Drudge Retort: The Other Side of the News
Sunday, July 06, 2014

Nick Hanauer: I am one of those .01-percenters, a proud and unapologetic capitalist. ... Seeing where things are headed is the essence of entrepreneurship. And what do I see in our future now? I see pitchforks. At the same time that people like you and me are thriving beyond the dreams of any plutocrats in history, the rest of the country -- the 99.99 percent -- is lagging far behind. The divide between the haves and have-nots is getting worse really, really fast. In 1980, the top 1 percent controlled about 8 percent of U.S. national income. The bottom 50 percent shared about 18 percent. Today the top 1 percent share about 20 percent; the bottom 50 percent, just 12 percent. ... If we don't do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn't eventually come out.

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Old Nick is right, a reckoning is coming. However, his simplistic solution is idiotic. The problem of income inequality is real, but increasing the minimum wage addresses the problem from the wrong end. Predatory greed is very real. An odd thing to say by a conservative (me). Time and again the incentive for executives to pay themselves as much as possible and pay their employees as little as possible is proven. It can no longer be disputed.

The problem can't be solved with a MINIMUM wage. All that will do is make inflation skyrocket and make everyone either poor, or ultra rich. Addressing the problem from the bottom will crush the middle class. What is needed is an approach that addresses a MAXIMUM wage. History has proven that the country was at its most prosperous when the the highest paid person in a company made no more than fifty times more than the lowest paid employee. We need to go back to that. A simple regulation that links pay in such a ratio will keep the American dream of earning as much as you want intact. What it will do is force employers to drag their employees along with them.

I would never want a maximum number....just a maximum as expressed in terms of what you are paying your lowest paid employee.

The middle class would be strengthened, the poor would find upward mobility easier, and the concentration of wealth at the top, while a necessity, would not be the grotesque gulf that it is today. Their HAS to be poor people. In the immortal words of Judge Smails, "the world needs ditch diggers too." However, the gap should not be the chasm it is right now.

As part of this, I would slash taxes, slash spending, and impose truly protective tariffs to disincentivize heading overseas for cheap labor. Everyone would earn more and keep more of their money...except the ultra-rich who have proven they can't be trusted to temper their greed.

I know it doesn't sound like I am a conservative, but I do really consider myself a fiscal conservative, but a social liberal. Maybe I am getting soft in my old age.

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"Everyone would earn more and keep more of their money...except the ultra-rich who have proven they can't be trusted to temper their greed."

The rich can't be trusted, but the poor can?

#1 | Posted by madbomber at 2014-07-06 11:08 AM | Reply | Flag:

FDR signed the 1st minimum wage law at 25 cents per hour. Since then the conservatives have opposed every increase (even of just pennies per hour) with false predictions of mass unemployment and economic doom. In the 80+ years since, the USA's economy has grown to be the largest in the world.
A raising tide, lifts all boats

#2 | Posted by SammyAZ_RI at 2014-07-06 08:29 PM | Reply | Flag:

The rich can't be trusted, but the poor can?

#1 | POSTED BY MADBOMBER

Everyone knows what will happen if the poor receive more money. They'll either spend it on goods and services or pay off existing debts enabling more spending or small savings opportunities in the future. Except for times of extreme inflation, all of the poor's choices are a positive for the consumption-based economy and for those who profit from it, which used to be most industries before our economy was parasitically sucked dry by the completely non-productive, expansive financial sector.

Many rich often look for the quickest and easiest way to increase wealth without regard to the economic damage some under/or non-regulated investment vehicles and speculations cause when inflating bubbles that inevitably burst, often plunging productive sectors of the economy into tailspins having nothing to do with their actual business practices outside of the universal connections of global finance which underpins all transactions.

The choices of the poor have never plunged an economy into recession or depression.

#3 | Posted by tonyroma at 2014-07-06 08:56 PM | Reply | Flag: | Newsworthy 5

"FDR signed the 1st minimum wage law at 25 cents per hour."

Adjusted for inflation, MW should be $3.56/hr. You're in support?

"Everyone knows what will happen if the poor receive more money. They'll either spend it on goods and services or pay off existing debts enabling more spending or small savings opportunities in the future."

