Millennials versus millionaires

Breaking the grip of the economic elites on Washington

November 14, 2011|Dan Rodricks

Nearly half the members of Congress are millionaires, according to an analysis of net worth by the nonpartisan Center for Responsive Politics. The center found median net worth for a member of the House to be $725,000; for a senator it was $2.4 million. (The value of family homes was not included in the analysis.) Congressional freshmen — those elected in the tea party-inspired revolt of November 2010 — are among the financial elite, too. In fact, 60 percent of freshmen senators and 40 percent of rookie representatives have net worth in the millions.

But that's just part of the picture. As "60 Minutes" reported Sunday, many members of Congress will leave office (assuming they don't stay forever) in even better financial shape than when they arrived. As committee members, they have access to information about legislation key to the financial fortunes of publicly traded companies, and nothing prevents them from capitalizing on these insights to improve their stock portfolios. They can also influence federal spending to benefit their districts and, in some cases, their personal investments.

The "60 Minutes" report cited examples of this "honest graft" among both Democrats and Republicans. Congressional millionaires, or those positioned to become millionaires, appear more than ever to represent their own interests — and those of their wealthy backers — above all else. No wonder the public's approval of this bunch is at an all-time low.

"The American system works for the super-rich, managers and professionals, but not for the rest," says the international economist and author Jeffrey Sachs, who spoke last week at the University of Baltimore. "Government is in the hands of Wall Street and other big business."

People who are uncomfortable with this discussion, and who say it merely proliferates class warfare that divides the country, miss an essential point: The country already is divided.

Only one American in every 100 can be considered a millionaire, the status enjoyed by half the members of Congress. At the other end of the spectrum, one in seven Americans is officially poor. Last week's revised estimate from the Census Bureau put the number in poverty at 49.1 million.

The government's revised poverty line for a family of two adults and two children is annual income of $24,343 or less. Members of Congress make seven times that. Certainly, a high income does not preclude a senator or representative from being sympathetic to the hardships of the working poor and middle class. But the gap is wider than ever; if the nation is polarized politically, it is super-polarized economically.

The Congressional Budget Office confirmed recently that income disparity has grown to historic levels; incomes of the top 1 percent nearly tripled between 1979 and 2007, while incomes of the American middle class grew by about 40 percent. I'll add another statistic, from "The Price of Civilization," Mr. Sachs' latest book: At the start of the 1970s, the average pay of the nation's top 100 corporate executive officers was about 40 times that of the average worker. Three decades later, it had reached 1,000 times, and it continues to grow. In 2010, CEO pay went up, on average, 23 percent, while wages for everyone else rose only a half-percent, according to a study prepared for The New York Times.

We got here, Mr. Sachs says, on the force of Ronald Reagan's anti-government message and the Republican faith in supply-side economics, as well as the Clinton-era embrace of financial deregulation. Republicans have sold out to Big Oil, he says, and Democrats, including those in the Obama administration, have sold out to Wall Street.

Greed and shortsightedness rule: Politicians can't see past the next election, CEOs past the next quarter.

At the core of all this, Mr. Sachs says, is loss of the civic virtues that were once part of the nation's political and business tradition: that is, progressive and "mindful" governance, prudent financial planning, a sense of obligation to the community and to the country, and a belief that taxation is "the price of civilization."

The nation, he says, needs to get back to those civic virtues and responsibilities. Eras of inequality and economic crises — the Gilded Age, the Great Depression — open the door to profound political change. "The future is up for grabs," Mr. Sachs says. He calls upon a new generation of young Americans, the millennials, to rise up (some from their Occupy tents), to run for office, use social media to get their message out, refuse corporate money or campaign donations above $99, and ultimately break the grip of the ruling elites on Washington.

Dan Rodricks' column appears Tuesdays, Thursdays and Sundays. He is the host of Midday on WYPR, 88.1 FM. His email is dan.rodricks@baltsun.com.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.