The Rich and the Rest of Us – A Must Read

From the book “The Rich and the Rest of Us – A Poverty Manifesto” by Cornel West and Tavis Smiley, I gleaned the following quote which provides some context for a huge challenge that workers, in general, but especially uneducated workers face in the job marketplace.

“American business is about maximizing shareholder value,” said Allen Sinai, chief economist at the research firm Decision Economics. “You basically don’t want workers. You hire less, and you try to find capital equipment to replace them.”

I wanted to begin my discussion on this timely and impactful book with this business context. The first sentence is the primary motivation for business existence. Absent that goal, there is no need to be in business, unless you have a charitable bent. The next two sentences are important, as businesses have always tried to do more with less. The key problem these statements run up against is we are more than machines and we need to deploy our skills and hard work for a greater good, which in turn will let us live decent lives. Plus, innovation occurs when people meet opportunity, so our ability to leap to new products and services hinges upon human involvement.

This book is a must read as it talks about how that used to be the America that many knew, yet it is not the America of today for many. We live in two Americas – I have used the phrase “the haves and have-nots.” Smiley and West use the title to tell the story in a more pronounced way – “the rich and the rest of us.” In essence, it is difficult for the those who have what they need (the rich) to understand the needs of those who do not (the rest of us). They will point to how the income disparity has gotten worse over time and can be traced in large part to the post-1970s period beginning with signficant changes to tax rates on the upper class. This problem evolved over time, has been exacerbated by the recession and cannot easily be fixed.

To try to summarize this book is difficult, so I thought I would use their conclusion section and paraphrase their words.

Ten Lies About Poverty that America Can No Longer Afford

1. Poverty is a character flaw. False. Poverty is the lack of money – period. The 150 million Americans in or near poverty are the result of unemployment, war, the recession, corporate greed and income inequality.

2. American manufacturing is going to bounce back. False. Per Steve Jobs, those jobs are gone and are not coming back. China is not about to give up its claim to “the world’s top manufacturer.” I think there will be some manufacturing that comes back, but we will never get close to where it was.

3. The Great Recession has ended. Not really. Most of the new jobs created since the economic recovery began have been low-wage occupations. Since the book was published, there has been continued, slow improvement month by month on jobs, but their point is valid.

4. Minorities receive the majority of governmental entitlements. False. Nearly half of all Americans live in a household that received some type of government benefit. Seventy percent of food stamp recipients are white.

5. No one goes hungry in America. False. 50 million Americans go to bed hungry and have no idea where their next meal will come from.

6. America takes care of its veterans. False. 67,000 veterans are homeless and another 1.5 million are considered at risk due to poverty, lack of support networks, or dismal or substandard living conditions.

7. Government handouts created the nation’s deficit. False. The dominant factors were Bush-era tax cuts, wars in Iraq and Afghanistan, the trade deficit, the mortgage crisis, and the great recession.. Discretionary spending is roughly 15% of the nation’s budget.

8. America’s wealthiest pay more taxes because they earn more. Partially true. The wealthiest wage earners pay about 21.5% in taxes relative to their personal income, but not on capital gains earnings. Under the Bush-era tax cuts, the wealthy pay on average 5.5% on capital gains from assets. This is a key reason Governor Romney’s tax rate is so low.

9. Medicaid takes care of our seniors’ health-care needs. Partially true. Health-care costs for those between 55 – 64 are twice those for those between 35 – 44. Rising health-care costs are the major contributor to bankruptcy among the elderly.

10. Poverty does not exist in the suburbs. False. The number of poor people living in the suburbs rose 24% from about 14 million to 18 million between 2006 and 2010. The number of poor in urban areas rose by only 20% during this time.

The book also speaks of 12 poverty changing ideas. I will save these for the next post, as my first thrust was to get the message out. I want these “Ten Lies” to resonate and ferment in people’s minds. With the work I try to do with homeless families and my wife does with the hungry, we witness these issues routinely. I found their statistics and data points to be very compelling, but the story can be told without the data. I would encourage you to get the book. For such a complex topic it is a quick read. Yet, it is one where I have dog-eared many pages and continue to refer to as I did for this post.

This is an important topic for America and is one that does not get talked about enough. We are too content to focus on the middle class, yet the middle class decline unfortunately has increased the numbers near or in poverty.  Several of my fellow bloggers have been highlighting these issues of late, so please check them out. There is an excellent piece at www.newsofthetimes.wordpress.com entitled “Is income inequality the tide that will sink all boats” which is a must read. Another blogger, www.hughcurtler.wordpress.com has written several pieces in the past few months as well.Thanks for reading this first post on “The Rich and the Rest of Us” and would welcome your comments or other blog must reads on the topic.

