The Out of Control Wealth Redistribution of the Obama Era

More and more it seems as though a certain subset of Americans – most of them found on Fox News – like to complain about the redistribution of wealth in the United States. We live in an era, exclaim the talking heads, of redistribution and class warfare.

They are correct, and they are winning. Wealth redistribution is occurring on a scale not seen in the modern era – from people around the country who truly believe in the rewarding value of hard work to a tiny portion of the population who, although they work extremely hard, are rewarded not only for their work, but for your work, and your neighbor’s work; for the work of their children’s teachers and the person who sells their ties.

I was really struck yesterday by Joseph Williams’ piece in the Atlantic, chronicling his experience with working a retail job after losing his creative-class job at POLITICO due to what he admitted were some personal mistakes.

As a sales clerk at a sporting goods store earning nearly fifty percent more than the federal minimum wage, Williams was nevertheless forced to work under constant suspicion of theft, in a job where he was subject to pat downs upon leaving, scolded or arriving on time and not early, and expected to stay late without extra pay in order to save his company on cleaning costs:

Mop the floors in the bathroom, replace the toilet paper and scrub the toilets if necessary. Vacuum. Empty the garbage. Wipe down the glass front doors, every night, even if they don’t really need it. It was all part of the job, done after your shift has ended but without overtime pay.

And expected never, during any point of this, to sit down:

It didn’t matter if it was at the beginning of my shift, if the store was empty, or if my knees, back, and feet ached from hours of standing. Park your behind while on the clock, went the unspoken rule, and you might find it on a park bench scanning the want-ads for a new job.

Worse, Williams was kept at 30 hours or below because to employ him for more hours, the company would have had to spend extra money to provide him with health insurance and the other benefits that we like to think of as part of the bargain for which so many have fought and died throughout history: a world where hard work and dedication can lead to a life with a certain level of comfort.

The easiest defensive reaction to a piece like that, of course, is judgement against the writer: he made professional mistakes, pled guilty to a crime (one that I don’t mean to trivialize), and didn’t have skills that were applicable to the modern jobs market. And those are all valid criticisms.

But the story that runs through his narrative is the truth, not just for Williams but for millions of people throughout this country. It surfaces in a hapless laid off office manager in House of Cards, in horror tales from Black Friday, in empty-nest parents who return to the marketplace finding themselves left hopelessly behind. It popped up in an episode of the radio show “This American Life” last spring, where a reporter went to a county in Alabama with the highest rate of its citizens on disability benefits of any county in the nation.

Here, a reporter interviews a woman who previously worked in a fish plant and as a nurse’s aide before qualifying for disability payments:

Chana Joffe: In your dream world, if you could have a different job that you could do with your back, what would that be?

After 45 minutes, the woman was finally able to answer:

Ethel Thomas: You asked me a while back what would be the perfect job. I thought about it, and I said that the perfect job, it would be like I would sit at a desk like the Social Security people, and just weed out all the ones that come in and file for disability.

The reason for this career aspiration, it turns out, is not that Ethel Thomas has some deep-seeded need to protect the benefits she receives from others she deems unworthy, but that it is the only job of which she can conceive that would allow her to sit.

More and more, the economy is divided into two categories of jobs: the white-collar jobs where workers complain about sitting too much, and the service-sector jobs – at restaurants and in retail – where the workers are expected to stand and smile politely for the benefit of their customers.

This is not to say that there is not a need in the economy for these jobs, or that opportunities do not exist for some people to pull themselves out of impoverished communities like Hunt, Alabama in order to make it into the creative class, later to develop back pain from sitting too much. But we need to concede that not every member of the American economy has the means to pull themselves into such a job – there are too few slots, and if nobody worked in the service sector it would leave a hollowed out economy.

An economy composed entirely of people employed in investment banking would function just as poorly as an economy composed entirely of retail salesclerks (although I imagine the former would more quickly turn to cannibalism in order to survive). But often, in our political conversations we throw out decades of progress in the labor movement and treat the latter as though their lack of leverage qualifies them for less than human treatment.

Let us not forget who demands the conditions faced by many of these former middle-managers who found that their services had been turned obsolete by the internet, grandparents whose savings vanished in the financial crisis, or single parents trying to create a better life for their children. They are treated like thieves, called upon to replace laid-off custodial staff as an add on to the job for which they are paid, and kept below the threshold where they might have access to a safety net in pursuit of greater and greater profit. If the company that employs them fails to take these steps out of compassion or out of values held over from an era long past, they are set upon by private equity and cut to the bone, all in service of the higher equity prices and bigger dividends for the sacred shareholders. American workers produce the most they ever have for the lowest costs. But they rarely receive the reward. 

