There’s a lot of interest these days in our nation’s money problems: fiscal cliffs, sequesters, taxes, loopholes, deficit reduction, debt ceilings, and inequality.
The last problem mentioned in this list, inequality, has become an especially critical one in our nation today. In 1970, for every dollar the average worker earned, the top 100 CEOs got, on average, $400. By 2007 it had jumped to a $1726 to $1 ratio. In 2010 the top 1 percent of income earners took home 93 percent of the growth in incomes.
According to a report by Joshua Holland and Les Leopold, the hedge fund picture is even starker. Top hedge fund CEOs now average $843,000 an hour. At the top of the ladder is John Paulson, the CEO of the Paulson & Co. hedge fund. In 2010 he took in $4.9 billion, about $2.4 million an hour. Available to such wealthy individuals are overseas tax havens and special income tax loopholes such as “carried interest” that limits most of their income to a 15 percent tax rather than the top rate of 35 percent. Today many of the nation’s top corporations pay little or no federal income tax, and the ten most successful U.S. firms paid an average income tax rate of just 9 percent.
The Church Fathers back in the Middle Ages took a dim view of the state of inequality existing between the rich and the poor. St. Augustine declared that the surplus of the rich is the needs of the poor, and St. Gregory and St. Isidore claied that any surplus belongs to the poor by right, and that possession means management for the good of all. An anonymous Friar Minor, in his “Tabula exemplorum,” put it even more succinctly, declaring that the cause of poverty was human selfishness. The creator has provided everything necessary, he said, and people should share this out equally. The deprivation of the poor is the result of the super-abundance enjoyed by the rich.
These Fathers would describe Paulson’s wealth as theft from the poor, and raise a crucial question for us today: at what point does Paulson’s wealth, or the wealth of any rich person for that matter, become theft from the poor?
Also at the center of today’s national debate about money and taxes is another Wall Street financier, Pete Peterson, who co-founded the private equity firm Blackstone Group in 1985, and more recently, launched the Peter G. Peterson Foundation to help foment a national uprising against debt and deficits. He has poured an estimated half-billion dollars into his long campaign to get Congress and the White House to cut Social Security, Medicare, and Medicaid while providing tax breaks for corporations and the wealthy.
A recent Oxfam report has placed our nation’s problem with inequality in a global context, stating that “The $240 billion net income in 2012 of the world’s richest 100 billionaires would be enough to eliminate extreme poverty four times over.”
Jeremy Hobbs, Oxfam’s executive director, stated: “Concentraton of resources in the hands of the top one percent depresses economic activity and makes life harder for everyone else--particularly those at the bottom of the economic ladder. We can no longer pretend that the creation of wealth for the few will inevitably benefit the many — too often the reverse is true. In a world where even the basic resources such as land and water are increasingly scarce, we cannot afford to concentrate assets in the hands of a few and leave the many to struggle over what’s left. From tax havens to weak employment laws, the richest benefit from a global economic system which is rigged in their favor. It is time our leaders reformed the system so that it works in the interests of the whole of humanity rather than a global elite.”
On the first Sunday of this month Swiss citizens voted overwhelmingly to rein in exorbitant executive pay. Their initiative bans certain kinds of compensation, bonuses for takeovers, and big payoffs for new and departing managers. Will citizens of other nations be joining the parade?
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This column is sponsored by Cumberland Countians for Peace and Justice and dedicated by the local writers to the theme that the lion and the lamb can and must learn to live together and grow in their relationship toward one another to ensure a better world. Opinions expressed in “Lion and the Lamb” columns are not necessarily those of the Crossville Chronicle publisher, editor or staff. For more information, contact Ted Braun, editor, at 277-5135.