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33 thoughts on “The Rich and the Rest of Us – A Must Read

  1. This book apparently explodes all the myths behind Romney’s 47% belief system. And contrary to his statements of caring for 100% of Americans, he has no understanding or empathy for the middle class or the poor.

    Your piece clearly attacks the stereotypes that are being handed out like rock candy at Republican rallies. I think that by believing these falsehoods, we are creating a means to smooth our concious, make ourselves feel better about how little we all actually do to help others. Caring for the greater good is not a libertarian fallacy or dream, it is the model by which a successful society operates. And today, I cannot see any way that we are a successfully operating society.

    Great post

  2. Excellent work my friend. I need some time to let this digest and jot down some notes in order to respond more completely. There is so much food for thought here, if I don’t write my own thoughts down I’ll forget them. My “who we are what we need” piece fits in with this too. Also, nary a headache for me this morning, just in case you were wondering. I just got a little “Footloose” , that’s all. 😉 My personal fave Irish band are the Dropkick Murphys (the Murphs- lol). More later, we’re off shortly to attend a Dinner at the K of C with friends.

    • Thanks for the comments and I look forward to more after you organize your notes. I need to check the band out. My oldest son has turned me onto Flogging Molly, which is actually a US based Irish rock and roll band. I think the lead is the son of one of The Dubliners. Take care, BTG

  3. You know I love anything that helps dispel myths about poverty. And thanks for the shout-out!! I am really looking forward to the post on solutions…that is where so many of us who know these facts, but really want to change society get stuck! Thanks for a great post!

    • Many thanks. The first mission is to heighten the awareness. There but by the grace of God go I. The poor looks like everyone else and we need people to realize that who have it made. I bet if you asked someone who lost their job and then their house, if they imagined they would be homeless or near homeless the answer would be it cannot happen to me. Thanks for all you do and have done. Best regards, BTG

  4. I don’t really think you have to say, or, understand more than your first quote:… [“American business is about maximizing shareholder value,” said Allen Sinai, chief economist at the research firm Decision Economics. “You basically don’t want workers. You hire less, and you try to find capital equipment to replace them.”]

    All the rest is simply using a magnifying glass, or, a microscope to examine more closely the particular types of disintegration taking place in the various tissues that make up what is now best defined as a corpse.

    As far back as you care to look, our ancestors, when faced with death and dying, turned to the one thing that distinguishes mankind from the rest of the living creatures on planet earth. “Magical Thinking”!

    As Capitalism (the game of Monopoly writ large) begins to show its true nature and population pressures and the declining availability of resources tightens down the screws on a culture long drunk on high self esteem we see it again. “Magical Thinking”! The truth becomes what YOU want/need it to be. Facts are meaningless…. Make them up! Demonize and destroy any who dare to disagree with the entirely fictitious reality that best eases your existential angst.

    It’s almost comical to read all this about poverty and the decline in America’s Middle Class. Doesn’t it make you want to ask the question… “Where the hell have we been?” While we were contenting ourselves with designer jeans and brightly colored bits of plastic crap from Wal-Mart BILLIONS of people were living in filth, without clean water to drink, nutritious food to eat, or adequate shelter… on less than 50 cents a day.

    What was it Yeats said about that rough beast, its hour come round at last?

    • Great comments. As you note, this is not news. What has made the middle class issue mainstream news is it is a lever to win an election. The tipping point on poverty awareness may be that people’s neighbors who look like them are now in poverty or homeless. The statistic on the increase in suburban poverty tells this. Thanks for reading and writing.

      • “The tipping point on poverty awareness may be that people’s neighbors who look like them are now in poverty or homeless” Hitting too close to home, as it were. Excellent point.

      • Thanks. HBO has a great documentary that is sad and telling on this. I cannot recall the title, but it traces five or six people in economic distress that come from suburbia.

