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Sunday, April 27, 2014

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

Sunday, April 13, 2014

Equal Access to the American Economic Opportunity Structure

How will our contribution be judged by future generations?  Will the ordinary citizen be prepared for the demands of Judgment Day?  …

Wave after immigrant wave to our shores fantasize about realizing the American Dream.  When it comes to obtaining better, more equal, access to the American economic opportunity structure, the stakes are high.

Factually, the unemployment rate may be hovering around 7% of all Americans, but 20% of American teenagers, and 50% of American black teenagers.  In such times, the ordinary citizen may feel an urge to reflect.  At the end of the Civil War, blacks were so impoverished, so illiterate, and for the most part so lacking in skills that freedom meant little more to them than the ability to leave the place to which they had been bound by slavery.  The post-war records are replete with tales of blacks who took to the roads and retraced their paths back to the plantations from which they had been sold, in search of the families they had lost.  Surely there were blacks who were so battered by the system of slavery that they became sexually promiscuous or irresponsible parents, and apparently remain so, today.

An ordinary citizen may be urged to reflect further.  There are a multitude of decent Americans, who not only are unmoved by the fact that 40% of black children are living in poverty, but use that fact to buttress their own convictions about black inferiority.  Is it reasonable for an ordinary citizen to consider that blacks should constitute 49% of America's prison population?  Is it reasonable for an ordinary citizen to ignore persistent disparities between black and white health, income, wealth, educational attainment, and employment?

Opposing arguments aside, is it also reasonable for an ordinary citizen to consider that a significant number of decent Americans regularly assert enormous efforts to destroy affirmative action?  Is there empathy for the fact that the fragile affirmative action program was enacted in the 1960s and 1970s to compensate for deep injuries sustained over 350 years of legally sanctioned subordination?  Some label the campaign to do away with affirmative action as “brilliant rhetorical propaganda.”  But Cory A. Booker, the black mayor of Newark, NJ calls on the ordinary citizen to consider the economic reality that, in fact, “Yale is cheaper than jail.”

One scholar has warned that his

recurring nightmare in recent years has been that there will be such a significant separation of the black upper and middle classes from poor blacks that when America declares total victory over anti-black racism, substantial numbers of well-off blacks and members of other minorities will be complicit in the deceit.  We will then have a society much like that found in Brazil.  We could tell ourselves that we have a ‘racial democracy’ here, and overlook the fact that the only thing the blacks at the bottom have in abundance is misery, made permanent by their virtually complete lack of access to the national opportunity structure.  We will have put the finishing touches on our national scapegoat; an untouchable, impoverished caste of permanent mudsills, filling a role not at all unlike the one John Smith had in mind for Native Americans almost four centuries ago.

When it comes to civil rights, history does suggest a sort of rather dim view of prior times.  But what about the present?  Put another way, how will our contribution be judged by future generations?  Today, the 400 richest Americans possess more wealth than the bottom half (150 million) combined.  Does this sobering statistic uphold the basic ideal of social justice which is this nation’s moral foundation?

While there will be time later to contemplate “tomorrow,” for now, it is understood that if America stands for one thing, more than any other, it is the following.  America provides the ordinary citizen with the opportunity to make something of himself.  The ordinary citizen may accomplish this by exerting his God-given abilities to engage in struggles for decency, discharging the responsibility to hold up his own end of the challenge.  In the end, Judgment Day may demand nothing less.

-Michael D’Angelo