Rich get richer, poor get poorer
By Thomas Adcock
Copyright © 2014 – Thomas Adcock
UNITED NATIONS, New York
They are in every city and every village of the world: live bodies fallen to a field scattered with dead-ended souls. It hurts us to look at them, and so we have made them invisible. We are nimble in sidestepping these men and women and children with nowhere to go for the simplest of privacies. We hold our breath, discreetly, as we pass them by; we mean no offense, we wish only to avoid inhaling unpleasantness.
Not too close, we warn ourselves. Lice are notorious jumpers.
The Invisible keep their shaggy heads low, eyes respectfully averted from ours. If they seem nonviolent—why so angry?—we proffer alms. We hope Mr. Invisible accepts our coins, and that he will use the money to buy coffee and a buttered bun rather than cigarettes. Smoking is injurious to one’s health, as everyone who can afford a doctor knows.
Such has ever been so: we prefer history as a remembrance of palatial dreams to nightmares of poverty. The splendor of Carlovingian courts and the House of Medici and the Hapsburg Empire, and the Valois; long before, grand villas aside the Roman hills. O, the stories there! Legends of the few and the mighty are recorded in books, and therefore matter. Who knows the names of the masses—The Invisible?
As I write, legends of our own epoch are grubbily birthed in the counting houses of Frankfurt, London, Tokyo, and Wall Street. These gilded goings-on, and the responsible corporeality, are dutifully recorded in books; now, as well, glorified in movies.
Fundamental to our contemporary myth is the same old proposition of anciens régimes: sustenance for the proletariat requires faith in the trickling beneficence of wealthy élites, and willful ignorance of Aristotle’s warning, circa 347 B.C.—“Poverty is the parent of revolution and crime.”
On the bitterly cold and windy afternoon of January 20, The Invisible of New York occupied their usual posts. Streets were emptier on this particular Monday. As a result, alms were sparse. It was Martin Luther King Day in the United States, a time for Americans to pause in memory of a civil rights leader who created the “Poor People’s Campaign” of 1968—though he himself was unable to lead the national demonstrations, due to his assassination in April of that year.
The Reverend Dr. King asked the same back in ‘68 as The Invisible ask today, in mute misery: Please provide us a “middle ground between riots on the one hand, and timid supplications for justice on the other,” as the murdered prophet put it.
On that day of sad remembrance, I briefly shivered with a dozen other journalists on line at a security checkpoint outside the First Avenue gates of the United Nations, a stretch of international real estate along Manhattan’s East River. We waited for credentialed admission to a seminar, entitled “The Threat of Growing Inequities.”
Beyond the security gates are a number of handsomely built conference centers, the iconic U.N. Assembly Building, and outdoor sculptures meant to inspire distaste for war and violence against our fellow men and women. This complex is populated by and for the privileged: those with sinecures in service to government or academia, and tourist safaris under the watch of somber men in dark suits tailored to conceal Glock semi-automatic pistols. Fallen people with shaggy heads know, instinctively, to steer clear of this place—including the east side of First Avenue, where steel gates and men with guns enforce a socio-economic divide.
While waiting, I noticed Mr. Invisible—over there, on the west side of First Avenue. He shuffled along with the collar of his ragged coat pulled tight against the icy wind, eyes averted from the U.N. complex. He towed a hobble-wheeled shopping cart crammed with his dingy possessions. The god of Irony was present: on one side of pavement, The Invited; on the other, The Invisible; each dealing, in their respective ways, with “The Threat.”
Included among The Invited was Joseph Stiglitz, the internationally renowned professor of economics at New York’s Columbia University. He delivered a keynote address to a large conference room crammed with people able to leave their possessions at home.
“The ‘American dream’ is now a myth,” thundered Mr. Stiglitz. “The bankers of Wall Street have brought the world nearly to ruin. What is happening here is happening in most other countries, largely because they have followed the American [economic] model. We pay a high price for inequality—divided society, political instability, dysfunctional government.
