Friday, January 3, 2020

Abigail Disney is one of the Patriotic Millionaires devoted to action on extreme inequality.

As the calendar turned over a page to January 1, thousands of Arizona workers got a pay raise.

In the January 1st Daily Star Howard Fischer Capitol Media Services reports that the Arizona minimum wage increases Jan. 1 from $11 to $12 per hour. For the worker logging 2080 hours (52 weeks x 40 hours) that amounts to $2,080 per year or about $1,600 after taxes. (More on this latter point below). My eye-ball averaging of Fischer’s numbers suggests over 300,000 workers would benefit.

Now don’t get me wrong here. For people earning so little, even a little by other standards will be enormously helpful. But what I wish to drive home today is that it’s not enough. When corporate CEOs take home millions and millions of dollars each year a $1 hourly raise is not even a blip in the economic inequality data.

Sheelah Kolhatkar at the New Yorker reports on [The Ultra-Wealthy Who Argue That They Should Be Paying Higher Taxes][ultra]. She provides a case study: In an age of historic disparity, Abigail Disney and the Patriotic Millionaires take on income inequality.

For those interested in economic in justice in all its forms, this one should be read in entirety. Among other insights, we learn about how even the very wealthy have misgivings about the magnitude of that disparity. Here I will post on just a few passages from Kolhatkar’s intriguing report.

Let’s start at the top of the economic food chain.

On April 10th [2019], a video of Representative Katie Porter, of California, questioning Jamie Dimon, the C.E.O. of JPMorgan Chase, went viral. Dimon had previously spoken about the many Americans “left behind,” noting that forty per cent of people in the U.S. earned less than fifteen dollars an hour, and that the same percentage said that they didn’t have four hundred dollars in savings to deal with an emergency. JPMorgan Chase had just reported $9.2 billion in profit for the first quarter and almost thirty billion dollars in revenue; Dimon had been paid thirty-one million dollars the year before. Porter described the monthly budget of a hypothetical new employee at a Chase bank in Irvine, California—a single mother who was earning sixteen dollars and fifty cents an hour. After paying the rent for a one-bedroom apartment that she shared with her daughter, plus the costs of utilities, food, child care, and a basic cell phone, the woman, Porter said, had a five-hundred-and-sixty-dollar deficit each month. “My question for you, Mr. Dimon, is: How should she manage this budget shortfall while she’s working full time at your bank?” Porter said. Dimon seemed uncomfortable; he told Porter that he “would have to think about it.”

By the numbers: compare Dimon’s $31,000,000 against the average yearly wage for a worker earning a minimum hourly wage of $15 – that yearly pay is $31,200. The inequality ratio is about 1,000 to one.

In the U.S., executive compensation has increased, on average, by nine hundred and forty per cent since 1978, according to one estimate; during the same period, worker pay has risen twelve per cent. Income inequality hasn’t been this extreme since the nineteen-twenties. A recent study by the economists Emmanuel Saez and Gabriel Zucman found that, as a result of cuts to estate and corporate taxes, as well as the 2017 G.O.P. tax bill, the four hundred richest Americans pay a lower over-all tax rate than any other group in the country. In a Times Op-Ed, Saez and Zucman wrote, “This is the tax system of a plutocracy.”

[In 2014] the entrepreneur Nick Hanauer, one of the first investors in Amazon, gave a ted talk called “Beware, Fellow Plutocrats, the Pitchforks Are Coming.” After describing his multiple homes, his yacht, and his private plane, Hanauer argued that the U.S. was at risk of becoming a neo-feudalist rentier society similar to France before the Revolution. In an essay in Politico, he wrote, “Revolutions, like bankruptcies, come gradually, and then suddenly. One day, somebody sets himself on fire, then thousands of people are in the streets, and before you know it, the country is burning. And then there’s no time for us to get to the airport and jump on our Gulfstream Vs and fly to New Zealand.”

Kolhatkar’s focus is on one multimillionaire - Abigail Disney. Yep - of those Disneys.

… As a child, she would go with her grandfather to Disneyland, where she was treated as a special guest. “He loved taking us to the front of the line,” she said. She would hang her head as they marched past other families who had been waiting for rides in the hot sun. “I’d say, ‘Grandpa, they hate us,’ ” she recalled. “And he’d say, ‘I worked so hard all those years so you could go to the front of the line.’ ” …

… One day, when her children were older, she took an overnight flight [on her family’s private 737] from California to New York, where she lives. She was travelling alone, but there was a full staff on duty to cater to her needs. As she got into the queen-size bed and secured the safety belt that stretched across the mattress, preparing to sleep for the next few hours, an unpleasant feeling came over her. “I couldn’t help thinking about the carbon footprint of it, and all the fuel,” she said. “It just felt so wrong.”

And then she decided to do something about it.

In 2011, she joined an organization called the Patriotic Millionaires, a group of wealthy Americans who are concerned about rising income inequality and who speak out in favor of policies traditionally considered to be antithetical to their economic interests. She began to make public appearances and videos in which she promoted higher taxes on the wealthy. She told me that she realized that the luxuries she and her family enjoyed were really a way of walling themselves off from the world, which made it easier to ignore certain economic realities. “Coming face to face with it feels fucking awful,” she said. “That’s why the wealthy have the private planes and the bottle service in the back and the limousines with the tinted windows.”

