THE 0.1 PERCENT SOLUTION

August 24, 2015 by  
Filed under Blogs, Hot Button / Lynn Ashby

Many major elections have given us some catchy phrases, such as, “54-40 or fight,” which I believe was the score of the TCU-A&M game in 1920. There was: “He kept us out of war.” That was Woodrow Wilson’s slogan until, of course, he got us into war, then it was, “The war to end all wars,” which it wasn’t. In more recent times there were the New Deal, the Fair Deal, and, “It depends on what the meaning of the word ‘is’ is.”

This presidential election is giving us “income inequality,” which means about the same as “comprehensive immigration reform,” i.e., whatever you want it to mean. It is a simple fact that this nation, like many others, has income inequality, and the gap is widening. But how and why, and does it make any difference? I mean, do I really care what my yardman thinks about this growing economic problem, and he can’t vote, anyway? So, as usual, we shall look into this matter and figure out to how turn a buck on the deal.

First, we all know that, like the song says, the rich are getting richer and the poor are getting poorer. According to a new Pew Research Center Report (I rely on Pew, it’s a good, objective and fair operation), upper income family wealth is 70 times larger than lower income family wealth. Big deal. Tell us something we don’t know. Here’s something: the wealth gap between upper and middle income Americans – yes, Mr. and Mrs. Average American — has hit a record high. On average, today’s upper-income families are almost seven times wealthier than middle-income families, compared to 3.4 times wealthier in 1984. So now it’s not just the great unwashed who are getting left behind, but everyone else is, too.

Today only the top 10 percent of Americans are seeing their wealth grow while the bottom 90 get less and less of the pie each year. The driving force of this wealth chasm are the top 0.1 percent, who have seen their share of the nation’s wealth grow the most over the past decades, from 7 percent in 1979 to 22 percent today. We are talking about hedge fund managers, CEOs of the Fortune 400 and most semi-literate NBA stars. This next fact should yank your chain: The top 0.1 percent are now worth more than the entire bottom 90 percent of the U.S. population. Why this increase in the wealth of the tip-toppers? The Great Recession. While the rest of the nation was hurting, that 0.1 percent actually gained wealth. It has something to do with tax loopholes, stock options and a post office box in the Cayman Islands.

I, for one, can’t fault athletes and movie stars who make an obscene amount of money. Their bosses are mostly hard-headed business people who have determined that if they pay, say, Julia Roberts or Tom Brady $40 million, the bosses are going to make $80 million. It’s called the free market system. Should the recipient, who has maybe five good years to clean up, shove the chips back across the table and say, “Sorry, but I’m not worth that much.”? Would you? If so, come work for me.

But what chaps my chaps are the sneaky CEOs who are quietly creating a new robber baron class with lawyers, lobbyists and greedy politicians running interference, while the dumb workers don’t know they are getting screwed. A survey conducted showed that Americans drastically underestimate the CEO-to-worker pay gap. Respondents guessed the average CEO made 30 times as much as the average unskilled worker. In actual fact the CEO-to-worker pay ratio is 354-to-one.

Here in Texas, the income disparity situation is worse. Texas has the largest percentage of its population falling either below the poverty line or making more than $200,000 a year, relative to the other states. Yep, we have the largest income gap of all 50 states. Just over 21 percent of Texas’ population falls into one of these two camps, the rich and the poor, although – surprise! — most fall into the poor group. But none of our Texas’ politicians runs on the income disparity ticket. Remember, my yardman can’t vote. Among U.S. cities, College Station-Bryan ranks sixth in income disparity. Texarkana is 7th, Brownsville is 17th. Incidentally, the College Station-Bryan income statistic need some explanation. This includes 50,000 Aggies, whose collective income is zero. Incidentally, the College Station-Bryan income statistic need some explanation. This includes 50,000 Aggies, whose collective income is zero.

Now back to our presidential candidates. They are having problems with this income gap problem, and most had rather not mention it. Donald Trump’s unofficial slogan is: “I’m Rich! Deal with it.” Carly Fiorina received a $21-million golden parachute from HP. She and her husband reported a net worth of $59 million, so she can’t play the income disparity card. Hillary and Bill earned more than $25 million delivering 104 speeches since the beginning of last year, plus she made another $5 million on her book. Jeb Bush has parlayed his former governorship into about $29 million since he left office. Rick Santorum’s wealth, he said, is between $880,000 and $1.9 million. That’s not much compared to the others.

Rick Perry is building a nice house in Washington County, so he must be doing all right. Dr. Ben Carson, a neurosurgeon, author and speaker, reported that he and his wife, Cindy, earned between $8.9 million and $27 million over a recent 16-months period. Marco Rubio plays up his humble beginnings, but does not mention his purchase of an $80,000 yacht. (Conversely, Wisconsin Gov. Scott Walker owes between $15,000 and $150,000 in credit card and car loan debt. Do we really want such a spendthrift for president?) Only Bernie Sanders mentions income disparity. Actually, he rants about it in every speech.

This is not a gilt trip. Our job is not to sulk and be jealous. Our job is to elect the person who will get us into that top bracket. So vote for the candidate whose slogan is: “0.1 or fight.”

Ashby is getting poorer at ashby2@comcast.net

 

 

 

 

 

 

 

 

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