for a well functioning society and economy. So, the second part of your "we really don't want" is actually a pretty good solution for the 99% of us. We just need to learn to vote that way.
3
Maybe a company shouldn't be able to pay dividens unless all employees are paid @150% of the poverty level.
3
There is a middle ground--50% tax rate that is actually collected, and the money re-directed to those who need it most, in the form of time in the classroom and accessible health care. When well and busy working or learning, the otherwise desperate have no time for blood in the streets.
The classroom isn't cheap, but it's less expensive than the alternative. Consider how quickly work skills become obsolete in the 21st century economy. The fix is a complete skills refresh for one year out of every ten--paid for by those most fortunate at the top. There will be competition for workers for a change. They'll all get a fairer paycheck.
The classroom isn't cheap, but it's less expensive than the alternative. Consider how quickly work skills become obsolete in the 21st century economy. The fix is a complete skills refresh for one year out of every ten--paid for by those most fortunate at the top. There will be competition for workers for a change. They'll all get a fairer paycheck.
2
The place to start is our tax code which is nominally progressive but functionally regressive. There is no rational economic or social justification for the preferred treatment of dividends, capital gains or inheritances. All income should be subjected to the same marginal rates, and the FICA taxes should be repealed altogether.
4
One way to begin income parity is quit giving rich people tax breaks paid by everyone else. What do I mean,
At every construction site the city, county and state have given huge tax breaks to big business. From tax increment financing, eminent domain, blight designations, rezoning, grants, easy and cheap building permits and other tax breaks paid for by the rest of the taxpayers that are not affluent.
If the building needs built, then it should be done without the builder reaching into the taxpayer's pocket to do it.
At every construction site the city, county and state have given huge tax breaks to big business. From tax increment financing, eminent domain, blight designations, rezoning, grants, easy and cheap building permits and other tax breaks paid for by the rest of the taxpayers that are not affluent.
If the building needs built, then it should be done without the builder reaching into the taxpayer's pocket to do it.
4
The big business leader calling on business leaders to take bold action starts by asking the government for tax incentives? He has just said that businesses have cleaned up economically for decades, receiving huge increases in worker productivity without paying out anything? He wants the workers to know that "help is coming -- not as an increase in government support, but as a fairer way to share in the hard work and increment value a business generates" yet calls for an increase in government support in their effort? Corporate leaders are always telling us how bold they are and how many risks they take. This one lays out all the advantages for workers, for businesses and for the economy at large of paying people a fair wage. Why, then, do they need a government handout? Maybe they could just take home a little less themselves? But that's the mentality of corporate America: we want to help -- as long as we can print our name on everything, as long as we are seen as heroes, and as long as there's no skin off our back. Mr. Georgescu, paying employees fair wages, letting them share in the prosperity that they helped to generate is the right thing to do. Why is it hard for the richest among us to take that step? Be bold. Just do it.
3
Although I understand the gesture, Home Depot lags behind all aformentioned companies in benefits and salary. Many employees in my area that work fof Home Depot are leavi g to work for Walmart. They flee to Costco or Aldi's as well. Home Depot pays the few remaining employees from the beginning pretty well. They start new ones at around $9/hour. Home Depot used to be great company to work for. That reputation has some how stayed with them even though they have fallen behind even the most hated company in America. Home Depot is not starbucks or costco. It isn't google and it isnt even Walmart.. dont let this guy writing about his friend tell you anything different.
2
In the 1990s capital gains taxes were 30+%. This is when the internet boom happened. They went to 15% after 9/11 and in the meantime the medicare drug benefit was established - thanks George W. Now we seem to think taxes discourage investment, but that certainly was not the case in the 1990s. They should be double what they are now.
How about we deal with crony capitalism and the pay to play mindset in Washington these days. Do that, and control illegal immigration and income inequality will take care of itself
At the time that the author came to the UNited States and enjoyed the opportunity to grow, the tax rate on income over $500,000 dollars was probably significantly higher than the oppressive 80% rate he mentions. While busniess needs to be part of the solution to making capitalism work for all, the government needs to do more for redistribution and revenue generation as welll and th epolitical donor class need to recognize that its long term interests are best served by a vibrant capitalism and a thriving middle class.
2
Well I had to wait 20 paragraphs to get to the government intervention in your effort. I cannot believe a man as accomplished as you with all of your fears cannot be spurred into action without the help of the governement. But luckily our regulatory system is set up to assist you and your friends at your end of the economic ladder. By the time the politcal climate is ripe for a congress to raise taxes to 80% your great - grandchildren will "get by" on the billions in capital gains you accumulate in the meantime.
Rest easy sir. This is a nice thought experiment. I appreciated hearing your and Mr. Langone's story and it would be nice if those opportunities were available for other people but you've exposed the systemic problem - your colleagues don't have the will do change becasue it's fair or decent - they might be spurred to action with still more government intervention.
Rest easy sir. This is a nice thought experiment. I appreciated hearing your and Mr. Langone's story and it would be nice if those opportunities were available for other people but you've exposed the systemic problem - your colleagues don't have the will do change becasue it's fair or decent - they might be spurred to action with still more government intervention.
2
Not scared enough to actually spend your own money. Have to get a subsidy from the government before you will provide workers with some minimal share of that 80% increase in productivity? Don't you represent the people who say, "If the government would just get out of my way..."? But you can't pay people fairly unless the government picks up the tab? Doesn't sound to me like a person who seriously wants to solve this problem.
13
Really, the clueless hubris of Mr. Georgescu is breathtaking.
2
Please excuse me for being frank, but if you consider K. Langone a "friend" I'm really not interested in your views on how to fix inequality. I'd have trouble sitting at the same table with that person, let alone calling him a friend. This is the guy threatening to withhold charity donations to the catholic church for the pope's addressing problems with capitalism. He's also the person who went after spitzer because of his crack down on wall street corruption. Perhaps one of the things you capitalists can start doing is getting a moral compass and letting those in your circle know some things are acceptable behaviors and will result in social consequences within your peer group. The federal reserve has talked about the dysfunctional culture in the banking industry and often an organizations culture stems from behaviors at the top. Maybe start by getting rid of certain friends and sending a message of culture change will help ?
5
The malefactors of great wealth have retreated so far into their gated worlds that this Georgescu creature thinks that we should be enthusiastic about sending more of our (taxpayer) money to companies that refuse to pay a living wage.
We don't need billionaire solutions to middle class problems. We need to get the billionaires out of our politics.
We don't need billionaire solutions to middle class problems. We need to get the billionaires out of our politics.
3
This is a wonderful idea, but because it is, we can be sure the GOP will oppose it.
No one seems to addressed the question of what incentive such highly paid executives have to build the businesses they have been hired to run. At the time of the BP spill that company's chief executive was on his yacht and took a very long time to address the problem of the spill, thereby damaging BP's business reputation even further. The extremely generous compensation such executives receive makes it easy for them to insulate themselves from day-to-day operations, the challenges of competition -- until it's too late, and paying attention to employees' needs and to their ideas for improvement and change that could make U.S. companies more productive and competitive, which is what creates jobs. These executives did not start out in the mailroom and they are not entrepreneurs. They don't know the work and they don't have the fire. They are employees. In the rapidly changing world economy, their job is to keep their companies viable, competitive and growing. However, with compensation in the tens of millions of dollars annually, is it surprising that so many of them are not producing? Doesn't this pattern of extremely high executive compensation damage businesses' productivity and competitive edge, limit shareholders' gains and cause job loss?
1
Ridiculous solutions from an entitled rich guy. Go figure. Raise taxes on the wealthy - including business, increase union participation, universal healthcare, free education, revise the tax code, and quit allowing tax cut after tax cut for the rich. Oh, and you might stop lobbying for more and more tax cuts while you send jobs overseas.
2
It's interesting that the 80% tax on high incomes become "oppressive" when that's exactly what existed with this gentleman arrived in the US. It's only "oppressive" if you are in the one percent. To think that capitalism will right itself on its own belies a fundamental lack of understanding of its basic function. Capitalism goes to the lowest common denominator. It must. That's its job. Social programs are what levels the playing fields for all. The only question is how level to make the field.
4
Business leaders helped create this economy by working with conservatives over the past 40 years to devalue those who earn income (laborers) while elevating those with capital (investors). Hand in hand with conservative politicians they have worked to gut the middle-class & gather ever greater financial rewards by writing laws, opposing unions & obtaining tax breaks. Laborers have no politicians, other than Bernie Sanders, who support them. And laborers have been manipulated by both legislators & businesses to vote against their own self-interest. Since our votes are meaningless the best we can do is live small by minimizing our consumption & stop feeding this inequitable capitalist beast.
3
So are the rich really wealthy without the other "classes" making and spending money - not really. Without a vibrant middle class and those climbing out of poverty then having all the money in the world wont make a difference it has no value. The rich cannot support themselves without a growing economy and market.
Taxes: are not a good way to stimulate an economy. We should have a flat tax and laws that our government cannot spend more than it takes in. In the tax code and after a certain amount of income, the rich should not have to pay taxes on documented goods and services procured and made in the country in a given year, By doing this we would produce jobs and stimulate growth. the generation ally poor- while have to properly care for them, should not have the vote until they demonstrate a willingness to participate in the economy, this eliminates politicians catering to the dedicated poor to stay in office.
Taxes: are not a good way to stimulate an economy. We should have a flat tax and laws that our government cannot spend more than it takes in. In the tax code and after a certain amount of income, the rich should not have to pay taxes on documented goods and services procured and made in the country in a given year, By doing this we would produce jobs and stimulate growth. the generation ally poor- while have to properly care for them, should not have the vote until they demonstrate a willingness to participate in the economy, this eliminates politicians catering to the dedicated poor to stay in office.
Income inequality in the world is certainly a very serious problem...but the solution will not come from the capitalists
1
Mr. Georgescu is afraid that without voluntary pay increases for workers from CEOs, there will be (gasp!) social unrest or higher taxes. It's not going to happen. So let's bring in higher taxes instead of social unrest. Under an iconic conservative president, Eisenhower, the top marginal tax rate wasn't 80%... it was 91%! We had a dream decade.
We need a much, much higher marginal tax rate on the rich, nothing else (including social unrest) will preserve the middle class. The key word is 'marginal'. If somebody makes fifty million dollars a year, don't tax them 80% on all of it. The first million could be at today's rates. The next nine million could be at, say, 50%. Only over ten million would rates near 80% kick in. And of course this has to be without loopholes... the tax breaks that give Romney and Buffett lower rates than their secretaries have to go.
I'm sorry to say that Mr. Georgescu is whistling past the graveyard with his pie-in-the-sky idea of voluntary give-backs from CEOs. For every Langone, Schultz and Sinegal there are a hundred venal short-term thinkers, running way too many of America's big and mid-sized companies. And they own what should be OUR government. We may see the social unrest before we see the tax structure we need.
Dan Kravitz
We need a much, much higher marginal tax rate on the rich, nothing else (including social unrest) will preserve the middle class. The key word is 'marginal'. If somebody makes fifty million dollars a year, don't tax them 80% on all of it. The first million could be at today's rates. The next nine million could be at, say, 50%. Only over ten million would rates near 80% kick in. And of course this has to be without loopholes... the tax breaks that give Romney and Buffett lower rates than their secretaries have to go.
I'm sorry to say that Mr. Georgescu is whistling past the graveyard with his pie-in-the-sky idea of voluntary give-backs from CEOs. For every Langone, Schultz and Sinegal there are a hundred venal short-term thinkers, running way too many of America's big and mid-sized companies. And they own what should be OUR government. We may see the social unrest before we see the tax structure we need.
Dan Kravitz
208
hy not fill the empty bed rooms at the Hamptons and Marthas Vinyard with the homeless .That should be a feel good moment.
You are too generous; see my comment above on Kravitz.
So the problem is inequality and Mr. Georgescu's solution is paying living wages subsidized by the government? Please explain Mr. Georgescu, why companies can't pay living wages on their own. How is the government subsidizing corporate profits a solution to anything? It already does this in a number of instances with Walmat and four of the 10 wealthiest US people are Walton family members.
"No business which depends for existence on paying less than living wages to its workers has the right to continue in this country. By Living wages, I mean more than the bare subsistence level - I mean the wages of a decent living." -Presdident Franklin D. Roosevelt
"No business which depends for existence on paying less than living wages to its workers has the right to continue in this country. By Living wages, I mean more than the bare subsistence level - I mean the wages of a decent living." -Presdident Franklin D. Roosevelt
4
Why should the government have to subsidize raising wages and further reduce federal revenues. You make a good case for rasing wages, and benefits as well. Corps. don't need tax breaks to do it.
Further, if business doesn't do better for its employees, sooner or later, we'll see a revived labor union movement that will demand it. Is that what the big corporations want?
Further, if business doesn't do better for its employees, sooner or later, we'll see a revived labor union movement that will demand it. Is that what the big corporations want?
1
I agree with Bernie Sanders and with most of the Republican candidates. Illegal immigrants are depressing our wages.
Fix the illegal immigration problem (seal the border) and you will see incomes rise.
Not complicated.
Fix the illegal immigration problem (seal the border) and you will see incomes rise.
Not complicated.
1
This commentary would make more sense if its argument and proposal was not an expressed wish to avoid 'civil unrest or an 80 percent tax rate'.
In fact, rather than its proposal for another big tax break to the wealthy (of course paid for by everybody so mainly by the non-wealthy), it surely makes more sense to have more progressive taxation such as the Pikety-proposed 80% tax rate on the wealthy.
In fact, rather than its proposal for another big tax break to the wealthy (of course paid for by everybody so mainly by the non-wealthy), it surely makes more sense to have more progressive taxation such as the Pikety-proposed 80% tax rate on the wealthy.
1
I don't understand the vitriol directed towards this author by so many commenters. Here is a member of the 1% who is providing a solution to improve our system, and he is being trashed. That just comes across as hate, and it's a shame that NY Times readers are becoming knee-jerk rejectionists.
1
Even more challenging than getting a majority of business leaders behind such radical moves as tax incentives to companies that pay their workers reasonable wages is the overwhelming problem of money in politics. I don't see any durable long-term solutions to the income inequality problem unless or until Citizen's United is overturned and we return to a representative democracy rather than an oligarchy like we have now. The system isn't rigged, it's fixed. You agree? Thank you, Terry Malouf, Boulder, CO
2
My first job out of engineering school (1967) was at Boeing in Seattle. I was paid $9600 per year, a senior engineer was paid roughly $15000 per year. That same year the head of Boeing was being paid about $50000 per year. A ratio of about 3 to 1. The head of Boeing today is compensated 30 million dollars and a senior engineer is being paid about $100000 per year. That is a ratio of 300 to 1. This is true with every major corporation in our country. Truly disgusting.
3
start with fair taxation. E.g., supposing that 80% of nation's wealth is held by the top 20% then fairness requires that 80% (not 60) of total tax revenues flows from them. if not the rest pay disproportionately and income is redistributed by government upwardly and maldistribution of the nation's wealth worsens. this is not partisan. its mathematics.
This is the kind of conversation that should be taking place in this campaign season instead of the middle school name calling we watched the other night.
1
Much has lately been written on the growing inequality. But this article is from the wealthy’s selfish viewpoint. It's not that they don't know what to do about cutting inequality to size but that they have been unwilling to embark on that UNPLEASANT journey. This theme could be a powerful impetus. When self-preservation is threatened, anyone would act.
The best way is to follow Piketty's line of recommendations. I wouldn't propose an "oppressive taxation" of 80% on over $500K, which was actually not far from the pre-Reagan era top marginal rates - in 1981 a top rate of 70% was imposed on >$563K. Before 1964 it was 91% on >$3M or so, both in 2014 dollars.
I would propose a 70% tax on over $25M & 50% on >$5M; the top 15% in incomes should pay at Clinton era level. This would be quite fair. The problem with too drastic changes is that it can’t last. Reagan revolution was a reaction to the confiscatory taxation of the Eisenhower era. The Scandinavian taxation is about ideal, and enacted by consensus, not imposed on them.
The additional revenue, which would be, guessing, about $3 trillion in 10 yrs., should be used to subsidize minimum wage of $15 at 2014 dollars for adults who’ve paid in 4 quarters in payroll tax & to be adjusted for inflation. More liberal earned income tax credits as well.
Payroll tax should be reduced to 1% for the first $10K & 2% for the next $10K. Payroll tax cap should be eliminated but reduced to 2% on >$500K & 1% on >$1M.
The best way is to follow Piketty's line of recommendations. I wouldn't propose an "oppressive taxation" of 80% on over $500K, which was actually not far from the pre-Reagan era top marginal rates - in 1981 a top rate of 70% was imposed on >$563K. Before 1964 it was 91% on >$3M or so, both in 2014 dollars.
I would propose a 70% tax on over $25M & 50% on >$5M; the top 15% in incomes should pay at Clinton era level. This would be quite fair. The problem with too drastic changes is that it can’t last. Reagan revolution was a reaction to the confiscatory taxation of the Eisenhower era. The Scandinavian taxation is about ideal, and enacted by consensus, not imposed on them.
The additional revenue, which would be, guessing, about $3 trillion in 10 yrs., should be used to subsidize minimum wage of $15 at 2014 dollars for adults who’ve paid in 4 quarters in payroll tax & to be adjusted for inflation. More liberal earned income tax credits as well.
Payroll tax should be reduced to 1% for the first $10K & 2% for the next $10K. Payroll tax cap should be eliminated but reduced to 2% on >$500K & 1% on >$1M.
3
I believe that the ideas discussed in this article are a valid step in the right direction to reduce inequality. But it must be realized that progress and a durable solution cannot come solely from the wisdom or the act of generosity of one or a few enlightened individuals.
The way to a stable solution and a stable society is to restore our democracy. Congress is not paralyzed by accident but because capitalists and their lobbyists have effectively bought legislators to enact laws in their interest, not in the interest of society. The current state of affair must end if we as a society want to move toward a better life.
Mr. Georgescu, in addition to the good idea you expose in this article are you willing to work with your colleagues, business leaders, "C.E.O's" etc. to clear our politics of special-interest money and influence and restore our democracy as it was meant to be?
The way to a stable solution and a stable society is to restore our democracy. Congress is not paralyzed by accident but because capitalists and their lobbyists have effectively bought legislators to enact laws in their interest, not in the interest of society. The current state of affair must end if we as a society want to move toward a better life.
Mr. Georgescu, in addition to the good idea you expose in this article are you willing to work with your colleagues, business leaders, "C.E.O's" etc. to clear our politics of special-interest money and influence and restore our democracy as it was meant to be?
1
The 21st century likely will see humanity needing to solve two challenges that could be transformative in their consequences. The first is environmental change that is inimical to human life and the contours of current civilization … but that’s not today’s theme.
The second is the gradual but accelerating obsolescence of human labor at the hands of automation. This op-ed seeks to focus attention on one of its outcomes, which is that the value of low-skilled labor is rapidly decreasing relative to high-skilled labor, and as a consequence we see the compensation gap widening. Human beings compete now with lower-cost automation for productive work at the low-end, and that competition is driving down wages. However, technology advances in waves and platforms, each wave building on the platform established by the last wave. It won’t be long before high-skilled (and highly-paid) work is automated as well.
If humans weren’t as numerous, we might manage this transition. But seven billion today, projected to exceed ten billion in just a few decades, require immense amounts of low-skilled work to remain productive consumers within current frameworks of governance and economics.
I see no solution to this other than the death of capitalism and, frankly, immense social upheaval and even violence, followed by extensive rebuilding on principles that are not now evident. THIS is what we should be focusing on, and not on mere income inequality, which is very much a transitory phenomenon.
The second is the gradual but accelerating obsolescence of human labor at the hands of automation. This op-ed seeks to focus attention on one of its outcomes, which is that the value of low-skilled labor is rapidly decreasing relative to high-skilled labor, and as a consequence we see the compensation gap widening. Human beings compete now with lower-cost automation for productive work at the low-end, and that competition is driving down wages. However, technology advances in waves and platforms, each wave building on the platform established by the last wave. It won’t be long before high-skilled (and highly-paid) work is automated as well.
If humans weren’t as numerous, we might manage this transition. But seven billion today, projected to exceed ten billion in just a few decades, require immense amounts of low-skilled work to remain productive consumers within current frameworks of governance and economics.
I see no solution to this other than the death of capitalism and, frankly, immense social upheaval and even violence, followed by extensive rebuilding on principles that are not now evident. THIS is what we should be focusing on, and not on mere income inequality, which is very much a transitory phenomenon.
1
The only correlation I see is the more government has intruded in lives and business and the economy, the ability of a family with a one working parent and a stay at home parent to buy a home, buy a car, and pay for college has virtually vanished. The government has tried to cure poverty with trillions of dollars and only made it worse, the government has interfered in banking and made it worse, Government has passed employment rules, fiddled with industry and lowered US competitiveness in the world. Basically, I really can't think of anything the government does well except take money, waste it and grow its bureaucracy. When I was growing up things were much better economically for my parents and me than for my kids or grandkids and it is a result of government interference and its unintended consequences. Government is always the problem, never the solution!!!.
There is a way to start but not with new tax incentives, heavens no! First, we must close old tax loopholes. For decades, corporate income tax revenues, state and federal, have been declining while profits are reaching new heights along with millions more spent for lobbying for...more corporate tax breaks and retaining the loopholes they currently enjoy. Enough!
The biggest and worst tax loophole worldwide is the one that allows multinational corporations to shift profits to tax haven subsidiaries. "The most common way multinationals avoid taxes is through transfer pricing..." (Economist page 67, July 11th issue) or mis-pricing in order to make here, sell it there, and put the profits way over there in a subsidiary in Luxembourg, Ireland, or the Cayman Islands - all hiding in plain sight.
The American states, laboratories of Democracy, could and should lead the way but are too busy competing with each other to offer betters tax deals and win the race to the bottom - which shifts the tax burden to the lower classes and raises their sales and property taxes. The American states are blind to damage that they are inflicting on our national competitiveness. Recently, Jim Koch, founder and chairman of Boston Beer, said "Because of our broken corporate tax system, I can honestly predict that I will likely be the last American owner of Boston Beer Company." Our broken corporate tax system puts US-based corporations at a disadvantage to foreign rivals who buy up US businesses.
The biggest and worst tax loophole worldwide is the one that allows multinational corporations to shift profits to tax haven subsidiaries. "The most common way multinationals avoid taxes is through transfer pricing..." (Economist page 67, July 11th issue) or mis-pricing in order to make here, sell it there, and put the profits way over there in a subsidiary in Luxembourg, Ireland, or the Cayman Islands - all hiding in plain sight.
The American states, laboratories of Democracy, could and should lead the way but are too busy competing with each other to offer betters tax deals and win the race to the bottom - which shifts the tax burden to the lower classes and raises their sales and property taxes. The American states are blind to damage that they are inflicting on our national competitiveness. Recently, Jim Koch, founder and chairman of Boston Beer, said "Because of our broken corporate tax system, I can honestly predict that I will likely be the last American owner of Boston Beer Company." Our broken corporate tax system puts US-based corporations at a disadvantage to foreign rivals who buy up US businesses.
3
I'm not a fan of government and corporate collusion. Obamacare is a classic example of forcing middle class Americans to pay for insurance they will not be able to pay because the insurance companies are strangling them with rising premiums. Eventually uninsured, much of the the middle class will see fines which lines government pockets, while the insurance companies make out like bandits, having to only insure the wealthiest Americans with the tax dollar guaranteeing to cover any fall-out. It's a corrupt system when the government and corporate America are in collusion, so I don't agree with the author's solution. But addressing income inequality issue is profoundly important for all the reasons that the author suggested. A government tax incentive for big business, however, is not the way to achieve that goal in my opinion.
The way to address income inequality is to cripple the ability of American companies to hire overseas cheap labor with a foreign labor tax. For every person working for practically nothing in Malaysia, for example - lining some CEO's pocket - there is a tax to compensate the American not working, assuming that CEO and/or his company wants to remain an American company. And if it doesn't, that's fine, too. The company can headquarter somewhere else and live and work under foreign rule. But it would give American labor both value and negotiating ability. And the rise in worker income would be a natural result.
The way to address income inequality is to cripple the ability of American companies to hire overseas cheap labor with a foreign labor tax. For every person working for practically nothing in Malaysia, for example - lining some CEO's pocket - there is a tax to compensate the American not working, assuming that CEO and/or his company wants to remain an American company. And if it doesn't, that's fine, too. The company can headquarter somewhere else and live and work under foreign rule. But it would give American labor both value and negotiating ability. And the rise in worker income would be a natural result.
2
This sounds like more corporate welfare--tax incentives to pay more to those making 80,000 or less. I believe that going back to tax rates of the 1970's would help tremendously. I don't buy the solution of tax breaks to the rich so that it tricks down to the shrinking middle class. It is more of the same failed ideology which had created enormous inequality rather than real opportunity.
