January 17, 2012
It is a failure that has serious consequences for us all as those within the ranks of the 99% continue to support the wealthiest 1% for the wrong reason
In a video from Bill Moyers’ new show, Moyers & Company there is a segment where members of his team are interviewing people at the Zuccotti Park’s Occupy Wall Street movement in lower Manhattan. I was captivated by the presence and comments of a Wall Street-type investment banker from Florida named Stephen Hays. He clearly stuck out from the OWS crowd as he and a friend with him were dressed like the Wall Street bankers they were. He was having a conversation with a market executive from Oregon, Peter Craycroft. Craycroft was speaking optimistically about the Occupy Wall Street movement and particularly how the OWS encampment was a “perfect kind of forum for us all to come and talk about [our concerns]”
Hays was smirking as Craycroft explained how he had “seen many souls change” on both sides. “Really” Hays said dismissively, then proceeded to lecture his peer:
“I went through the Woodstock generation, Hays said, and I thought it was just back to business as usual. Just sort of … it was a big party. That’s what I see this as, (gesturing to the OWS crowd gathered around him) a party with no cover.”
Hays then turned his attention to the Moyer’s reporter:
“I’m a defender of money, freedom, individual freedom, rich people. Cause I’m still … even though I’m still trying to be one … because the more money I have, the more good I can do. And it will be my decision on how I allocate that good. How I allocate that capital.
And when I look around at all of these buildings, hospitals, colleges … I don’t see many poor peoples names. They’re all rich people.
Reverend Ike, a black minister use to preach up here in New York, and he used to say ‘if you curse the rich you’ll never be one’”
When challenged by a passerby who questioned whether rich people will actually allocate their resources in a manner that benefits society as they see fit, Hays circumvents the question by condescendingly pointing out that the guy questioning him has “a nice camera, nice clothes” alluding to the fact that it was the free-markets that made that possible. I just can’t be so pessimistic” Hays tells the man.
We hear that a lot from the supporters of rich people and money. The fact that many of the 99% can have cheaply made gadgets and other commodities totally misses the point that we are only able too because they were made in cheaper foreign labor markets. Labor markets that took many American jobs and have ultimately created the condition we are seeing today where wages in this country have to more closely reflect those cheaper wages abroad.
Where Peter Craycroft from Oregon saw opportunity to address the core issue with the OWS crowd regarding the growing income disparity in this country, his counterpart in investment banking, Stephen Hays, only saw a new generation of hippies threatening his income source as they “party” with no meaningful solution to the problem – “no cover” as he referred to it.
Stephen Hays had pre-conceived notions before coming down to Zuccotti Park. It seems pretty clear that he left with them completely intact.
To people like banker Hays the OWS crowd represents a direct threat to the iconic status of the career he has chosen. The belief in money, individual freedom and rich people that Hays defends seems to come across however as a defensive reaction that isn’t willing to accept the reality that this choice has some serious flaws. It isn’t easy for people to come to grips with the fact that their choices they have aspired to for years has lost some credibility. People who don’t share their views will automatically be seen as a threat. Demonizing this threat is an act to reinforce their own self-worth.
But there really isn’t any threat out there from the OWS crowd or anyone else for that matter who feels like large corporations should have some government oversight, contrary to what Stephen Hays thinks. The Occupy Wall Street movement is not an anti-capitalist, socialist movement as has been portrayed by Wall Street. It’s a reaction to the overwhelming evidence that Wall Street is occupying nearly every facet or our lives, the 99%. The American middle class is slowly disappearing while 1% of the nation’s income earners expands astronomically as this chart shows.
Left unchecked this rapid income-gap expansion could see this once great economy that people from all around the world wanted to emulate turn into something closer to those nations run by despotic oligarchies. Let’s put things in perspective so people like Stephen Hays can have a more realistic view of the problem we’re having in this country.
Sean F. Reardon and Kendra Bischoff of Stanford University put out a report entitled Growth in the Residential Segregation of Families by Income,1970-2009, that demonstrated how a severe income disparity can affect the character of the local areas where people currently live, going from once stable, middle income neighborhoods to more crime ridden, less sociable poorer ones. As people lose their jobs or suffer wage decreases they ultimately lose the ability to keep up with mortgages or buy homes homes that are in good neighborhoods.
