Monday, October 8, 2012

A 'Job Creator' Speaks

A Bloomberg article that I read today sent me to the blog of former American Airlines chairman and CEO, Bob Crandall.  The piece was about economic inequality in the US, a subject that I think is THE major issue of our time, and mentioned that even a successful, wealthy, and well-respected ex-CEO like Crandall was decrying the negative impacts of so much wealth concentrated at the top.  Naturally this piqued my interest and I promptly made my way over to his blog and read the most recent dozen entries or so.

Sure enough, this one-percenter makes some of the same observations and points that have seemed so obvious to me and many others.  What makes it noteworthy is that this is yet another prominent business leader making statements that are blasphemous to American right wing ideology, an ideology that probably 40% of the population takes as gospel, even as they are ravaged by the real-life consequences of its policies.  It’s one thing for a bearded hippie living in a tent near central park to point out that the US is turning into a banana republic, but something else entirely when ex CEOs of iconic American corporations and billionaire investors do it.

I appreciate and support the Occupy Wall Street movement.  These are people who, regardless of their image or social status, at least understand the source of the problem.  They get who’s screwing them.  They are vocal and visible and reminiscent of the real people-power type of mass movements that were so successful at initiating social change in the 1960s.  That is a great thing.  And one conclusion that I’ve come to after five or six years of studying politics and power like a mad scientist is that positive social change starts from the bottom up.  The people influence the leaders who are in a position to make public will a reality.

So Occupy is great, but the mere fact that most of them are students or people who are otherwise not working a nine-to-five makes them easy for the media and much of society to marginalize.  Sadly, there are millions of people in this country who just don’t think you count as a real human being with valid concerns unless you’ve had to “make a payroll”.  An entire political party subscribes to this view.  Nevermind the absurdity that only a small percentage of people who belong to that party actually meet their own criteria for being a worthy citizen. 

Bob Crandall is not the kind of person that the usual suspects can assail with the sneering “take a shower and get a job” line of attack.  When someone of his social standing is willing to put aside their own narrow self-interests and openly discuss truths that are uncomfortable and inconvenient to his class, I find it encouraging and I think it should be applauded.  The cry of “class warfare” is used by the very people who are successfully waging it. It’s nothing more than an attempt to shut down the discussion and far too often it works.  But when people like Crandall lend their voice to this cause, the efforts to turn it into a thought crime become less effective.

Other business leaders have weighed in on this issue, most notably Warren Buffett who made the statement: “There’s class warfare alright, but it’s my class, the rich class, that’s making war, and we’re winning.”  There’s also venture capitalist Nick Hanauer who gave the must-see TED talk where he refers to  trickle down economics as the biggest political con in history.   And the big boogeyman of the American right, super-capitalist billionaire George Soros, also has a few things to say on the subject.

Buffett, Hanauer, Soros, and Crandall are not the kind of people who can be brushed off by so-called conservatives as shiftless government dependents or socialist agitators.  Although to be fair, I’ve seen them try, usually with pretty laughable results. (Ex: “But Buffett is just an investor, he hasn’t created any jobs!”…What? So you mean it’s possible to become the wealthiest human being on earth and not be a ‘job-creator’? Hmmm...)

Each of these individuals has directly or indirectly advocated policies that would personally cost them money.  They’ve acknowledged that the system is rigged in favor of people in their position at the expense of people who are not.  They’ve admitted that such an imbalance of power and wealth has serious negative consequences on society.  Why?  My guess is that they feel a sense of responsibility and obligation to the country that allowed them to achieve such dramatic success.  Does it upset others in their social class who do not feel that sense of responsibility? Of course it does.  There will always be those who, despite their obscene wealth, think of nothing but getting more, whatever the impact that has on everyone else.  Unfortunately, in terms of the one-percent they are in the majority.  And that makes the Buffetts and Crandalls out there even more important to those of us who would like to see positive change.

Getting back to Bob Crandall’s blog, here are some of the points he brings up which I think are spot on:

  •  26 of the country’s top CEOs personally made more money than their company paid in taxes in 2011.  This is absurd and is a perfect example of the unfairness of tax laws and the need for changes   in corporate governance rules.
  •  In order to address major problems and the looming national debt, the very wealthy and corporations need to pay higher taxes.  The Bush tax cuts for incomes over $250K should be allowed to expire and the estate tax should be re-instated.
  • The right likes to complain that the corporate tax rate is too high, 39% they say.  But statutory tax rates are different than effective tax rates and the effective rate (the one that actually reflects the percentage paid) of US corporations is roughly 12%.  As an example, Apple, now the world’s richest company, only paid a 9.8% tax rate in 2011.
  •  The US government needs to spend more money in the short term to stimulate demand. Our infrastructure is outdated and crumbling and with interest rates at roughly 0%, now would be a great time to invest in some much needed improvements and put some people to work.
      I predict that as time goes on and the gold-plated, diamond encrusted, elephant in the room becomes even harder to ignore, more people like Bob Crandall will look beyond the self-interest of their own socio-economic class and speak up on behalf of the greater good.  Then maybe we can quit pretending that this is a discussion about envy and treat it like the very real threat to American democracy that it is.

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