2
Ken Langone, is a right wing extremist and the main reason why i won't step one foot into a Home Depot store!
3
So the answer is tax incentives? How about a moral obligation as citizens to pass the wealth to your employees which will have the net effect of a better purchasing sector. Your wealth was created by my tax dollars paying for roads and schools etc. Now its your turn to do the right thing. It will make you richer and your employees happier. Pretty simple.
1
One would think that after observing the history the French and Russian revolutions, providing fair recompense to employees--and forestalling another such revolution-- could be considered by the business oligarchs to be just another cost of doing business. Apparently this thought still eludes them.
1
Asking for tax incentives to increase wages amounts to asking the government to subsidize those increases. Why should this be necessary, if an 80% increase in productivity has flowed exclusively into the pockets of the rich over the last 40 years?
1
Something like that may help the educated but education and skills are needed to get those out of poverty. But it is heartening to hear some one in you position thinking about this problem.
Thank you for an excellent piece and your promotion. Similar ideas were brilliantly promoted in the book The Divine Right of Capital by Marjorie Kelly over a decade ago - advocating that corps are run for the benefit of employees more than shareholders. I believe a highly civilized, sustainable economy will ensure that what I've called The Four Aspirants are affordable to people in the "aspiring class" - which can be defined loosely at people living below 50% of the national household average. What are the Four Aspirants? Health care, higher education, housing and ideally home ownership, and transportation. The first three have been rising much faster than general inflation and wages of the "aspiring class" for a long time. Time for action and business leadership is very very welcome!
Income inequality originates from a place that is immune from the reach of any legislation hoping to correct it. The private sector never stops begging for tax breaks and insists its the only thing that can make them competitive but how does any tax break keep from just being slammed into personal compensation and not find its way into R and D or trickling down to lower level employees who are the most likely to stoke the economic cycle by spending it? Recall the Vegas junkets and bonuses the beneficiaries of government bail outs tried to get away with? Wait a minute there Sparky, not so fast with taxpayers money. That "need" is as much of a scam as trickle down, supply side economics always has been. Light candles at the altar of tax breaks for the job creators and they'll surely Miracle down the jobs. Having The Faithful as a constituency has its benefits. Look up "The Vulture Chart", it illustrates all you need to know.
The article is missing the point, those in power never willingly relinquish it or negotiate with those that do not possess power themselves. As for the green shoots described in the article, it has largely been a by product of fast-food workers and other service industry types banding together for higher wages. Even then grudgingly, the raises have been meager and will be implemented years from now if inflation hasn’t eaten away at the gains by then. The symptoms however from such vast inequality have been utterly devastating for the majority of people from students saddled with debt they have no hope of ever paying back, to the formerly middle class which is struggling and once emergency away from destitution. Read David Brooks’s recent column about our colossal failures militarily, to columnist Roger Cohen’s recent column about American excess, to understand the social costs of entropy. All three columns take on various costs to the country, from Brooks’s stating that we don’t win wars anymore, why would we when society is effectively demoralized and destitute, to Cohen’s column about the high costs of obesity and a lack of social cohesion to Georgescu’s column about low wages. They are describing the various symptoms of inequality on the American body politic.
2
Philanthropy has always been the price vice paid to virtue, but given the awakening of Mr. Georgescu and recently even the Koch brothers et al, perhaps the 1% are coming to the obvious realization that tossing out a few pennies to the poor is not enough to quiet the monster they are creating.
Hoarding wealth has no silver lining as French King Louis XVI learned too late as he looked out his balcony at the mob in the streets of Paris on Bastille Day and asked his handler, "Is this just another bread riot?"
The handler answered, "No, Sire. This is revolution."
Those who have hoarded American wealth better come clean now while they and the nation have a chance.
Hoarding wealth has no silver lining as French King Louis XVI learned too late as he looked out his balcony at the mob in the streets of Paris on Bastille Day and asked his handler, "Is this just another bread riot?"
The handler answered, "No, Sire. This is revolution."
Those who have hoarded American wealth better come clean now while they and the nation have a chance.
3
Let me get this straight. The way for billionaires to address extreme income inequality ["Capitalist, Arise .. . .] is to have the government give them money ("incentives"), and some of it will trickle down?
Mr. Georgescu says he and his fellow billionaires are scared. Scared of what? Paying more taxes on future earnings. So, to avoid his paying higher taxes in the future, he suggests that government give him and his fellows more money now. Genius.
And his buddy Ken Langone? A true philanthropist. After taxpayers poured millions and millions into NYU over the years, he gives a relatively modest gift (tax-deductivel, of course) and now it's the " NYU Langone Medical Center." That's not a gift, that's advertising and brand building,
"We're billionaires, and we're here to help you." No thanks. And we're not buying your upcoming book, either.
Mr. Georgescu says he and his fellow billionaires are scared. Scared of what? Paying more taxes on future earnings. So, to avoid his paying higher taxes in the future, he suggests that government give him and his fellows more money now. Genius.
And his buddy Ken Langone? A true philanthropist. After taxpayers poured millions and millions into NYU over the years, he gives a relatively modest gift (tax-deductivel, of course) and now it's the " NYU Langone Medical Center." That's not a gift, that's advertising and brand building,
"We're billionaires, and we're here to help you." No thanks. And we're not buying your upcoming book, either.
1
Business leaders can probably make the most important change happen, namely the strengthening of regulations of large banks, and possibly even of hedge funds. The profits from ordinary lending are no longer enough, because loans can never compete with investments. If Glass-Stegall was restored, lending to small business would look very profitable and our economy would grow here at home. That would help create the environment that the author want to see, more so than providing more tax breaks to business.
I agree with Georgescu that an 80% tax would indeed be punitive. Those who have made a great deal have often worked to the point of giving up all else, and many, particularly those who started businesses, took enormous risks. Why should those people have to give-up the rewards that come with such sacrifice and risk? Rather than demonizing the wealthy, which is what the "98%" seem intent on doing, why not begin demanding more opportunities for those who have little to work, sacrifice, and take risks too? Free higher education, low cost health care, and publically supported child care would allow others to access the same playing field. They may not work as hard, they may not take the risks, but they will have the opportunity to. We need to stop assuming that those with wealth are somehow the transgressors. It is an anger borne of jealousy and it will not solve the problem of a diminishing middle class. Rather than always thinking in terms of "taking" from the wealthy, it's time to think about strengthening an educational and human service infrastructure that allows hard working people to achieve their potential.
20
"We need to stop assuming that those with wealth are somehow the transgressors"
Those with wealth that buy Congress and write law favorable to themselves ARE the transgressors.
Those with wealth that buy Congress and write law favorable to themselves ARE the transgressors.
1
No, actually a government that allows itself to be bought is the transgressor.
1
It is not jealousy.. It is the recognition that the wealthy fight tooth and nail against any taxation which would make the ameliorating social benefits you suggest possible. Instead, they want tax cuts. Why don´ they just pay a just wage out of their excessive profits.
What about the people who are doing well, but are not billionaires? Ten percent of US households have ncomes greater than $125K. These people are the backbone of the country, and set policy and control institutions.
Maybe they don't want the people in the bottom half to have higher incomes, because they would be directly impacted. They have a good thing going, with nice houses it he suburbs, an influential position in society, and a socially liberal outlook that draws the line at economic reforms. Just as long as we fight global warming, support gay marriage, and help poor blacks in distant slums, everything is OK.
I suspect this is the reason for the stubborn resistance to real change, not the dark money of nameless billionaires.
Maybe they don't want the people in the bottom half to have higher incomes, because they would be directly impacted. They have a good thing going, with nice houses it he suburbs, an influential position in society, and a socially liberal outlook that draws the line at economic reforms. Just as long as we fight global warming, support gay marriage, and help poor blacks in distant slums, everything is OK.
I suspect this is the reason for the stubborn resistance to real change, not the dark money of nameless billionaires.
Henry Ford is known for his use of the assembly line to produce the Model "T", the everyman's car. Many people overlook his paying his workers enough money so that they could afford to buy his car. It's a lesson that's been forgotten. We've been sold a bill of goods called supply side economics, that ignores half of the economics equation. It's like building a bridge while ignoring gravity. At some point it will fall.
3
Yes, we need to deal with income inequality. The question becomes, who pays for the structural changes necessary to put more money in the pockets of the middle and lower income classes. What is needed is a major shift in the income tax/social security structure -- upper incomes pay more/middle and lower less. The upper income, well-to-do will talk about it but when it comes time to increase income and social security taxes will they agree or disagree? My hunch is the latter.
Look where we have come. The author mentions Eisenhower. Now we have the likes of Donald Trump who shamelessly keeps saying ' I am rich, I exploit the loopholes to make money, I buy politicians, immigrants are rapists, women are pigs and he is leading in the polls. People who suffer inequality also support him.
Reagan started the process of inequality, Bush extended it and if we get another Republican President he will seal it.
Remember water seeks its own level after the flood.
Inequality or equality will seek its own level after the catastrophe
Reagan started the process of inequality, Bush extended it and if we get another Republican President he will seal it.
Remember water seeks its own level after the flood.
Inequality or equality will seek its own level after the catastrophe
2
I have always thought that the stalemate in American politics and economics could come to an end under two scenarios. The first is a great great depression comes ( even worse than 2008 ) with the result that finally the federal government steps in once again like in 1933 with sweeping reforms. The second was that American business comes to its senses and the Democratic Party meets it half way. Notice here that I ignore the Republican Party in any viable scenario. They are useless. This opinion gives me hope but I am still betting on the first scenario.
2
"Tax incentives to business... ." Really? And "I don't know yet what it would cost." It would cost business executives and shareholders a sliver of their annual earnings to pay their workers a wage that would enable them to not just subsist but enjoy a bit of life: a movie now and then, eating out occasionally, buying decent health insurance, and saving for the future--all of which would eventually help business and its shareholders. Being tight-fisted hurts everyone in the long run.
1
I have an idea, Mr. Georgescu. Let us start with a return to defined pension plans, followed perhaps by maternity and paternity leaves, four-week vacations, and some kind of insurance against being laid off at the corporation's whim.
"You may say I'm a dreamer
But I'm not the only one
I hope some day you'll join us
And the world will be as one." (John Lennon)
"You may say I'm a dreamer
But I'm not the only one
I hope some day you'll join us
And the world will be as one." (John Lennon)
2
From "Is Capitalism Moral" :
Exec to front line worker pay, post WW2 - 50 : 1
Today - 350+ : 1
Why?
I don't believe Capitalism is immoral; but today's Reaganesque-Trickle Down, made-up definition of Capitalism is not working for 90% of us.
Exec to front line worker pay, post WW2 - 50 : 1
Today - 350+ : 1
Why?
I don't believe Capitalism is immoral; but today's Reaganesque-Trickle Down, made-up definition of Capitalism is not working for 90% of us.
2
This column evoked the image of French aristocrats -- just before the French revolution -- wondering if they should, perhaps, reign it in a bit.
Alors...the guillotine got to them first.
Alors...the guillotine got to them first.
3
A big part of the problem is the ghost of Ronald Reagan, particularly as expressed in his claim that "government is the problem." Too many political leaders take this as encouragement to stop the government from doing any of the kinds of things it did in the period from the 1930s to about 1970, during which everybody's income was rising together - not just that of the super-rich.
The solutions you suggest here include a call for government action, and I agree, the government needs to act on behalf of ordinary Americans. But it won't, not as long as Congress is dominated by "government is the problem" thinking.
The solutions you suggest here include a call for government action, and I agree, the government needs to act on behalf of ordinary Americans. But it won't, not as long as Congress is dominated by "government is the problem" thinking.
1
"Business has the most to gain from a healthy America, ....."
Glad you recognize that. It seems not to have sunk in that you are all 'in business' to sell a product or service, which fewer and fewer Americans can afford to buy. With Europe in trouble, and China fading, American
and multi=national corporations can no longer assume they can treat American workers like serfs and sell to the rest of the world. So, what is your end game? Who will you sell to? Have you created your own death spiral?
No wonder you're afraid. You should be. Not of riots in the streets, though that is a possibility; but because your own greed has led you to deny to your workers the very source of your own prosperity - living wages.
Something else not mentioned is the casino that is Wall St. When corporations began playing the 'quarter-to-quarter numbers game', and it became more important to push profits up to keep stock prices rising, you lost sight of not only R&D, but any kind of real planning for the future at all, beyond that next quarterly report. People used to 'invest'; now hedge funds and mutual funds trade stocks at lightening speeds for fractions of cents, multiple times a day. There is no investment - there is only trading. And false values. This money is buying the political system that keeps it all rolling for now. But it will end badly for us all, because it truly is a House of Cards.
Glad you recognize that. It seems not to have sunk in that you are all 'in business' to sell a product or service, which fewer and fewer Americans can afford to buy. With Europe in trouble, and China fading, American
and multi=national corporations can no longer assume they can treat American workers like serfs and sell to the rest of the world. So, what is your end game? Who will you sell to? Have you created your own death spiral?
No wonder you're afraid. You should be. Not of riots in the streets, though that is a possibility; but because your own greed has led you to deny to your workers the very source of your own prosperity - living wages.
Something else not mentioned is the casino that is Wall St. When corporations began playing the 'quarter-to-quarter numbers game', and it became more important to push profits up to keep stock prices rising, you lost sight of not only R&D, but any kind of real planning for the future at all, beyond that next quarterly report. People used to 'invest'; now hedge funds and mutual funds trade stocks at lightening speeds for fractions of cents, multiple times a day. There is no investment - there is only trading. And false values. This money is buying the political system that keeps it all rolling for now. But it will end badly for us all, because it truly is a House of Cards.
2
The only way one can really speak of inequality is between people with no regard to national boundaries. I like to talk about inequality between nations as opposed to within nations. Since you mentioned him, this is one thing Thomas Piketty refused to touch in his book; he studied only Europe and America. Karl Marx once submitted that "Accumulation of wealth at one pole is at the same time accumulation of misery..at the opposite pole,”. The fact of this statement is now being experienced in the West as manufacturing jobs are shipped oversea. Accumulation in China creates redundancy in America and Europe - - this is not yet very obvious.
The Wealth of Europe and America was created on the back of 'third world countries'. Not just wealth in the material form but, image form, confidence and the RIGHT to name and define. Blacks and woman will always have a hard time in the West because they do not have that direct confidence that comes with being white and male.
Inequality between nations is just too difficult to watch. A sub-Saharan child starving with no water to drink or food to eat while there is enough technology to end hunger overnight. The amount of money spent for the preparation of pointless wars by wealthy nations will literally (as UN argued) abolish hunger and send every child in Sub-Saharan Africa to school.
The Wealth of Europe and America was created on the back of 'third world countries'. Not just wealth in the material form but, image form, confidence and the RIGHT to name and define. Blacks and woman will always have a hard time in the West because they do not have that direct confidence that comes with being white and male.
Inequality between nations is just too difficult to watch. A sub-Saharan child starving with no water to drink or food to eat while there is enough technology to end hunger overnight. The amount of money spent for the preparation of pointless wars by wealthy nations will literally (as UN argued) abolish hunger and send every child in Sub-Saharan Africa to school.
1
So all you capitalists need is more government welfare? I think not. Cut all CEO's pay to reasonable proportion and pay far more taxes. Corporations in this country make out like the bandits they are. Increase worker benefits and wages and I hope I live to see you reap what you have sown.
1
I don't see it.
The poor people have got it pretty good. Cellphones, cable tv, EBT card, public housing, healthcare, etc.
Why throw all that away? No, no revolution. Just complaining.
The poor people have got it pretty good. Cellphones, cable tv, EBT card, public housing, healthcare, etc.
Why throw all that away? No, no revolution. Just complaining.
There's a role for philanthropy and investment in the "fourth sector" to create enterprises that are able to pay workers more. Quarterly profit reports are less important to fourth sector investors.
I was with you almost all they way ! Now you want the "dreaded" government to give you tax incentives to pay people a decent wage ??
We already have government subsides (food stamps, medicaid) for companies that pay employees starvation wages, now you want additional subsidies to pay employees a living wage ?
I think I prefer civil unrest or the 80% tax called for by Mr. Piketty.
We already have government subsides (food stamps, medicaid) for companies that pay employees starvation wages, now you want additional subsidies to pay employees a living wage ?
I think I prefer civil unrest or the 80% tax called for by Mr. Piketty.
2
Capitalism is for people with capital.
3
YOU and your friends in the top 1% global financial elite broke it, Mr. Georgescu. WE will fix it in the next elections. Your little "kingdoms" are about to crumble.
1
There will be no taxes raised, no one wants a government. And there are no laws for union. Everyone is in a "gig" economy cobbling together several jobs to make a living. I don't see companies wanting to "hire" people except on an hourly wage. Oh, yeah, in Silicon Valley there are jobs, long commutes, people living in rooms in houses while they leave their families. There is no reason for the "rich" to anything for the "middle class". They lives in different worlds, except they employ them to take care of their kids, mow their lawns, and cook their food for minimum wage. Health care workers get minimum wage while their agencies get the same for finding them jobs. So, as the "rich" step out of their house they will find beggars on the street, pee on their lawns, and garbage on their sidewalks. Wait, they won't because they will be getting into their helicopter.
2
What can business leaders do to fight income inequality?
A. Pay themselves less and the people they are dependent upon more?
B. Pay congress more to pass a law that compels the former middle class to pay his employees.
A. Pay themselves less and the people they are dependent upon more?
B. Pay congress more to pass a law that compels the former middle class to pay his employees.
1
Wealth inequality is a bigger problem than income inequality, and with the Fed pumping money selectively into certain asset classes, income and wealth inequality are not the same. It is admirable to develop programs to bring up people from the sub-$80K regions, as Mr. Geogescu is suggestinh, but it won't address wealth inequality.
If one of these new $80K workers saves half of his pretax earnings, then with current zero interest rates, in one million years, thirty thousand generations, his descendants will be on par with the Gates, Zuckerberg, Ellison, Bloomberg crowd. Bread and circus for the masses, while certainly a good idea, will not help them rise into the upper crust of American society. You will never work your way into that group; monopolies and Federal Reserve asset class boosting are the way to get there.
If one of these new $80K workers saves half of his pretax earnings, then with current zero interest rates, in one million years, thirty thousand generations, his descendants will be on par with the Gates, Zuckerberg, Ellison, Bloomberg crowd. Bread and circus for the masses, while certainly a good idea, will not help them rise into the upper crust of American society. You will never work your way into that group; monopolies and Federal Reserve asset class boosting are the way to get there.
1
Yes, forty years of dealing out flat wages while productivity rose 80% is a good long run for naked greed. The question is indeed how much longer pouring money into the right wing propaganda machine will be effective suckering working whites into believing that African Americans and Illegal Aliens and Unions and Gays and Lesbians and Teenagers Having Sex and Unwed Mothers and Welfare Queens and Feminists and Tree-Huggers and Abortionists and Teachers and West Coast Liberals and Hollywood and, once upon a time, the Japanese and, now, the Chinese and, the biggest bugaboo of all, the Federal government -- the list is long and longer and getting thin -- are to blame for all that ails them, before everyone starts looking around and realizes they are all in the same leaky boat watching America's ruling class go sailing by in their yachts to visit Caribbean tax havens. And they say Russia has a kleptocracy....
3
Unemployed M.Ed. here, with administrative and higher ed and international background, can't get a foot in the door of colleges, non-profits, tutoring outfits, or temp agencies. Too qualified or not qualified enough. All my friends 50+ are in the same situation, watching our savings disappear as our resumes get passed over. We thought there would always be a market for bright, creative educators, and a livable wage to support a single-earner household if we earned advanced degrees. Ha!!
I have no sympathy for the CEOs who are sweating about the prospect of a peasant revolt. Yes, you all had better do something, or history will repeat itself. And no, you don't get a tax break for your effort...because guess who will make up the difference, most likely in reduced services; see: food stamp cuts, no unemployment extensions, etc.
You m/billionaires have no idea what the average person is doing to stay clothed and fed, or you have forgotten that long-ago boat ride that brought you to this land of opportunity. Hard work does not always equal financial reward. How many teachers live in Malibu? Entertainment rules. How did the movie industry take off? Selling fluffy diversions to Depression-weary folks who wanted to escape for a couple hours. We are no different now.
I have no sympathy for the CEOs who are sweating about the prospect of a peasant revolt. Yes, you all had better do something, or history will repeat itself. And no, you don't get a tax break for your effort...because guess who will make up the difference, most likely in reduced services; see: food stamp cuts, no unemployment extensions, etc.
You m/billionaires have no idea what the average person is doing to stay clothed and fed, or you have forgotten that long-ago boat ride that brought you to this land of opportunity. Hard work does not always equal financial reward. How many teachers live in Malibu? Entertainment rules. How did the movie industry take off? Selling fluffy diversions to Depression-weary folks who wanted to escape for a couple hours. We are no different now.
1
Dear Mr Georgescu
(1) You already HAVE tax incentives to pay employees more.
You get a 100% deduction (deduction - not credit which is worth less than a deduction in $$$) for every penny you spend on employee wages, benefits and unemployment comp and worker's comp.
You want more than a 100?% tax credit for every dollar you spend on employees??!! WOW!! Guess you really do believe "Greed is Good"!
(2) Obviously you and your friends are not 'scared' enough.
Home Depot wages for a full-time worker will NOT pay for even a 1 bedroom apartment in my area.
As the saying goes, "Charity begins at home" so why doesn't Langone begin his efforts at 'home' in Home Depot and pay a worker enough to rent that $750 a month 1 bedroom AND keep a car on the road to get to work (no public transportation here)?
That is called "Leading by Example"
Or maybe we could just give all the low wage employers a bill - the bill for their worker's food stamps, subsidized housing, unpaid (and unpayable) medical bills or their Medicaid costs or subsidized health insurance premiums?
(1) You already HAVE tax incentives to pay employees more.
You get a 100% deduction (deduction - not credit which is worth less than a deduction in $$$) for every penny you spend on employee wages, benefits and unemployment comp and worker's comp.
You want more than a 100?% tax credit for every dollar you spend on employees??!! WOW!! Guess you really do believe "Greed is Good"!
(2) Obviously you and your friends are not 'scared' enough.
Home Depot wages for a full-time worker will NOT pay for even a 1 bedroom apartment in my area.
As the saying goes, "Charity begins at home" so why doesn't Langone begin his efforts at 'home' in Home Depot and pay a worker enough to rent that $750 a month 1 bedroom AND keep a car on the road to get to work (no public transportation here)?
That is called "Leading by Example"
Or maybe we could just give all the low wage employers a bill - the bill for their worker's food stamps, subsidized housing, unpaid (and unpayable) medical bills or their Medicaid costs or subsidized health insurance premiums?
1
Dear Mr Georgescu
(1) You already HAVE tax incentives to pay employees more.
You get a 100% deduction (deduction - not credit which is worth less than a deduction in $$$) for every penny you spend on employee wages, benefits and unemployment comp and worker's comp.
You want more than a 100?% tax credit for every dollar you spend on employees??!! WOW!! Guess you really do believe "Greed is Good"!
(2) Obviously you and your friends are not 'scared' enough.
Home Depot wages for a full-time worker will NOT pay for even a 1 bedroom apartment in my area.
As the saying goes, "Charity begins at home" so why doesn't Langone begin his efforts at 'home' in Home Depot and pay a worker enough to rent that $750 a month 1 bedroom AND keep a car on the road to get to work (no public transportation here)?
That is called "Leading by Example"
Or maybe we could just give all the low wage employers a bill - the bill for their worker's food stamps, subsidized housing, unpaid (and unpayable) medical bills or their Medicaid costs or subsidized health insurance premiums? (and go back to the Eisenhower tax rates with the $$ increments adjusted for inflation?)
(1) You already HAVE tax incentives to pay employees more.
You get a 100% deduction (deduction - not credit which is worth less than a deduction in $$$) for every penny you spend on employee wages, benefits and unemployment comp and worker's comp.
You want more than a 100?% tax credit for every dollar you spend on employees??!! WOW!! Guess you really do believe "Greed is Good"!
(2) Obviously you and your friends are not 'scared' enough.
Home Depot wages for a full-time worker will NOT pay for even a 1 bedroom apartment in my area.
As the saying goes, "Charity begins at home" so why doesn't Langone begin his efforts at 'home' in Home Depot and pay a worker enough to rent that $750 a month 1 bedroom AND keep a car on the road to get to work (no public transportation here)?
That is called "Leading by Example"
Or maybe we could just give all the low wage employers a bill - the bill for their worker's food stamps, subsidized housing, unpaid (and unpayable) medical bills or their Medicaid costs or subsidized health insurance premiums? (and go back to the Eisenhower tax rates with the $$ increments adjusted for inflation?)
3
Yay!!! Trickle down theory!!!!
We finally may get to test it out after waiting 40yrs.
So how much are you/they going to piddle on us? Just enough to stop the trundle carts and guillotines?