You mean they'll pay off the big screen TV and the cruise they put on their credit cards. That's why we allow the rich to live, to fund the creature comforts we are not able to fund on our own.

This is definitely Kardashianland...

#4 | Posted by madbomber at 2014-07-06 09:17 PM | Reply | Flag:

Meanwhile the police are being militarized coast to coast. The attacks on OWS were just a small taste of what is to come and what is required to get wealth fairly redistributed.

#5 | Posted by nutcase at 2014-07-06 09:27 PM | Reply | Flag: | Newsworthy 2

The 50x rule is idealistic. Even if it were mandated by law with prison as a penalty, there isn't one wealthy man in 50 who wouldn't cheat on it. Greed conquers all.

#6 | Posted by nimbleswitch at 2014-07-06 09:28 PM | Reply | Flag:

A proponent of the time-tested theory of the multiplier effect, which works. Resentment of the ultra-rich should be expected in a land where people are hungry, schools are poor and politicians serve as toadies of the wealthy...

#7 | Posted by catdog at 2014-07-06 09:28 PM | Reply | Flag:

You mean they'll pay off the big screen TV and the cruise they put on their credit cards.

And who makes money when they do these things?

It's hard to believe certain people can be so ignorant of simple economics. First, ALL people are entitled to spend the money they EARN on whatever they want to. When people buy tv's, the store, the employees, the manufacturer, the shipping companies and the tax coffers all get something in the transaction.

When investors place money into speculative investments and derivatives, only the players in the game stand to gain more wealth while this very same speculation can create higher prices for goods and commodities simply because of how and where the bets are placed.

Stop being a snob, everyone has the freedom of making their own choices. It's just that our government needs to stop supporting and encouraging destructive economic behaviors just so a minority can enrich themselves while constantly making it harder for the workers to realize even a slightly significant portion of their own productivity gains as higher wages and benefits. We can and should accomplish both, not play the stupid game that one has to oppose the other. They both can and do work together when investors are compelled to make their wealth in more productive manners through the federal tax codes that are supposed to benefit everyone's interests.

#8 | Posted by tonyroma at 2014-07-06 09:39 PM | Reply | Flag: | Newsworthy 4

Like most the 1% give a damn?

Despite the good among them the majority of say the top 10% are more removed from reality that they actually think Ayn Rand is right about economics and society.

#9 | Posted by Tor at 2014-07-06 09:51 PM | Reply | Flag: | Newsworthy 1

The pitchforks are coming. Followed by abject misery for the so called 99%. Liberals will happily trade the wealthy for all powerful statists. None of this will end well.

#10 | Posted by justanoversight at 2014-07-06 10:34 PM | Reply | Flag:

@ JUSTANOVERSIGHT

I fear the moment affluenza became legally recognized as a reason for people not to be held accountable for their actions a pandora's box was opened.

We can not survive as a society with two codified sets of law allowing one group to get away with murder and the other to be sent to prison for life for dealing pot.

en.wikipedia.org

#11 | Posted by Tor at 2014-07-06 10:57 PM | Reply | Flag:

tor,

More evidence judgments are for sale. Its a sure bet the defendant was white. Can you imagine what they would do to a black man who did the same thing, or even a poor white man.

Then there's the President, who can kill anyone anytime with impunity. Shrub most likely killed a million with shock and awe. Clinton killed a half million Iraqi children just with sanctions. Madelyn Albright confirmed this and insisted it was worth the cost. Obama has also left a trail of death and destruction.

Then we get to hear speeches about our love for freedom and Democracy and lecture other countries about human rights. We live inside a farce in a sea of lies.

#12 | Posted by nutcase at 2014-07-06 11:51 PM | Reply | Flag: | Newsworthy 1

NUTCASE a President ordering a strike on someone considered to be a threat to us all who's outside of America is one thing.

A private civilian killing others through recklessness and avoiding jail time literally due to his parents wealth is another.

#13 | Posted by Tor at 2014-07-07 01:09 AM | Reply | Flag:

Pitchforks? Today's pitchfork is an ar15.