“Inequality is the result not just of economic forces, but of [government] policy,” he added. “Now matters are becoming worse. Inequalities are growing. Our democracies are undermined.”
Mr. Stiglitz and comrades blew three hours of such bugle calls. Most pointed were calls from Fabrizio Barca of Italy, until last year a member of Prime Minister Mario Monti’s cabinet, and Irene Khan of Bangladesh, former secretary general of Amnesty International.
“The reason for inequality,” said Mr. Barca, “is that some do not want equality.”
“Inequality thrives when the law discriminates, when the law is skewed toward wealth,” said Ms. Khan. “When the wealthy both make the law and break the law.”
Less alarming was the turgid prose of academic treatises presented at the seminar, exemplified by a paper authored by Mr. Stiglitz and his colleague at Columbia University, Professor Michael W. Doyle. Their effort dealt with “Gini indices” and “Palma ratios” and “horizontal inequalities” and “destabilizing dynamics” linked to demographic “stratification.”
As a bonus, the paper contained algorithms that charted country-by-country inevitabilities of conflict. The paper concluded, “The fact that…dimensions of inequality are related suggests that focusing on one dimension at a time may underestimate the true magnitude of societal inequalities and provide an inadequate basis for policy.”
Mr. Invisible’s hobbled cart was certainly an inadequate basis for stashing a copy of the Stiglitz-Doyle paper; there seemed to be no room. But I doubt that he is inclined to study the thing, even if he could locate a warm room in which to read; the paper holds little or no insight for a man of Mr. Invisible’s experience.
For a long while, Mr. Invisible has played his rôle in a story as old as dirt: The rich get richer, and the poor get poorer.
In the context of economics, this is Mr. Invisible’s sole reality—unless someone in the fraternity of The Invited cuts him a piece of the action regarding serious money behind the overflow of academic treatises.
Minds will wander when confronted with educated narishkeiten; my unlettered mind is certainly no exception. I believe I lost focus at the U.N. seminar when the terms Gini indices and Palma ratios arose. My attention drifted off to something once said by an angry young man—the American gangsta rap musician Tupac Shakur (1971-1996), killed in Las Vegas in a drive-by shooting.
In his inimitable manner, the late Mr. Shakur said of economic bifurcation, “There’s no way that Michael Jackson or Whoever Jackson should have a million thousand droople billion dollars and there’s people starving. No way! There’s no way these people should own planes and there’s people don’t have houses. Apartments. Shacks. Drawers. Pants! I know you’re rich. I know you got forty billion dollars. But can’t you just keep it to one house? And if you only got two kids, can’t you just keep it to two rooms? I mean, why have fifty-two rooms while you know there’s somebody with no room? It just don’t make sense to me. It don’t.”
Mr. Shakur misses the point. Important people are not obliged to make sense of their importance. Take Jamie Dimon, for instance, chief executive of Wall Street’s JP Morgan Chase & Company.
Last year, Mr. Dimon’s investment bank agreed to pay the U.S. treasury an all-time record $13 billion (€10 billion) in civil penalties arising from federal investigations of its home-mortgage swindles, root cause of the Great Global Recession begun in 2007-08 that damages most of us today. An additional $2 billion (€1.46 billion) was paid to the government to avoid criminal prosecution for the bank’s blasé attitude toward a suspicious pattern of multi-million deposits and transfers made by a leading client—Bernard Madoff, now serving one hundred-fifty years in a federal penitentiary for masterminding history’s biggest Ponzi scheme. In 2012, JP Morgan ponied up a cool billion dollars, split between the American and British governments, for civil violations of derivatives trading, in which Mr. Dimon was famously unable to account for bank losses of $6.2 billion (€4.54 billion).