Better hurry!
Bring back Unions!
Bring back manufacturing!
How about a pre-Reagan tax structure?!
Yes, "shareholders" may loose a little fast cash.
Top executives may not be able to buy a G35 or that 2nd yacht.
I hear the HD is having a sale on cart supplies and other sharps!
We finally may get to test it out after waiting 40yrs.
So how much are you/they going to piddle on us? Just enough to stop the trundle carts and guillotines?
Better hurry!
Bring back Unions!
Bring back manufacturing!
How about a pre-Reagan tax structure?!
Yes, "shareholders" may loose a little fast cash.
Top executives may not be able to buy a G35 or that 2nd yacht.
I hear the HD is having a sale on cart supplies and other sharps!
1
Reading this article or plea makes me sick to my stomach.
Home Depot and other retailers make money for one simple reason; they have done a complete end run around American manufacturing and sourced their products overseas where the cost of doing business is so low.
Now they want to lead the charge and give their give their employees a little raise?? The retailers' antics have put a LOT of us out of business and along with us went our employees to the unemployment, welfare, food stamp lines.
Now that all the manufacturing opportunities for investment have dried up, here come hedge fund guys, wall street guys, etc etc for their pound of flesh because they know that investment opportunities have dried up outside of Wall Street.
You want to do something??? Buy your products here and don't make me laugh at your absurd crocodile tears.
Home Depot and other retailers make money for one simple reason; they have done a complete end run around American manufacturing and sourced their products overseas where the cost of doing business is so low.
Now they want to lead the charge and give their give their employees a little raise?? The retailers' antics have put a LOT of us out of business and along with us went our employees to the unemployment, welfare, food stamp lines.
Now that all the manufacturing opportunities for investment have dried up, here come hedge fund guys, wall street guys, etc etc for their pound of flesh because they know that investment opportunities have dried up outside of Wall Street.
You want to do something??? Buy your products here and don't make me laugh at your absurd crocodile tears.
165
"I don’t know yet what it would cost. But not acting would be far more costly."
This sentence alone is enough evidence that the author is simply writing an "I need to feel good" column, but has no clue about how to propose anything concrete. If it he doesn't know how much something will cost, how does he know the alternative is less costly? It is this kind of "loose" thinking that we must avoid in America.
Not everything that is not "fair" is necessarily "bad" and in need of a government fix. Somethings are just the way the world works. There will always be people with more skills and more luck and better family support than others. And so, there will be huge disparity in financial outcomes among people.
It has always been like that. From the pharaohs to the lords to the artists/athletes/CEOs. With one exception. The western labor compensation bubble, that lasted from end of WWII till the fall of the Soviet block communism. That was the exception, where WWII devastated capital, and the red-scare cause the affluent in the west to tolerate unsustainable high taxation.
But the bubble is over and we are moving back to the historical norm of wealth distribution between owners and laborers. Nothing new. Nothing to be scared off. Just going back to normal. There will be no rebellion, simply because rebellion never works - look at Arab spring for a recent example.
This sentence alone is enough evidence that the author is simply writing an "I need to feel good" column, but has no clue about how to propose anything concrete. If it he doesn't know how much something will cost, how does he know the alternative is less costly? It is this kind of "loose" thinking that we must avoid in America.
Not everything that is not "fair" is necessarily "bad" and in need of a government fix. Somethings are just the way the world works. There will always be people with more skills and more luck and better family support than others. And so, there will be huge disparity in financial outcomes among people.
It has always been like that. From the pharaohs to the lords to the artists/athletes/CEOs. With one exception. The western labor compensation bubble, that lasted from end of WWII till the fall of the Soviet block communism. That was the exception, where WWII devastated capital, and the red-scare cause the affluent in the west to tolerate unsustainable high taxation.
But the bubble is over and we are moving back to the historical norm of wealth distribution between owners and laborers. Nothing new. Nothing to be scared off. Just going back to normal. There will be no rebellion, simply because rebellion never works - look at Arab spring for a recent example.
2
Why is an 80% tax on billionaires "oppressive"? Let's ask Mr. Eisenhower, former President of the USA. Mr. President, you presided over the period of maximum expansion of the middle class in the USA, what was the top bracket in your time?
2
It's time that the comfortably off stop avoiding their responsibility for the plight of the poor by continual reference to the 1%. A more relevant way to partition society is to take, on the one hand, those that consider it perfectly normal to spend three, four, five, or perhaps even more dollars on espresso based drinks, sometimes several times a day, against those that have not much more than that to spend on their major meal of the day. Let's see the Starbuckers put their hands in their pockets instead of complaining about those who have created their jobs.
Not impressed by the author's vague biography. Intervention of Eisenhower? Kind headmaster at Philips Exeter Academy? Somehow these entitled, upper class monsters always expect us to believe their tired up by the bootstraps fabrications. Eisenhower could have told you about fairness in taxation...
2
I remember someone similar to this on the Newshour back when Billionaires for Bush was a new thing. It was a remarkable perspective. Since then, it is no longer unpolite to talk about raising minimum wage, ect. as it was for the past 20-30 years (a Reagan legacy, I suspect). PLEASE Mr. Georgescu, keep talking some sense to these people!
This issue reminds me of kids sports and the clashing ethics of 'superstar' vs team playing. Superstar etchics are like the CEO's pulling in 800 times the average employee in compensation. Superstar ethics create wins (and plenty of losses) on the scoreboards and loads of alienation between players. Team ethics truly succeed; win or lose everyone feels good about playing the game.
BUSINESS IS A SOCIAL CONSTRUCT. Businesses around the US flourish because we as a people protect our borders, build roads, educate our children, etc. Their companies are CHARTERED by the government because THE government sees it as in the public interest to let them do so. Their success would be nothing without the web of understandings and public infrastructures that it rests upon. Only the shortsighted, narrow minded and dangerously foolish can think they succeeded on their own.
It's so great you are show the dangerous psychology of pretending that society has nothing to do with the success of the wealthy. Surely you are right in pointing out that safe havens they have for their wealth won't be safe forever, if things continue. 2 words: European history.
This issue reminds me of kids sports and the clashing ethics of 'superstar' vs team playing. Superstar etchics are like the CEO's pulling in 800 times the average employee in compensation. Superstar ethics create wins (and plenty of losses) on the scoreboards and loads of alienation between players. Team ethics truly succeed; win or lose everyone feels good about playing the game.
BUSINESS IS A SOCIAL CONSTRUCT. Businesses around the US flourish because we as a people protect our borders, build roads, educate our children, etc. Their companies are CHARTERED by the government because THE government sees it as in the public interest to let them do so. Their success would be nothing without the web of understandings and public infrastructures that it rests upon. Only the shortsighted, narrow minded and dangerously foolish can think they succeeded on their own.
It's so great you are show the dangerous psychology of pretending that society has nothing to do with the success of the wealthy. Surely you are right in pointing out that safe havens they have for their wealth won't be safe forever, if things continue. 2 words: European history.
No way on the tax break. I see where your logic is, give the corporate welfare directly to the corporations instead of to the poor in the form of demoralizing entitlements to subsidize poverty wages, but this is only slightly better. Think outside the box and lets use citizens united to beat the corrupt inept politicians at their own game. Create a SuperPac with independent leadership where all companies above a certain size must pledge funds for 10 years. The sole purpose of this pac would be to Fight Inequality, reinstate death taxes, outlaw stock buybacks, takeaway tax breaks for companies who outsource, tie executive comp to avg worker pay, abolish student debt and break up the banks, desegregate schools including private schools.....
Is this deep satire? Peter Georgescu and Ken Langone (bankroller of the outlandishly piggish Chris Christie) are worried about income inequality? And they think the specter of social unrest -- remote indeed, given poor white America's affinity for Republicans -- should convince us to give them even more tax breaks? Can this possibly be a serious proposition?
3
Terrific to hear this from a high capitalist. But a tax break for business is your only answer?
2
A forward thinking, courageous essay! I don't think I know enough econ to really have all the answers to this conundrum, but it seems to me that now the shareholders have more power than the employees (perhaps due to our slightly imperfect -Citizens United funded - political system), so naturally the CEO's steer the profits their way. There must be a mechanism by which we (our democracy - Jim Webb & Elizabeth W!) could deincentivize this imbalance of power & insure that the real wealth creators (sorry, Mitt!) get a fair share of the profits, so capitalism can keep generating more wealth that is shared by everyone who works.
one word: Bernie
2
There are several facets to income inequality never mentioned. One, the corporate officers that receive disproportionate bonuses for either minor changes to business practice or getting employees to accept less compensation, but two, the middle managers, who obstruct real improvements or deny acknowledgement of real improvements, and get rewarded.
Sorry, I witnessed a third. Mid managers who didnt understand the situation, but still let a $250million win occur, then told the lowly engineer that you couldnt expect the company to believe you did that - they only can understand you making a contribution that is 4 times, or maybe 10 times your salary so she took credit for the very effort she opposed.
The status quo is ripe for upset.
Yet we dont want upset to our investments...
Sorry, I witnessed a third. Mid managers who didnt understand the situation, but still let a $250million win occur, then told the lowly engineer that you couldnt expect the company to believe you did that - they only can understand you making a contribution that is 4 times, or maybe 10 times your salary so she took credit for the very effort she opposed.
The status quo is ripe for upset.
Yet we dont want upset to our investments...
Capitalism is our national faith. It's encouraging to see some of the higher ranking members taking action to prevent it from destroying us.
When you build castles and moats, catapults and battering rams are sure to follow. It goes with the territory. Speaking of luck, was Langone's shilling for Grasso's $139 million 'retirement' package part of his master plan to better the condition of the working man? No one thought Grasso was a genius, or a skilled athlete, but he was certainly lucky - to have known Langone. Mr. Georgescu, your arguments deserve zero sympathy. Just because a brand of capitalism made you and your friends supremely rich, doesn't justify it as a form of human development. And please don't expect respect and dignity; that's for those who have a hope of threading the eye of the needle.
In the parlance of the younger generation:
FAIL, Mr. Georgescu.
I think the younger generation may still use 'GET REAL!'. Tax exemptions to support shareholder dividends just doesn't cut it sir.
If you and your buddies are truly worried about a revolution or higher taxes, and I don't think you are, the faux solution proposed here is absurd. Unless you think the proles are moronic. I guess you probably do, you have a life time of experience in public relations that tells you just that.
I can't imagine what you will have to say for yourself in the promised next two parts of your series.
As one of the major players in distributing the Soma to the proles for a couple of generations now, I just can't believe in your concern. I think you know a lot better than that.
My only question is 'Why are you doing this?' Many focus groups told you this would fly?
Sorry, your screed, published here, lives a bitter taste in my mouth.
FAIL, Mr. Georgescu.
I think the younger generation may still use 'GET REAL!'. Tax exemptions to support shareholder dividends just doesn't cut it sir.
If you and your buddies are truly worried about a revolution or higher taxes, and I don't think you are, the faux solution proposed here is absurd. Unless you think the proles are moronic. I guess you probably do, you have a life time of experience in public relations that tells you just that.
I can't imagine what you will have to say for yourself in the promised next two parts of your series.
As one of the major players in distributing the Soma to the proles for a couple of generations now, I just can't believe in your concern. I think you know a lot better than that.
My only question is 'Why are you doing this?' Many focus groups told you this would fly?
Sorry, your screed, published here, lives a bitter taste in my mouth.
1
There's a reason why the country was booming in the fifties - it was that "odious" tax rate you're complaining about.
The experiment now is to see if Capital has the moral courage to compensate labor with the fair share of increased capital that labor has earned with its 80% rise in productivity and outrageous profits for corporations.
The second thing you have to do, is bring back the jobs you've off-shored. Suck it up. People need jobs - people of all colors and competencies. You've taken that away from so many people, that the despair and poverty is unbearable to millions.
Until you do those two things, everything you say and do means nothing.
The experiment now is to see if Capital has the moral courage to compensate labor with the fair share of increased capital that labor has earned with its 80% rise in productivity and outrageous profits for corporations.
The second thing you have to do, is bring back the jobs you've off-shored. Suck it up. People need jobs - people of all colors and competencies. You've taken that away from so many people, that the despair and poverty is unbearable to millions.
Until you do those two things, everything you say and do means nothing.
4
'...Government can provide tax incentives to business to pay more to employees making $80,000 or less...'
How is this not asking the government to give more money to businesses to pay their employees fair wages?
And who will make up the loss to the tax coffers?
Hazard a guess? (FYI: It will not be the 1%. It never is.)
How is this not asking the government to give more money to businesses to pay their employees fair wages?
And who will make up the loss to the tax coffers?
Hazard a guess? (FYI: It will not be the 1%. It never is.)
2
The American capitalism this article described in the time before Reagan did not die. It was assassinated by the GOP and the people they - and the media - work for. I have no reason to believe that incredibly greedy people, who have never known financial insecurity, will be interested in the author's proposal. It will take pitchforks and rabble in the streets makimg them shudder in fear before they agree to anything. They will have to fear - viscerally - total loss of their wealth before they will part with a penny.
1
What baloney. Through the employer mandate we have made more expensive for all employers to hire new employees. We have seen many small businesses (and even Universities) limit hours to keep them part time so employers don't have to provide health insurance, and other companies keeping their numbers under 50 so that they are not hit by the employer mandate. What this author is asking for are refundable tax credits to employees who make less than $80,000. Yes this "idea is simply pie in the sky." We have a 17 TRILLION DOLLAR BUDGET DEFICIT, and according to the CBO will again approach 1 trillion dollar annual deficits in a few years. Go to a Home Depot store and please find to try someone who knows anything about the products in the store. This article is ridiculous.
1
this is an important and prescient essay. i wrote something like it in the times back in the reagan-'80's--"democracy and capitalism collide".
mr. langone has great influence over republican party policy--where the chief impediment to implementing your suggestion resides. simply stated: tell the republican leadership that they must stop insisting on tax cuts; stop pursuing austerity; stop preventing government spending on infrastructure; stop opposing increases in the minimum wage.
the republicans today are vastly different from the so-called eisenhower republicans, whose philosophy guided my youth. tell the party--yes, this IS about partisan politics--to resist the urging of the extremists and the greedy. use the models warren buffett and bill gates have established to address all those billionaire friends of republicans pouring millions into the election cycle that they must stop thinking in terms of short term profit maximization.
you've written an essay. now start talking to the people who can do something about the serious problem you correctly identify.
mr. langone has great influence over republican party policy--where the chief impediment to implementing your suggestion resides. simply stated: tell the republican leadership that they must stop insisting on tax cuts; stop pursuing austerity; stop preventing government spending on infrastructure; stop opposing increases in the minimum wage.
the republicans today are vastly different from the so-called eisenhower republicans, whose philosophy guided my youth. tell the party--yes, this IS about partisan politics--to resist the urging of the extremists and the greedy. use the models warren buffett and bill gates have established to address all those billionaire friends of republicans pouring millions into the election cycle that they must stop thinking in terms of short term profit maximization.
you've written an essay. now start talking to the people who can do something about the serious problem you correctly identify.
3
Capitalism is failing. Be terrified. We're coming for you.
The Soviet Union "took over" Romania – after Romania had invaded the Soviet Union in alliance with Nazi Germany. So yes, you are quite lucky to have made it out.
"We promise we will make things more fair. First, you start by giving us a huge tax break for our businesses, then some undefined time later, we will make your lives good. Trust us! Sure, nothing has trickled down from those tax breaks we ask for yet, but this time it will!"
3
'...The fact that real wages have been flat for about four decades, while productivity has increased by 80 percent, shows that has not been happening...'
There is an article in the New York Times this week titled '25 Years After Gardner Museum Heist, Video Raises Questions' about a museum heist that occurred in 1990.
In the second to last paragraph, it is mentioned that the night security guard was 'earning $7.35 an hour for his graveyard shift'. In 1990 dollars.
The minimum wage is currently $7.25 per hour, 25 years later. That comes to $15,080 if a person works 40 hours per week for 52 weeks.
It is astounding that intelligent business leaders in the US do not understand that our economy and, indeed any country, can only thrive with a strong middle class.
History tells us what eventually happens to a country with only an aristocracy and a peasant class. Majority wins and it is not pretty.
There is an article in the New York Times this week titled '25 Years After Gardner Museum Heist, Video Raises Questions' about a museum heist that occurred in 1990.
In the second to last paragraph, it is mentioned that the night security guard was 'earning $7.35 an hour for his graveyard shift'. In 1990 dollars.
The minimum wage is currently $7.25 per hour, 25 years later. That comes to $15,080 if a person works 40 hours per week for 52 weeks.
It is astounding that intelligent business leaders in the US do not understand that our economy and, indeed any country, can only thrive with a strong middle class.
History tells us what eventually happens to a country with only an aristocracy and a peasant class. Majority wins and it is not pretty.
5
The saddest thing about this article is the complete lack of empathy the writer has for struggling Americans. He is not motivated by their inability to live healthy productive lives, spend time with their families, or send their children to college. He is not motivated by the horrible old age awaiting Americans without pensions or savings.
Instead Is motivated by his own selfish fears. Either of loosing his yacht or his head.
Instead Is motivated by his own selfish fears. Either of loosing his yacht or his head.
2
Well, pensions have disappeared, people's salaries has been relatively flat for a decade, employment is actually very high because it is vastly understated, people can't live on savings accounts, middle class tax rate is still at a record, people can't afford homes and young generations are priced out. Meanwhile, corporations' profits keep increasing, CEO pay has lost touch with reality, billionaires and corporation do not pay taxes or very little, and their collective wealth keep increasing. What's wrong with that? Everything, if we would count lobbyism and campaign contributions as what they are, bribes, we would realize that we are in fact living in a very corrupted country where all politicians have sold out and stopped representing the people. Instead, they prefer taking money so they can get rich as well. The clintons and obama, and all your wonderful local politicians. All of them stopped caring about you a long time ago and gutted out legislations that protected you - Glass Steagall, nafta, to name a few while passing legislation to protect the robbers. Please Peter don't tell us about being scared because you and your fellow billionaires have put the people there. You've been around for a while, you are not innocent.
165
'... people's salaries has been relatively flat for a decade...'
Inflation-adjusted, for four decades, since Reagan, a Republican, whose party you seem loathe to mention, implemented his policy of 'trickle down' economics that would 'lift all boats'.
We are still waiting.
Inflation-adjusted, for four decades, since Reagan, a Republican, whose party you seem loathe to mention, implemented his policy of 'trickle down' economics that would 'lift all boats'.
We are still waiting.
Isn't it funny that Rep candidate Bush says the way to economic recovery is to raise productivity of working people when productivity has been raised 80% in 40 years? What did they get in return?
Corporate America will not change their ways until they run us all in the ground. If the government tries to increase taxes they will just move their headquarters to another country to avoid them. Some already have.
I think "civil unrest" will be the only way to change things. I don't know where the author found his "CEO" friends. Personally I think he's hallucinating!
Corporate America will not change their ways until they run us all in the ground. If the government tries to increase taxes they will just move their headquarters to another country to avoid them. Some already have.
I think "civil unrest" will be the only way to change things. I don't know where the author found his "CEO" friends. Personally I think he's hallucinating!
3
Capitalists arise! You have nothing to lose but one of your yachts.
I echo commenter Thomas Zaslavsky. Why should taxpayers subsidize the 1% to treat the newly-recognized "actual value creators," i.e., the employees fairly? What is it, in their fabulously redundant affluence, that constrains them from doing the right thing as sound business practice, if not human decency?
As for good buddy Ken Langone, the man who compared the Democratic Party and other critics to the Nazi Party and the enablers of Hitler's rise, his words speak plenty loud enough.
Ordinary folks seeking a reasonable smidgen of economic security should not be looking toward the one-percent for restitution because we know only too well the direction those folks are taking us. The Ken Langones of the world call the search for fairness "class warfare" when it is they who wage war every day with their lobbyists, accountants, lawyers and cash. They're the warriors; we're the victims.
www.endthemadnessnow.org
I echo commenter Thomas Zaslavsky. Why should taxpayers subsidize the 1% to treat the newly-recognized "actual value creators," i.e., the employees fairly? What is it, in their fabulously redundant affluence, that constrains them from doing the right thing as sound business practice, if not human decency?
As for good buddy Ken Langone, the man who compared the Democratic Party and other critics to the Nazi Party and the enablers of Hitler's rise, his words speak plenty loud enough.
Ordinary folks seeking a reasonable smidgen of economic security should not be looking toward the one-percent for restitution because we know only too well the direction those folks are taking us. The Ken Langones of the world call the search for fairness "class warfare" when it is they who wage war every day with their lobbyists, accountants, lawyers and cash. They're the warriors; we're the victims.
www.endthemadnessnow.org
2
1964: ROCKEFELLER VS. GOLDWATER
Of course Nelson Rockefeller had far more wealth that Goldwater: Standard Oil vs. an owner of a department store. Goldwater was a Conservative and Rockefeller was a moderate Republican.
Yet Goldwater never understood that Gov. Nelson Rockefeller was attempting to save capitalism; while Goldwater believed that the rich should have the freedom to be as wealthy as they wanted to be.
Sen. Goldwater was a man of integrity but not an intellectual. He never realized that a society divided by class could no longer be a democratic republic. But, ultra rich Rockefeller was aware that an economic system that contained two antithetical classes would lead to a revolution or worse,
So,he was a moderate (today he would be labeled a liberal) for both philosophical and pragmatic reasons.
For a viable middle class is needed for the billionaires to survive. This is especially relevant now as Murdoch and the Koch bro's and folks like Exxon/Mobil seem to have subscribed to the faux Goldwater underpinnings and if this trend continues it will bring down the entire capitalist system,
Of course Nelson Rockefeller had far more wealth that Goldwater: Standard Oil vs. an owner of a department store. Goldwater was a Conservative and Rockefeller was a moderate Republican.
Yet Goldwater never understood that Gov. Nelson Rockefeller was attempting to save capitalism; while Goldwater believed that the rich should have the freedom to be as wealthy as they wanted to be.
Sen. Goldwater was a man of integrity but not an intellectual. He never realized that a society divided by class could no longer be a democratic republic. But, ultra rich Rockefeller was aware that an economic system that contained two antithetical classes would lead to a revolution or worse,
So,he was a moderate (today he would be labeled a liberal) for both philosophical and pragmatic reasons.
For a viable middle class is needed for the billionaires to survive. This is especially relevant now as Murdoch and the Koch bro's and folks like Exxon/Mobil seem to have subscribed to the faux Goldwater underpinnings and if this trend continues it will bring down the entire capitalist system,
3
A storm is coming. OUR storm. And when it arrives, it will shake the universe...
Let's all agree on the ends, Mr. Georgescu, but the devil, here, is in the details...
If you were 50 and laid off and looking for work, or 24 with a huge college debt and looking for a job, or 64 and unable to retire after years of being contract-labored and hearing that your pittance of social security should be cut, if you worked in a field being made contingent (like college teachers, architects, engineers, IT and more)--you'd be scared then for real. If you were surrounded by wolves waiting for medical bills to get you so you'd fall behind on loans and then have your interest rates climb to the stars, sinking you and yours for good, you'd be scared. There are a hundred ways to be gutted these days, and not many ways out. So if you want to pile up fortunes to heaven while your nation fails, yes, you should probably be scared. God knows the rest of us are.
5
Whether Mr. Georgescu and his concerned peers get taxed at 80% or 40% it comes to the same thing--the only thing that will have a substantive effect is substantive redistribution. Mr. Georgescu's avowed fear, or guilt, whatever it might be, isn't really the point either. The bottom line is the takedown by the wealthy in this country of everyone else--regardless of Mr. Georgescu's emotional state. If history is any guide, the tiny sliver of society that vastly benefits from the current arrangement isn't going to willingly walk away from it--why should they when it's bought and paid for?
2
Mr Georgescu and Mr Langone:
Are YOU willing to take a pay cut to the extent that you earn a salary (which INCLUDES lavish stock options) that is ONLY 30 times higher than your lowest paid full time employee? Let's say that employee makes $8.00 an hour, 40 hour week, 50 weeks a year = $16,000
Can you guys not live on ONLY $480,000 a year? Oh man, I wish I ONLY made that much money teaching my oh so unimportant school children (I see 250 children a week).
How many homes do you need? How many cars? Yachts? European vacations? I wish my job was as important as yours is. Maybe I'd make more money.
Are YOU willing to take a pay cut to the extent that you earn a salary (which INCLUDES lavish stock options) that is ONLY 30 times higher than your lowest paid full time employee? Let's say that employee makes $8.00 an hour, 40 hour week, 50 weeks a year = $16,000
Can you guys not live on ONLY $480,000 a year? Oh man, I wish I ONLY made that much money teaching my oh so unimportant school children (I see 250 children a week).
How many homes do you need? How many cars? Yachts? European vacations? I wish my job was as important as yours is. Maybe I'd make more money.
