OxBlog

Tuesday, November 21, 2006

# Posted 11:31 PM by Ariel David Adesnik  

SEN. WEBB VS. MR. BURNS: After watching Jim Webb on Meet the Press, I wrote that:
I was sort of turned off by Webb's dire warnings of class division and class conflict in the United States.
That comment provoked a heated response from dignam, who asks:
Why do Webb's points about American economic inequality and class division "turn you off"? Is it because he is saying something untrue?

Is it because it contradicts your belief in trickle-down economics (a belief that is somewhat unfounded, as the trickle that goes down is a drip-drop that forms a pool in the upper-middle class and descends no further)?
Well I don't know that OxBlog has ever identified itself with the economic philosophy of C. Montgomery Burns, but...
Webb produced a spectacular, and very well-written, opinion piece in the WSJ, of all places, talking about income inequality. So I'd like to know exactly why this very important issue is unimportant to you.
If it were unimportant, I wouldn't have registered my disagreement in the first place. But what I can tell you, dig, is that Webb's penchant for exaggeration, is, as you put it, "spectacular". Here's the opening graf from his column in the Journal:
The most important--and unfortunately the least debated--issue in politics today is our society's steady drift toward a class-based system, the likes of which we have not seen since the 19th century. America's top tier has grown infinitely richer and more removed over the past 25 years. It is not unfair to say that they are literally living in a different country.
Ahh, the 19th century. When union-busting involved baseball bats. When industrial accidents often cost workers an arm and a leg (literally) and there were no disability checks from the government to cover the costs. I could go on, but my supply of puns is temporarily exhausted.

And the rich live "in a different country"? Is Webb saying that they're un-American? Funny, I thought that only conservatives were allowed to suggest that liberals are un-American, not vice versa.

Anyhow, here's another bit of wisdom from Webb:
Workers' ability to negotiate their futures has been eviscerated by the twin threats of modern corporate America: If they complain too loudly, their jobs might either be outsourced overseas or given to illegal immigrants.
Hmmm. Is the primary rationale for outsourcing that it dramatically lowers the cost of production, or that it is an effective way to punish unruly workers? As for illegal immigrants, they take the jobs that we don't want. Or does Webb think that native-born Americans have a secret desire to work as gardeners, busboys, maids and lettuce-pickers?

Now, I admit that responding to absurdity with mockery is not the way to foster a sophisticated debate about the American standard of living. But what I wanted to do in this post is demonstrate why I found Webb's rhetoric to be a turn off.

Inequality, low wages and a lack of healthcare are all important issues. But if Webb wants to do something about the problem instead of just shouting about it, he may find it useful to put aside his exaggerations and put some good policies on the table.
(23) opinions -- Add your opinion

Comments:
Spectacular piece in the WSJ????

Did you read yesterday's letters to the editor? Webb's piece was FULL of holes, with outdate and just plain wrong statistics. I think the WSJ fact-checkers are in hiding now. It was shredded.
 
I'm not surprised there was opposition to Webb's piece in the WSJ, which is basically the propaganda page of corporate America. Letting this sort of sedition in must've produced a very angry response.

That said, much of David's response is sound-bite claptrap. Americans don't have a secret desire to work as apple pickers - but plenty would if it paid a respectable wage. There aren't jobs Americans won't do, but there are, in many cases, wages Americans won't take because it's illegal to pay them so poorly. Using illegals is an end-run around the law not out of necessity but out of greed.

As for the 19th century, perhaps Webb's engaged in hyperbole there - but if you compare modern economic conditions to the 1970s, the gap between executive pay and worker pay has increased sixfold. Apparently, making 40x as much as your employees just wasn't satisfying.
 
I'm not surprised there was opposition to Webb's piece in the WSJ, which is basically the propaganda page of corporate America. Letting this sort of sedition in must've produced a very angry response.

That said, much of David's response is sound-bite claptrap. Americans don't have a secret desire to work as apple pickers - but plenty would if it paid a respectable wage. There aren't jobs Americans won't do, but there are, in many cases, wages Americans won't take because it's illegal to pay them so poorly. Using illegals is an end-run around the law not out of necessity but out of greed.

As for the 19th century, perhaps Webb's engaged in hyperbole there - but if you compare modern economic conditions to the 1970s, the gap between executive pay and worker pay has increased sixfold. Apparently, making 40x as much as your employees just wasn't satisfying.
 
I don't know about you, but the way I read "since the 19th Century" is not that he is saying that the current state of affairs as equally as bad, but rather that there has been nothing as bad after the 19th century.

e.g. "J.K. Rowling is the best author since Shakespeare" means that she's not better or just as good of a writer as Shakespeare, but that there has been nobody equal to or better than her after Shakespeare.
 