Disney is one of the highest-profile figures in the Patriotic Millionaires, which now has more than two hundred members in thirty-four states: technology entrepreneurs, software engineers, Wall Street investors, industrialists, and inheritors of family fortunes. Although Abigail is best known for her criticisms of the Disney company, the group’s mission was initially a simple idea endorsed by a half-dozen rich people: “Please raise our taxes.” The members now have the broader goal of pressuring their wealthy peers to confront what they believe are the destructive effects of trickle-down economics—the idea, which has driven U.S. policy decisions for several decades and has largely been debunked, that reducing taxes on businesses and the wealthy will benefit low- and middle-income workers. Members of the Patriotic Millionaires lobby lawmakers and affluent individuals to instead support policies that would, for instance, increase the minimum wage and raise taxes on corporations and the rich. “If you want to change social norms, you’ve got to be out there going public about your beliefs,” Eric Schoenberg, a former investment banker, said, during a breakfast that the group held in New York, in October.

To qualify for the group, members must have an annual income of at least a million dollars, or assets worth more than five million dollars. That could include many families who would describe themselves as upper middle class—who, for instance, own homes in cities with hot real-estate markets. When I asked Payne how hard it was to persuade rich people to join, she said, “I think the last time I checked there were about three hundred and seventy-five thousand taxpayers in the country who make a million dollars a year in income”—there are now almost half a million—“and we have a couple hundred members.” She laughed. “If you ever needed a back-of-the-envelope calculation of how many of America’s √©lite are concerned about the basic well-being of their fellow-citizens, that should give you a rough estimate.” Members include Chuck Collins, the heir to the Oscar Mayer fortune; Roberta Kaplan, the civil-rights lawyer; Jeffrey Gural, the real-estate investor; and George Zimmer, the founder of Men’s Wearhouse.

… the group’s members say that they are concerned about the future of the nation. Some of them feel that severe inequality fuels corruption and has led to the election of Trump and other right-wing leaders across the world. Many of them believe that inaction on inequality could lead to the kinds of violent street protests recently seen in countries like Chile.

[The founder of Patriotic Millionaires, Erica Payne] began approaching Democratic donors and businesspeople to pitch the idea of an organization focussed on three core beliefs: that if people work full time they should be paid enough to meet their basic needs; that regular people deserve as much political power as the wealthy; and that rich people and corporations should pay higher taxes. Payne speaks bluntly about these goals. People who support tax cuts for high earners and reductions to social programs are “very deliberately attempting to create a permanent underclass,” she said. “You want people to suffer and die earlier, because your greed is more important to you than another human being.”

… Several members, including Molly Munger, the daughter of Charlie Munger, the longtime vice-chairman of Warren Buffett’s firm, Berkshire Hathaway, have spoken in favor of a wealth tax.

In February, Morris Pearl, a former executive at the asset-management firm BlackRock and the chair of the Patriotic Millionaires, wrote an article for the group’s Web site expressing support for Elizabeth Warren’s proposed wealth tax, which would impose a tariff of two per cent on fortunes greater than fifty million dollars and three per cent on those above a billion. (Warren recently doubled her proposed billion-plus tax rate, to six per cent.) The group helped develop a bill, introduced in the House of Representatives in November, that would impose a surtax on the country’s highest earners, and it is working on other legislation, including a bill that would raise the estate tax.

More business leaders have begun to say that inequality has reached dangerous levels. In April, Ray Dalio, the founder of the hundred-and-sixty-billion-dollar hedge fund Bridgewater Associates, posted a lengthy essay on LinkedIn in which he wrote that American workers in the bottom sixty per cent of earners have had no income growth, after adjusting for inflation, since 1980, while the incomes of the top ten per cent have doubled and those of the top one per cent have tripled. One graphic ranked wealthy countries in terms of the likelihood that a child born into the lowest economic quartile would move into the top quartile; the U.S. was second to last, ahead of only China. Dalio warned that, if capitalism wasn’t drastically changed, the U.S. would have “great conflict and some form of revolution that will hurt everyone.”

Can philanthropy equalize? Disney is skeptical.

[Kolhatkar] asked [Disney] how she felt about the pledge that billionaires such as Buffett and Bill Gates had signed, promising to donate at least half of their fortunes to philanthropic causes. “I’ve given away much more than fifty per cent of my net worth, and I don’t intend to stop,” she said. “And, frankly, *if you’re a billionaire and only want to give away half of your fortune, something is wrong with you.*” Disney is wary of the idea that the generosity of individual rich people can solve society’s problems.

Let me leave with two other items.

First, from Abigail Disney:

Why, [Kolhatkar] asked Disney, did she have faith that things would get better, when there was so much evidence to the contrary? “I always keep coming back to the idea that you just keep investing in the future,”

Second, as a means to that investment, read more about The Patriotic Millionaires from their web site.

Proud “traitors to their class,” members of the Patriotic Millionaires are high-net worth Americans, business leaders, and investors who are united in their concern about the destabilizing concentration of wealth and power in America. The mission of The Patriotic Millionaires organization is to build a more stable, prosperous, and inclusive nation by promoting public policies based on the “first principles” of equal political representation, a guaranteed living wage for all working citizens, and a fair tax system:

  • All citizens should enjoy political power equal to that enjoyed by millionaires;
  • All citizens who work full time should be able to afford their basic needs;
  • Tax receipts from millionaires, billionaires and corporations should make up a greater proportion of federal tax receipts.

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