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The decision to squeeze every last drop of capital out of every single unit of labor is invariably made in the service of the shareholders of the company. But how many of the shares belong to people who work for that company, sweat for that company, smile for that company and how many to the people who drag around excel tables for the company that bought them?

I bet you ten thousand bucks that some of these guys are major Democratic donors, too

I bet you ten thousand bucks that some of these guys are major Democratic donors, too

This was not an accident. It is the result of a relentless push towards deregulation, towards increasingly opaque financial products, and a belief that all this serves to grease the economy. And it has, to the point where countless people slip and fall. You can argue that those people made the wrong choice in a capitalist society, and in some cases you may be correct. But in so doing – in arguing for a meaner, leaner economy, you also must argue for an economy where the wealth is concentrated a tiny minority from other people who want nothing more than to work, raise a family, and retire in comfort. You must argue for an economy that resist any effort against stagnation, where people who fulfill their end of the social contract nevertheless find themselves increasingly dependent on the scraps trickling down from above and where every dime diverted to dividends is torn from the skin on the backs of the workers who might once have earned it.

That is the true wealth redistribution of the Obama era, and to have any hope of fixing the economy we must first fix that. To do so is not socialism, but rather humanism: a belief in the dignity of life and of work. The modern economy should not exist as a binary between soul-crushing hours in dream-crushing professions and quality family time spent laboring in poverty – between the Scrooge of the world of Dickens and his struggling but cheerful factotum, Bob Cratchet. Real economic growth comes not in a vertical trickle like urine from the heavens, but in a horizontal flood buoyed by the contributions and confidence of all that if they paddle hard enough, they just might float. 

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One Strike and You’re Bankrupt

The day that I was supposed to head home for winter break and the holidays, I put my foot down on the brake pedal of my car and it didn’t stop. It was a scary moment that could have resulted in serious damage, so I decided to take my car to the mechanic before braving the 300 mile journey to Western New York. Two days later and $1200 poorer, I finally made it home.

I didn’t buy that car. I never had to scrape together enough savings or make a monthly car payment. When he bought it new in 2002, my grandfather had — rightly — called it the last car that he would ever own. It was my first.

I don’t pay the insurance on that car, either. My parents cover the cost of that through their policy (and if they haven’t given that recent thought, this will be a very expensive column for me). I pay for the gas and the maintenance costs, and for small repairs. But when calamity strikes, my parents are still my first call. This does necessarily not make me lazy; when my parents wanted to buy their first house, they too called their parents, who probably never could have called on their own for such a favor. If the goal of each generation is to leave their children better off, then success is not something that happens overnight. It builds over years, through family, across generations. We benefit from the hard work and good fortune of those who came before.

Most people in the United States do not have this option. Their ancestors weren’t on the boat as early, or were denied the same opportunities, or were unlucky. If they run into car trouble around the holidays, they must take it out of the money that they might otherwise spend on Christmas presents for their kids, on family trips, or on visits to the dentist. Or they scrap their car and hope that a bus comes along. Millions of Americans live just one piece of misfortune away from utter financial ruin. Some of them may be lazy or unimaginative. Some of them might not have given their bootstraps a tug. But the vast majority are pulling with all of their might, and their fingers are getting sore, but they stay locked in poverty, struggling to make things work out somehow. Until one day their brake pedal sinks to the floor and it all falls apart.

In the alleged economic recovery of the last few years, the type of middle class jobs that come with the type of salary that allows for saving have largely been replaced by low-wage or minimum wage jobs. With a federal minimum wage stuck at $7.25 an hour, a worker who might need a car to get to their job every day would need to work for more than 160 hours — four full-time weeks — just to pay for those repairs. Ford could help by making more reliable cars, but the federal government can help by raising the minimum wage, which when adjusted for inflation is a third lower than its original level. Raising the minimum wage will not slow job growth, especially since many of the worker who would benefit work in service sector jobs that cannot move overseas. Instead, a raise in the wage would help to shift money from record corporate profits and executive compensation to the people who will immediately return that money to the economy. This is not because they lack in thrift, but because their daily needs exceed their daily income.

I have worked in a number of jobs throughout my time in college — landscaper, janitor, web designer, research assistant. For me this has always been a point of pride. I like to think of myself as financially independent and fiscally responsible. But this ignores some inconvenient realities. It ignores the nature of success and the nature of generational improvement. When you are one unexpected serious illness away from bankruptcy, or homelessness, or not being able to afford breakfast for your children — situations that plague millions of Americans — every day is a battle and every spin of the roulette wheel could be deadly. When you struggle to survive it is much more difficult to further your education or build a career. When you struggle to stay out of the ditch it is much more difficult to climb the slippery hill and look beyond it to the stars than if you started two thirds of the way up the slope, where the pitch starts to level. The American Dream is not a rocket ship, but rather a hard slog and the people just starting the trek do not deserve our scorn. They deserve our help.