What slowly tends to happen is that mixed neighborhoods where there is a blend of affluent and moderate income families begin to disappear creating greater segregation between the haves and have-nots. As this income segregation grows it may well lead to inequality in social outcomes.
Income segregation implies, by definition, that lower-income households will live in neighborhoods with lower average incomes than do higher-income households. A large body of research suggests that the neighborhood context one lives in can directly affect that person’s social, economic, or physical outcomes. This suggests that income segregation will lead to more unequal outcomes between low- and high-income households than their differences in income alone would predict because households are also influenced by the incomes of others in their community.
What this portends is that more and more children today are less likely to be upwardly mobile than their parents were. Current census data has shown that “a record number of Americans — nearly 1 in 2 — have fallen into poverty or are scraping by on earnings that classify them as low income … [depicting] a middle class that’s shrinking.”
Coupled with this is a report by the Organization for Economic Cooperation and Development (OECD) that shows a pattern here that could prove economically disastrous for this country as “the gap between rich and poor in O.E.C.D. countries has reached its highest level for over 30 years.” O.E.C.D. countries are not third world nations. They are some of the most prosperous nations in the world. Of the 22 nations rated, the U.S. has the 3rd highest rate of income disparity, trailing nations like Denmark, Luxembourg and our neighbor to the north, Canada.
Paul Krugman elaborates on these findings, explaining that “we actually have less intergenerational economic mobility than other advanced nations. That is, the chances that someone born into a low-income family will end up with high income, or vice versa, are significantly lower here than in Canada or Europe.”
And there’s every reason to believe that our low economic mobility has a lot to do with our high level of income inequality.
Last week Alan Krueger, chairman of the president’s Council of Economic Advisers, gave an important speech about income inequality, presenting a relationship he dubbed the “Great Gatsby Curve.” Highly unequal countries, he showed, have low mobility: the more unequal a society is, the greater the extent to which an individual’s economic status is determined by his or her parents’ status. And as Mr. Krueger pointed out, this relationship suggests that America in the year 2035 will have even less mobility than it has now, that it will be a place in which the economic prospects of children largely reflect the class into which they were born. SOURCE
So let’s return to Stephan Hays’ defense of wealth and his right to allocate his capital as he chooses. This is not simply about one’s “individual freedom”. It’s about a way of life that has developed over the last century where upward mobility has been a given. It resulted not because we waited for the wealth of a few to trickle down to everyone else but because their was an ethic within our government and society to provide for the general welfare. An ethic which saw that a decent living wage and basic health care coverage made good economic sense and enhanced growth. An ethic that provided good education for all its citizens and provided quality roads, schools and parks so that upward mobility would be possible.
Mr Hays was also wrong about how only the names of the rich people were on the all the buildings, hospitals and colleges. Yes, there are those private institutions whose wealthy benefactors have insisted that part of the deal for laying out the funding include plastering their name on the building. However, every public school, public library, county hospital and state university system are there through the taxes that we all pay for. Those along with every private institution are built not by rich people but the labor of hard working low and middle income people.
Most of that wealth generated to pay for that labor came from a prosperous middle class that could afford to buy the products and open savings accounts that ultimately provided investment funds to construct great depositories of business, medicine and education. Take that middle class away by reducing their income and it will be matter of about two decades where fewer such dwellings will be in place.
When everything becomes owned by the private sector then only people with enough money will be able to utilize their services, slowly eliminating more and people as that income for most of the 99% fails to keep pace with the 1%. The public commons will eventually exist no more.
Mr Hays should be grateful that this “new generation of hippies” is out their trying to save capitalism from itself so he can continue to aspire to be wealthy. Follow their lead Mr. Hays if for no other reason than you own survival is at stake. No one is “cursing the rich” because we don’t want to be like them. We merely want a livable income so we can prepare our kids and grandkids to take advantage of those opportunities that are all but disappearing from their grasp.
Inconvenient Income Inequality (Charles M. Blow, NY Times)