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By Tom Cushing

About this blog: The Raucous Caucus shares the southpaw perspectives of this Boomer on the state of the nation, the world, and, sometimes, other stuff. I enjoy crafting it to keep current, and occasionally to rant on some issue I care about deeply... (More)

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Wealth, unions, the beleaguered middle class and the last cookie

Uploaded: Jul 12, 2011

As the story goes, a unionized public employee, a middle manager, and a Wall Street CEO are seated at a table, with a dozen cookies on it. The CEO takes 11 cookies, looks at the manager and says, "Watch-out for that union guy -- he wants a piece of your cookie."

There's truth in humor. Since the 1970s, abundance has migrated from the middle class to the wealthiest among us, on a massive scale. As of 2007, the richest 10% of Americans hold nearly 3/4 of this country's wealth. That is a banana republic-worthy statistic, and far out-of-sync with American traditions and perceptions. The imbalance is also unsustainable, as vibrant middle class spending and job creation are crucial to an American-style economy.

Individually self-reliant to a fault, middle class families have tried three unsuccessful strategies in ever more desperate attempts to stay even: spouses went to work, then everybody worked the world's most exhaustingly long hours, and then home equity savings were looted to cover current consumption. Finally, the real estate bubble that funded those second mortgages burst: the middle class is now tapped-out, tired and ticked-off.

Remarkably, however, instead of bargaining for more cookies, or advocating that the wealthiest few acknowledge their good fortune in fairer taxes -- the middle class has turned instead on public employee unions -- groups who have struck better deals and thus stayed closer-to-even. All motion is relative; the sinking middle class blames its nearest neighbors, who seem to be floating slightly higher. The wealthy are, apparently, above the fray. It's a dismal quarrel over the last cookie.

The political Right has done a masterful job mis-framing the debate, raising the specter of dreaded "socialism" (not remotely close to reality), "wealth redistribution" (which has already happened, benefiting the rich), and "class warfare" – the only real example of which is the middle class turning on itself. The losers in a smaller government era will be users of government services, and the vulnerable: the needy, disabled folks, students and oldsters among them. The winners? You guessed it – maybe the rich really Are different?

This is actually not to castigate the well-to-do for the vast improvement in their economic well-being. Instead, the lesson here is that the middle class must come to grips with its actual degraded circumstances, and direct its collective electoral influence toward the achievement of its self-interests – revitalization of its job-creating engine and a reformed tax structure. Those real interests have little to do with beggaring public services – or government employees.

We all have to fight for our cookies, and them that's got 'em are not on our side.

Comments

Posted by Exactly!, a resident of Danville,
on Jul 13, 2011 at 7:57 am

The political right and Wall Street have done a masterful job of turning the public on government employees, thus deflecting blame from themselves and the banking/mortgage meltdown for our current financial crisis. Joseph Goebbels would be proud. I am a lifelong Republican, but it is no longer the party of Lincoln and being held hostage by Tea Party extremists is the last straw for me.

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Posted by razmatanian, a resident of Danville,
on Jul 13, 2011 at 8:30 am

Thank goodness! Someone else in Danville is saying what I have been thinking.

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Posted by Tom Cushing, a resident of Danville,
on Jul 13, 2011 at 10:26 am

I've moved this comment to the blog, as it does go to the arguments presented above:

"Posted by spcwt, a resident of the Danville neighborhood, 1 hour ago

Dear middle class,

The top 1% of taxpayers pay more income taxes than the bottom 95% combined (Yes combined. Look it up). You just raised taxes on ?the rich? by $1 trillion to pay for a middle class healthcare entitlement. And now you want the rich to pay even more.

You want all the benefits of a European welfare state without paying for it. You want to be like Europe? Fine. Then pay for it. Europe has a value added tax. What do you pay? Jack squat. You live off the wealthy. You pine for an America that never was."

I think the equity of the tax system depends on rates each individual pays, not grossed-up collections numbers (in case yours are right -- you don't cite any sources). Warren Buffett, one of the world's richest men, seems to concur:

"Mr. [Warren] Buffett, who is worth an estimated $52 billion (£26 billion), said: 'The 400 of us [at a posh fund-raiser] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you?re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.'

Mr. Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent." Web Link

As to any "America that never was," in 1944 the top marginal tax rate for a married couple, filing jointly was 94%(!) on income over $200K. It has fallen steadily since then to where it is now 35% on income over $379K. Web Link

The effective rates are far less, for as we all know, IRS agents go home on weekends; tax lawyers and CPAs do not. In addition to the wealthy who aren't shy about defending their interests, there's a whole powerful tax prep industry, and lobby, devoted to keeping things just as they are.

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Posted by Aubrey from Alamo, a resident of Alamo,
on Jul 13, 2011 at 12:18 pm

Posted by Aubrey, a resident of the Alamo neighborhood, 19 minutes ago

I don't need a "professor" to tell me what Obama, Pelosi, and Reid have done to my country. They've wiped out the treasury, trashed the dollar, and divided the country by engendering class warfare.

Pelosi promised Paygo in 2006 and Obama promised it again in 2008, suspending it every time they passed a spending bill. Bush was no prize unless you compare him to Obama.

Obama has successfully destroyed the middle-class, blaming "the rich" at every turn. The buck stops in the Oval Office, period. Look no further...