How I Fixed the Federal Deficit

A heavy knock on the door startled me as I sat at my desk the other night, wallowing through a lengthy problem set.

“Come in,” I yelled, and then returned to my work. When I noticed my visitors I nearly fell out of my seat. President Barack Obama stood in my doorway, flanked by House Speaker John Boehner (R-Ohio) and Senate Majority Leader Harry Reid (D-Nev.). In the hallway, standing on his tiptoes and looking like a turtle with big glasses was Senate Minority Leader Mitch McConnell (R-Ky.).

“Mr. President!” I gasped. Behind me, I heard a tap on my window. There stood House Minority Leader Nancy Pelosi (D-Calif.), jumping up and down, struggling to see inside. Boehner strode past me and pulled my curtains shut.

“Ignore Nancy,” he said. He reached into my fridge for a bottle of wine — by which, of course, I mean grape juice — and poured a generous amount into a glass that was definitely not stolen from Ross Dining Hall. He let out a deep sigh, full of longing for times past. “We’ve got a problem,” he said to me. A solitary tear ran down his orange cheek.

Obama scornfully handed Boehner a tissue. “What he means to say is that we need your help. We just can’t agree on this budget, and Harry here says you’re the one to fix it.”

“Well, I don’t know about that, sir…”

“So tomorrow, we are endowing you with the power to take whichever steps you deem necessary to fix this budget crisis. We all pledge to support whatever plan you come up with.  Even Mitch agrees to support it.”  Obama reached out to shake my hand. “Good luck, Zach.” He snapped his fingers and they all disappeared in a flash of red, white and blue light.

Once in charge of fixing the budget crisis, my first step was to repeal the Bush tax cuts, restoring $3.7 trillion of revenue to the government over the next 10 years. I decided that we would bring the war in Afghanistan to the quickest possible end and stop throwing money at contractors when American troops could do the job just as well. I increased the age at which the elderly could receive Social Security benefits from 65 to 70 — except for those who could qualify for hardship benefits — and decided to phase out payouts for wealthy retirees entirely. When that law was first passed, average life expectancy was 62. Now that it’s more like 78, this seems not only necessary but also fair.

With the more obvious adjustments taken care of, I moved on to look at the harder choices. I found a few billion dollars in the government’s discretionary spending fund, but that was only a tiny chunk of the federal budget so I moved on to defense spending — always the first target of a liberal looking for some budget savings — and started by canceling a lot of expensive weapons that were under development.

Then, in a copy of Time Magazine to which I subscribed purely for Joel Stein’s column, I saw an article about the deficit. One of the things about a recession is that government revenue dries up pretty quickly, exploding the size of the deficit. Because of the economic climate, current debt projections are based on an anemic 2.8 percent growth rate in our GDP. In February, however, the Federal Reserve predicted that the economy will grow at a rate of 3.9 percent in 2011. At that rate, the annual deficit should shrink from $1.4 trillion today to a measly $113 billion by 2021.

I grasped the solution that seems to have been missed by most of the media. Massive cuts such as the House Republican budget plan that would lead to the loss of 700,000 more jobs are totally unnecessary.

So, I restored most of the weapons programs, because making weapons is what we do best. Someone has to fill that role; and have you ever seen an F-35 or a Reaper drone? The awesomeness makes them well worth the money, and the military drives a lot of technological innovation that makes its way into the civilian world in ways most of us would not imagine. The same company makes bomb-defusing robots in Iraq and dust bunny-diffusing robots back home.

I did, however, tell the manufacturers that they needed to stop writing “made in the USA” on all the weapons we’d be selling to repressive regimes. (Quick: Are the former protestors in Egypt more or less likely to buy American because of an advertisement stamped on the tear gas canisters that bombarded them?)

I changed U.S. trade laws to prohibit the importation of products made with child labor or in sweatshops.  Suddenly, our manufacturers had a fighting chance. Sure, prices at Wal-Mart went up a little. But for the first time in a generation, wages for the middle and working classes began to rise. On the strength of a revolution in green manufacturing jobs, our trade deficit shrank and GDP growth increased. We were pushing a 4.5 percent growth rate.

The deficit was vanishing into history and I wanted more, so we used our awesome military technology and annexed Canada for its resources. This caused a bit of an uproar in the Canadian press, but when we decided to adopt their healthcare system, they settled down and were actually pretty nice “aboot” the whole thing.