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Friday, November 11, 2011

The Comfort Of Other People: Inequality Then And Now

Posted: 11 Nov 2011 02:00 AM PST

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John and Fanny Dashwood, 1805

John and Fanny Dashwood, 2011

Mrs. John Dashwood had never been a favourite with any of her husband’s family; but she had had no opportunity, till the present, of shewing them with how little attention to the comfort of other people she could act when occasion required it.

It is a truth universally acknowledged that rising inequality and social unrest go hand in hand. Wealth and therefore power in the US are becoming concentrated in fewer and fewer hands, and the deliberate exercise of this power has created one of the highest levels of inequality in the world.
The Congressional Budget Office breaks down the facts on inequality.
CBO finds that, between 1979 and 2007, income grew by:
275 percent for the top 1 percent of households,
65 percent for the next 19 percent,
Just under 40 percent for the next 60 percent, and
18 percent for the bottom 20 percent.

Two hundred years ago, in 1805, the US had less income inequality.
While the top 1% of American households earn 20% of all the income today, say Lindert and Williamson, in 1774 the top 1% earned less than 4% of total income in New England and under 9% of total income in the 13 colonies as a whole.
Even by 1805, roughly a dozen years after stocks began trading on Wall Street, the distribution of income was nowhere near as unequal as it is today, report Lindert and Williamson.
So just how do the elite justify out of control inequality to themselves and to the growing ranks of newly poor? Some say that inequality is not that bad, some say it is irrelevant, and some say that it’s no more than the poor deserves.
Times may change, but people do not. In 1805 a middle class Englishwoman with a merciless understanding of humanity and a cutting wit sliced open and laid bare the selfish elite of her time for all to enjoy. In Sense and Sensibility, Jane Austen describes the considerable fortunes of Mr. and Mrs. John Dashwood, both of whom inherited large fortunes, and the more straitened circumstances of Mr. Dashwood’s step-mother and half sisters. Most of the family wealth went to the males in their line and the Dashwood women were utterly dependent on the good will of John Dashwood for the little inheritance they were due. Unfortunately for them, when the 99% depend on the charity of the 1%, the 99% is usually out of luck.
Mr. John Dashwood had not the strong feelings of [his sisters and step-mother ...]. He was not an ill-disposed young man, unless to be rather cold hearted, and rather selfish, is to be ill-disposed: but he was, in general, well respected; for he conducted himself with propriety in the discharge of his ordinary duties.
Mr. Dashwood would have made a fine libertarian. Wealthy through no effort of his own, not intelligent enough to imagine how others might think or feel, and certain that inheriting advantages was the same as earning them, he was considered perfectly acceptable by a society that demanded nothing more than money and a personable demeanor. But he did have glimmers of a conscience.
Had he married a more amiable woman, he might have been made still more respectable than he was:—he might even have been made amiable himself; for he was very young when he married, and very fond of his wife. But Mrs. John Dashwood was a strong caricature of himself;—more narrow-minded and selfish.
Mrs. Dashwood did her very best to convince her husband to ignore his family’s plight. Mr. Dashwood had intended to live up to the promise he had made to the previous generation of Dashwoods to help provide for others in his family. After Mrs. Dashwood went to work on him, his sisters were lucky to escape with their household furnishings intact.
Mrs. John Dashwood did not at all approve of what her husband intended to do for his sisters. To take three thousand pounds from the fortune of their dear little boy, would be impoverishing him to the most dreadful degree. She begged him to think again on the subject. How could he answer it to himself to rob his child, and his only child too, of so large a sum?