5
Small green shoots and meetings among billionaire CEOs is forward thinking and laudable, but it may be too little too late. You might put your heads together and act quickly before you lose them to the guillotine.
There it is, at the root of the problem, GREED! Who's contribution to the businesses they work for could possibly be worth, say, one-hundred million dollars a a year? That this would seem normal to anyone astounds me.
2
Oppressive taxes. LOL : )
2
No need to worry, billionaire Mr. Georgescu. As you well know, the hi-tech surveillance security state is right now actively and effectively arming itself to forever protect Property - yours - against People - the rabble. Its willingness to follow Orders - yours - against anyone lower on the s.e. scale is clearly demonstrated so often as to be boring were it not tragic for those thereby savaged. And the propaganda arms of major ad agencies will be used in perpetuity to assure the rabble of their need for such protection. Further subsidies to you and yours will be provided as requested by politicians purchased for that purpose.
1
If the system is set up so that rewards become ever bigger but ever scarcer -- and this due simply to increasing efficiency in how we organize our productive energies -- a corollary of this is that jobs themselves are getting bigger, and scarcer.
Income inequality is only the start, an overture. The main drama itself, is the era of the obsolescence of labor.
What is the solution when the problem is not merely low wages, but any wages at all? A turnkey and automated economy? The owners of the turnkeys will reap vast rewards, but as this plays out, the crisis of wage stagnation will seem like golden years.
What shall capitalism do, when it has made production so efficient, there is ever decreasing need for the labor of billions?
"What are we to do about low wages?" is the opening moments for the real challenge: 'What shall we do as the need for our labor disappears?"
This is the end game of capitalism, and it is a human problem as great if not greater than global warming.
Income inequality is only the start, an overture. The main drama itself, is the era of the obsolescence of labor.
What is the solution when the problem is not merely low wages, but any wages at all? A turnkey and automated economy? The owners of the turnkeys will reap vast rewards, but as this plays out, the crisis of wage stagnation will seem like golden years.
What shall capitalism do, when it has made production so efficient, there is ever decreasing need for the labor of billions?
"What are we to do about low wages?" is the opening moments for the real challenge: 'What shall we do as the need for our labor disappears?"
This is the end game of capitalism, and it is a human problem as great if not greater than global warming.
3
The risk of becoming a country like Latin america is real. We'll have a 1% economic elite with 99% of the wealth. Today that would be about 3 million with a lot and 317 million with nothing. People will look for jobs that have been outsourced, nobody will own a home. Like in Brazil politicians and executives will take bribes to siphon out what's left. After them, there will be even less and they' ll go somewhere else to pay less taxes and flee the misery and crime that will be the only way to survive. There needs to be something to be done to stop the giant sucking sound of the rich and powerful (WS) insisting on more profit and less benefits, pensions, salaries and so on for workers. We need more balance, WS and lobbyists are sucking this country dry. Democrats need to help, if they don't the country will fall. Hilary will not help, do not vote for her.
1
Does the author believe in unions and greater unionization or does he merely trust that enlightened capitalists in this era will pay more decent wages to their workers?
1
Employees aren't paid for the value they create, but their cost of replacement. Don't like it? Open your own company.
Productivity gains go to the shareholder since the gains are from automation and technology, not harder working employees. Self driving trucks will eliminate 3.5 Million truck driving jobs, Amazon drones even more. What do we do when companies produce large value to consumers and need no employees?
Productivity gains go to the shareholder since the gains are from automation and technology, not harder working employees. Self driving trucks will eliminate 3.5 Million truck driving jobs, Amazon drones even more. What do we do when companies produce large value to consumers and need no employees?
1
"Productivity gains go to the shareholder" No, they don't. CEO compensation has increased by 350% while 90% of the population has experienced no noticeable increase at all. Productivity gains have gone almost exclusively to the top layer of executives.
Just FYI, almost all of us have a big stake in shareholder returns either through pension funds or our insurance companies. If returns had actually gone to shareholders, it wouldn't be so bad.
Just FYI, almost all of us have a big stake in shareholder returns either through pension funds or our insurance companies. If returns had actually gone to shareholders, it wouldn't be so bad.
1
No mention of profit sharing? Giving workers ownership, in the form of profit sharing, will give them a stake in the business, and hope for making more money. It's no longer morally defensible for owners to take all the profits.
Is this the same thing as tax cuts? What are the details of your program suggestions?
Mr. Georgescu says most corporate employees are not getting pay increases because boards of directors are unwilling to do so in the face of quarterly earnings pressure. This is fiction. The reality is top management refuses to cut their pay in order to fund a raise for everyone else. The only solution to immovable greed like this will be government regulations of the kind Tony Atkinson proposes in his recent book on Inequality.
2
So, besides talking, what are you doing? Are you contributing to candidates that are addressing the issue? Are you supporting them? Voting for them, canvassing for them?
1
Basically what you're saying is that "In our enlightened self-interest, we the wealthy individuals and corporations should get the government to pay us to raise worker salaries. Seriously?
4
Capitalists arise? I say the Capitalists need not take the blame ... but how about tax free non profit groups! A prime example in New York City alone, and according to Al Jazeera America, the Catholic church is worth $121 billion ... The Donald .. 1 billion ... and it is the largest tax exempt property owner ... 24 parochial schools shut down and up for sale ... yet neither the money nor the property is returned to the local communities .. that paid higher property taxes because these properties were taken off of the tax rolls. When sold the money reverts to Cardinal Dolan, tax free ... he doesn't even pay capital gains. I might point out ... that he can name any price, such as a lower price for the sale, and the buyer thankful for not having to pay higher transfer taxes etc ... donates to a Catholic organization ... he gets a deal, the public is taken for another ride. List all Tax exempt non profit organizations ... then talk to the capitalists who work and pay taxes.
1
"Capitalists, Arise"? This article is for billionaires, about billionaires, who pretend concern for the impoverished 80% of American Citizens.
"Help is on the way...", is a laughable smokescreen hiding the lavish, leisure class who live on $500,000. per month, who inherit billions of dollars.
Now comes the great pretenders, who pretend that they are going to help the impoverished, the struggling, and are now writing columns and books about the fear and dread they feel about being reduced to $500,000. per year incomes by the tax structure Thomas Piketty recommends in his book, Capital in the 21st Century.
What nonsense. The foolishness of it all is that these wealthy inheritors of billions of dollars simply gave away their fortunes and cast their fate with the impoverished people they claim to care about.
Inequality is a simmering caldron. When the children of the great American poor majority are sufficiently deprived, and suffer the sight of the American rich lavishing their children with celebrity status, and more money each year than the average American earns in a lifetime, the 2nd American Revolution will arrive.
Will the walls of gated communities and mansions hold? Will the National Guard and the American soldiers protect the property of the rich? Or will they side with the people they grew up with, the poor, the middle-class? What walls would hold against the great American majority of 260 million poor, and struggling souls?
"Help is on the way...", is a laughable smokescreen hiding the lavish, leisure class who live on $500,000. per month, who inherit billions of dollars.
Now comes the great pretenders, who pretend that they are going to help the impoverished, the struggling, and are now writing columns and books about the fear and dread they feel about being reduced to $500,000. per year incomes by the tax structure Thomas Piketty recommends in his book, Capital in the 21st Century.
What nonsense. The foolishness of it all is that these wealthy inheritors of billions of dollars simply gave away their fortunes and cast their fate with the impoverished people they claim to care about.
Inequality is a simmering caldron. When the children of the great American poor majority are sufficiently deprived, and suffer the sight of the American rich lavishing their children with celebrity status, and more money each year than the average American earns in a lifetime, the 2nd American Revolution will arrive.
Will the walls of gated communities and mansions hold? Will the National Guard and the American soldiers protect the property of the rich? Or will they side with the people they grew up with, the poor, the middle-class? What walls would hold against the great American majority of 260 million poor, and struggling souls?
Stop putting Republican free traders in office; stop buying Chinese --- encourage a resurgence in US manufacturing by providing a market (yeah that means you have to accept that you're going to take a hit in the "profit wallet). Isn't that obvious. Stop buying politicians whose outlook is that the stock market and wealth accumulation by the upper caste are appropriate measures of the economy.
Could not agree more with your analysis, but would like to know if you also support raising the minimum wage, and legislation to strengthen bargaining rights for employees, so that the 40% are not dependent on the benevolence of the 1%, but also have stronger legal rights.
Ban stock buybacks and encourage companies invest in their businesses. Cap CEO stock holdings. Maximizing short term "shareholder value" should not be the only objective of a corporation.
1
If I were an oligarch who had been taking for the past 30 years from those with little to nothing so I could have even more, I'd be scared too. Very scared, and with good reason.
What Income inequality?
$456 billion: Total net worth of America's 10 richest people.
($456 billion is 4 times China annual military budget)
$410 billion: total estimated value of the 35 largest not for profit philanthropy foundations (setup by America's rich to avoid paying taxes on their wealth)
$78 billion: Bill Gates net worth plus or minus $10 billion (Trump change)
To put $78 Billion into the proper perspective, $78 billion is enough to feed every man, woman and child on the face of the earth (7 billion people) for one day.
$42 billion: The value of Bill and Melinda Gates Foundation (a phony foundation setup by rich people to avoid paying US taxes)
$10 billion: Donald Trump's estimated net worth.
$60 million: The Bush family entitlement aka net worth
$45,000: average American’s annual wages.
$20,000: average annual social security benefits paid an American retiree after working 47 years.
$456 billion: Total net worth of America's 10 richest people.
($456 billion is 4 times China annual military budget)
$410 billion: total estimated value of the 35 largest not for profit philanthropy foundations (setup by America's rich to avoid paying taxes on their wealth)
$78 billion: Bill Gates net worth plus or minus $10 billion (Trump change)
To put $78 Billion into the proper perspective, $78 billion is enough to feed every man, woman and child on the face of the earth (7 billion people) for one day.
$42 billion: The value of Bill and Melinda Gates Foundation (a phony foundation setup by rich people to avoid paying US taxes)
$10 billion: Donald Trump's estimated net worth.
$60 million: The Bush family entitlement aka net worth
$45,000: average American’s annual wages.
$20,000: average annual social security benefits paid an American retiree after working 47 years.
2
"We are creating a caste system from which it’s almost impossible to escape, except for the few with exceptional brains, athletic skills or luck." Truer words were never spoken. I see it all around me. But don't act like this happened all of a sudden. It has been coming for a long time and there have been many people who could see the truth behind the work arounds and the make dos and the various ways in which we hid the growing problem. The women's movement of the 1970 was fueled as much by the need for income as it was by politics. The rise of the easy credit cards and growing consumer debt in the 1980's was caused by people's need for money to keep up. And wasn't all the ups and downs of the economy, all the speculation of the housing market, caused as much by the need for a big win that would give a family security as anything else? We've been heading down this road for a long, long time.
A carve out tax break is the same as an entitlement program, but you are rewarded and not shamed for taking it.
You don't have to receive cards that identify you as needed assistance to buy food to feed your family. You are not identified as a taker. It doesn't matter how hard you work, if you receive food stamps you are a taker.
You are called a job creator, even though the government subsidizes those wages.
You don't have to receive cards that identify you as needed assistance to buy food to feed your family. You are not identified as a taker. It doesn't matter how hard you work, if you receive food stamps you are a taker.
You are called a job creator, even though the government subsidizes those wages.
Feel the Bern!
1
Exactly how 80% taxation makes the person who only has $1,300 left over, have more money? Answer: It doesn't.
Exactly how a revolution (e.g. Arab Spring, Soviet Revolution in 1917, etc) makes the person who only has $1,300 left over have more money? Answer: it doesn't.
Therefore there will be no revolution or taxation. Anyone scared of that is non-sensical.
Therefore, neither 80
Exactly how a revolution (e.g. Arab Spring, Soviet Revolution in 1917, etc) makes the person who only has $1,300 left over have more money? Answer: it doesn't.
Therefore there will be no revolution or taxation. Anyone scared of that is non-sensical.
Therefore, neither 80
Kill your internet, get out into the streets, resist, revolt. 100,000 people standing in front of the Capitol for fair taxation will look good on media and scare the oligarchs. Stop posting on the Internet, that doesn't do anything. Get into the streets.
I recall that when I worked in Madrid in the 80s, a wealthy friend drove his old Seat because his fancy car would get vandalized if he left it on the street too long. That sort of unrest is coming here, yet I do not feel too sanguine about it. To a mob, I look like a rich dude, even though I would, if prompted, kick a corporate brute down a flight of stairs. They are wrecking our democracy.
"Government can provide tax incentives to business to pay more to employees making $80,000 or less."
The United States can no longer afford redistribution on a voluntary basis. Justice demands no less than a more equal redistribution of a part of national income. That should be done by taxation that is then redistributed downward.
The United States can no longer afford redistribution on a voluntary basis. Justice demands no less than a more equal redistribution of a part of national income. That should be done by taxation that is then redistributed downward.
2
I agreed Mr. Georgeuscu, I really expect from them to start this action. Capitalism in this unlimited greed form is a plague, not different from the fascism and communism. Eventually wealth and power cumulates only top percentage.
America fell sick very badly in 2008, I do not know it can handle one more.
America fell sick very badly in 2008, I do not know it can handle one more.
" The benefits would be huge. People would have more money to spend, and many would no longer need government help. That would mean a reduction in entitlements."
I tend to agree. But what about all the taxes corporations are forced to pay now? For example, I remember when Wal-Mart was beat about by the haTERS because it was encouraging its labor to sign up for food stamps, medical health, etc rather than increase their wage.
But what the media doesn't say is that it is Walmart's money (and all corporations) in the form of tax that they are encouraging their laborers to take advantage of. So who can blame Walmart for pushing back against those who'd force wal-mart to pay higher wages when, in fact, they already pay a double wage.
Lessen the taxes and corporations would be willing to pay a higher wage.
I tend to agree. But what about all the taxes corporations are forced to pay now? For example, I remember when Wal-Mart was beat about by the haTERS because it was encouraging its labor to sign up for food stamps, medical health, etc rather than increase their wage.
But what the media doesn't say is that it is Walmart's money (and all corporations) in the form of tax that they are encouraging their laborers to take advantage of. So who can blame Walmart for pushing back against those who'd force wal-mart to pay higher wages when, in fact, they already pay a double wage.
Lessen the taxes and corporations would be willing to pay a higher wage.
1
If Obama and his laggard supporters try to get at my nest egg through excessive taxation they will be in for a rude awakening. When you are not living paycheck to paycheck you can afford to invest in tax-avoidance strategies just like that hypocrite Warren Buffet and the rest of the "increase taxes on everyone but themselves" crowd.
And to the laggards of society, please stop whining and work harder to achieve the American Dream.
And to the laggards of society, please stop whining and work harder to achieve the American Dream.
"During more than 50 years in the marketing, advertising and public relations business,"
Oh dear.
Oh dear.
1
Does the author know no privately held company, one not beholden to Wall Street, who can simply go ahead and start paying his employees more, without jacking up the prices of their products?
I commend him for his success; now it's time to share it with the people who made it possible.
I commend him for his success; now it's time to share it with the people who made it possible.
"I am scared" one of the masters of the universe admits, and apparently speaks for other masters... Hard to sympathize with your fears sir, very hard, particularly when the "solutions" you offer are meant to quell your fears only. Not enough, try again
"There is a way to start. Government can provide tax incentives to business to pay more to employees making $80,000 or less."....sounds like corporate welfare to me...why should the government pay...why don't the companies just pay their workers more so they have more to spend? Perhaps a tax incentive for small and emerging businesses, but they way it usually works is the large mega corporations walk away without paying any taxes which are critical for infrastructure, the arts,education, transportation,mental health etc. and the C suite executives are making 7 and 8 figure salaries. How about greater pay parity in corporations....the CEO pay is pegged to the lowest paid worker.... rant over
1
I am confused and wonder why you wrote this article. You are afraid of an uprising? Are you serious? The average wage earner has no time for an uprising. It should have happened decades ago, but our Republican Congress continues to be elected, and wipes the feet of your donor class. Change is not on the way. You will continue to be wealthy and free, while most citizens will be poorer than at any other time in our nation's history. Children, living in poverty, are dropping dead in the United States. No one is talking about our diseases of malnutrition and extreme poverty. The solution to our living standards will never come from the extremely wealthy. The impoverishment of your own soul is not our problem, and we are not buying.
2
Read the comments carefully, Mr. Georgescu, and you will discover that you are not talking to a bunch of credulous fools. In other words, a lot of Democrats read this paper. I believe many have answers that you dare not even imagine.
1
Why are capital gains only taxed at 15% while a middle-income person pays a much higher percent?
New York is inviting businesses to move to New York with all sorts of tax incentives; if these companies aren't paying taxes, where is the state getting the money to provide for the infrastructure these companies will need?
New York is inviting businesses to move to New York with all sorts of tax incentives; if these companies aren't paying taxes, where is the state getting the money to provide for the infrastructure these companies will need?
1
Warner better be working on something in VA. Zero growth thus far in the Old Dominion, likely to be negative once the next round of sequester cuts take effect in fall. He really needs to intervene with local governments pursuing new taxes to address Stormwater regulations. These are very ill timed.
What about the TRADE COMPETITIVENESS angle? Making wages higher in the US without some equalizer with our trading partners will be further crippling. Here are two suggested remedies:
1) Replace the CorpIncTax by a VAT, which is border-adjustable..meaning applied to imports and subtracted from exports; VAT would make imports shoulder equal burden with domestic goods and exports cheaper; all our trading partners use VAT's to our current competitive disadvantage; ending the CorpIncTax would also end double-taxation of dividends.
2) Require for the protection of a US patent that 80% or so be value-added in the US; this would stop our innovators from exporting manufacturing to China and bring high-paying jobs home, e.g., iPhone made here.
1) Replace the CorpIncTax by a VAT, which is border-adjustable..meaning applied to imports and subtracted from exports; VAT would make imports shoulder equal burden with domestic goods and exports cheaper; all our trading partners use VAT's to our current competitive disadvantage; ending the CorpIncTax would also end double-taxation of dividends.
2) Require for the protection of a US patent that 80% or so be value-added in the US; this would stop our innovators from exporting manufacturing to China and bring high-paying jobs home, e.g., iPhone made here.
1
You capitalists will sell us the rope we use to hang you with.
3
That's Noblesse Oblige for you, 21st century style...the government should pardon taxes for the wealthy who pay workers a wage commensurate with their worth. BALDERDASH! Fully fund 100 percent of health care and education for everyone. Repair the roads, bridges, rails, ports, and airports. Support family friendly policies and truly child-friendly policies. In other words, join the rest of the developed world. Bless his heart but Mr. Georgescu comes late with precious little! Check the tax tables the year that JFK was elected if you want to see where we went wrong.
3
Two ideas here, one is a question:
1. Not sure why all of a sudden the government has to get involved to incentivize higher wages. That kind of flies in the face of the case you made that wealthy businesses have to do this or face the consequences. I understand it is a good business strategy to get something if you can, but I would say no to that (if I was the government). Sounds like NOT doing it is a bad business decision.
2. Why not find ways to help the lower/middle make it up the ladder? Set up angel investment funds, or just invest in opportunities for entrepreneurs to realize their own dreams and ambitions (kind of like the "hand up" you might have gotten when you first started out). Those kinds of trusts to provide tax shelters and even opportunities for some return on investment.
1. Not sure why all of a sudden the government has to get involved to incentivize higher wages. That kind of flies in the face of the case you made that wealthy businesses have to do this or face the consequences. I understand it is a good business strategy to get something if you can, but I would say no to that (if I was the government). Sounds like NOT doing it is a bad business decision.
2. Why not find ways to help the lower/middle make it up the ladder? Set up angel investment funds, or just invest in opportunities for entrepreneurs to realize their own dreams and ambitions (kind of like the "hand up" you might have gotten when you first started out). Those kinds of trusts to provide tax shelters and even opportunities for some return on investment.
How about if corporations begin by paying their fair share of taxes? When I read about companies like GM paying no taxes for years, then receiving government millions for advertising, it makes me feel like a sucker for playing by the rules.
2
Corporate America: always looking to the government with their hand out.
No, you don't need any more tax incentives. What you need to be is more taxed.
No, you don't need any more tax incentives. What you need to be is more taxed.
2
Peter
I was six years at Groton with Hugh Scott and ten with Crocker Snow as publisher of the WorldPaper. Thank you for taking this on. I too feel deeply about this issue. Economic growth and profits at all costs, and as fast as possible, has fled to the inequality issue you so eloquently addressed (as well as resistance to addressing global climate change. Inequality led to the overthrow of Russia in 1917, China in 1949 and Cuba in 1959 to name only a few examples. Give a call if there is any thing I can do to help you. Wilford Welch
I was six years at Groton with Hugh Scott and ten with Crocker Snow as publisher of the WorldPaper. Thank you for taking this on. I too feel deeply about this issue. Economic growth and profits at all costs, and as fast as possible, has fled to the inequality issue you so eloquently addressed (as well as resistance to addressing global climate change. Inequality led to the overthrow of Russia in 1917, China in 1949 and Cuba in 1959 to name only a few examples. Give a call if there is any thing I can do to help you. Wilford Welch
My late father, a wealthy farmer told me a time would come when it would be the haves and the have nots in this country. He told me to always be generous and nice, because that was the only way to prevent people from hating people with money. I thought he was being dramatic. 35 or more years ago.
Dear Mr Georgescu
(1) You already HAVE tax incentives to pay employees more.
You get a 100% deduction (deduction - not credit which is worth less than a deduction in $$$) for every penny you spend on employee wages, benefits and unemployment comp and worker's comp.
You want more than 100?%??!! WOW!! Guess you real do believe "Greed is Good"!
(2) Obviously you and your friends are not 'scared' enough.
Home Depot wages for a full-time worker will NOT pay for even a 1 bedroom apartment in my area.
As the saying goes, "Charity begins at home" so why doesn't Langone begin his efforts at 'home' in Home Depot and pay a worker enough to rent that $750 a month 1 bedroom AND keep a car on the road to get to work (no public transportation here)?
That is called "Leading by Example"
Or maybe we could just give all the low wage employers a bill - the bill for their worker's food stamps, subsidized housing, unpaid (and unpayable) medical bills or their Medicaid costs or subsidized health insurance premiums?
(1) You already HAVE tax incentives to pay employees more.
You get a 100% deduction (deduction - not credit which is worth less than a deduction in $$$) for every penny you spend on employee wages, benefits and unemployment comp and worker's comp.
You want more than 100?%??!! WOW!! Guess you real do believe "Greed is Good"!
(2) Obviously you and your friends are not 'scared' enough.
Home Depot wages for a full-time worker will NOT pay for even a 1 bedroom apartment in my area.
As the saying goes, "Charity begins at home" so why doesn't Langone begin his efforts at 'home' in Home Depot and pay a worker enough to rent that $750 a month 1 bedroom AND keep a car on the road to get to work (no public transportation here)?
That is called "Leading by Example"
Or maybe we could just give all the low wage employers a bill - the bill for their worker's food stamps, subsidized housing, unpaid (and unpayable) medical bills or their Medicaid costs or subsidized health insurance premiums?
1
Mr. Georgescu simply states the exact problem—Wall Street. Where is it written that shareholders should reap the rewards rather than those who create the success - at every job level. " The fact that real wages have been flat for about four decades, while productivity has increased by 80 percent, shows that has not been happening Before the early 1970s, wages and productivity were both rising. Now most gains from productivity go to shareholders, not employees." Major social unrest...you betcha!
1
Hey, how about GE paying taxes,,, anyone, anyone??? I know it's just soooooo complicated, so much so I almost throw up my hands in cynical disgust.... it's as if I'm the target of some psyops operation.... wait
1
Capitalism as it is cannot deal with income inequality. Income inequality is the natural result of capitalism. As long as our paradigm is about winning, which is the heart of capitalism, we will see vastly more losers than winners. Once we decide that having enough for everyone is more important than the obscene rewards of "winner take all", we can get started on dealing with vast disparities or wealth. Until then we will watch wealth separate itself from everyday reality by frightening dimensions.
2
People in the upper middle class having only $1,300 a month after paying the bills? What bills take so much of income over $100,000, or 250,000? I should have such expenses. An 80% tax rate? who's talking about that? What, on incomes over ten million? Oh the horror, the horror!
But take heart; this writer has a solution: a TAX BREAK for the really rich, so they can afford to pay their employees more without having to forego any green fees at the country club or designer dresses for the next gala. It boggles the mind.
But take heart; this writer has a solution: a TAX BREAK for the really rich, so they can afford to pay their employees more without having to forego any green fees at the country club or designer dresses for the next gala. It boggles the mind.
At last! Mr. Georgescu, you are my hero. It seems that shareholder wealth has become the only product that any major corporation cares about. With any luck, a voice like yours can make a difference. This 1960's- raised, tree-hugging, commie-hippie peace creep is rooting for you!!!!