Never mind all that. Three days after the U.N. seminar, JP Morgan’s board of directors voted unanimously to boost Mr. Dimon’s annual pay package by seventy-four percent—to $20 million (€14.6 million). The pay hike ended Mr. Dimon’s punishment and sufferings throughout 2013, when the board slashed his income to a paltry $11 million (€8 million), as a means of bringing about a twelve-month “state of contrition,” according to a JP Morgan press release. Contrition. Still, this year the board balked at restoring Mr. Dimon’s salary and stock options to the 2007 level of $49.9 million (€36.5 million).
By no means, however, does a mere $49.9 million, let alone $20 million, place Jamie Dimon in the stratosphere of the world’s ultra-rich.
On the day of the U.N. seminar, Oxfam International published a report containing an eye-popping statistic: eighty-five individuals together hold more wealth than 3.5 billion people in the world—half the Earth’s population of 7.1 billion. Eighty-five. Nowhere in the report are these people named. Could they be an exalted species of The Invisible? It don’t make sense to me. It don’t.
Forty-eight hours after the U.N. seminar & M.L. King Day, the forty-third annual World Economic Forum opened for business in the resort town of Davos, Switzerland, where the alpine scenery is stunning and the unemployment rate is a fraction of one percent. Jamie Dimon and numerous other unindicted bankers arrived in Davos in their respective private jets, intent on haggling with fellow financial grandees and mingling with good-looking people from Hollywood, earnest politicians, billionaire flâneurs, corporate racketeers, and treacherous potentates (along with the usual discreet delegation of long-legged women with short résumés).
Boris Johnson, the eminently quotable lord mayor of London, declined to attend. He complained that this year would be no different from others: sober colloquies among the puissant and pecunious, sandwiched between Champagne and caviar receptions, skiing, cigar-smoking, black-tie banquets, and hush-hush carnality. Once around the track was enough for the lord mayor, who assessed the high-octane festivities of Davos as “a constellation of egos in an orgy of adulation.”
In discussing the plight of the poor, and those of us dancing around the rim of poverty, the ultra-wealthy Davos assemblage concentrated their own seminars on the theme of—take a wild guess—economic inequality. Press notices were not admiring. For example, this from Sitaram Yechury, a member of the Indian Parliament, writing about a bankers’ symposium for the English-language Hindustan Times newspaper:
Given [the] vacuity amongst those who made money without knowing how they were making money, it was only natural that the cries for larger bailout packages reached a crescendo. There were calls for a $4 trillion bailout package to restore the previous health of the global financial markets. Clearly, the causes for the current global crisis…are not yet understood, or there is a complete denial on this score. The crisis was precipitated by the incapacity of the borrower to return the loans that were virtually forced…on him (by hurry-up-and-sign-hard-sell deals on subprime mortgages), and not due to the incapacity of the lender.
Any amount of bailout strengthening the lender will provide no succor to the borrower, who continues to be ruined with the crisis already throwing millions of people out of their jobs across the globe, and will not solve the crisis.
It was left to…Archbishop Desmond Tutu to say, ‘We worshiped in the temple of cut-throat competition, and so some cooked the books because the treasure is so great. We spend billions on banks when we know that a fraction of this money could save all the children in the world.’
It is possible that one or more persons in Davos this year were among the Fabulous Eighty-Five cited by Oxfam. Kevin O’Leary, a Babbitt-like Canadian businessman and television chat show personality, would happily lick their boots—all one hundred and seventy boots, property of whomever.
“This is a great thing,” Mr. O’Leary chirped to Amanda Lang, his TV co-chatter. “It inspires everybody, gets them motivated to look up to the one percent and say, ‘I want to become one of those people, I’m going to fight hard to get to the top.’”
Ms. Lang’s response was priceless: “Really? So, someone living on a dollar a day in Africa is getting up in the morning and saying, ‘I’m going to be Bill Gates?’”
Ms. Lang’s flippancy is part of a “rising tide of hatred of the successful one percent,” according to Tom Perkins, a California venture capitalist and paranoid plutocrat. In a recent letter published in the Wall Street Journal—owned by right-wing press baron Rupert Murdoch, who acquired it for $5 billion (€3.66 billion) in a 2007 hostile takeover—drew a ludicrous parallel between “Nazi Germany’s war on its one percent, namely its Jews, to the progressives’ (read dangerous left-wingers) war on the American one percent, namely the rich.”