 Won’t John think of the children? He shouldn’t deprive the next generation, should he?
Our elite also warn that the children will suffer if the wealthy are forced to help the less fortunate. Our One Percenter President Obama told Americans that cuts in “programs like Medicare” would have to be made for the sake of future generations, as did John McCain, also of the 1%. warned, “According to CBO and Census Bureau long-term estimates, the amount of debt placed on the backs of children born today is about to explode.
The Heritage Institute tried its best to whip up fears of toddlers crushed by a mountain of debt. The Cato Institute said the same thing with numbers. Both Cato and Heritage were founded by the 1%, including the Kochs, and worked valiantly at trying to eliminate regulation and taxation that might bother those who hold their purse strings.
Why ask what you can do for your country when you can refuse to do anything at all? The current generation benefits greatly from sacrifices made by earlier generations but why dwell on old-fashioned notions like “duty” and the Golden Rule. To be sure, the “it’s my money and I want it now” middle classes, upper and lower, would instantly “discover” that Social Security is not insolvent if they were interested in the subject. They might even realize that a European-style national health care program would be possible in the US if they were to agree to lower their standards of living to save enough money for health care in their old age.
Just because one has benefitted from the generosity of others doesn’t mean one should hand over one’s inherited hard-earned money to people who are practically strangers. As John Dashwood said:
“Perhaps, then, it would be better for all parties if the sum were diminished one half. — Five hundred pounds would be a prodigious increase to their fortunes!”
[Fanny] “Oh! beyond any thing great! What brother on earth would do half so much for his sisters, even if really his sisters! And as it is—only half blood!—But you have such a generous spirit!”
“I would not wish to do any thing mean,” he replied. One had rather, on such occasions, do too much than too little. No one, at least, can think I have not done enough for them: even themselves, they can hardly expect more.”
“To be sure […] and, indeed, it strikes me that they can want no addition at all. They will have ten thousand pounds divided amongst them. If they marry, they will be sure of doing well, and if they do not, they may all live very comfortably together on the interest of ten thousand pounds.”
After all, the poor already have so much! As Jonah Goldberg tells us:
To understand how subjective poverty in America is, one need only recognize the fact that most rich people from a century ago would be considered poor by today’s standards and today’s poor would be considered rich by the standards of 1900. In 1900, 2 percent of homes had electricity and 1 out of 10 homes had flush toilets. Today, pretty much all of them do. In other words, the tangible goods that defined wealth have been democratized.
Sen. Rand Paul said:
Robert Rector of the Heritage Foundation has profiled the typical poor household in America. The average poor household has a car, air conditioning, two color televisions, cable or satellite TV, a DVD player, and an Xbox. Its home is in good repair and bigger than the average (non-poor) European home. They report that in the past year they were not hungry, were able to obtain medical care as necessary, and could afford all essential needs….
The Atlantic blogger Megan McArdle also believes that income inequality is no big deal–after all, rich people have televisions and so do poor people.
I broadly agree with Will [Wilkinson] that consumption inequality, not income inequality, is what matters. If the rich have access to broad classes of goods that the poor can’t have, I find this worrying. On the other hand, if the problem is that Bill Gates has a really awesome 80 inch flat panel television, while the poor have to be content with a 32 inch CRT, well, I can’t say my heartstrings are plucked very tight by this injustice. So it’s important to know what the real differences are.
If the poor have bread and circuses, why would they need anything else?