Peter, Peter, Peter, just let them eat cake.
After all, aprés nous, le déluge.
BTW, does Home Depot pay more than minimum wage, with its concurrent need for public assistance, i.e., tax payer subsidy to the plutocrats?
After all, aprés nous, le déluge.
BTW, does Home Depot pay more than minimum wage, with its concurrent need for public assistance, i.e., tax payer subsidy to the plutocrats?
1
You and your kind are responsible for our current mess. As a MAD Man you helped push the corporate lies on the American public, and now that you are old and guilty, it's too late, for I'm sacred.
Sorry guy, you lose, and so dowe.
Sorry guy, you lose, and so dowe.
1
More tax incentives to business? Ha ha ha ha ha. Brilliant and diabolical. If government is going to throw money around, why not just give it directly to the people struggling in the form of lower taxes or a higher mandatory minimum wage and eliminating the tax breaks that allow corporations and the wealthy to pay a lower percentage of tax than many people.
In case you were wondering why the police have been militarized and haven't been prosecuted or stopped from abusing and even killing people? I'm beginning to think this is really the plan to combat the social unrest discussed here. What I take from this ridiculous editorial: people need to keep protesting police brutality and bringing lawsuits. Social "unrest" is apparently getting attention. And if tax breaks are given to businesses so that they will do the right thing, then people should really protest.
In case you were wondering why the police have been militarized and haven't been prosecuted or stopped from abusing and even killing people? I'm beginning to think this is really the plan to combat the social unrest discussed here. What I take from this ridiculous editorial: people need to keep protesting police brutality and bringing lawsuits. Social "unrest" is apparently getting attention. And if tax breaks are given to businesses so that they will do the right thing, then people should really protest.
1
I am at a loss to understand why the top 0.1% worry about increased taxes. They are not spending the money they have now, so what possible benefit is there to accumulate more?
1
Fundamentally, capitalism = plunder.
1
How did it become legal for banks to charge upwards of 28% for credit card debt? How did it happen that those same banks pay less than 1% on savings accounts? It wasn't that long ago that we could "shop" for the best deal for a credit card with interest from 8% to 12%. If credit cards were suddenly outlawed, what remains of the middle class would plummet to gone-altogether. Because of credit cards, people have no idea of how poor they really are.
My parents were able to retire on modest Social Security and the simple savings accounts they contributed to - which earned five and a quarter to five and a half percent.
My parents were able to retire on modest Social Security and the simple savings accounts they contributed to - which earned five and a quarter to five and a half percent.
It is time for Americans to join together and start true employee-owned companies where all employees share equitably in responsibility and profit - no outside investors to suck off the rewards. It is time for Americans to stop waiting for "jobs" and develop a new, sustainable business model for the world. It is time for OUR government to help US instead of the wealthiest. They blew it.
Mr. Georgescu's solution to income inequality is to give him and his fellow billionaires more tax breaks. His understanding of the plight of ordinary workers is on the same level as Marie Antoinette's. If radical changes don't happen in the not-too-distant future, his fate may be the same as hers.
1
Capitalists arise-------------------------I assume that means the 1-5%ers want a continuing larger share of the pie.
Don't buy the Conservative Republican elixir, it's old, it's stale and never bought the less well off anything.
The con is still in.
Don't buy the Conservative Republican elixir, it's old, it's stale and never bought the less well off anything.
The con is still in.
2
Excellent opinion piece Mr. Georgescu. One thing that should be done, in parallel with your proposals, would be reducing the outrageous costs in the healthcare industry (drugs and procedures) and higher education to match the median in the EU (which are many 10 times or more cheaper). Only then, the middle class will rise from the bottom.
Carried Interest is a mockery of our tax laws. (In this case, a large income is taxed as capital gain through a distortion of what defines labor and what defines capital.) Even the hedge fund managers know this, but they are keeping their powder dry and mouths shut. This is a good place to start with wise changes to tax laws.
Social unrest, 80% taxation as reasons to act? Why not "it feels good to be the CEO of a company who treats its employees well including paying them a generous living wage?"
1
If you're serious about fighting inequality, put your money where your mouth is. Donate to Bernie Sanders and the Fight for $15 campaigns nationwide.
1
Mr. Georgescu, BIG business IS the problem and has been dismal in "self-regulating" unless you look only at the top 1% global financial elite like yourself. Please don't pretend that you and your friends "started from nothing". Your parents had connections and you were able to create the kingdom you have for yourself because connections and hard work. This is your idea of how to fix it? "There is a way to start. Government can provide tax incentives to business to pay more to employees making $80,000 or less." Did you happen to realize that WE workers who actually pay taxes ARE the government and work our butts off to fund it? Now you want US to pay YOU to "fix the problem". NO. WE are going to DEMAND that Congress do what Mr. Pliketty and many others have suggested: "80 percent tax rate on income over $500,000 suggested by Thomas Piketty, the French economist and author of the best-selling book “Capital in the Twenty-First Century.” WE are also going to DEMAND that 90% of WEALTH, including that wealth hidden in supposed philanthropic foundations that allow their tax-dodger founders to seem like heroes, be taxed at 90% and shut down. WE are going to DEMAND a tax on every "market" transaction. Just for 40-50 years - the same amount of time it took you and your buddies to take over OUR governments at all levels and steal all the rewards of our hard labor. Then we'll evaluate it.
1
If this American is sincere, he must recognize that to effectively combat and end the system as it exists today will require a constitutional amendment. Which one? There are various. The point is until our society is allowed to find its common ground, nobody is going anywhere. To formally propose an amendment today, due to the corrupting influences upon the legislative branch, must be done through the Article V Convention. foavc.org
IOW: It's convention or bust.
IOW: It's convention or bust.
Social unrest? A cheaper alternative to economic equality might be more gated communities for the wealthy, protected by barbed wire and minimum-wage guards wielding machine guns.
1
Not radical enough by far.
Allow corporations to pay a large portion, if no all, of their in the form of non-voting stock with priority on dividends. Take these shares and form a giant mutual fund, and allocate every American one share at birth (or at the formation, to start out). The dividends would be distributed to the people at given intervals. People could purchase and sell additional shares, but the allocated one share could not be transferred. As the economy grows, the dividends distributed to the people would grow with them, making increases in productivity passed on to the people in general. It would be stock options for the masses.
Allow corporations to pay a large portion, if no all, of their in the form of non-voting stock with priority on dividends. Take these shares and form a giant mutual fund, and allocate every American one share at birth (or at the formation, to start out). The dividends would be distributed to the people at given intervals. People could purchase and sell additional shares, but the allocated one share could not be transferred. As the economy grows, the dividends distributed to the people would grow with them, making increases in productivity passed on to the people in general. It would be stock options for the masses.
I was right there with you, thinking "what a breath of fresh air" right up until the "give corporations a tax break" part . Many corporations already pay little tax due to the various loopholes in the tax code. This proposal is just another sop to the corporations. If that's the best you brilliant and successful men can come up with, you really ought to be scared.
1
I haven't read all the comments, but I sense from the ones I've read that the author is right about the social unrest part. The average person is becoming less and less enchanted with "the system" and corporations are a ripe target. ALEC alone is digging a pretty impressive hole for itself--are corporations really under the impression that people will always remain ignorant of its activities? I don't want corporations writing our legislation, thank you very much, and I suspect that when the more rabid elements discover the full range of that activity, they'll be quite happy to apply the boot to the backside of ALEC and deliver it to what will, by then, be a quite deep hole. So yes, social unrest. And possibly a draconian tax revenge, as well. The author is quite right to raise the issue, and I applaud him for taking a public stand. History is on his side even if institutional shareholders are not. At least not yet.
1
O.K. Peter... I volunteer to help you. I will help you. And I'll try to find a means to engage my professional and personal friends in support of your desired initiative. Let's have a discussion about how I might support your ideas in a live or online dialogue. Please reach me at [email protected] or live via Skype. On Skype, I am bobricebeijingitucXXXX.
Looking forward to a conversation.
Bob, Seattle
Looking forward to a conversation.
Bob, Seattle
Business people always want the government to subsidize their businesses so paying people a living wage doesn't reduce profits. They fight minimum wage increases, and anything else that increases worker power to increase their wages, and then send their employees to government offices for medicaid and food stamps so their employees have enough to barely get by. Now they seem to want the government to give them tax breaks to subsidize their workers wages. All of the productivity gains of recent years, much of which results from making workers work more for less money, has gone to the employers.
1
"...If inequality is not addressed, the income gap will most likely be resolved in one of two ways: by major social unrest or through oppressive taxes, "
Mr. Georgescu seems to think that it will be an either/or proposition, but I see both "social unrest" and "oppressive taxes" as likely outcomes.
But what is an oppressive tax? To some people with seven figure incomes, even an 18% marginal tax rate is "oppressive" and it seems like the richer one is, the more oppressed they feel by any level of taxation. Witness the fact that many will dance on the edge of tax fraud and tax evasion, or even cross over, to shave a few percentage points off their tax rate.
Warren Buffet said that his secretary pays a higher percentage of her income than he does himself.
Mr. Georgescu seems to think that it will be an either/or proposition, but I see both "social unrest" and "oppressive taxes" as likely outcomes.
But what is an oppressive tax? To some people with seven figure incomes, even an 18% marginal tax rate is "oppressive" and it seems like the richer one is, the more oppressed they feel by any level of taxation. Witness the fact that many will dance on the edge of tax fraud and tax evasion, or even cross over, to shave a few percentage points off their tax rate.
Warren Buffet said that his secretary pays a higher percentage of her income than he does himself.
1
I'm glad that at least some of the 1%, including Mr. Georgescu, understands that this is serious. However, I think Professor Robert Reich's film "Inequality for All" has much better prescriptions for fixing the problem. I urge everyone to watch it!
2
I would add that the very foundation of free market economics is the notion that there is mobility that allows the best/most deserving/hardest working/smartest to get ahead. That is what creates efficiency in the system that makes it superior to other systems. However, in the US, those from households that are not elite (top 10%) get a lesser education in K-12, worse healthcare putting them at risk, and more stress resulting in few opportunities to go to good colleges or further themselves. Who you know is more prevalent today in getting ahead and unaffordability of college for the middle class either provides a barrier to kids or destroys the parents financial health. We need to look at the rest of the industrialized world that already is trying to insure they do not waste resources (human potential) with their unfair systems - and sadly have been doing better job for a generation.
1
One of the equalizers of income or personal wealth is considered the inheritance tax. WHAT IS MR. GEORGESCU'S OPINION ON IT?
I view it as an immoral and confiscatory tax by the government who wants to shear the sheep to the last millimeter of their fur. A patrimony accumulated over a period of years was undoubtedly subject to income, capital gains, and whatever other taxes that had been paid. This final amount is the owner's absolute property, which he should be able to dispose of, as he sees fit. Cutting a slice of it upon its transfer to another owner is Shylock's pound of flesh. In my opinion, hands and clawed paws off the inherited property.
I view it as an immoral and confiscatory tax by the government who wants to shear the sheep to the last millimeter of their fur. A patrimony accumulated over a period of years was undoubtedly subject to income, capital gains, and whatever other taxes that had been paid. This final amount is the owner's absolute property, which he should be able to dispose of, as he sees fit. Cutting a slice of it upon its transfer to another owner is Shylock's pound of flesh. In my opinion, hands and clawed paws off the inherited property.
The notion that tax payers have to pay corporations to get them to pay workers a living wage is an absurd suggestion. Corporations have no problem paying huge pay packages to their executives who are then under taxed when that compensation is in the form of stock options. Reduce this executive compensation to fund decent pay for your workforce! You don't need the government's help to accomplish this.
2
I was a small time real estate business man. I had to hire help paid at the minimum wage. The local worker couldn't be on time to work @ 8AM. My son and I came 20 & 30 miles to be at work by 7 AM.
We hired a newly arrived legal immigrant with a wife and child that rented an apt in the less expense area of Queens, NYC. He had an engineer degree from a soviet dominated country. He worked for a minimum wage and as we got to know him he want to properties in different sections of the boro doing maintenance work. That was 30 years ago. He worked to support his family at a job below his qualifications, but now he resides in the mid-west in a well paying occupation. We are still in contact with one another. My point is he did what was necessary to make a living for his family and was rewarded for his keeping at it. So many in our society won't put in the effort to succeed. They just want it without the effort!
We hired a newly arrived legal immigrant with a wife and child that rented an apt in the less expense area of Queens, NYC. He had an engineer degree from a soviet dominated country. He worked for a minimum wage and as we got to know him he want to properties in different sections of the boro doing maintenance work. That was 30 years ago. He worked to support his family at a job below his qualifications, but now he resides in the mid-west in a well paying occupation. We are still in contact with one another. My point is he did what was necessary to make a living for his family and was rewarded for his keeping at it. So many in our society won't put in the effort to succeed. They just want it without the effort!
2
In the past few years small business has been crushed by recession, tax increases, the specter of Obamacare, increased regulation, Amazon.com, etc.
The big companies mentioned here have the resources to outsource, move, hire lobbyists, etc.
Those jobs lost are irreplaceable.
The big companies mentioned here have the resources to outsource, move, hire lobbyists, etc.
Those jobs lost are irreplaceable.
Henry,
I wish you had read my new book, Confronting Capitalism, before you published this article. I covered at least six reforms that are needed. The fact is that excessive wealth is accumulating and we need more drastic measures than you describe.
I wish you had read my new book, Confronting Capitalism, before you published this article. I covered at least six reforms that are needed. The fact is that excessive wealth is accumulating and we need more drastic measures than you describe.
1
Wealth disparity is the third great crisis in our nation's history (the first occurred when our nation was formed, the second when it was perpetuated). The crisis is now more than 100 years old, having been identified as such by Theodore Roosevelt, the last great Republican president.
Yes, we could learn a thing or two from TR on how to solve this crisis, if you read your history: "Those who oppose reform will do well to remember that ruin in its worst form is inevitable if our national life brings us nothing better than swollen fortunes for the few and the triumph in both politics and business of a sordid and selfish materialism."
http://lifeamongtheordinary.blogspot.com/2014/05/trs-new-nationalism-and...
Yes, we could learn a thing or two from TR on how to solve this crisis, if you read your history: "Those who oppose reform will do well to remember that ruin in its worst form is inevitable if our national life brings us nothing better than swollen fortunes for the few and the triumph in both politics and business of a sordid and selfish materialism."
http://lifeamongtheordinary.blogspot.com/2014/05/trs-new-nationalism-and...
2
If we keep electing Republicans who will then appoint even more radical conservative justices from the Supreme Court down to other judgeships, resulting in additional disastrous Decisions to enhance Citizen's United, one of those scary scenarios surely will surely happen.
2
Maybe the Left should get out of the way for the US economy to start creating businesses and jobs. "If you can't tax it to death, regulate it to death".
I applaud Mr. Georgescu for his civic minded and enlightend view of what is needed. Capitalists are just people who are in the corporate system, who are begining to realize a healthy dose of enlightened self interest is necessary. However, the top down hierachy of corporate structure requires only a few people with computers to run a business. They are approaching zero marginal costs. Programs are often free online and 3D printers are ascending to the commonplace.The whole dynamic structure of our society is in flux with jobs disappearing as a result. A new build out of transportation, communication and most of all, energy is needed as the three pillars of the new economy. It begins with energy. Energy that is abundant and clean, levels the playing field fundamentally. Fossil fuels continue to monopolize, with endless wars and big banks' hegemony. Other countries are providing solar to individual homes and businesses and connecting them with a grid to send the power where it is needed. This alone, disperses "power" of all kinds to individuals and communities instead of the top down system we are all plugged into now. A base income for anyone is not so outrageous to consider at this point. Energy(clean!) that is basically free after a build out which in the meantime could provide jobs for a couple of decades, is the most important step we could take as a society. We need a more comprehensive view of where we are going as a society.
4
Peter,
You have a remarkable story. I hope you appreciate how lucky you were to be invited by the Headmaster of Phillip Exeter Academy to attend his school. You had an excellent education start. Your education would be unaffordable, now, even for the best & brightest in our society -- only the very rich can send their children to a boarding school.
I think you are serious in your objective so I thought I would share some ideas for how we can replicate your good fortune, and spread the good life to a larger segment of the economy. They are:
Raise the minimum wage to about $70 or $80 K per year.
Send all children to quality boarding schools and public universities and provide K-16 to all who want it with tuitioh, books, fees, room and board and about $100 per month spending money for clothing. Everyone, rich & poor are eligiable. In return for this funding, graduating students will perform public service for 4 years. They will have parent visitation days & probably be given a month or so of time at home. So before they are launched from their learning nest they will be 26 years old & their brains will be fully developed.
The education trust fund will be funded with a flat 10% rate on total compensation. Rich and poor will pay the same rate on their compensation to the Trust Fund. The $70K toilet cleaner will contribute $7K annually and a $200 million per year executive would pay $20 million. No exceptions, no funny stuff on earned and unearned income. etc.
You have a remarkable story. I hope you appreciate how lucky you were to be invited by the Headmaster of Phillip Exeter Academy to attend his school. You had an excellent education start. Your education would be unaffordable, now, even for the best & brightest in our society -- only the very rich can send their children to a boarding school.
I think you are serious in your objective so I thought I would share some ideas for how we can replicate your good fortune, and spread the good life to a larger segment of the economy. They are:
Raise the minimum wage to about $70 or $80 K per year.
Send all children to quality boarding schools and public universities and provide K-16 to all who want it with tuitioh, books, fees, room and board and about $100 per month spending money for clothing. Everyone, rich & poor are eligiable. In return for this funding, graduating students will perform public service for 4 years. They will have parent visitation days & probably be given a month or so of time at home. So before they are launched from their learning nest they will be 26 years old & their brains will be fully developed.
The education trust fund will be funded with a flat 10% rate on total compensation. Rich and poor will pay the same rate on their compensation to the Trust Fund. The $70K toilet cleaner will contribute $7K annually and a $200 million per year executive would pay $20 million. No exceptions, no funny stuff on earned and unearned income. etc.
3
The money quote: "The fact that real wages have been flat for about four decades, while productivity has increased by 80 percent, shows that has not been happening. Before the early 1970s, wages and productivity were both rising. Now most gains from productivity go to shareholders, not employees."
How interesting he neglects to mention the rise of CEO's over the same time period. About 350%. Why no word on that?
How interesting he neglects to mention the rise of CEO's over the same time period. About 350%. Why no word on that?
7
Just a casual observation: When Marie Antoinette was told that the poor had no bread she responded, "Let them eat cake." I don't think that was nearly as dismissive in intent as it has been portrayed, but that is how it was taken. That attitude is a good part of why she was executed along with many of her fellow aristocrats during the French Revolution. In typical fashion we in the US have deluded ourselves into believing that such events could not happen here. Yet, we continue to set the stage through a Capitalist system that clearly favors the rich and demeans those who are not and then institutionalize those measures in our laws and tax codes.
Jesus taught that it is easier for a camel to pass through the eye of a needle than for a rich man to get into heaven. I don't think he was condemning money, just the attitudes that seem to come with having so much money. Those attitudes are evident in the actions to benefit the rich and even among many comments here from those who are not.
Sadly, the wealthy in this country seem to forget that their wealth was and is ultimately built upon the sweat and labor of those who toil at minimum wages. Minimum wages in the US are set well below the poverty level. Even wages above the minimum are set so that there is little hope for someone who just wants to work hard and built something meaningful to live a life that doesn't also include scrambling for money and watching every single dollar they spend.
Jesus taught that it is easier for a camel to pass through the eye of a needle than for a rich man to get into heaven. I don't think he was condemning money, just the attitudes that seem to come with having so much money. Those attitudes are evident in the actions to benefit the rich and even among many comments here from those who are not.
Sadly, the wealthy in this country seem to forget that their wealth was and is ultimately built upon the sweat and labor of those who toil at minimum wages. Minimum wages in the US are set well below the poverty level. Even wages above the minimum are set so that there is little hope for someone who just wants to work hard and built something meaningful to live a life that doesn't also include scrambling for money and watching every single dollar they spend.
9
I'm sure that this gentleman means well, but the concentration of wealth in a few hands always leads to the impoverishment of the many. We patched the system for a few years, reduced accumulated wealth by heavy taxes and inheritance taxes and recycled the money into the system. The result was unparalleled prosperity.
And the reforms were taken down over time, as they always are, by the privileged and wealthy whose quest for more profit degrades the entire country around them. Of course now they feel like they are beyond nationality, many of them. Fine. They're foreigners.
Declare war.
And the reforms were taken down over time, as they always are, by the privileged and wealthy whose quest for more profit degrades the entire country around them. Of course now they feel like they are beyond nationality, many of them. Fine. They're foreigners.
Declare war.
7
Social unrest? We already have it, but conveniently, we hide it under the name of inner-city crime. Much of that would have been "petty crime" elsewhere, but the availability of guns juiced it into the shootings we see every week. Poverty and oppression have always produced "lawlessness."
In France, the storming of the Bastille was largely symbolic. The years before that were marked by widespread disturbances, sometimes named the "war of wheat." Bad weather and an Icelandic volcanic eruption meant bad harvests. The squandering of successive kings, Louis 14, 15, and 16, hit the national finances harder. But the national mood lacked leaders to direct their energies into revolution until the king called the Estates General into session.
In Ireland, long before the 1916 Rising, agrarian agitation was common. White Boys, Peep O' Day Boys etc. vented their anger on landlords by digging up their lawns and by maiming their cattle. In the wake of the famine, a new republicanism took hold. One survivor of that early movement, O'Donovan Rossa, died on Staten Island 100 years ago. His burial in Dublin and the oratory accompanying it, lit the fuse of the 1916 Rising.
America already has social unrest. It still lacks a coalescing force. But by their short-sighted, punitive policies and their continued racism, the GOP do their damndest to provide that force.
In France, the storming of the Bastille was largely symbolic. The years before that were marked by widespread disturbances, sometimes named the "war of wheat." Bad weather and an Icelandic volcanic eruption meant bad harvests. The squandering of successive kings, Louis 14, 15, and 16, hit the national finances harder. But the national mood lacked leaders to direct their energies into revolution until the king called the Estates General into session.
In Ireland, long before the 1916 Rising, agrarian agitation was common. White Boys, Peep O' Day Boys etc. vented their anger on landlords by digging up their lawns and by maiming their cattle. In the wake of the famine, a new republicanism took hold. One survivor of that early movement, O'Donovan Rossa, died on Staten Island 100 years ago. His burial in Dublin and the oratory accompanying it, lit the fuse of the 1916 Rising.
America already has social unrest. It still lacks a coalescing force. But by their short-sighted, punitive policies and their continued racism, the GOP do their damndest to provide that force.
8
The blame for the inequalities we see lies with the legislature, not the CEOs.
A publicly traded company will only ever be able to make decisions that maximize profit. There is nothing evil about it, that's just a reality of the way the capital markets work. Only privately owned companies have the luxury of foregoing potential profits and doing what is best for their employees.
Only if the legislature steps in and either requires or incentivizes higher compensation for low level employees will publicly traded companies be able to pay more.
A publicly traded company will only ever be able to make decisions that maximize profit. There is nothing evil about it, that's just a reality of the way the capital markets work. Only privately owned companies have the luxury of foregoing potential profits and doing what is best for their employees.
Only if the legislature steps in and either requires or incentivizes higher compensation for low level employees will publicly traded companies be able to pay more.
1
It is pretty lame for Ken Langone to blame the corporate boards for always stressing short-term profits. The boards are made up of other CEO's that receive excessive pay and benefits. I recall a business article which named Ken Langone as one of these.
I too escaped from East Germany and came to this country in 1954. I also graduated Princeton in 1970 and went to business graduate school, and made a very comfortable life for our family. Our fellow alumnus Carl Icahn started 'green mailing' companies to reduce costs and increase share prices.
If workers don't share in rising productivity, they cannot spend much to help the economy. Warren Buffett wants to raise capital gains taxes so that capital is taxed at least much as labor. We could at least use this to expand the Earned Income Tax Credit.
I too escaped from East Germany and came to this country in 1954. I also graduated Princeton in 1970 and went to business graduate school, and made a very comfortable life for our family. Our fellow alumnus Carl Icahn started 'green mailing' companies to reduce costs and increase share prices.
If workers don't share in rising productivity, they cannot spend much to help the economy. Warren Buffett wants to raise capital gains taxes so that capital is taxed at least much as labor. We could at least use this to expand the Earned Income Tax Credit.
10
We live in an economy that relies upon mass production to sell to mass markets to generate most of the new wealth, and most of the consumers that make up the mass markets are the kind of people who have not been earning greater wages or salaries in proportion to the increases in productivity. The wise cost cutting and preservation of good profit margins have allowed businesses to profit well despite the slow growth but lack of growth of markets is going to eventually limit opportunities for greater wealth creation over the long run. If all those people are given a chance to earn more they will spend more and the economy will be able to grow faster and to offer greater opportunities for capitalists to make even more wealth.