#14 | Posted by klifferd at 2014-07-07 01:14 AM | Reply | Flag:

You mean they'll pay off the big screen TV and the cruise they put on their credit cards. That's why we allow the rich to live, to fund the creature comforts we are not able to fund on our own.

This is definitely Kardashianland...

#4 | Posted by madbomber a

I have no idea what the price of a big screen tv is now a days it has been about 15 years since I have had a working tv.
but if you think most poor people are taking cruises and charging it on credit cards you are a bigger fool then I thought you were.
most poor people that I know are having a hard time just keeping a roof over their head.
you do not know crap about what it is like being poor.

#15 | Posted by PunchyPossum at 2014-07-07 02:09 AM | Reply | Flag: | Newsworthy 1

You mean they'll pay off the big screen TV and the cruise they put on their credit cards. That's why we allow the rich to live, to fund the creature comforts we are not able to fund on our own.
This is definitely Kardashianland...

#4 | POSTED BY MADBOMBER AT 2014-07-06 09:17 PM | REPLY | FLAG PFFFTT

You're the kind that is the first one to go down so just keep singing stupid things at he top of your voice. You belong to the same class those stupid quasi militia men who were going stand behind their wives so the world could see the government slaughter women... before they were carved in to small chunks.

Believe me when it gets to that the morality you are counting on to save your stupid @$$ will be just a footnote that people laugh about.

The acquisition of those big screen TV's which sell on craigslist for $200 or $300 are not the problem. It is your sanctimony that somehow you have more right to own one than someone else who worked just as hard in a profession that is paid far less. Someone fed you the idea that what it is you do is so much more valuable. The truth is without the people you denigrate the product you pitch... I don't care what it is...is worthless because there is no one else to buy it.

Throughout history it has always comes down to that and the pigs on your side of the court always lose. Every time. No exceptions.What is so stupid is you will insist on losing and you don't care who you take with you as long as you think what you did was so much more important. Most of you work for the day where you can live off your bloated sense of self and live of the proceeds of defunct services you performed in the past that serve no one in the present... and then you will bitch about the takers. Let someone intimate they are going to take that from you and your destiny is to join the rest who have to stand in the lines. You will squeal all the way home.

self righteous idiots

#16 | Posted by RightisTrite at 2014-07-07 02:33 AM | Reply | Flag: | Newsworthy 5

Oh goodie. Another rich liberal that wants to raise taxes on himself and spew "raise the min wage" lectures to us all.

Funny how liberals that get rich feel the need to attack themselves. I don't see them paying more into the Treasury on their own however. He was an early investor in Amazon.com and rode the wave. Easy come.

Meanwhile does Amazon.com pay $15 an hour that this loon wants everyone else to pay? No... Above min. yes... but...

"amazon wouldn't say how much it pays its workers. But according to data gathered by career website Glassdoor.com, Amazon pays its 20,000 warehouse workers an average hourly wage of about $12, which is below the national average. "

#17 | Posted by sames1 at 2014-07-07 04:58 AM | Reply | Flag:

Liberals are compassionate even when the get rich and know what will help the country or at least want to. Conservatives prefer wolves and thieves in the banker seat.

#18 | Posted by klifferd at 2014-07-07 08:50 AM | Reply | Flag:

Liberal compassion has made slaves out of many minorities that are living on welfare and food stamps. There heart was in the right place but their method is all screwed up. But.......... they have bought many votes to keep themselves in office with all that welfare. No one benifits from long term welfare except the politicians.

#19 | Posted by Sniper at 2014-07-07 09:38 AM | Reply | Flag:

This is a repeat thread, so I will repeat what I said the last time. The rich are getting richer because they earn their money via capital gains, not income. When you idiot liberals are all standing around cheering the stock market hitting 17,000, you're effectively cheering a widening wealth gap. Increasing the income tax on the rich will accomplish NOTHING, because they pay capital gains tax instead, which is currently around 15%. Do you really believe the administration doesn't know this? Of course they do. But they trot out the minimum wage red herring, propose tax cuts for "working Americans" (by which they mean the poor who already pay little or nothing), promise to raise taxes on the rich (income tax..again - NO EFFECT)....ALL POLITICAL THEATER.