It’s true that many poor people have a television. They can pick out any of dozens of televisions at the local Goodwill. They can buy an X-box for $50 online. They might not be able to buy their children orange juice or a chicken but they can buy them spaghetti or a fast food hamburger. If they have a raging fever, they can take them to the emergency room. What the poor cannot do is protect themselves from corporations that eliminate jobs to increase profits or that pay politicians to write laws that will let them pollute the environment, charge exorbitant fees for credit, and ignore safety and health laws. Our society is very wealthy and the poor can always live on the crumbs of the rich. However, it takes a very selfish, mean sort of person to measure out the crumbs we allot to the poor and deem it abundance.
1805 the selfish were constrained by Christian teachings on duty and charity. Fortunately for their bank accounts, modern economic conservatives like Goldberg and McArdle feel comfortable ignoring religious teachings because they can appeal to the authority of a failed screenwriter. When they are not sure what to say, they can drag out their worn copy of Atlas Shrugged and tell themselves that Ayn Rand was right: the poor are looting and mooching scum.
Rand believed that the world should be ruled by the elite, a tiny group of genetically superior men and women whose drive for excellence in the business world would inevitably lead to world domination. The only thing that hampered their rise to greatness was the mediocrity and weakness of the rest of the world. The scum, looters and moochers who made up the other 99% of the population obviously wanted to bring down the wealthy because of jealousy and shame.
Understandably, this philosophy became extremely popular in the business world. The elite saw Rand’s fairy tales of inherent superiority and personal glorification as a permission slip to denigrate and dismiss the poor. Rand taught the elite to be proud of being greedy and callous. She dreamed up a million reasons to be cold and selfish, why the emotions that were natural to her should be natural to everyone else.
Even though altruism declares that “it is more blessed to give than to receive,” it does not work that way in practice. The givers are never blessed; the more they give, the more is demanded of them; complaints, reproaches and insults are the only response they get for practicing altruism’s virtues (or for their actual virtues).
In other words, forget the poor–what about ME? Rand ignores reality, in which the rich and successful are fawned over by every segment of society. She prefers to take personal affront at any complaints, reproaches and insults directed towards cold, selfish people.
After reducing the amount he planned to give his step-mother and sister, John Dashwood decided that perhaps it would be a good idea to set up a little annuity for them. He could put money aside now for his poor relations and his step-mother would be through her declining years. Fanny goes to work on John with an enthusiasm and skill that would make a Peterson Foundation propagandist weep with envy.
Do but consider, my dear Mr. Dashwood, how excessively comfortable your mother-inlaw and her daughters may live on the interest of seven thousand pounds…. They will have no carriage, no horses, and hardly any servants; they will keep no company, and can have no expences of any kind! Only conceive how comfortable they will be! Five hundred a year! I am sure I cannot imagine how they will spend half of it; and as to your giving them more,, it is quite absurd to think of it.
Money is wasted on the poor. The undeserving masses do not provide jobs by inheriting factories and farms or stimulate the economy by ordering jewels and carriages. They can’t even sell bad CDOs and bet against them. Where would the 99% be without the 1% to run the world for them? Obviously the elite are rich because they work harder, are smarter, and are more moral.
If suggesting that the middle class doesn’t need anything doesn’t work, the propagandists take a more menacing tone. If the 99% are unhappy with inequality they should remember that what the 1% gives, the 1% can take away.
Some on Wall Street viewed the [Occupy Wall Street] protesters with disdain […]. If anything, they say, people should show some gratitude.
“Who do you think pays the taxes?” said one longtime money manager. “Financial services are one of the last things we do in this country and do it well. Let’s embrace it. If you want to keep having jobs outsourced, keep attacking financial services.”
It’s no wonder that this money manager did not give his name; his outburst is threatening but also illogical. The financial service industry has crippled the economy. Productivity has been rising while wages have been falling. Tax rates on the rich are getting lower; when the rich are paying more taxes it is because they are growing richer. Yet the rich say that they are groaning under their burden of taxation and are almost ready to shrug off the unbearable weight.
John Dashwood is eagerly persuaded to ignore the pledge he made to his dying father to care for his sisters.
“It is certainly an unpleasant thing,” replied Mr. Dashwood, “to have those kind of yearly drains on one’s income. One’s fortune, as your mother justly says, is not one’s own. To be tied down to the regular payment of such a sum, on every rent day, is by no means desirable: it takes away one’s” independence.”
Helping others is not just unnecessary; it’s also a loss of freedom, the freedom to refuse to help others in need. Judge Andrew Napolitano, commentator at One Percenter Roger Ailes’ Fox Network, feels just as put upon as John and Fanny Dashwood at the thought of being forced to help their less fortunate relations.
In Ayn Rand’s remarkable and famous novel, “Atlas Shrugged”, the producers of wealth got so sick and tired of the government taking their wealth that they stopped producing. What would the government do then?