You should not be critical of Webb. After all, he is a fiction writer.
 
Yup, he's a Navy Cross wearing Senator-elect fiction writer.
 
Workers' ability to negotiate their futures has been eviscerated by the twin threats of modern corporate America: If they complain too loudly, their jobs might either be outsourced overseas or given to illegal immigrants.

I think you're right to call Webb on this. But he's only wrong insofar as the either/or. In the last 40-50 years, the bulk of the American workforce has shifted from blue-collar manufacturing to white-collar service. White-collar service/admin/support/marketing etc. jobs, whose increases in efficiency have largely fueled economic growth -- especially recently -- are not supported by unions capable of pressing for better employer/employee wage ratios. Employers have taken advantage of this disorganized state of American workers, a change that has been caused by such a swift change in American industry.

You joke about the "different country" quote. Where are you located these days, out of curiosity? In America or in England? Every day I see evidence of the wealthy's complete obliviousness toward the average worker's costs, tax burden, etc. (My own parents -- corporate lawyers and twice-over Bush voters -- were shocked at my (>$50k gross income) tax bill, and were utterly incredulous when I explained to them that the marvelous double tax cuts touted by Bush gave me a total tax credit of exactly $32. There are many, many people in this country that are willfully ignorant of anyone other than themselves.) Are we forgetting Barbara Bush's comments in the Superdome? Seems to me a natural line of descent from Leona Helmsley...

I strongly suspect that Republicans have been using tax-cut propaganda along with promises of Christian fundamentalist theocracy in order to placate that scientifically illiterate portion of the populace that their needs are being catered to, in order to prevent them from despairing when they realize that their ignorance in science and technology is quickly making them obsolete.

Perhaps more later when my first salvo of tryptophan has expired...
 
I retired a few years ago after forty years of teaching at the University of Michigan. My own financial situation is excellent and Ann Arbor's knowledge based economy is doing fine, but the state as a whole is collapsing. Senator
Webb 's article is only too accurate, and it's a pity that David can't or won't understand what's happening here and elsewhere to America's working class.
 
Dignam -
Yeah, what we need are people who can empathize with the little guy. People like John Kerry, Harry Reid, or John Edwards, who understand that any financial obstacle can be overcome by marrying an heiress, getting real estate windfalls by passing self-serving legislation, or suing obstetricians for birth defects - and if it weren't for scientific illiteracy on juries, John Edwards couldn't afford a half page ad in the Raleigh Yellow Pages.

BTW, the idea that tryptophan causes drowsiness is a myth, like the idea that belief in evolution is a purely liberal phenomenon, or that the overseas movement of white collar jobs would be slowed by unionization, or the loss of blue collar jobs to immigrants would be slowed by minimum raise increases.
 
I just don't like people, whether it is Jim Webb's unequal society or George Bush's Christian-values-based society, coming up with these dramatic theories of social chaos, and proposing solutions, without more sound empirical diagnoses of the problems and pragmatic approaches to solving them.

In my opinion, part of the problem is the state of intellectual inquiry in this country. People don't seem to adhere to basic philosophies of truth anymore, the fallibility principle defined by Karl Popper...or the similar theories of truth created by Charles S. Peirce, one of the greatest American thinkers to live.

I posted on this on my site, so take a look if you are curious who these men were.

http://woodstock.typepad.com
 
People like John Kerry, Harry Reid, or John Edwards, who understand that any financial obstacle can be overcome by marrying an heiress...

Kerry was already rich when he married Heinz. Harry Reid is married to Landra Gould, the daughter of a chiropractor; they met in high school. Elizabeth Edwards is a former attorney and the daughter of a U-2 pilot; they met in law school.

You must be thinking of John McCain, who dumped his first wife for Cindy Hensley, a 'philanthropist.'

And tryptophan does cause drowsiness. It just has to be taken as a free amino acid, not as part of a protein.

Can you get anything right?
 
Anonymous (are all the A's the same person?), you either deliberately misread the comments about Ried and Edwards or you didn't read them carefully. I'll give you the benefit of the doubt and say you didn't read carefully, because a deliberate misread would be unfair, wouldn't it. Reid profited greatly from real estate deals related to Reid's supposed work for the Government and Edwards was an ambulance chaser who used faux science testimony to get rich. Dignam said basically this and nothing about the wives of Reid and Edwards.
 
"... if you compare modern economic conditions to the 1970s, the gap between executive pay and worker pay has increased sixfold. Apparently, making 40x as much as your employees just wasn't satisfying."

So? By any measure, the average worker of today is materially far better off than in 1970. Percentages of homes with air conditioning, automobiles, telephone, televisions, major appliances, etc., (not to mention the vastly improved quality of such items) are all far superior today than in 1970.