If you want to put a dent in income inequality, REWRITE THE TAX CODE. Tax ALL income as income, not as capital gains. Make reinvestment in a company (vice taking a dividend) a tax write-off to encourage rebuilding American industry. Lower the corporate tax rate to encourage growth.

#20 | Posted by MUSTANG at 2014-07-07 10:08 AM | Reply | Flag:

The notion that we cannot afford to feed the poor (for their own good) but we can afford to blow the crap out of other people is not just absurd, it is evil.

#21 | Posted by nutcase at 2014-07-07 11:07 AM | Reply | Flag: | Newsworthy 1

most poor people that I know are having a hard time just keeping a roof over their head. you do not know crap about what it is like being poor.

#15 | POSTED BY PUNCHYPOSSUM

He is actually talking about the middle class. The wage slaves. Living month to month. No savings. Very little in checking. One paycheck away for bankruptcy.

At least more of them can afford real health care now. In spite of the Republicans best efforts at preventing that, too.

#22 | Posted by donnerboy at 2014-07-07 12:11 PM | Reply | Flag:

Eventually, the French Revolution will have a repeat performance in 21st century America. It may not happen in the lifetimes of anybody alive and currently over 40, but it is almost sure to occur based on current conditions. The one percent can only deflect economic issues on minorities (done that), immigrants (doing that), and the poor in general (trying to do that, but it's not taking much hold) for so long. Likewise, those who insist on furthering the interests of the one percent will find themselves caught in the the middle. as the one percent will ultimately cover their own backsides as much as they can and not protect their erstwhile defenders.

Even for those who would like to see it happen, this is still not necessarily a positive long-term development. Even Robespierre eventually got the guillotine. The end result, after the public has had its fill of violence, is a strongman oligarch who proclaims himself "savior." I won't get into the historical examples, but we all know who they were/are.

#23 | Posted by spurs1 at 2014-07-07 12:21 PM | Reply | Flag:

"Resentment of the ultra-rich should be expected in a land where people are hungry, schools are poor and politicians serve as toadies of the wealthy..."

Except that people aren't hungry, and that's not what we're talking about here. This is more like the belief that the man living on the top floor of the Waldorf Astoria has a moral debt to the man living on the bottom floor. This is really an argument that there is such thing as too rich; and argument that could be leveraged to make legal claim to the wealth of those who were too rich.

"It's hard to believe certain people can be so ignorant of simple economics."

I agree completely. I've always maintained that the cure for progressivism is an economics class. I've taken many, so I've built up some immunity to that level of ignorance. Others have yet to find their way.

#16

You're just waiting for the day when you can legally spend someone else's money to buy that new TV or go on a cruise, aren't you. And you don't have to look very hard to find someone who will tell you that YOU deserve that cruise, or that TV, or that iphone 5; and that you would have those things, if it weren't for that rich guy who is holding on to wealth that you deserve.

Throughout history it has always comes down to that and the pigs on your side of the court always lose.

Here's the rub. You may not like the rich, but you ------- need them. Because you're not a wealth producer. Not like them. You want that new TV, or that cruise, or that iphone, you're going to need them to keep making money so you can spending it.

I don't know if you can grasp this, but it the top 10% or 1%, or whomever just up and disappeared, the other 90% aren't going to increase their wealth generating capability by one. single. bit. But that would have to pay their own taxes, which are a lot.

#24 | Posted by madbomber at 2014-07-07 12:30 PM | Reply | Flag:

I can see how someone living in Somalia could be resentful of the wealthy, but we don't have poor people in the US. not like they do elsewhere. And if poverty is the problem, address it as such. But income inequality has nothing to do with poverty.

If said it before, if we're concerned about poverty being a problem, then bring back the CCC or some similar program.

#25 | Posted by madbomber at 2014-07-07 12:40 PM | Reply | Flag: | Newsworthy 1

This is to easy, makes too much sense, congress can never pass anything this simple to correct such a gross injustice. It will never get past the lobiests.
We should be voting for the lobiests and take whatever congressman or senator comes with them.

