Business Success and Civic Virtue

Among other achievements, F.D.R. exposed once and for all “the popular myth that business success was a guarantee of civic virtue.”  The rich man’s “material position” had not been harmed, “but his moral prestige is gone.”  …

The national economy struggles, as wealth disparity increases.  Millions of full time American workers earn wages at or below the poverty line.  One simple take away is that wealth disparity --- of which poverty is an ominous measure --- restricts economic growth.  It’s just math.

Consider the following example.  The average CEO pay in the nation’s fast food industry more than quadrupled from 2000 to 2013 to about $24 million per year.  That’s more than $11,400 per hour --- or $190 per minute.  For sake of comparison, the average pay for the fast food restaurant worker has increased by only .3% since 2000.  He earns about $19,000 per year, assuming he is full time and earns $9 per hour.  For what it’s worth, the US government fixes the poverty line for a family of four at $23,850 per year.

While the effect on the economy can be debated, the effect on human welfare cannot.  How many flat screen TVs --- or iPads --- does the CEO need in his comfortable residence?  How many can he realistically buy to keep him happy?  One would think the saturation point would be reached rather quickly.  By contrast, imagine the boost to the economy, if each and every full time ordinary worker had the means through his paycheck to own a modest car --- or educate his children.

The privileged class objects to raising the minimum wage for ordinary workers.  It also objects to payment of higher effective tax rates.  The reason given is that both are job killers.  But the empirical data over the past 60+ years points in a different direction.  It seems that retaining or putting more money in the hands of the privileged class has not created more jobs.  What it has done is simply put more money in the hands of the privileged class.

Mitt Romney, the successful business man, should have been given the chance to lead at the highest political level, the argument goes, because he is truly a decent man whose objective was only about service.  Okay, so maybe we are talking about moral standing here.  Was any light shed in that regard during the 2012 presidential campaign?

The popular belief is that Mr. Romney, the Republican nominee, came up short because he was caught making a poorly timed private comment that nearly half the population (47%) could essentially be written off as lazy dependents.  While not helpful, the comment was not decisive.  What undid Mr. Romney, rather, was his opinion expressed in one of the debates that it was “fair” for his effective tax rate (on nearly $20 million of unearned income) to be lower than that of his $40,000 per year secretary.

Let’s measure Mr. Romney’s opinion against the twin pillars of national social progress, Theodore Roosevelt and Franklin D. Roosevelt, one a Republican and the other a Democrat.  While it is true that both came from money, it may be a fallacy to labor under the assumption that the rich hated each on the simple charge of a Roosevelt turning his back on them.

Joseph Kennedy, father of the Kennedy men and himself a rich man, identified a more penetrating charge.  The elder Kennedy was of the opinion that F.D.R. exposed once and for all “the popular myth that business success was a guarantee of civic virtue.”  The rich man’s “material position” had not been harmed, “but his moral prestige is gone.”

What happens then?  A land of opportunity exists only to the extent that the ordinary citizen has the freedom to an unfettered pursuit of happiness unassisted by special privilege of his own --- and unhampered by the special privilege of others.  “No man who carries the burden of the special privileges of another,” Theodore Roosevelt had said, “can give to the commonwealth that service to which it is fairly entitled.”  Nor can he reach his own true potential.  It’s a lose-lose proposition.

Perhaps a number of developing countries today do not dislike the US because we are a democracy --- but rather because we only masquerade as a democracy.  Perhaps the joint rhetoric of the two major political parties tells them that the moral prestige of the men behind the curtain may be lacking.  Does America continue to be a promised land, as once envisioned?  Or just simply another in a long line of crusader states lost in search of empire, with little regard for the inhabitants of its own house?  Actions typically speak louder than words.

-Michael D’Angelo