1
While I applaud the author for his efforts, you simply cannot rely on a large group of more-or-less rational actors to act against their individual self-interest and in favor of their class interest. In this case, every CEO's individual self-interest would dictate refusing to wage employee compensation in order to gain a competitive advantage over those who do raise employee compensation in order to favor the business-owning class everywhere. We economists call this the free-rider problem.
Wages and other forms of compensation will have to be driven up by the increased buying power, consumer demand, and labor market, from a resurgent middle class. Th the only way to get there is to reinstate the progressive tax policies of this country's Golden Age.
Wages and other forms of compensation will have to be driven up by the increased buying power, consumer demand, and labor market, from a resurgent middle class. Th the only way to get there is to reinstate the progressive tax policies of this country's Golden Age.
3
Who would ever think that we would have entered the dark periods of times that we as middle and high schoolers read about particularly in European history. During those times the rich landowner and merchant classes owned some 90% of societies riches. The rest of the population worked as serfs, or fought in armies paid for by the rich. Many walled themselves in castles and created dungeons for the poor, the disgraced, the discriminated against and for criminals. Many inspired thinkers, artists and scientists emerged from these societies and gradually paved the way to the more enlightened societies of the west that brought us such great advancement in the science and humanities. Today,s rich and merchant class have become adept at dividing societies by pointing to the "others" ...blacks, Hispanics, illegal immigrants as the source of all our problems, never mind them hoarding 90% of the socitie's resources. The poor and working class can then see themselves as better than those people and be induced to vote against their own interest which they gladly and rapidly do.
9
This is a serious problem and it has placed our society on a level with third world countries. The only way to govern well, in my opinion after observing the world for decades, is from the center. We have been governing from the right since Ronald Reagan, one of the most calamitous presidents to ever befall a capitalist society. Of course, by now, any minor correction will be decried as "socialist" by those who apparently never took a civics or economics class, or deliberately act dumb in order to defend their class privileges. We all lose when mothers and children grow in distress, when the young do not progress educationally to the best of their ability, and when the one percent is allowed to behave like the aristocrats before the French Revolution in the country that was the beacon of democracy.
6
Oppressive taxes and social unrest in my hometown cut in half the population of the 6th largest city in the US in the '50s to about 450th by 1985. From 1985 to today the population was a net loss bi-annually -- prior to elections population estimates were rigged and fixed.
Glad you missed this. It was deadly and oppressive. Try to avoid social engineering and allow lower income persons some freedom and privacy to fend for themselves without selective retaliation.
15% flat tax without loopholes will likely generate more tax revenues than 80% pre-tax loophole rates. Refer to city-states like HK and Singapore.
Glad you missed this. It was deadly and oppressive. Try to avoid social engineering and allow lower income persons some freedom and privacy to fend for themselves without selective retaliation.
15% flat tax without loopholes will likely generate more tax revenues than 80% pre-tax loophole rates. Refer to city-states like HK and Singapore.
1
Mr. Georgescu's wishes are well-meaning, but he is deceiving himself. The biggest driver of income inequality in the USA is globalization. If American businesses don't cut costs, their markets will be taken over by lower-cost competitors from China, Vietnam, India. Since labor costs are 80 per cent of their total costs, they will offshore those jobs rather than raise wages. Their other strategy is to concentrate on their core competencies, usually marketing and design, and outsource and offshore every other task.
Every civilized country, except the United States, has strong social welfare programs and single-payer government health programs to help minorities and the poor. It would be a pleasant surprise if Mr. Georgescu and his friend, Ken Langone, were to support these.
Every civilized country, except the United States, has strong social welfare programs and single-payer government health programs to help minorities and the poor. It would be a pleasant surprise if Mr. Georgescu and his friend, Ken Langone, were to support these.
4
"There is a way to start. Government can provide tax incentives to business to pay more to employees making $80,000 or less. The program would exist for three to five years and then be evaluated for effectiveness."
Somehow, in America, everything the government does for its people has to involve enriching some kind of middle man. If the government wants to help students, it guarantees student loans for private lenders. If the government wants to create jobs, it gives large corporations tax subsidies. If the government wants to provide health care, it provides subsidies to pay for private insurers instead of going to singe-payer.
I guess if somebody isn't skimming a buck off the top, it will smell too much like communism.
Somehow, in America, everything the government does for its people has to involve enriching some kind of middle man. If the government wants to help students, it guarantees student loans for private lenders. If the government wants to create jobs, it gives large corporations tax subsidies. If the government wants to provide health care, it provides subsidies to pay for private insurers instead of going to singe-payer.
I guess if somebody isn't skimming a buck off the top, it will smell too much like communism.
10
Income inequality? There has to be some. How about we start with the job discrimination which is causing tens of millions of Americans to be involuntarily long-term unemployed, and involuntarily underemployed? For example, I earned a B.A. in a useful subject, and have important contributions to make in my chosen field, but except for the one time I was the second-best applicant for one job opening, have been barred by job discrimination from doing even one job requiring my college education. Just talking about treating current employees properly in the pay department omits the millions who are unemployed. I do agree the pay range from the top of a given company to the bottom should be reduced, but that by itself will neither end involuntary long-term unemployment, nor end involuntary underemployment. Only attacking the job-discrimination epidemic will do this: http://www.change.org/petitions/demand-workforce-guided-job-creation.
While I agree that the income inequality issue must be addressed sooner rather than later what I always find disappointing is the immediate request for tax relief. In 2009 the American people gave the banks and corporate America loans to bail us out of the worst recession since the Great Depression. In the ensuing five years we have seen the stock market rebound from a low of around 8000 to the current highs of 17,000 plus. Record profits have been reported by American corporations. Yet the gap between increases in productivity and wages just continued to get worse. While you can argue that the stock market recovery has benefitted the middle class through the replenishment of various retirement plans the America that is hurting--that 40% you note--are not in those plans. In the end the job makers that promised to rebuild America after 2008 simply pocketed the money. At the end of the day America no longer trust you (collectively) to do what is right since in the end you can not being permanently beholden to a faceless shareholder that is driven by profit. If anything corporate America has to go to their shareholders and tell them it is time to give back.
In closing, ask you buddy John Mackey how after declaring that in his 'new age' grocery chain his salary would not exceed 14 times that of a store employee it is now 30+ times that ratio? Oh, the rationale in the 10K... "we have to pay competitive salaries to attract good talent".
In closing, ask you buddy John Mackey how after declaring that in his 'new age' grocery chain his salary would not exceed 14 times that of a store employee it is now 30+ times that ratio? Oh, the rationale in the 10K... "we have to pay competitive salaries to attract good talent".
6
I think I recall the stock market low was more like 6,600
Capitalism, particularly the harsh justice type of capitalism imposed by ruthless firms holding millions of shares in any given company, requires the exploitation of the population, particularly those who are weak and unable to fight back. These principles apply to gross exploitation of the financially weak through efforts like very high interest loans, payday loans, used car sales and financing and high prices in small neighborhood stores. It also applies to labor. If you can get it cheaper, if you can force people to accept less and demand nothing more, you win. My question: with these forces build into the capitalist, enterprise system, how and why would those who lead it, getting millions of dollars every year, manage to force or otherwise arrange any sort of change or moderation? It looks like it can't be done.
4
The author is misguided. Reduction in income inequality isn't going to happen voluntarily. There are 2 ways to fix the situation. a) Increase personal income tax rates and make them steeply progressive. b) Reduce corporate income taxes and replace revenue loss with a national VAT. This will incentivize companies to move jobs to the US and reduce the incentive to produce elsewhere and sell here.
2
It's gratifying to see recognition of the problem and it's severity. An important first step. Now for the discussion on how to address the problem. I fear that reasoned discussion will be quickly devolve to debaters shouting absolutist, zero-sum solutions, stoked by the media. Pam from NY makes a good point - it's not that complicated. It can be a multiple measures proven to work in the past - progressive income taxes, fair minimum wages, gas tax to fund infrastructure work, regulations on shameful credit practices of the financial services industry, and more. But when such proven and reasonable solutions are anathema to Republicans, is success possible as long as they hold any power?
3
Just remember that we had one of the greatest economic expansions in this country after WWII when the top tax rate was 70%. Such a high rate may be "punitive" (at least to those who have to pay it), and I doubt that anyone would suggest that we return to such a high tax rate. The problem is that tax rates have been cut over and over again for several decades, leaving the government too little income to provide many basic services. Every Republican candidate is again proposing more tax cuts even though there is strong evidence that tax cuts don't stimulate the economy. It's just part of their DNA to propose tax cuts. Although Mr. Georgescu's proposal may have merit, I can't see anything like that happening with Republicans in control of Congress.
5
Pete Peterson gathered businessmen around a table in the early 1970s and invented the notion of shareholder primacy. Mr. Georgesu might do the same thing today with his "concerned" colleagues and re-define the corporate mission to ensure that all employees have the same compensation package as CEOs: a middle class wage; good health care; defined benefit pensions; leave time and vacation that enables them to de-stress; and safe working conditions. It would cost money, but it would generate faith in the system that is lacking now.
8
There is this sense in the discussion that all the less desirable effects of capitalism are somehow an unintended side effect of an otherwise magnificient engine of economic growth, even freedom. That I don't get. It could very well be that great disparities of inequality, environmental destruction ("external costs"), even political inequality are inherent in the system, too. If we accept that we may start out in a better place to fix the thing. The tenor of the article seems to be that all is well (as it certainly was for the author), but let's clean up these externalities, and we'll be ok. What if that isn't true, or at least isn't true any longer?
5
Both Theodore Roosevelt and Winston Churchill knew that when most of the people of a country are suffering from the carelessness of the well-off few, social unrest is inevitable, and without some remediation, violence will ensue. That is why these privileged men became progressives and instituted in their countries many needed reforms.
One of the best things we can do for the United States is to institute single-payer health care. We can pay a bit more in taxes and provide medical coverage for everyone. And we'll decrease the number of .01%ers in that the CEOs of Blue Cross, Oxford, and the like will find themselves out of jobs (but living nicely, I daresay, on their golden parachutes).
And one of the other best things we can do is uniformly to tax corporations that set up their manufacturing in other countries. Just as New York City can't hope to compete with Hoboken and Wilmington, Delaware, given our high taxes on corporations, so America cannot compete with Bangladesh when the cost of doing business there is so low. Make it unprofitable to send jobs overseas.
One of the best things we can do for the United States is to institute single-payer health care. We can pay a bit more in taxes and provide medical coverage for everyone. And we'll decrease the number of .01%ers in that the CEOs of Blue Cross, Oxford, and the like will find themselves out of jobs (but living nicely, I daresay, on their golden parachutes).
And one of the other best things we can do is uniformly to tax corporations that set up their manufacturing in other countries. Just as New York City can't hope to compete with Hoboken and Wilmington, Delaware, given our high taxes on corporations, so America cannot compete with Bangladesh when the cost of doing business there is so low. Make it unprofitable to send jobs overseas.
7
I don't disagree with this, but am skeptical it will move forward. I think what's needed alongside these kinds of efforts would include a leadership role from business leaders such as Georgescu to:
1) Cut off the flow of "dark money" into political activity through "social welfare" organizations by supporting the work of the IRS to curb the abuses of this gigantic loophole for lobbying and corruption
2) Tell the SEC that they should mandate disclosure of political spending by public corporations to their shareholders
3) Overturn Citizens United
4) Stop state-level voter suppression and gerrymandering
5) Turn back the extensions and expansions of "intellectual property rights" such as the absurd length of duration of copyrights, the abuse of patents by Big Pharma and agribusiness
6) Stop the abuse of "transfer pricing" by MNCs exploiting tax havens to reduce their effective tax rates to near zero
7) Close the "carried interest" tax loophole
8) Stop the revolving doors between Wall Street and the public sector
9) Put an end to for-profit prisons and campaign contributions to judges
In short, there is still way too much corruption, and until those sluice-gates close I have a hard time imagining that the good will of a handful of billionaires will make the slightest bit of difference.
1) Cut off the flow of "dark money" into political activity through "social welfare" organizations by supporting the work of the IRS to curb the abuses of this gigantic loophole for lobbying and corruption
2) Tell the SEC that they should mandate disclosure of political spending by public corporations to their shareholders
3) Overturn Citizens United
4) Stop state-level voter suppression and gerrymandering
5) Turn back the extensions and expansions of "intellectual property rights" such as the absurd length of duration of copyrights, the abuse of patents by Big Pharma and agribusiness
6) Stop the abuse of "transfer pricing" by MNCs exploiting tax havens to reduce their effective tax rates to near zero
7) Close the "carried interest" tax loophole
8) Stop the revolving doors between Wall Street and the public sector
9) Put an end to for-profit prisons and campaign contributions to judges
In short, there is still way too much corruption, and until those sluice-gates close I have a hard time imagining that the good will of a handful of billionaires will make the slightest bit of difference.
We are stuck in this inequality quagmire because of the blind devotion to the delusional cult of shareholder value, which has infected the American business community over the past few decades. Sure, shareholders are important. No corporation can operate without capital. But shareholders are merely supporting players compared with the people who are the real lifeblood of every successful business -- productive employees and loyal customers. Without them, there is no business. But many of today's corporate executives have become so hypnotized by the mantra of maximizing shareholder value that they seem willing to shortchange their customers with lousy products and service, exploit their employees with rock-bottom wages and benefits, and, in turn, damage the long-term prospects of their companies and the economy as a whole. And when did this cult-like devotion to shareholders emerge? At about the same time that executives became significant shareholders themselves -- through overly generous equity-based compensation schemes that align their personal financial interests with those of their often shortsighted fellow shareholders. But maybe that's just a coincidence.
I agree with the problem described in the piece. The problem is with the solution. I have always been wary of arguments based on "someone should" without mechanisms to make certain that the action does indeed take place. Considering the dramatic changes in business ethics, practices and the almost complete elimination of regulatory policies over the past 40 or more years, there are no incentives to do what is proposed (I taught economics and management for much of that period and am quite aware of the issues).
Why would any executive even of the companies noted in the piece change behaviors? There are no social or political rewards save a few articles in the NYT or elsewhere. The rewards are personal and expressed in monetary terms. Why would any CEO want to take the risks of investing in activities where there may be no pay off? Business in general has become more risk averse as can be seen in their investments in financial instruments rather than employees, markets and products.
But with corporate greed, political obedience by both parties, and public apathy except for a few. I see little hope for "the should" becoming reality. President Carter's comment about the oligarchical status of American ring true.
I contemplate the should on a societal level when individuals including myself do not always do what we should do.
Why would any executive even of the companies noted in the piece change behaviors? There are no social or political rewards save a few articles in the NYT or elsewhere. The rewards are personal and expressed in monetary terms. Why would any CEO want to take the risks of investing in activities where there may be no pay off? Business in general has become more risk averse as can be seen in their investments in financial instruments rather than employees, markets and products.
But with corporate greed, political obedience by both parties, and public apathy except for a few. I see little hope for "the should" becoming reality. President Carter's comment about the oligarchical status of American ring true.
I contemplate the should on a societal level when individuals including myself do not always do what we should do.
1
I don't know much about Georgescu, and I agree with his observation about income inequality, but his proposal completely disregards the wealth inequality that has been fostered since Reagan's presidency (and would continue to be fostered under his proposal), and it ignores (willfully?) the continuation of the obscene corporate profits and management compensation that only extend inequality in the USA. He suggests that the government, rather than the corporations, subsidize underpaid employees, yet he fails to address how such a program should be funded. He states that corporations have been buying back their stock in order to support earnings per share. Yes, corporations have been doing that instead of investing in R&D (as well as training, efficiency or employee benefits), but I maintain that they've been doing that in order to retain their profits within the corporation and its management rather than paying dividends to shareholders. An effective solution to the problem of income inequality would incentivize corporations to invest in production and employees, instead of paying away profits to taxes. Increasing the incomes of employees, particularly those of low earners would have the immediate effect of reducing the cost of government programs such as SCHIP (aka food stamps), housing assistance and Medicaid.
2
Most of the productivity gains come from computerization and automation - both of which require fewer workers, thereby depressing wages.
I work in telecommunications. Our modern networks are more reliable and carry far more traffic per dollar invested than previous generations. We no longer need technicians to connect a home, and the move to fiber means fewer failures, and easier fixes when they occur. We use electronic routing where humans used to to that in the past. Our networks and in home devices are increasingly self healing, reducing calls and dispatches.
All of this means fewer jobs to deliver better services to more people.
With that in mind, there's less work and accordingly less income to be shared. The money instead goes into capital for equipment that delivers a better product.
As we move more and more to a digital economy, there more of the same coming.
I work in telecommunications. Our modern networks are more reliable and carry far more traffic per dollar invested than previous generations. We no longer need technicians to connect a home, and the move to fiber means fewer failures, and easier fixes when they occur. We use electronic routing where humans used to to that in the past. Our networks and in home devices are increasingly self healing, reducing calls and dispatches.
All of this means fewer jobs to deliver better services to more people.
With that in mind, there's less work and accordingly less income to be shared. The money instead goes into capital for equipment that delivers a better product.
As we move more and more to a digital economy, there more of the same coming.
1
The caste system is already in place. It's not the top 20% of the population, but really only the top 1% that hold the bulk of the assets and are feeling good.
"Who will be courageous enough to start the ball rolling? The most obvious choice is our government. But the current Congress has been paralyzed."
Yes, thanks to the large corporations that make huge contributions to politicians to put corporation- and top-1%-friendly policies in place at the expsense of the workers, "the actual value creators," as the author puts it.
Is 80 percent tax rate on income over $500,000 really that oppressive? Historically, top earners paid 70% from 1965 to 1981, 77% in 1964, 91% from 1954 to 1963, 92% from 1953 to 1952, and 91% from 1946 to 1951. Remember, these were the times of real growth in America.
So what can business leaders and corporations do? Put their money to work in politics. Make the government reinstate tax rates 70% and above for the top earners that enable the government to invest in education and to build infrastructures that are sorely needed in the US today for real growth. This is what will put a stop to inequality.
"Who will be courageous enough to start the ball rolling? The most obvious choice is our government. But the current Congress has been paralyzed."
Yes, thanks to the large corporations that make huge contributions to politicians to put corporation- and top-1%-friendly policies in place at the expsense of the workers, "the actual value creators," as the author puts it.
Is 80 percent tax rate on income over $500,000 really that oppressive? Historically, top earners paid 70% from 1965 to 1981, 77% in 1964, 91% from 1954 to 1963, 92% from 1953 to 1952, and 91% from 1946 to 1951. Remember, these were the times of real growth in America.
So what can business leaders and corporations do? Put their money to work in politics. Make the government reinstate tax rates 70% and above for the top earners that enable the government to invest in education and to build infrastructures that are sorely needed in the US today for real growth. This is what will put a stop to inequality.
2
None of this deals with the reality pointed out by the late Dr. Albert Bartlett of the University of Colorado that the greatest shortcoming of the human race is our inability to understand the exponential function.
https://www.youtube.com/watch?v=o0ghHia-M54
I live on $1300/month before property taxes and insurance. I have internet and I have Netflix. I treat my kids a couple of times a month to Wendy's or Pizza Hut. I haven't used air travel for thirty years, have never eaten sushi or Thai food, yet I still feel guilty knowing how much water I'm wasting and polluting because we as a nation haven't invested even in the most simple infrastructure to separate re-usable "grey" water from the sewage stream. I'm drowning in plastic, and am forced to be reliant on fossil fuels. I don't want to spend more, I want to spend less.
Parkinson's Law states that work will expand to fit the time given it. Roads will fill up with cars as quickly as they are built. And so forth. We are all in a rat race, each one chasing the tail of the rat in front, who in turn chases the tail of the rat in front of him, with the biggest rats earning billions and spending hundreds of millions, destroying our world.
There's something wrong with us. Maybe understanding what Dr. Barton is talking about as it pertains to declining resources and sustainability in a consumerist economy and finance sector with delusional concepts about the possibility of "growth" would be a good place to start.
https://www.youtube.com/watch?v=o0ghHia-M54
I live on $1300/month before property taxes and insurance. I have internet and I have Netflix. I treat my kids a couple of times a month to Wendy's or Pizza Hut. I haven't used air travel for thirty years, have never eaten sushi or Thai food, yet I still feel guilty knowing how much water I'm wasting and polluting because we as a nation haven't invested even in the most simple infrastructure to separate re-usable "grey" water from the sewage stream. I'm drowning in plastic, and am forced to be reliant on fossil fuels. I don't want to spend more, I want to spend less.
Parkinson's Law states that work will expand to fit the time given it. Roads will fill up with cars as quickly as they are built. And so forth. We are all in a rat race, each one chasing the tail of the rat in front, who in turn chases the tail of the rat in front of him, with the biggest rats earning billions and spending hundreds of millions, destroying our world.
There's something wrong with us. Maybe understanding what Dr. Barton is talking about as it pertains to declining resources and sustainability in a consumerist economy and finance sector with delusional concepts about the possibility of "growth" would be a good place to start.
Question for Mr. Georgescu: I applaud your effort to drum up support from the business community for alleviating inequality. What do you think the role of government should be, in terms of tax and social spending policies?
As documented at http://ourworldindata.org/data/growth-and-distribution-of-prosperity/inc... and other places, the USA's pre-tax inequality of income isn't that much different than many other industrialized countries. However, when one takes into account the after-tax and after-government social spending, then we rank first. The implication is that our government policies make inequality greater because we don't have a progressive-enough tax system nor as effective a social safety net. We can see this clearly in the shift of federal tax contribution share from corporations to individuals and breaks provided to high-income individuals over the past 2 decades.
So I would love to hear your views on what you think the role of government is with respect to tax and social spending policies.
As documented at http://ourworldindata.org/data/growth-and-distribution-of-prosperity/inc... and other places, the USA's pre-tax inequality of income isn't that much different than many other industrialized countries. However, when one takes into account the after-tax and after-government social spending, then we rank first. The implication is that our government policies make inequality greater because we don't have a progressive-enough tax system nor as effective a social safety net. We can see this clearly in the shift of federal tax contribution share from corporations to individuals and breaks provided to high-income individuals over the past 2 decades.
So I would love to hear your views on what you think the role of government is with respect to tax and social spending policies.
3
This opinion piece highlights a little noticed shift that has taken place in the past 40 years regarding the definition of a successful capitalist enterprise in the US. The modern capitalists think they have found the miracle of never ending market growth with hostile takeovers, downsizing and mergers that eliminated the jobs of millions of employees, financial instruments of mass destruction, off shoring of jobs, tax avoidance by globalization, etc.. Every one of these tactics created short term gains. These short term gains were increasingly sunk into stock buy backs, CEO pay, employee pay for financial types that created incentives maximizing risk and causing a huge mortgage bubble that burst, and shareholder dividends not based on the long term health of the company but instead on the strategy that maximized management pay. None of these uses of the financial short term gains these companies experienced resulted in gains for the long term interests of these companies, for our workers or for our economy. In the era from 1945 to 1975 we had workers, CEOs, companies and the economy all growing and benefiting from increased productivity. Long term company growth was the goal for businesses in that era. Short term profit is the primary goal for too many companies today. What specific steps can we take to make long term growth for companies, for CEOs, for shareholders and for workers and in the en for our whole economy the goal for for the future?
1
First, many of those in the middle quintiles are living paycheck-to-paycheck by choice, living large and in debt rather than living simply and solvent. The average American house and car are both much larger than they need to be. Over several decades, the average house has grown by 1000 square feet, even as family size has shrunk. That's roughly $100,000 of additional debt, not even counting the extra heating, maintenance and taxes. Many if not most Americans, pay them 20% more and they'll find a way to spend it, without necessarily improving their financial situation.
Second, very few businesses can afford to pay their rank-and-file employees 20% more. They'll simply be undercut by others paying 20% less. In a globalized, mechanized economy, retail has long been the employer of last resort. But even retail can be replaced, by Amazon and its robots. The inconvenient truth is that human labor isn't worth nearly as much as it was just a few decades ago, and I personally don't see that there's much either government or industry can do about it.
Second, very few businesses can afford to pay their rank-and-file employees 20% more. They'll simply be undercut by others paying 20% less. In a globalized, mechanized economy, retail has long been the employer of last resort. But even retail can be replaced, by Amazon and its robots. The inconvenient truth is that human labor isn't worth nearly as much as it was just a few decades ago, and I personally don't see that there's much either government or industry can do about it.
Great note Peter. However, I think you (and many others) mix two separate but similar concepts together when each has their own causes and potential solutions: income inequality and income mobility. Income inequality has greatly increased in the last 20 years; no argument there. However, income mobility has stayed roughly the same over the last several decades (see http://www.nytimes.com/2014/01/23/business/upward-mobility-has-not-decli.... What complicates matters is that greater income inequality has made the same income mobility feel more daunting because of the larger gaps between classes.