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Posted by What?, a resident of Danville,
on Jul 13, 2011 at 7:25 pm

So the "Professor" from Golden Gate University(the Harvard of the Tenderloin) is lecturing us uneducated, naive, and tax paying citizens of Danville that:
(1) The death penalty should be abolished, even for the worst of the worst sadistic criminals who torture and kill children, because he is concerned about the "expense and costs".
(2) Public employee union workers are heroes and it is unfair to question the "expense and costs" that their run away pensions are draining of our limited resources;
(3) The political right is to blame for all of our economic woes;
(4)We need a "reformed tax structure",i.e. lets increase taxes for those evil people who studied and worked hard in school, played by the rules, got a good job and earned a good income to support their family, so that those who screwed around in school, developed substance abuse problems, can be taken care of.

Thanks for the lesson, "Professor", but fortunately our town is not buying what you are trying to sell. I would suggest relocating closer to your "University" in San Francisco, I think you would have a more receptive audience.

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Posted by Tom Cushing, a resident of Danville,
on Jul 14, 2011 at 11:20 am

Hi Dr. What?:

You seem to be stuck on this academic theme (despite an apparent misapprehension of what an adjunct professor is and does), so okay -- you get an A in Sneer and an Incomplete in Reading Comp.

1 -- the death penalty piece presented the dilemma of folks who support both CP and efficient government. As administered since 1978, it's an unmitigated, disastrous failure. As I indicated to American, my own objection relates to the 138 innocent convicts (that we know-of) who were sentenced to death. The System is not good enough to exact that penalty. Your mileage may vary, but you should at least have the full policy picture.

2 -- the public union problem exists, as bargainers for the taxpayers dropped the ball, repeatedly. But Joe's pension didn't cause the current economic unpleasantness -- it's a distraction.

3 -- kindly 'splain me where you found that, Lucy

4 -- good fortune accounts for a arge fraction of individual economic success. I think there's a tendency among those who have 'made it' to credit themselves more than their circumstances. I think they're mistaken, in major part. Also, plenty of folks did all those salutary things you mention, but for various random reasons find themselves also caught in the current economic crisis. Your simplistic view of the world as a meritocracy is naive, methinks.

BTW, I am proud of my association with GGU -- a hundred-year institution that has found its niche in the hyper-competitive Bay Area education market by focusing on intensely practical graduate training of adults. They hire adjuncts not as failed full-time academics, but as professionals who bring valuable, real-world experience to bear on the curriculum. As you'd expect, I have had some brilliant students and others not-so-much. Your snide attempts at wholesale belittling of the institution reflect poorly on you. Perhaps a critical thinking course on GGU's cyber-campus would fix you right up?

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Posted by smart a, a resident of Danville,
on Jul 14, 2011 at 11:23 am

Hey, What? Your moniker is truly appropriate... Umm, I'm a GGU grad and proud of it. Oh, also a Stanford MS grad - I guess that counts more in your book? Or less? I think Tom's comments are right on target, and certainly are basically correct. What are you - one of those Cal wienies?? that should get a response from someone... :)

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Posted by Ashley, a resident of Blackhawk,
on Jul 14, 2011 at 12:09 pm

To all who disagree with Mr. Cushing-

Don't bother wasting your time or energy responding to a person who believes that the wealthy who probably work 120+ hours a week to provide nicely for thier families should give handouts to those who only want to work from 9 to 5 with all of thier appointed breaks and think it is not fair aren't able to.

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Posted by Alan, a resident of Danville,
on Jul 14, 2011 at 12:15 pm

With regard to that 9 to 5 with breaks thing, teachers are the poster children for that although it's 8 to 4 (sometimes even 3:30)!

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Posted by Tom Cushing, a resident of Danville,
on Jul 14, 2011 at 1:30 pm

Hi Ashley: you know, the democratization (small "d") of the media has meant that you never have to be exposed to opinions that differ from your own. Apparently my columns contain some of those perspectives.

Part of the reason I write 'em is that it's growthful -- for me -- to test my opinions against the ideas of others. You might consider whether the process of discussing these issues could be useful to you, as well -- after all, you have to have Something to do after working only 120 hours/week.

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Posted by What?, a resident of Danville,
on Jul 14, 2011 at 2:36 pm

Ashley: Good point, I will not spend anymore time reading, or responding, to the left wing ranting of Mr.Cushing. In fact, DE has lost their credibility as a source of local news, which was the reason I started reading it in the first place. DE seems to be more interested in giving time to extreme liberal political opinion pieces, rather than keeping us locals informed of local news and local events. Giving Mr.Cushing his own column and platform is evidence of this. I am done reading DE. I would not be surprised if others also stop reading DE, as they are no longer about giving us local, non-partisan, news. I would expect advertisers to also stop wasting money on DE, as readership will be dropping, and I doubt many local merchants want their good business name associated with this type of extreme political periodical.

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Posted by Tom Cushing, a resident of Danville,
on Jul 14, 2011 at 3:50 pm

Interesting perspective, Dr. What? -- are you under the impression that anything has been taken out of this fine periodical to make room for these conversations (rants?? I guess you better hope you never have to read one of my "rants." It'd be much more immoderate than this!)? Do you think you are required to read them -- that there'll be a test? There won't be, and you are certainly free to ignore these missives.

I'm confident the paper will survive.

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