Monday, December 16, 2013

True Greed


Recent reports from Rome indicate that the Pope is calling out the nations of the world to deal with the great problem of global economic inequality. I will reserve comment on the Pope’s views until I can find out more about what he actually said. Today, I would just like to focus on the way in which fragmentary news reports have argued that the Pope had launched a full scale attack on Capitalism.

It would appear that the Pope has been critical of a brand of Capitalism, the so-called “trickle down” variety.  According to the trickle down theory, as the rich get richer many of the crumbs from their tables will trickle down to the poor below. They will need servants, hairdressers, gardeners, gamekeepers etc. American commentators have praised the Pope because his words appear to be an attack on “greed”; the only one of the seven deadly sins that liberals still believe exists.

Trickle down economics is kind of a parody of real Capitalism. It is the way anti-business critics like to denigrate the American system. These critics were brought up to visualize anyone working for profit as Mr. Monopoly, or as Thurston Howell, the millionaire on Gilligan’s Island, the popular but incredibly ignorant comedy of a generation ago. But even if you look at today’s sophisticated TV fare you will see that the villains are all successful white businessmen. Young black men make up 70% of America’s prison population, but on the popular TV show “Law and Order” 90% of the criminals turn out to be successful white businessmen. 

Although more and more American college students study business administration today, profit-making enterprises are still regarded as somehow tainted in our popular culture. Working to turn a profit seems somehow ignoble. It smacks of greed. Many college graduates would much prefer to work for government or for so-called non-profits. Non-profits are “good” and supposedly serve the public interest, but profit making smacks of greed and selfishness. This attitude is seen everywhere in popular communications media.  Journalists, movies, TV shows, and music lyrics never tire of hanging the greed label on bankers, CEOs, and Wall St. brokers.
But recent news articles indicate that darlings of the media and anti-business left wing politicians are not immune to greed. Popular liberal movie stars like George Clooney and Matt Damon each make over 20 million per film. Is that greed? I would guess that they make more than twelve times what their stand-ins or stunt men make on their pictures.

Recently New York Yankee star baseball player Robinson Cano left the Yankees to sign a ten-year contract with the rival Seattle Mariners worth $24 million per year. Did anyone in New York, one of the most liberal blue states in the country, complain that Cano was making too much money? On the contrary, the Yankees were blamed for not offering Cano more to stay in New York. Certainly, no one suggested or argued that all baseball players should be paid equally. Neither did anyone blame Cano’s agent, the wealthy rap star JayZ, who will receive approximately 15% of Cano’s salary for the next 10 years. Why isn’t JayZ considered greedy for making $3.6 million dollars a year from Cano’s labors?

Actually Cano won’t be able to keep all the money. After deducting for JayZ’s share he will probably pay about 40% of his annual pay in the form of income taxes to Federal, State and local governments. Some have suggested that New York’s high state and city income taxes might have contributed to Cano’s move. Didn’t popular basketball star LeBron James take advantage of Florida’s lack of a state income tax when he moved from Cleveland to Miami a few years ago?

Pop stars and athletes are only the tip of the iceberg, Why are today’s wealthy labor unions and their leaders, especially the so-called public service unions, always exempt from the greed label? They are no longer the downtrodden workers of yesteryear. Today, their jobs are virtually guaranteed, their compensation exceeds that of the majority of taxpayers who pay them, and their benefits and pensions are without equal in the country. Why aren’t they considered greedy when rather than take a cut in their pay or pensions, they would rather see newer members of their own unions laid off?

One story in the news this past week illustrates the free pass given to popular figures when it comes to the greed label. The recent death of Nelson Mandela has sparked a wave of adulation all over the world. Mandela was the face of the movement that brought an end to the system of apartheid in South Africa. In a column over the weekend in the Wall St. Journal Holman Jenkins Jr. revealed that Mandela was a member of the Communist party in South Africa. Although he and his allies denied the fact all of his life, only after his death did the deputy general secretary of the Party reveal that “Mandela’s membership had been kept a closely guarded secret for ‘political’ reasons.”

I’m not bringing up Mandela’s communism because I believe he helped to create a communist society in South Africa. Apparently, it was almost the opposite. In his article Jenkins noted that Mandala’s official party, the African National Congress (ANC), became under his leadership “a party of revolutionaries turned business owners and financiers.”

Jenkins cited a 2012 book, “Who Rules South Africa?” by two respected journalists that provided some remarkable statistics. Three quarters of the ruling Cabinet members have outside business interests, as do 60% of the regime’s 400 members of parliament. In the impoverished Eastern Cape, Mandela’s ancestral home, three quarters of government contracts went to companies owned by state officials and their families. Cyril Ramaphosa, a former militant leader and the country’s likely next president, is worth 65 Million, three times the net worth of Mitt Romney. Jenkins concluded,
One indisputable ANC success has been creating a new black business elite with a stake in preserving South Africa’s advanced capitalist economy.
George Orwell’s little classic, “Animal Farm” ought to be required reading in all American high school classrooms. It is less well known than his futuristic “1984” but much more relevant today. In “Animal Farm” the animals revolt against and drive out the oppressive farmer in the hope of establishing an egalitarian utopia. In short order the wily Pigs turn the revolution to their own benefit and change its motto from “all animals are equal” to “all animals are equal but some are more equal than others.” In the chilling end, the once again oppressed animals stare into the farmhouse window to behold the wealthy Pigs dealing with the Farmer.

The funeral service for Mandala with the fake sign language interpretation was revealing in more ways than one. This video shows not only the fat cats but also that their words and speeches are never to be taken at face value.


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