[…T]here is no such thing as a free lunch. Everything must be paid for. And I am not just talking about paying in high taxes. I am talking about paying in the loss of freedom.
We know […] that government goodies come with strings attached. At one end of that string is the government, and at the other end is the recipient. In other words, we pay a price for this cradle to grave utopia not only in lost money, but also in lost freedom.
A great many of our leaders and their little helpers are cold and selfish. They are satisfied to say the right thing and hope someone else actually does the right thing. As the middle class grows poorer and the poor grows more desperate, protests against inequality and austerity are growing larger and more numerous. Occupy Wall Street has grown from dozens of protesters in New York to thousands across the country. The very wealthy are attempting to convince the masses that not only are the lower classes not growing poorer, the top 1% aren’t really growing richer, and so all those dirty, noisy protesters should just pack up and go home before something unfortunate happens. Waging a class war is not nearly as much fun when the lower classes stop listening to propaganda and start fighting back.
When the 1% and their minions finally noticed the Occupy Wall Street protesters, they immediately began defending their financial and political interests. Barack Obama, president of the 1%, tried to show just enough enthusiasm to convince the protesters that he stood with them but not enough enthusiasm to send the wrong message to the rest of the 1%.
In a call previewing Obama’s upcoming bus tour through North Carolina and Virginia, […] Obama will make it clear that he is fighting to make certain that the “interests of 99 percent of Americans are well represented,” the first time the White House has used the term to differentiate the vast majority of Americans from the wealthy.
The last time Obama represented the 99% he gave away millions of their tax dollars to the 1%, but a fact can be safely ignored. As the number of liberal hopefully Democratic voters protestors grew, Obama grew more supportive. Both Obama and Joe Biden compared the OWS protesters to Tea Party protesters, saying that both movements feel their government is favoring the banks over them and is “not looking out for them.” Obama and Biden did not assume any responsibility for their own actions, which have included helping to use taxpayer funds to bail out the banks and refusing to prosecute Wall Street criminals.
Obama and his reelection team have decided to use the anger against Wall Street for his reelection campaign, according to the Washington Post. “We intend to make it one of the central elements of the campaign next year,” Obama senior adviser David Plouffe told the paper. “One of the main elements of the contrast will be that the president passed Wall Street reform, and our opponent and the other party want to repeal it.”
House Leader and One Percenter Nancy Pelosi was equally supportive of the idea of speaking out against things that somehow happened when she wasn’t looking, such as high unemployment and bank bailouts.
Naturally Republicans were a little less supportive of Occupy Wall Street and a little more supportive of paranoid invective directed towards it. Mitt Romney, also a member of the 1%, took a dignified position–as dignified as he could manage.
[…] Mitt Romney was asked about the protests, and said that he had spoken to the people involved.
“I think it’s dangerous — this class warfare,” Mr. Romney said.
Mr. Romney, whose professional career consists of eliminating jobs instead of creating them, evidently thinks that increasing economic inequality is not class warfare—real class warfare is protesting against economic inequality. After the protests continued to grow, Romney became more sympathetic to the shrinking middle class and announced that he understood how “those people” feel, declaring “I worry about the 99 percent in America.”
Republicans seemed to think that accusing Democrats of class warfare was a crushing blow and took every opportunity to drill in the words through sheer repetition. Representative and Ayn Rand fan Paul Ryan (R-1%) tells us what class warfare actually is:
Sowing social unrest and class resentment makes America weaker, not stronger. Pitting one group against another only distracts us from the true sources of inequity in this country.
Ironically, equality of outcome is a form of inequality — one that is based on political influence and bureaucratic favoritism.
That’s the real class warfare that threatens us: a class of bureaucrats and connected crony capitalists trying to rise above the rest of us, call the shots, rig the rules and preserve their place atop society.
Mr. Ryan seems to think that trying to make the elite act ethically can only be a cover for a more nefarious agenda: helping dishonest, all-powerful civil servants to preserve “their place atop society.” Majority Leader Eric Cantor is increasingly concerned about the growing mobs occupying Wall Street and other cities across our country while “W. W.” at The Economist called the protesters extremists.
CNN’s Erin Burnett, soon to be one of the 1% by marriage, mocked the OWS protesters. At Forbes, FreedomWorks’s Matt Kibbe, another Koch employee, Ayn Rand fan and lackey of the 1%, said the dirty hippies at OWS were hypocrites for supporting Obama’s government bailouts, as opposed to the clean, hard-working Tea Party protesters who had supported Bush’s government bailouts.
If the 1% is not waging class warfare on the 99%, why are the elite spending so much money on propaganda designed to undercut the middle and lower classes, telling them they do not need, want or deserve relief from nearly unprecedented levels of inequality?

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