Mr. Perkins added, “Kristallnacht was unthinkable in 1930. Is its descendent ‘progressive’ radicalism unthinkable now?”
The reason for inequality is that some do not want equality?
Last Tuesday night, it was President Barack Obama’s turn to talk of the oceanic divide between America’s rich and the rest of us—we who are still rattled by last July’s report by the über-objective Associated Press news service:
Four out of five U.S. adults struggle with joblessness, near-poverty, or reliance on welfare for at least parts of their lives, a sign of deteriorating economic security and an elusive American dream.
Hardship is particularly growing among whites…Pessimism among that racial group about their families’ economic futures has climbed to the highest point since at least 1987. In the most recent AP-GfK poll, 63 percent of whites called the economy ‘poor.’
And this grim notice from the U.S. Census Bureau: “Most Americans—58.5 percent—will spend at least one year below the poverty line at some point between ages 25 and 75.”
As expected, income disparity was the leitmotif of Mr. Obama’s annual State of the Union address to a joint House-Senate session of Congress, an evening of pomp and circumstance mandated by the Constitution.
“Those at the top have never done better, but average wages have barely budged,” said the president, titular head of the Democratic Party. “Inequality has deepened. …[T]oo many people are working more than ever just to get by, let alone get ahead. And too many still aren’t working at all. So our job is to reverse these trends.”
Mr. Obama’s modest proposals toward a gauzy goal will be fiercely opposed by his Republican Tea Party opponents, who control the House of Representatives to such extent that they gleefully shut down the federal government for most of last August—inconveniencing millions of citizens and stalling paychecks for thousands of civil servants, at a cost to the national exchequer of $300 million (€220 million) per day, according to the Colorado economics research firm IHS, Inc.
Among a short list of modest specifics was Mr. Obama’s vow to sidestep Congress and employ presidential authority to raise the minimum wage in future federal contracts with private companies—from the current $7.25 hourly, the standard for the past seven years, to $10.10. It is impossible to know how many workers will be affected by this seemingly good news, or how many others already on the job will resent the newcomers.
Whatever, it should be noted that if normal rates of monetary inflation were applied to the minimum wage of the 1970s, this year’s figure should be close to $13 hourly—three bucks more than the president proposes. Of further note, the boss-to-worker pay ratio has increased since 1950 by a cool one thousand percent, according to data compiled by Bloomberg News.
No matter, Democrats in the Congressional audience jumped to their feet in wild applause as Mr. Obama declared, “Let’s give America a raise!” On the Republican Tea Party side of the aisle, every member sat and scowled—and fired off Tweets and pronunciamentos. A small sampling:
• “On floor of house waitin (sic) on ‘Kommandant-In-Chef (sic)…the Socialistic dictator,” wrote Rep. Randy Weber of Texas.
• Rep. Tim Huelskamp of Kansas likened the president’s proposals to “dictates from a king.”
• “He may declare he’s a king,” ranted Rep. Michele Bachmann of Minnesota, “but that’s not what he is. He better be prepared (sic) for the lawsuit that the U.S. Congress will bring to him.”
And, per Republican Tea Party custom, the president’s signature accomplishment—the Patient Protection and Affordable Care Act, which will eventually provide medical insurance coverage for physical and mental illnesses to some thirty million Americans in need—was the target of familiar inchoate attacks. Said Rep. Mike Lee of Utah, “Obamacare, all by itself, is an inequality Godzilla.”
Until all concerned grasp the central fact of life for people we are unable or unwilling to see, whose names we do not record, little will happen beyond seminars and bugle calls.
The fact is this: The opposite of poverty is not wealth, it is justice.
Thomas Adcock is America correspondent for CulturMag.