#26 | Posted by usmountainc at 2014-07-07 01:01 PM | Reply | Flag:

Virtually nothing taught in undergraduate economics courses has any basis in facts or experimental evidence. Economics as taught by the majority of schools in this country is a pseudoscience. It is about pandering to the ruling class. Telling them things that make them feel better and make them richer. All the economics sheeple hope to join them someday and many do if they are connected to banking. It is impossible to get a pHD in economics today without conforming to the conventional economics BS. If you challenge this conventional wisdom your opinions will be removed from the mass media.

#27 | Posted by nutcase at 2014-07-07 01:40 PM | Reply | Flag:

I can't imagine a board ever being against linking top pay to bottom pay. I would cause barely a blip on their bottom line as suddenly the top receiver of pay went from 50 million down to a couple of million, and the remainder the company had their pay increased by not much more than he lost. Or, even they did have it easy into their profits, they would find happier and more productive employees would more than offset the costs.

Yes, I am aware the capital gains rate is only 15%. That should end. All income should be taxed the same.

The biggest issue of linking pay to the highest and lowest would be folks trying to all be a corporation of 1 and hands no limit....No accountability. Also, "contracting" would be an issue....So any contacted services would have to be applied the corporation to prevent then from contracting everything low paying out in order to keep their stupid high incomes. But, I think the markets need would ensure that all services continue, so the disruption would be minimal.

#28 | Posted by ABH at 2014-07-07 01:44 PM | Reply | Flag:

#27

Lemme guess. You've not taken an economics course. Most of it is common sense. And I think you're in for a tough sell trying to convince the world the common sense is actually a classist conspiracy theory.

#28

You're sort of sticking to addressing the corporate bogeyman. What about the other millionaires out there? My boss was a small businessman who was good with his money. He was sitting on a couple of million in M1/M2 assets. Had property also. What about actors, musicians, professional atheletes, lawyers, doctors, etc. Many don't work in a construct where there is a highest paid/lowest paid guy.

The truth is that wealth inequality is far greater within the top 1% than it is in the other 99%. Address that and you might not need to address it anywhere else.

#29 | Posted by madbomber at 2014-07-07 01:56 PM | Reply | Flag:

The pitchforks are comming for you because you are buying government favors. That one ain't too complicated.

#30 | Posted by Sniper at 2014-07-07 02:32 PM | Reply | Flag:

#29

lemme guess, you have not read "Debunking Economics" by Professor Keen

#31 | Posted by nutcase at 2014-07-07 03:02 PM | Reply | Flag:

The pitchforks are comming for you because you are buying government favors. That one ain't too complicated.

#30 | Posted by Sniper

Might be too complicated for some of you. There is math involved and a few yes or no questions.

And I don't know about you but I personally cannot possibly compete with the billionaires who really are the ones buying government "favors".

So do you really think that 47% + The Middle Class = the same concentrated power of the richest 1%?

(sorry that was a formula)

Are the wealthiest 1% the richest any humans have ever been in the history of getting rich?

And are THEY now firmly in control the strings of power in our government and do they set the rules for how the "market" works in our country...if not the world?

(Those are the yes or no questions. Hope they are not too complicated. Using google IS allowed)

#32 | Posted by donnerboy at 2014-07-07 10:22 PM | Reply | Flag:

Problem is the 1% controls 100% of the government. Therefore, by proxy, they own the gun the government has pointed at your head. They're the mob, and they're saying, "--- you, pay me."

#33 | Posted by GUNDERFUNK at 2014-07-08 02:29 AM | Reply | Flag:

#29 I would say, particularly in the movie analogy, the linking would very much address the problem. There are grips, electricians, set designers, etc.... that get paid working on a movie, find the lowest paid one, and tell the actors they can't make more than fifty times their pay. Shoot, maybe it won't cost 100 bucks for a family of four to see a movie and have some popcorn.

As for "independent investors" I get it. It would be difficult to control that. However, it could be used the same way as a contractor. Count the investors the same as contractors and limit how much they can receive. That sounds like a terrible idea and stifling to growth. However, I believe the opposite is true. Right now, investment is targeted at only a few people. If their were limits, business would have to cast a wider net for investment, helping more people get involved and making money.

#34 | Posted by ABH at 2014-07-08 08:37 AM | Reply | Flag:

So do you really think that 47% + The Middle Class = the same concentrated power of the richest 1%?