Look at the unemployment rates for most of the 1970s: 6, 7, 8, 9 %. The highest was 9% in may 1975. Compare that to 4.4% today. I'd rather be unemployed today than in the 1970s. The average home size in the United States is now 2,200 square feet, up from 1,400 square feet in 1970.

So what difference does it make if the CEO makes more? As long as standards of living keep steadily rising, I don't care. I do not want to go back to the 1970s. If the entrepreneur took risks and worked hard, why shouldn't he or she be rewarded? As an employee, as long as I get paid it does not matter. As a shareholder, if I thought the CEO was making too much, I'd sell the shares of the company.

Unfortunately, stirring up class hatred is a way to get votes.
 
Interesting non-sense.

CEOs are not paid to improve the standard of living, to lower the unemployment rate, or to improve technology, or other noble social goals. Would that they were. Instead what you are giving them credit for almost seems to be a left wing populist fantasy. Credit for this must be given to an invisible hand, something that few right wingers understand.

CEOs are paid as reflection of the profitability of the firm, which hasn't grown 40x. Webb's point stands.
 
Interesting non-sense.

CEOs are not paid to improve the standard of living, to lower the unemployment rate, or to improve technology, or other noble social goals. Would that they were. Instead what you are giving them credit for almost seems to be a left wing populist fantasy. Credit for this must be given to an invisible hand, something that few right wingers understand.

CEOs are paid as reflection of the profitability of the firm, which hasn't grown 40x. Webb's point stands.
 
What's wrong with CEOs making lots of money?

Though the Jumbo Intellectual Force currently makes very very little money, The Jumbo Intellectual Force certainly wants to make lots of money and double certainly does not have contempt for people that do make lots of money.
 
"CEOs are not paid to improve the standard of living, to lower the unemployment rate, or to improve technology, or other noble social goals."

Exactly, they are paid to perform a certain task, which is to run the business profitably. If a CEO is paid too much, then the shareholders will sell their shares. If too much of his salary consists of money unjustly taken away from his employees, resulting in the employees being underpaid, then those employees will be hired by another firm which pays them more. If the company underperforms expectations, the CEO will be fired by the board.

Do some firms overpay their executives? Of course, just like some firms make all kinds of other bad business decisions. The ones that make too many bad decisions fall and are replaced by better run firms. But the inherent threat by Webb, and other commenters here, is that there should be some sort of government action to reduce the wages of certain persons, regardless of what the market would otherwise pay. Non-governmental entities should be able to pay people what they think they are worth without government interference.
 
Typical right wing fear mongering. Webb has made no such threat.

There is nothing wrong with CEOs making a lot of money, especially if it is deserved. But as a stockholder, they work for me. Perhaps his largeness can explain Richard Grasso, the former CEO of the NYSE who was compensated $140M plus another $48M? The NYSE was a non-profit at the time.

At least CalPers has got my back.
 
The NYSE was owned by its member stockbrokerage firms, and it was up to them to monitor its CEOs salary.

In general the increase in CEOs salaries since the 70s is probably due to CEOs no longer being simply managers, but to a more active role in reinventing and reconfiguring companies. Certainly share prices have gone up dramatically in that period.

Id be inclined to say the real class problem is not shareholders getting shafted (enron aside) but the overall issues of inequality, the relative incomes of the top tier to the less affluent quartiles. And those are certainly important issues, but I dont think theyre mainly driven by outsourcing, and even less by illegal immigration. Yes, in theory, there could be high wage apple picking jobs. But back in the "good old days" of the 50s to 70s, it wasnt applepicking that supported the new blue collar middle class, it was manufacturing, esp autos, steel, etc. And there sure arent many illegal immigrants in those sectors. Webbs focus on isolationist aspects of the problem, and his ignoring of potential 'social democratic' solutions, reinforces my belief that we've imported a Buchananite wolf into the Dem party, and that it will NOT be good for our justifiable attempt to obtain social justice.
 
The NYSE was owned by its member stockbrokerage firms, and it was up to them to monitor its CEOs salary.

The NYSE was incorporated as a Not-For-Profit corporation in 1971 with a board of directors, ten of which were members of the GP. And there is a significant distinction between membership and ownership.
 
On the subject of Webb. From the Washington Post.

"How's your boy?" Bush asked, referring to Webb's son, a Marine serving in Iraq.

"I'd like to get them out of Iraq, Mr. President," Webb responded, echoing a campaign theme.

"That's not what I asked you," Bush said. "How's your boy?"

"That's between me and my boy, Mr. President," Webb said coldly, ending the conversation on the State Floor of the East Wing of the White House.
 
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