With the above in mind, my question is: is it more important (and potentially easier) for the private sector to reduce income mobility and provide talented people with avenues for wealth creation, or is it more important to attack inequality directly?
With the above in mind, my question is: is it more important (and potentially easier) for the private sector to reduce income mobility and provide talented people with avenues for wealth creation, or is it more important to attack inequality directly?
Peter Georgescu is illuminating a widening fault line in our capitalist democracy: we have undervalued - and under-compensated - directly productive, hands-on labor in favor of self-enriching financial investment. It's become a winner-take-all economy that has encouraged entrepreneurial energy (good, on its own terms), while downgrading worker loyalty, creativity, and stability - for many years, the cornerstones of middle-class growth. By casting his argument in non-political terms and directing his appeal to the interests of the business class, he is pointing the way toward a new paradigm for discussing income inequality. I hope this piece lays the groundwork for future discussion of a subject that should be a top priority for anyone who cares about the future of this country, including those running for the presidency in 2016.
1
The US needs systemic change.
The core problem of our economic and social wellbeing is with globalization and with low wage growth (corporations siphoning off profits while productivity has been great, and not reinvesting in the US).
Strategic capitalism is called for. This is not an intrusive strategy—just identify US strategic interests then frame and guide behavior. Why is it OK for corporations to engage in political strategy and influence, and not OK for our government to strategically frame and guide market behavior?
First, we as a country are driven by the notion of 'free market capitalism' as a high order goal of the US in and of itself. It is only a tool that should be guided and influenced by our strategic interests as a whole--not by the strategic interests of the powers-that-be outside of our broken democratic (small d) process of government.
Second, a related problem is offshoring of profits by US-based global firms to escape their fair share of taxes. Result is increasing tax burden on those without an investment portfolio. If corporations want to enjoy security of US protection and have access to US markets then they should pay for that. Corporations don't own up to the corresponding responsibility of paying taxes. Where is real corporate responsibility--not just some window dressing support of social programs?
The core problem of our economic and social wellbeing is with globalization and with low wage growth (corporations siphoning off profits while productivity has been great, and not reinvesting in the US).
Strategic capitalism is called for. This is not an intrusive strategy—just identify US strategic interests then frame and guide behavior. Why is it OK for corporations to engage in political strategy and influence, and not OK for our government to strategically frame and guide market behavior?
First, we as a country are driven by the notion of 'free market capitalism' as a high order goal of the US in and of itself. It is only a tool that should be guided and influenced by our strategic interests as a whole--not by the strategic interests of the powers-that-be outside of our broken democratic (small d) process of government.
Second, a related problem is offshoring of profits by US-based global firms to escape their fair share of taxes. Result is increasing tax burden on those without an investment portfolio. If corporations want to enjoy security of US protection and have access to US markets then they should pay for that. Corporations don't own up to the corresponding responsibility of paying taxes. Where is real corporate responsibility--not just some window dressing support of social programs?
Third, lowering corporate taxes is a race to the bottom. We as individuals and corporations must pay for what we get. Global corporations, and all businesses for that matter, enjoy US protection overseas. Plus having access to US markets has value per se. Thus, protecting wealth both earned and earning (investments) should be taxed accordingly because there is more to secure and more opportunity to prosper. No taxes no security overseas-- taxation every entity (both business and not-for-profit) pays 15% net cash flow from operations. Also, 15% Board seats for the workers as part of the tax.
Fourth, how do we incentivize reasonably well-paying jobs--not minimum wage nor the grossly underemployed/under paid? Revamp free trade agreements—and renegotiate the WTO—on the basis of US strategic interests both economically and in terms of security. Then corral and guide corporate behavior away from moving financial and real assets outside of the US and select allies. Through sales tax and investment credits provide pulls that draw people to buy US goods and services, and encourage investment in real assets within the US.
As an enabler of well paying jobs, implement the business/labor collaborative German model.
Within this framework, promote trade. But jobs become a higher priority. Job growth and unemployment as measured today is misleading. Job measurement must include a factor for value—value to the worker.
Fourth, how do we incentivize reasonably well-paying jobs--not minimum wage nor the grossly underemployed/under paid? Revamp free trade agreements—and renegotiate the WTO—on the basis of US strategic interests both economically and in terms of security. Then corral and guide corporate behavior away from moving financial and real assets outside of the US and select allies. Through sales tax and investment credits provide pulls that draw people to buy US goods and services, and encourage investment in real assets within the US.
As an enabler of well paying jobs, implement the business/labor collaborative German model.
Within this framework, promote trade. But jobs become a higher priority. Job growth and unemployment as measured today is misleading. Job measurement must include a factor for value—value to the worker.
The only question is how much is too much or "Too much of a good thing is NOT enough!"
Does any individual or family need $1, 2, 3, or more billions to survive comfortably? How long do we allow or permit 1:1000 make the rules for everyone else. One of those rules is anyone with massive wealth deserves it. It is theirs. It is no one else's. They claim they made it all by themselves. They claim they are brillaint. They claim God wants it this way. They claim this is the American way.
Any analysis will show these delusional, insane and in denial arguments for what they are: delusional, insane and in denial. The makers are mainly very insecure and need that wealth to bolster their own deficiencies. Trump is one example but others hide behind a veneer of dishonest facades. The Koch brothers are an example.
For the most part the rape and destruction of the masses started with Native Americans and continued with slavery and then as now wage slavery makes it possible for a few to gather the wealth produced by the many.
The writing of laws favorable to those with wealth including their fronts and corporations now makes it impossible to regain any sense of ethics, morality, equality and even equaity.
This whole argument does not come down to pay the peasants a little more. America has passed that bone off the banquet table. It requires returning the wealth to those who made it possible while still granting to those with certian skills to keep a bit more, let's say $100,000,000.
Does any individual or family need $1, 2, 3, or more billions to survive comfortably? How long do we allow or permit 1:1000 make the rules for everyone else. One of those rules is anyone with massive wealth deserves it. It is theirs. It is no one else's. They claim they made it all by themselves. They claim they are brillaint. They claim God wants it this way. They claim this is the American way.
Any analysis will show these delusional, insane and in denial arguments for what they are: delusional, insane and in denial. The makers are mainly very insecure and need that wealth to bolster their own deficiencies. Trump is one example but others hide behind a veneer of dishonest facades. The Koch brothers are an example.
For the most part the rape and destruction of the masses started with Native Americans and continued with slavery and then as now wage slavery makes it possible for a few to gather the wealth produced by the many.
The writing of laws favorable to those with wealth including their fronts and corporations now makes it impossible to regain any sense of ethics, morality, equality and even equaity.
This whole argument does not come down to pay the peasants a little more. America has passed that bone off the banquet table. It requires returning the wealth to those who made it possible while still granting to those with certian skills to keep a bit more, let's say $100,000,000.
The author says that he came here from Romania in 1954. Reader comments suggest going back to the good old days of 1954 tax rates for U.S. individuals and corporations. But Romania is now part of the European Union. If people are panicked and want to go back to the past, could it be a longing for the days when the U.S. was one of only a handful of reasonable places on the planet in which to start a business? http://www.heritage.org/index/country/romania shows that Romania has a lower tax burden (as a percent of the country's GDP) than the U.S. In 1954 nobody would have questioned that the U.S. was a better place to set up a business. Today it would depend on the type of business.
Left out of the sentence: "A fair and responsible enterprise system is still the best engine..." is mention of the very important additional qualifier that a well regulated system ensures that "opportunity and a higher standard of living" is possible for all. Constructive regulation is how "a fairer way to share in the hard work and incremental value a business generates" will be found. It will not happen if CEOs are left to their own devices. We've come to where we are precisely because they have been given a free rein.
Decades of Reagan-inspired GOP pursuit of financial deregulation, a business and upper-income favorable tax policy, removal of environmental protections, and withdrawal of labor support have wrought stagnation or, worse, devastation for the bulk of society. Georgescu, Langone and the few others like them are the Horatio Alger's offered as shining examples by so many defenders of the present system of reward and punishment. Statistically speaking, their example is more of a condemnation, for failures far outnumber successes in this system.
You know havoc has been wrought if the well-off are suddenly "scared" for their own skin. The "caste system," call it business gerrymandering, they decry is the result of business as usual, and as cynical as it may sound their concern now is because of a growing sense that it is no longer sustainable or cost-effective to maintain.
Who would not want them to lose "our way of life," given what it has cost everyone else?
Decades of Reagan-inspired GOP pursuit of financial deregulation, a business and upper-income favorable tax policy, removal of environmental protections, and withdrawal of labor support have wrought stagnation or, worse, devastation for the bulk of society. Georgescu, Langone and the few others like them are the Horatio Alger's offered as shining examples by so many defenders of the present system of reward and punishment. Statistically speaking, their example is more of a condemnation, for failures far outnumber successes in this system.
You know havoc has been wrought if the well-off are suddenly "scared" for their own skin. The "caste system," call it business gerrymandering, they decry is the result of business as usual, and as cynical as it may sound their concern now is because of a growing sense that it is no longer sustainable or cost-effective to maintain.
Who would not want them to lose "our way of life," given what it has cost everyone else?
1
Yes, "There is a way to start." But rather than "Government can provide tax incentives to business to pay more to employees making $80,000 or less.", eliminate the tax deduction for that part of any individual's compensation expense that exceeds 20x the median compensation of employees in each company.
Limit the total of all non-cash compensation to 50% of each employee's cash compensation as one step in re-balancing the rewards between employees and shareholders. Excessive alignment between executive compensation and shareholder returns is one reason that the share of GDP going to employee compensation is at the lowest level in the history of the data, which starts in the 1940s. The prevailing split of GDP is effectively a substantial tax on the bottom 80% or 90% of the income distribution and that tax is retarding economic growth.
Limit the total of all non-cash compensation to 50% of each employee's cash compensation as one step in re-balancing the rewards between employees and shareholders. Excessive alignment between executive compensation and shareholder returns is one reason that the share of GDP going to employee compensation is at the lowest level in the history of the data, which starts in the 1940s. The prevailing split of GDP is effectively a substantial tax on the bottom 80% or 90% of the income distribution and that tax is retarding economic growth.
2
I was encouraged by the real concerns and noble sentiments set out at the beginning of Mr. Georgescu's article. Then I saw that his primary proposal is the self-serving suggestion of cutting taxes on big business in order to encourage the 1% to trickle down more of their staggering wealth to the other 99%. This is simply another variant of the familiar and failed Republican policy of seeking to grow the economy by starving government. To really improve the livelihoods of millions of struggling Americans (not to mention protecting our future), the government should be creating jobs by increased spending on infrastructure, education and basic research. And that requires more revenue. You don't have to raise taxes anywhere near 80% to achieve that. The highest tax rate is only 40% on ordinary income, and only 24% on capital gains. Why not modest rate tax increases on the wealthy, who can easily afford it? Billionaire hedge fund managers are taxed on their compensation at capital gain rates rather than the ordinary income rates their secretaries pay, which is crazy. Yet virtually all Congressional Republicans have signed a pledge never to agree to a tax increase, even to fund vital government programs - a sign that we have really gone off the tracks. Mr. Georgescu naively believes that the top 1% who are sitting on most of the nation's income and wealth are going to share that with others out of the kindness of their hearts. Good luck with that.
2
I suggest a supplemental tax to be paid by an employer on any wage or salary that is paid, directly or indirectly, to an employee who is not a resident of the U.S. and domiciled in the US in an amount sufficient to reduce the profit generated by not employing US residents
I also suggest eliminating any tax advantages for employers and employees for employer paid health insurance premiums thus leveling the playing field for employers who must compete in markets with government sponsored Plans. This will also result in less disparity among workers in the U.S. not all of whom have employer paid or sponsored Plans and also level the field for self employed people
There should be a limit on the favorable tax treatment of investment income
There should be a lower limit on the home mortgage deduction and no deduction for expenses not related to a primary residence This will eliminate the distortion in real estate costs
The ceiling on deductions for college expenses should be raised. There should be expanded student loan forgiveness in exchange for needed public service (emphasis on needed)
These are just a few ideas that will reduce income inequality without resorting to "pitchforks"
I also suggest eliminating any tax advantages for employers and employees for employer paid health insurance premiums thus leveling the playing field for employers who must compete in markets with government sponsored Plans. This will also result in less disparity among workers in the U.S. not all of whom have employer paid or sponsored Plans and also level the field for self employed people
There should be a limit on the favorable tax treatment of investment income
There should be a lower limit on the home mortgage deduction and no deduction for expenses not related to a primary residence This will eliminate the distortion in real estate costs
The ceiling on deductions for college expenses should be raised. There should be expanded student loan forgiveness in exchange for needed public service (emphasis on needed)
These are just a few ideas that will reduce income inequality without resorting to "pitchforks"
2
This article is a smokescreen. It misses the most important points about inequality in America in 2015.
1. The real problem is not the top 20% vs the rest. It's the astronomical salaries of the people at the top, maybe 0.5% or less, the CEOs who stuff compensation committees with their buddies to take salaries of 40x, 50x, or sometimes even 100x as much as an ordinary worker gets. I have no problem with someone smarter and harder-working than me getting twice as much as I do, or even 4x as much. But no human being is worth 50x as much as another.
2. 80% marginal income tax rate on incomes over $500,000 isn't "oppressive". The top rate of Federal income tax alone was 70% in 1980. Since $500,000/year is already about 10x the median income, no tax rate on amounts in excess of that can reasonably be called "oppressive".
3. "Now most gains from productivity go to shareholders, not employees." No they don't, they go to top-executive salaries and bonuses. Very few businesses pay dividends of even 3%, but the executives pay themselves megadollars in salaries and "bonuses".
1. The real problem is not the top 20% vs the rest. It's the astronomical salaries of the people at the top, maybe 0.5% or less, the CEOs who stuff compensation committees with their buddies to take salaries of 40x, 50x, or sometimes even 100x as much as an ordinary worker gets. I have no problem with someone smarter and harder-working than me getting twice as much as I do, or even 4x as much. But no human being is worth 50x as much as another.
2. 80% marginal income tax rate on incomes over $500,000 isn't "oppressive". The top rate of Federal income tax alone was 70% in 1980. Since $500,000/year is already about 10x the median income, no tax rate on amounts in excess of that can reasonably be called "oppressive".
3. "Now most gains from productivity go to shareholders, not employees." No they don't, they go to top-executive salaries and bonuses. Very few businesses pay dividends of even 3%, but the executives pay themselves megadollars in salaries and "bonuses".
2
90% in the 50's
Capitalism has become a religion or always was. The "Invisible Hand" is similar to a belief in "God," and as both seem to work in strange ways, they begrudge the insertion of the human hand in any process relating to the workings of the market or the spirit. Frankly, a 90% tax rate on incomes over x amount would put a dent in the enormous pay of executives and probably would pay for the government program suggested in this very well written and meaningful article. There are numerous other solutions, however, if we just look at the cause of the problems of income inequality, which in short is the insatiable quest for profit. It is the Holy Grail of capitalism, not much different than the idea of "good works" is to religion. It gets us in to a bigger house and in to Heaven, when what we really need is adequate housing and a reasonable living on earth for all. Far more government control, in the form of regulations (laws) that are in fact enforced, is needed than this article suggests, which makes it very tentative and weak in the final analysis. The business community is not interested in this and will never submit. It runs against their religion. Their greatest hedge is that they use some of their profits to buy government, and it works for them, alone.
3
I think that its time to look at the real culprit in the decline of the American middle class. It is not the economic system it is the death of democracy. A government owned lock stock and barrel by the monied elite is going to create a society focused on the monied elite.
I live in a democracy where the government caters to the needs of the middle class. The government understands it cannot legislate morality but that its mandate will be short lived if it cannot provide the quality of life desired by those making a family income between 40-80k a year.
We had a quiet revolution and we went from very low taxes , a stratified conservative society with high rates of poverty and extreme wealth, church run health education and welfare to high taxes, democracy and universal access to healthcare and quality education.
We change governments regularly and our last election saw our government which was seeking to extend and strengthen its mandate become a political party hoping to survive until the next election.
If the US was a democracy the anger and frustration of the electorate would not be manifest by a Trump candidacy but would see the Republicans and Democrats fighting for survival because they have failed the electorate, they would not be in a struggle to see who could collect the most money. America is rich not because of free enterprise but because of incredible human and property resources. Democracy promises a better future. Bernie and democracy is better.
I live in a democracy where the government caters to the needs of the middle class. The government understands it cannot legislate morality but that its mandate will be short lived if it cannot provide the quality of life desired by those making a family income between 40-80k a year.
We had a quiet revolution and we went from very low taxes , a stratified conservative society with high rates of poverty and extreme wealth, church run health education and welfare to high taxes, democracy and universal access to healthcare and quality education.
We change governments regularly and our last election saw our government which was seeking to extend and strengthen its mandate become a political party hoping to survive until the next election.
If the US was a democracy the anger and frustration of the electorate would not be manifest by a Trump candidacy but would see the Republicans and Democrats fighting for survival because they have failed the electorate, they would not be in a struggle to see who could collect the most money. America is rich not because of free enterprise but because of incredible human and property resources. Democracy promises a better future. Bernie and democracy is better.
5
Our current dilemma stems in part from the adversarial relationship between labor and management in this country. That relationship, in turn, owes its acceptance to the American obsession with competition. The idea that competition supplies the fuel that drives economic growth developed in the 19th century and affects every strand of our social and economic thought. It encourages employers to view their workers as a cost instead of a resource. It stimulates unions to conceive of the collective bargaining process as a zero/sum game. In contrast, companies in some European countries, notably Germany, place union representatives on corporate boards. The challenge for Americans, especially business leaders (since they enjoy most of the power), involves nothing less than a recognition that cooperation can contribute as much to the well-being of our society as competition. Regarding their workers as assets to be developed and valued rather than as costs to be trimmed would help transform the pay structure and encourage employees to re-imagine their relationship to the company. That would be a good start toward the goal Mr. Georgescu seeks to achieve.
3
By the time I finished reading this op-ed one word sprung to mind: mocking. Now, I don't know if the author meant to write in a mocking fashion, but regardless, the fact (in my view) that the entire piece comes off as some sort of a cruel joke demonstrates that the rich are indeed not like the rest of us.
In my view, the extreme hardship-rag-to-riches-by-lifting-himself-by-his-own-bootstraps adds insult to injury, as it seeks to perpetuate the (mistaken) notion that in America "everyone can make it" if they just work hard.
The fact is that the country has turned into an oligarchy controlled by financial and business cartels who control the population with propaganda (using the corporate-controlled mainstream media), an increasingly unequal two-tiered justice system, and an increasingly oppressive surveillance police state.
Given this reality, no one can expect billionaires to be able to begin to comprehend what's needed to right the ship of state, to help bring about democracy, justice, and equality -- other than cutting taxes for the rich.
The brutality, unquenchable greed, exploitation, and the destruction of the natural environment caused by the US-style capitalist system are all unsustainable. Something has to give sooner or later.
I don't believe the billionaires are scared at all, especially when one thinks about the real fear (due to economic insecurity) millions of people live with every single day.
This situation will not be fixed by tinkering at the edges!
In my view, the extreme hardship-rag-to-riches-by-lifting-himself-by-his-own-bootstraps adds insult to injury, as it seeks to perpetuate the (mistaken) notion that in America "everyone can make it" if they just work hard.
The fact is that the country has turned into an oligarchy controlled by financial and business cartels who control the population with propaganda (using the corporate-controlled mainstream media), an increasingly unequal two-tiered justice system, and an increasingly oppressive surveillance police state.
Given this reality, no one can expect billionaires to be able to begin to comprehend what's needed to right the ship of state, to help bring about democracy, justice, and equality -- other than cutting taxes for the rich.
The brutality, unquenchable greed, exploitation, and the destruction of the natural environment caused by the US-style capitalist system are all unsustainable. Something has to give sooner or later.
I don't believe the billionaires are scared at all, especially when one thinks about the real fear (due to economic insecurity) millions of people live with every single day.
This situation will not be fixed by tinkering at the edges!
292
Luis:
To my mind you are correct. It comes to this (for me). Societies move forward in positive directions when the underlying philosophy is one of access and participation, and not of extraction (for maximum self-interest) by the citizenry. History indicates all societies move along a continuum of this process, and fall apart when the citizenry practices more the latter aspect (extraction) than the former. Unfortunately this seems the phase America is now entering. The Oligarchs and elite one percenter's tend to practice it exclusively and, as a consequence, the general citizenry is crumpling into fragments of the same self-interest and "what's in it for me." Since this tone is set from the top, from the leadership classes, it falls on them to change it. History indicates this never happens, and it also indicates what will happen next....the saving grace is America is really still a young country. We can change if we have the will. But....
So it (always) goes.
John~
American Net'Zen
To my mind you are correct. It comes to this (for me). Societies move forward in positive directions when the underlying philosophy is one of access and participation, and not of extraction (for maximum self-interest) by the citizenry. History indicates all societies move along a continuum of this process, and fall apart when the citizenry practices more the latter aspect (extraction) than the former. Unfortunately this seems the phase America is now entering. The Oligarchs and elite one percenter's tend to practice it exclusively and, as a consequence, the general citizenry is crumpling into fragments of the same self-interest and "what's in it for me." Since this tone is set from the top, from the leadership classes, it falls on them to change it. History indicates this never happens, and it also indicates what will happen next....the saving grace is America is really still a young country. We can change if we have the will. But....
So it (always) goes.
John~
American Net'Zen
1
this is an excellent observation.....
the only practical solution on offer is a tax break so wages can be higher. Instead of a tax break how about a cut in shareholder dividends, the end of stock buy backs, and lower executive pay.
the only practical solution on offer is a tax break so wages can be higher. Instead of a tax break how about a cut in shareholder dividends, the end of stock buy backs, and lower executive pay.
1
I hope you continue to contribute to the New York Times comments section.
1
I wholeheartedly agree with the author's interpretation of the problems crippling American capitalism; I'm not entirely sure his solution will be effective. Capitalists and government officials alike should concentrate on redirecting the currently existing profits of major corporations and private enterprises. Private enterprises should unilaterally raise wages to boost productivity and morale; government should institute a higher minimum wage to boost lower wages, and raise the overtime pay limit to tighten labor markets; the tax system must be reoriented to reflect inequality: it should also lower income taxes for the lowest three brackets, and institute a new highest bracket, while also raising dividend and capital gains rates for high earners; something must be done to make American businesses more competitive on cost issues with foreign competitors, without deteriorating standards of living: a place to start would be to lower or scrap corporate income taxes (while my fellow liberals might squeal, the real money is to be had in income/capital taxes, and lower rates would create manufacturing jobs); bureaucrats at the Fed must encourage investment and the movement of money out of financial speculation and bubble-making, through continued low rates for lending, and regulations making it easier for smaller, non-"systematic" banks, to lend to productive businesses. These are just but a few of the policies that should be pursued by corporate and government leaders.
46
The way to encourage job creation is not to lower taxes, it is to raise them. If a business has to pay higher taxes they can reduce their tax burden by investing in the company. I am no economist, but if you don't want to pay 50% of your income in taxes, then put 25% into your product, facilities, and employees training, salary, and benefits. Then you get a better business and a lower tax burden. If you just cut the taxes they get the free money to do what ever they want, and we are seeing the result. They don't invest it in the company and create jobs, they keep it as profit.
I would gladly support eliminating *all* corporate income taxes, if only the executives actually paid their share of taxes.
RE: Sarra's suggestion that business and govt should work together....
Unfortunately, this idea is in fact the actual state of affairs--economic and otherwise --but not what Sarra has in mind. Our country is a de facto fascist state. That is, Government in almost all instances dances to the tune played by Business. The military-industrial complex of lore is only a part of how we as a people are dominated and driven by business interests.
We are literally driven to buy what we--cannot afford, do not need, harm us, harm others, and harm the planet.
It was refreshing to learn that the American Psychological Association recently declared it a professional policy, that it's members not engage in abetting torture. But unfortunately, psychological knowledge is routinely used with impunity to find out how people 'tick' and to use this info to bring about our slavish and too often destructive desires.
Not incidentally, such psychological/scientific tools are shamelessly used to sell us political candidates and ideologies that do not have the common good in mind. No such concern on this score from the APA.
One goal of the enlightenment was to give individuals the power to decide for themselves what was in their 'best' interests-- To turn on its head, all previous history which denied 'ordinary' people such power. This goal is largely now moot.
Journalists are largely in the same camp as many psychologists. Again, business and political power has pretty much won.
Unfortunately, this idea is in fact the actual state of affairs--economic and otherwise --but not what Sarra has in mind. Our country is a de facto fascist state. That is, Government in almost all instances dances to the tune played by Business. The military-industrial complex of lore is only a part of how we as a people are dominated and driven by business interests.