#32 | Posted by donnerboy

How do you explain all the welfare to the lazy here in the US? I'm surprised the 1% haven't died from the enlarged hearts they have.

#35 | Posted by Sniper at 2014-07-08 09:51 AM | Reply | Flag:

Inequality sucks.

The Google boys have a jet, Oprah has a jet, Al Gore has a jet, Jim Carrey has a jet, George Soros has a jet, et al.

I think everyone should have a jet. Let's write that in the tax code.

#36 | Posted by sames1 at 2014-07-08 10:01 AM | Reply | Flag:

The Adam Smith "hidden hand" BS only works when the one percent still cares about both their workforce and the rest of the community. Between modern transportation (see Interstate Highways that can take one a great distance in a short time) and modern communication (see internet), the one percent has decided that they can hide from the rest of the public until/unless they actually want to be seen. With some exceptions, the one percent doesn't give one whit about how dangerous or impoverished the cities become. The travails of Chicago and Detroit, for example, are punchlines to their jokes, or worse than that, opportunities to consolidate even more power.

That disconnect has been with us for a long time, but the one percent has managed to stave off disaster by either focusing our attention on other "enemies," either quite real who hate the USA for past indiscretions, or quite made-up such as immigrants, minorities, or others, or by simply hammering home the message that, if we are good serfs, and either draw the right set of lottery numbers, buy other people's foreclosures, or simply working our butts off for decades, the rest of us can reach the "promised land" of lifetime wealth.

The difference today is that more and more of the 99 percent aren't buying it. All they are asking for is a living wage and tolerable conditions. Because there is now no union to secure that, the workers are being told that it's not possible, or that it is possible, but those things simply won't be given and there's nothing the workers can do about it. Moving from job to job is irrelevant, because it is simply going from one bad environment to another on most occasions.

The American public will take a long time to come around to this in any massive way. Some still drink the kool aid, and there are too many diversions for change to happen fast. But the conditions for an eruption are there, they're getting worse, and no amount of whining by the one percent or their wannabe henchmen is going to prevent the inevitable.

#37 | Posted by spurs1 at 2014-07-08 10:15 AM | Reply | Flag:

I saw this on the news last night and I have to say I laughed. Sure it's a ------- thing to do but, I couldn't help myself when the one guy spewed black smoke all over the prius going down the road.

#38 | Posted by Dalton at 2014-07-08 10:30 AM | Reply | Flag:

I don't know if you can grasp this, but it the top 10% or 1%, or whomever just up and disappeared, the other 90% aren't going to increase their wealth generating capability by one. single. bit.
#24 | Posted by madbomber

I don't know if you can grasp this, but the top 10% or 1%, or whomever are not going to just up and disappear.

Try talking about reality, and things that might happen within the confines of reality. It will make you worth listening to.

#39 | Posted by snoofy at 2014-07-08 03:51 PM | Reply | Flag: | Newsworthy 1

madbomber...

You are clearly opposed to what he is saying but reality is the income disparity is incredible between the 1% and the rest of us. As is the level of wealth. The .1 and .01% differences are astronomical. They are worse than they have been in over a century. To me the problem isn't so much the minimum wage but the evaporating middle class. There are more and more lower paying jobs and fewer good paying jobs. If someone wants to be rewarded fairly for their knowledge and skills the company is just as likely to bring in someone unqualified on an H1-B. This has been happening for over 15 years and gotten worse over time.

Your observation about the minimum wage of .25 in 1938 vs today is a bit off but not hugely off. I figured it to be just about 4.15 adjusted for inflation. That said we all know inflation is a somewhat twisted measure to begin with - but let's say it is a good number. For the periods of time that the US was perhaps the most affluent - 1960s to 1970s the real minimum wage was inflated far over that 4.15 value it was more in the $9-10/hour range in today's dollars. That said - it has NEVER crossed the poverty threshold either. Also keep in mind that only about 2% of full time employees make the minimum and about 2/3rds receive raises within the first year. About 10% of part time workers make the minimum wage. There are a lot of factoids out there about the minimum wage.

#40 | Posted by GalaxiePete at 2014-07-08 05:18 PM | Reply | Flag: | Newsworthy 1

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