We are literally driven to buy what we--cannot afford, do not need, harm us, harm others, and harm the planet.
It was refreshing to learn that the American Psychological Association recently declared it a professional policy, that it's members not engage in abetting torture. But unfortunately, psychological knowledge is routinely used with impunity to find out how people 'tick' and to use this info to bring about our slavish and too often destructive desires.
Not incidentally, such psychological/scientific tools are shamelessly used to sell us political candidates and ideologies that do not have the common good in mind. No such concern on this score from the APA.
One goal of the enlightenment was to give individuals the power to decide for themselves what was in their 'best' interests-- To turn on its head, all previous history which denied 'ordinary' people such power. This goal is largely now moot.
Journalists are largely in the same camp as many psychologists. Again, business and political power has pretty much won.
I currently work for the AmeriCorps VISTA program. AmeriCorps has a noble founding vision that dates back to the 1960s. That was a time when the predominant exclusionary paradigm entrenched here in the United States was seriously challenged. A variety of people including African Americans and the LGBT community began strongly agitating for their right to participate equally in society. Now here we are 50 years later. We are *theoretically* better off now because more parts of our population can participate in society without being blocked, lynched, gay bashed etc. And yet for all the improvement the widening income gap threatens to wipe out the progress of five decades!
I chose AmeriCorps partly because I wanted to do it. I also chose this opportunity because I couldn't find a better opportunity. I have both an extensive professional history as well as an excellent educational background. And I still can't find a job that would use my skills *and* pay me a commensurate salary. So for the next year I will attempt to help empower other people to lift themselves out of poverty.
I feel fear regarding the direction this nation is going as well. I fear I may never pay off my student debt. And though I am willing to pay my debts I find it ridiculous to live in an unjust system in which there is so little meaningful opportunity.
My question to the writer: How can we successfully encourage people to pursue higher education when the rewards of such effort are so lacking now?
I chose AmeriCorps partly because I wanted to do it. I also chose this opportunity because I couldn't find a better opportunity. I have both an extensive professional history as well as an excellent educational background. And I still can't find a job that would use my skills *and* pay me a commensurate salary. So for the next year I will attempt to help empower other people to lift themselves out of poverty.
I feel fear regarding the direction this nation is going as well. I fear I may never pay off my student debt. And though I am willing to pay my debts I find it ridiculous to live in an unjust system in which there is so little meaningful opportunity.
My question to the writer: How can we successfully encourage people to pursue higher education when the rewards of such effort are so lacking now?
152
One-percenters asking for a government handout. Nothing new here. "Government can provide tax incentives to business to pay more to employees..."
God forbid they raise their employees' wages, which could readily be done by all executives in all major corporations taking a pay cut. Oh, dear, they might have to forego buying a 5th palatial home.
God forbid they admit that their special tax breaks must indeed end, and that a mere 80% tax rate would be a kindness compared to the 90% or so paid by their ilk during Eisenhower's administration.
No, no, no. We average taxpayers must fund the 1%ers' supposed concern for us.
God forbid they raise their employees' wages, which could readily be done by all executives in all major corporations taking a pay cut. Oh, dear, they might have to forego buying a 5th palatial home.
God forbid they admit that their special tax breaks must indeed end, and that a mere 80% tax rate would be a kindness compared to the 90% or so paid by their ilk during Eisenhower's administration.
No, no, no. We average taxpayers must fund the 1%ers' supposed concern for us.
2
Nobody paid the 80% because deductions were different. Salaries were much lower and people paid a much lower percent to taxes, federal an state. Second, why in the world would anybody work 60-80 hour or more weeks, if all you did were pay taxes? This populist think is not realistic.
Peter Georgescu writes, "The fact that real wages have been flat for about four decades, while productivity has increased by 80 percent, shows that has not been happening. Before the early 1970s, wages and productivity were both rising. Now most gains from productivity go to shareholders, not employees."
And who , if not the CEO and the Board of Directors, decide those wages? Perhaps those CEOs, who are so worried about income inequality, should simply increase the wages of their employees to the tune of decreasing their own. That would be a much potent symbol than penning this article.
And who , if not the CEO and the Board of Directors, decide those wages? Perhaps those CEOs, who are so worried about income inequality, should simply increase the wages of their employees to the tune of decreasing their own. That would be a much potent symbol than penning this article.
2
How about this? Right now we have an extra tax on low and middle wage earners in the US - Social Security and Medicare. This tax is both on the wage earner and the employer. When you pay an employee $10,000, about $750 comes out of the employee's pay and the employer kicks in another $750. Do away with this tax on human capital and move it to a profit or consumption or capital or carbon tax. Also, put in a government sponsored health care system for all. Employers are trying to get rid of employees because the cost so much. This would make starting up a business and hiring a few employees much more affordable. Overall the society's costs would be the same.
1
The fear is warranted, the solution misguided.
re: "Government can provide tax incentives to business to pay more to employees making $80,000 or less."
In fact, there is already a Government tax incentive to pay more... Worker salaries come out of Corporate profits as a cost of business (obviously) thus lowering the corporate tax on profits.
What makes this recommendation of further tax incentive even more of a slap in the face is that this effective mechanism is simply cheated by multinational companies offshoring their profits to countries that lack these taxes in the first place.
Since they aren't paying their taxes on profits, they have no incentive to hire and invest in their businesses which would normally (and historically had) create the corporate motivation to save taxes by hiring workers, paying better wages, and investing in factories and spending money on growing profits exactly as the author suggests.
This diversion and sleight of hand is truly indicative of the games corporatists play. Onshore the profits and apply proper taxation to profits and they will save on taxes by investing in America again.
re: "Government can provide tax incentives to business to pay more to employees making $80,000 or less."
In fact, there is already a Government tax incentive to pay more... Worker salaries come out of Corporate profits as a cost of business (obviously) thus lowering the corporate tax on profits.
What makes this recommendation of further tax incentive even more of a slap in the face is that this effective mechanism is simply cheated by multinational companies offshoring their profits to countries that lack these taxes in the first place.
Since they aren't paying their taxes on profits, they have no incentive to hire and invest in their businesses which would normally (and historically had) create the corporate motivation to save taxes by hiring workers, paying better wages, and investing in factories and spending money on growing profits exactly as the author suggests.
This diversion and sleight of hand is truly indicative of the games corporatists play. Onshore the profits and apply proper taxation to profits and they will save on taxes by investing in America again.
1
We know how to reduce inequality. We have done it before. Let's compare periods of high inequality (the 1920's and the 2000's) with the long period (1946 - 1973) of low inequality to see what can be done.
1. Strengthen unions - Outlaw "right-to-work" laws which allow deadbeats to enjoy the benefits obtained by unions without paying dues. Prevent companies from coercing employees against unions, e.g. threatening to close plants. As in Germany, require union representation of boards on directors.
2. Have very high tax rates on the Rich and higher real corporate tax rates. This will encourage the Rich to take lower compensation and discourage companies from leaving oodles of cash sitting around. Today corporate taxes actually paid as a percent of GDP are about a third of what they were after WWII and are the lowest among developed nations.
Higher tax rates on the Rich will also discourage wild financial speculation.
3. Strongly regulate speculation, e.g. outlaw naked credit default swaps, require buyers of future contacts to show ability and willingness to take delivery, etc.
4. Pump more money into the private sector and get it to the people who will spend it. Have the federal government finance worthwhile projects like fixing infrastructure, grants to state for education and police, more research, a new efficient power grid, etc. Realize that debt and deficits do not and have not ever hurt us.
Why not do what has worked instaed of what has failed?
1. Strengthen unions - Outlaw "right-to-work" laws which allow deadbeats to enjoy the benefits obtained by unions without paying dues. Prevent companies from coercing employees against unions, e.g. threatening to close plants. As in Germany, require union representation of boards on directors.
2. Have very high tax rates on the Rich and higher real corporate tax rates. This will encourage the Rich to take lower compensation and discourage companies from leaving oodles of cash sitting around. Today corporate taxes actually paid as a percent of GDP are about a third of what they were after WWII and are the lowest among developed nations.
Higher tax rates on the Rich will also discourage wild financial speculation.
3. Strongly regulate speculation, e.g. outlaw naked credit default swaps, require buyers of future contacts to show ability and willingness to take delivery, etc.
4. Pump more money into the private sector and get it to the people who will spend it. Have the federal government finance worthwhile projects like fixing infrastructure, grants to state for education and police, more research, a new efficient power grid, etc. Realize that debt and deficits do not and have not ever hurt us.
Why not do what has worked instaed of what has failed?
4
Here's a radical thought from a liberal: the problem is not so much that the rich have a lot as that the non-rich don't have enough. Piketty is right: wealth needs to be redistributed. But the wealthy have so much of it that they could give up half of it and still be rich. Perhaps I'm missing something, but it's hard for me to see what of value I could acquire from having twenty billion dollars that I couldn't acquire from having ten billion dollars.
The dividing line is when wealth is used for ostentation and status rather than for personal comfort and convenience. The tax rates are less of an issue than the question of what income and wealth is taxable. If all those Cayman Islands stashes were repatriated, they wouldn't have to be taxed at a very high rate to make a huge difference as long as the entire stash was counted.
Let's start with an idea from that great hero Richard Nixon: a comfortable guaranteed annual income provided to all with no requirement for working. Especially with the wealth generated by technology, it could be done. The value attached to different kinds of work would shift dramatically. Jobs now considered menial would be highly paid, because high pay would be needed to induce people to take them. And there will always be people who want more than the minimum, even if the minimum is at a comfortable level.
The dividing line is when wealth is used for ostentation and status rather than for personal comfort and convenience. The tax rates are less of an issue than the question of what income and wealth is taxable. If all those Cayman Islands stashes were repatriated, they wouldn't have to be taxed at a very high rate to make a huge difference as long as the entire stash was counted.
Let's start with an idea from that great hero Richard Nixon: a comfortable guaranteed annual income provided to all with no requirement for working. Especially with the wealth generated by technology, it could be done. The value attached to different kinds of work would shift dramatically. Jobs now considered menial would be highly paid, because high pay would be needed to induce people to take them. And there will always be people who want more than the minimum, even if the minimum is at a comfortable level.
2
The problem is not unique to the USA, although our lack of a welfare system makes the consequences worse. I believe that the causes are found in evolving technologies that have globalized markets, and enabled and encouraged the financialization of our economy.
Small-scale capitalism has been enfeebled; large-scale capitalism is triumphant everywhere. We see it in every industry: the best operators scoop the pot, with a handful of large competitors struggling for the crumbs. The minnows starve and die-off.
New markets for hitherto undreamed-of products do not develop from small enterprises; - they are born huge and complex (Uber is a perfect example of this) having been fed by amounts of capital and executive expertise that are unavailable to small operators. Thus the emerging economy is owned and controlled by the wealthiest before the rest of us get a look in.
Capital and executive skill at the highest level rule, and their kingdom is growing and devouring everything. The trend in every major sector in the economy is towards consolidation - healthcare, financial services, communications, shopping, transport - everything bar the most trivial goods and services. Look at the emerging dominance of a handful of giants in repair services and home-help. once the domain of the individual capitalist.
This cannot be reversed, and the only way to ameliorate it is by a massive cash subsidy to every American not able directly share in the profits bonanza these changes bring.
Small-scale capitalism has been enfeebled; large-scale capitalism is triumphant everywhere. We see it in every industry: the best operators scoop the pot, with a handful of large competitors struggling for the crumbs. The minnows starve and die-off.
New markets for hitherto undreamed-of products do not develop from small enterprises; - they are born huge and complex (Uber is a perfect example of this) having been fed by amounts of capital and executive expertise that are unavailable to small operators. Thus the emerging economy is owned and controlled by the wealthiest before the rest of us get a look in.
Capital and executive skill at the highest level rule, and their kingdom is growing and devouring everything. The trend in every major sector in the economy is towards consolidation - healthcare, financial services, communications, shopping, transport - everything bar the most trivial goods and services. Look at the emerging dominance of a handful of giants in repair services and home-help. once the domain of the individual capitalist.
This cannot be reversed, and the only way to ameliorate it is by a massive cash subsidy to every American not able directly share in the profits bonanza these changes bring.
1
It seems to me that any discussion of increasing pay for Americans, has to come with a limiting of globalization. If I'm a corporation, and I have the choice of employing 1000 Americans to do work, at $50,000 a head, or 1000 Phillipinos to do the same work, for $15,000 a head, it 's not a very hard choice to make.
.
Manufacturing has already been eviscerated in the U.S.; high paying careers that do not require higher education are gone. Increasing pay could have other implications, so long as barriers are not in place to prevent it. In my line of work, architecture, visualization is already outsourced to China. In many cases drafting is as well. It can only get worse.
.
I am not saying this to make apologies for the super rich. I am not saying this to throw a wrench in anyone's dream of higher pay. I dream of higher pay, too. I think it would be a wonderful thing to get middle class wages unstuck and rising again. We absolutely need to do it. But efforts to do this need to be coupled with efforts to prevent jobs from going overseas. That's all I'm saying.
.
Manufacturing has already been eviscerated in the U.S.; high paying careers that do not require higher education are gone. Increasing pay could have other implications, so long as barriers are not in place to prevent it. In my line of work, architecture, visualization is already outsourced to China. In many cases drafting is as well. It can only get worse.
.
I am not saying this to make apologies for the super rich. I am not saying this to throw a wrench in anyone's dream of higher pay. I dream of higher pay, too. I think it would be a wonderful thing to get middle class wages unstuck and rising again. We absolutely need to do it. But efforts to do this need to be coupled with efforts to prevent jobs from going overseas. That's all I'm saying.
They do. It's called Socialism.
Go look at Langone's comments from 10 years ago defending the outrageous pay he, Dick Fuld and other leading lights slathered onto the plate of then-NYSE head Dick Grasso, and compare them to the pap in this article.
Leveling things out is indeed a worthy endeavor, but it needs to be led by men with sufficient integrity.
Leveling things out is indeed a worthy endeavor, but it needs to be led by men with sufficient integrity.
1
Good opinion piece. We need to continue to push this conversation to the forefront.
Check out:
Robert Reich's "Inequality for All"
A great film on this topic and ideas on how to help turn the tide.
Check out:
Robert Reich's "Inequality for All"
A great film on this topic and ideas on how to help turn the tide.
You should be scared. You're gonna get an 80% tax rate, and you deserve it. End of story.
1
An internal "fix it" plan
Will not stop hitting of the fan
The current GOP
Compounds the misery,
The Wealth Tax awaits you, my man!
Will not stop hitting of the fan
The current GOP
Compounds the misery,
The Wealth Tax awaits you, my man!
1
The author's big idea for less equality is for government (translation the middle class taxpayer) to provide "tax incentives" to employers who pay a living wage? That again the not so rich taxpayers should "top off" the wages of our functional equivalent of slaves so essentially, in the end the status quo is preserved for the rich and powerful? What planet do these guys come from and just how stupid do they think the readers of the NY Times are? This is obviously a distract, bait and switch rhetorical trick. Also what good does it do to raise wages for citizen and on the books workers when the same 'few percent' business owner nobility is allowed to continue to lure 1-2 million immigrants to the US a year that it will simply hire more of at $5 an hour under the table, or work 12 hours get paid for 8 or kick back $$$ after cashing weekly min/wage check? Also what good will it do to raise wages if the authors rigging class of CEO's are allowed to continue to fast track trade agreement offshore the last few manufacturing jobs in the USA. What good is a theoretical living wage when the actual jobs have been sent to China or Mexico?
22
Both political parties are responsible for the flood of immigrants, legal and otherwise, that has caused the supply of labor to outstrip the demand for the past four decades.
Don't forget the robots. Last week on PBS News Hour, there was an estimate that in the next two decades, 45 percent off American jobs will be performed by robots. It's all shaping up for a massive structural change.
To add to my previous comment.
High income inequality, inequality in opportunity, inequality in goods and services, are what lead to Marxist revolutions. It is what brings about real Socialism, the public ownership of the means of production.
When a large majority of the public gets fed up with the wealthy running everything for their own benefit to the detriment of the rest of the population, radical actions are taken. You keep hear scare theories about social programs and help for the lower classes being Socialism. That is nothing compared to real Socialism.
the wealthy tend to lose sight of just how their use of their wealth affects the rest of the people. The think they can buy anything, but eventually they run out of souls to buy, then the revolution.
High income inequality, inequality in opportunity, inequality in goods and services, are what lead to Marxist revolutions. It is what brings about real Socialism, the public ownership of the means of production.
When a large majority of the public gets fed up with the wealthy running everything for their own benefit to the detriment of the rest of the population, radical actions are taken. You keep hear scare theories about social programs and help for the lower classes being Socialism. That is nothing compared to real Socialism.
the wealthy tend to lose sight of just how their use of their wealth affects the rest of the people. The think they can buy anything, but eventually they run out of souls to buy, then the revolution.
18
the difference today is who owns the companies that people work for. I worked for Hughes. Howard was at one time the worlds richest man, but he walked to floor in his factories, he knew the employees from the janitors to the engineers.
He did not have to answer to a board of billionaires like Icahn and Ackman. His employees got good pension plans, vacations including a Christmas Break and a turkey. special discounts, help with tuition, an excellent medical plan. He would watch people on the assembly lines, and if one looked like he/she was working extra, would call them up to his office and offer to send them to engineering school. When an employees husband died, he paid for her children's college.
That was Howard. Go to the retired Hughes employees Facebok page, and you will see hundreds of retirees who do not have a bad thing to say bout Howard.
The heads of corporations today treat their employees like cattle. They give them minimum feed, and cull them when they get older. Everything is and expense, and cutting expenses is the primary motive of the CFOs. Employees are an expense, not an asset.
Home Depot uses as many part time employees as it can get away with. A great many of its employees are retired people trying to just keep up. Go to the electrical equipment section, and the person who helps you is very likely to be a retired electrician. Same for lumber, paint, they have experience in those fields.
He did not have to answer to a board of billionaires like Icahn and Ackman. His employees got good pension plans, vacations including a Christmas Break and a turkey. special discounts, help with tuition, an excellent medical plan. He would watch people on the assembly lines, and if one looked like he/she was working extra, would call them up to his office and offer to send them to engineering school. When an employees husband died, he paid for her children's college.
That was Howard. Go to the retired Hughes employees Facebok page, and you will see hundreds of retirees who do not have a bad thing to say bout Howard.
The heads of corporations today treat their employees like cattle. They give them minimum feed, and cull them when they get older. Everything is and expense, and cutting expenses is the primary motive of the CFOs. Employees are an expense, not an asset.
Home Depot uses as many part time employees as it can get away with. A great many of its employees are retired people trying to just keep up. Go to the electrical equipment section, and the person who helps you is very likely to be a retired electrician. Same for lumber, paint, they have experience in those fields.
35
What is astounding is that bosses think the workers will not find ways to undermine them in every way they can, as no worker feels any loyalty to their bosses anymore, because loyalty is a two way street.
An additional part of the solution set: Employee stock ownership plans in growing middle market size companies. The evidence is overwhelming and irrefutable. See academic research by Joseph Blasi, Richard Freeman, Douglas Kruse and others. (Full disclosure: I am an ESOP lawyer and general ESOP advisor.) The USA can overcome this challenge. To quote a friend: "Smart people can do anything."
4
Henry Ford's business motto:
"There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible."
Today's CEO motto: Pay the lowest wages possible to the working people, pour the savings into CEO pay, no matter whether the corporation is profiting or losing stockholders' money.
"There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible."
Today's CEO motto: Pay the lowest wages possible to the working people, pour the savings into CEO pay, no matter whether the corporation is profiting or losing stockholders' money.
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The key is, the definition of 'possible' has changed.
Yes, Jan, and quality of product, health of consumers and customer service are all outdated ideas. Too bad the vast majority of us disagree.
There will be blood...
33
The social contract has been shredded on the behest of powerful economic interests that now control much of our government from behind the curtains. Their political minions have skewed the tax code and other laws to favor the accumulation of great sums of wealth for the few at the expense of the many. Our country needs another Theodore Roosevelt to bust the trusts, press for political reform, and facilitate collective bargaining through labor laws that promote unionization. Government is the only vehicle capable of protecting the working man and woman against corporate power. An economic and political rebalancing is much needed to restore the American Dream and to preserve our republic.
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We should not cap the CEO compensation, but rather tie the minimum wage paid to employees as a percentage of the CEO's compensation package ....... say, one percent.
Thus, if the big boss received a $5,000,000 package, the minimum for any employee would be a $50,000 package (including health, pension, social security, insurance, etc).
Since those "fringe benefits" generally run about 15% of salary, the cash salary would be
about $17.50 per hour, based on a 2000 hour work year.
Of course, the 1% that I used could be a lower % ..... and any minimum could phased in over time.
And note also that as wages are increased, the purchasing power of a huge number of people is greatly expanded, benefitting all employers nationwide with that enormous growth on the demand side.
David Brandt, Haddonfield, N J
Thus, if the big boss received a $5,000,000 package, the minimum for any employee would be a $50,000 package (including health, pension, social security, insurance, etc).
Since those "fringe benefits" generally run about 15% of salary, the cash salary would be
about $17.50 per hour, based on a 2000 hour work year.
Of course, the 1% that I used could be a lower % ..... and any minimum could phased in over time.
And note also that as wages are increased, the purchasing power of a huge number of people is greatly expanded, benefitting all employers nationwide with that enormous growth on the demand side.
David Brandt, Haddonfield, N J
The velocity of money recorded by the St. Louis Fed demonstrates that: although the money supply has dramatically expanded, it is being hoarded, but the hoarding is systemic! It is a consequence of QE.
The expansion of the money supply has not passed through the economy, since 2009, with its normal multiplier effect. It has remained in the vaults of the banks as reserves to collateralize derivatives trading.
QE was a corollary of the now bedrock principle of finance that profit should be privatized, and that the risks associated with the opportunities to profit should be socialized with investors no longer on the hook for their bad decisions. The taxpayer is in this new Gilded Age responsible for the irresponsible decisions of banksters.
The knock on effect of this principle has come to be know as the public subsidy for systemically Too Big To Fail Financial Institutions.
This absurd parody of Capitalism is what a market manipulation in the course of a mania looks like. We can certainly experience deflation in this preposterous version of the new normal. I wonder when economists will catch on?
The expansion of the money supply has not passed through the economy, since 2009, with its normal multiplier effect. It has remained in the vaults of the banks as reserves to collateralize derivatives trading.
QE was a corollary of the now bedrock principle of finance that profit should be privatized, and that the risks associated with the opportunities to profit should be socialized with investors no longer on the hook for their bad decisions. The taxpayer is in this new Gilded Age responsible for the irresponsible decisions of banksters.
The knock on effect of this principle has come to be know as the public subsidy for systemically Too Big To Fail Financial Institutions.
This absurd parody of Capitalism is what a market manipulation in the course of a mania looks like. We can certainly experience deflation in this preposterous version of the new normal. I wonder when economists will catch on?
11
This epitomizes the old saw that when the only tool one has is a hammer, everything looks like a nail. The author tells us that he and his corporate cronies are all just terrified, terrified! that the egregious wealth inequality in the US will lead to revolution or "oppressive" taxation.
And the solution from this corporate guy? Ready? Ta Da - Tax cuts! Tax cuts so that the poor corporations (who are sitting on piles of cash like Scrooge McDuck) will be able to afford to pay their oppressed workers living wages. Yeah, more "trickle-down"! That'll fix it! Sorry, Pete, but Reagan sold that reeking bag of horse puckey to a large part of the voting public in 1980 and wealth inequality has increased ever since.
How about this solution? When the author arrived in this great country to make his fortune, the corporate share of US tax revenues was equal to 5.4% of GDP. In 2014, corporations contributed only 1.9% of GDP, while individual and SS tax contributions rose to take up the slack. Let's return the corporate share to 5.4%. On a $17 Trillion economy, the US would realize an additional $600 Billion in tax revenues.
And the solution from this corporate guy? Ready? Ta Da - Tax cuts! Tax cuts so that the poor corporations (who are sitting on piles of cash like Scrooge McDuck) will be able to afford to pay their oppressed workers living wages. Yeah, more "trickle-down"! That'll fix it! Sorry, Pete, but Reagan sold that reeking bag of horse puckey to a large part of the voting public in 1980 and wealth inequality has increased ever since.
How about this solution? When the author arrived in this great country to make his fortune, the corporate share of US tax revenues was equal to 5.4% of GDP. In 2014, corporations contributed only 1.9% of GDP, while individual and SS tax contributions rose to take up the slack. Let's return the corporate share to 5.4%. On a $17 Trillion economy, the US would realize an additional $600 Billion in tax revenues.
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Robert Reich, a former US labor secretary who is now a University of California professor of public policy, argues that the trend is taking us back in time before most countries enacted labor standards.
How will corporations reconcile this current trend with your objective for them to implement “a fairer way to share in the hard work and incremental value a business generates?”