  5. Dear Bt,
    It seems this has been on my mind so much lately. And I find myself pointing things out to my children often. One night, it was wicked outside. I mean nasty. We were sitting around the dinner table to a particularly tasty homemade chicken recipe, with fresh bread and a delightful dessert waiting for us.
    I realized that we are the kings and queens of this land. I began talking to my children about our cozy warm house, enough food to fill our bellies, and soft beds waiting for us. We take so much for granted.
    We all ate quietly for a while…each of lost in what the alternative would be. I’m raising my children to not judge, to help whenever possible, and to appreciate the wealth we have.
    I wonder what changes could come in our world, just from that? On facebbook, I see fellow kings and queens complaining…everyday. Nothing is good enough for them.
    What if ALL of us saw the castles and kingdom we live in with clear eyes?
    I’m sorry, that I have no other solutions…this whole subject just sets my mind whirring.
    Great post.
    🙂
    Love, LIs
    xoox

    • Thanks Lis. The best memories are talking with family around a table. I think if we all lessen the amount of pre-judging that is done, we will be better for it. Prejudice comes from that hyphenated word. We must do our darnedest to see the issue from the other side of the table or after walking in someone’s shoes. Then, we might be willing to collaborate to find an answer. I think your encouragement to not pre-judge is the paramount to fixing the problems. They are hard enough without that biased lens. Well done and thanks, BTG

  6. Please excuse me for butting in here, but, could you explain your statement…. “I’m raising my children to not judge,”….?

    As a parent, and now a grandparent, I saw my obligation to be the exact opposite of that. It always seemed to me that the billions of years it took to develop enough neurological tissue to make a lump large enough to be called a brain shouldn’t be wasted. “Judging” is what it is for! Discrimination, sorting out, categorizing and “judging” in a skillful way is what keeps us safe and alive.

    Living in the American South the phrase, “I try not to judge” is heard over and over again, especially on Sunday. Having lived in many places I can honestly say that Southerners are, perhaps, the MOST judgmental people I have ever met. (They just do it very badly) Yet, they claim not to be and, like you, seem to profess being judgmental to be an unattractive trait.

    I have always thought the world would be a MUCH better, safer and happier place if we, rather than avoiding judgement, prided ourselves on jumping in feet first and judging WELL.

    Can you understand that?
    Best wishes
    Mrs. N.

    • Judging well also means getting all the facts and information available before taking that feet first jump. “judging in a skillful way” I like that phrase! I think perhaps Carr party meant she or he was raising their children not to assume – which is a good thing for sure. and yes Southerners are quite judgemental , Bless their Hearts! (another phrase used south of the Mason/Dixon quite often) Have a great day!

      • Just to be a pain in the ass, as can sometimes be my way, why is it a “good thing for sure” not to assume? Do you have no respect for intuition and prejudice? Do you see gut feelings as a mistake? Can it be that millennia of gut feelings and prejudices passed the test of time because they were worthless? I doubt that myself.

        Personally I fail to see any survival value in teaching your children…. “When you hear hoofbeats be sure to realize it could be zebras.”

        Not to belabor the point, but, I’m of the opinion that being “nonjudgmental”, as a culture, is what has us all headed full tilt toward H-E-Double Hockey-sticks in a hand basket. I’m not even sure you CAN HAVE a viable culture without being judgmental.

        Respectfully
        Mrs. N.

      • Thanks for your response. To your point, there is a great book by Malcolm Gladwell, one of many he has written, called “Blink.” It is about making gut instinct judgments in the blinking of an eye. The ones that seem to pan out best are the ones where someone has experience with the topic. He used the example of a firefighter, who sensed something was amiss and told his crew to get out of building before the floor collapsed, but it was years of experience interpreting very quickly the circumstances. He also uses the example where several cops chased an innocent man and shot him 41 times (Bruce Springsteen wrote a song about it), because they were primed to think he was a culprit. It works both ways. Your point is valid and when we don’t have time, we have to make quick calls. But, I have personally tried to never make a life decision (quit a job, invest in a stock, buy a house or car), without trying to be more informed. Keep on writing. Thanks BTG

      • I read Blink when it first came out btg. I was thinking more along the lines of getting the educated mind out of the way and trusting innate instinct. Sometimes over-thinking can be more dangerous than trusting your gut. As you pointed out, it isn’t for the novice, or, the timid.

        The cops that fired 41 shots were exhibiting herd behavior, a different thing entirely. I was thinking more along the lines of Zen archery. Relentless practice followed by complete letting go. Or, as Chevy Chase said in “Caddy Shack”…… (“Be the ball Danny.”)…… nenn…nenn..nenn…nenn.

    • Mrs. N, If you will see my comment back to Lis and after reading many of her posts, I took her to mean pre-judging or judging without all the facts. I agree with you about southernors being judgmental, but it may not be any more or less than other places. Informed judgment is hard work, so it behooves us all to aspire to be as informed as possible. This election should prove that we have many voters who honestly and sincerely believe they are making informed judgmental choices, when in fact, they are not close to a truly informed opinion. I try to be informed as much as possible, but I still fail to reach full enlightenment. So, I think Lis’ council is judicious (pun intended) and I believe your points are valid, yet I would add the adjective informed to judgment for purpose of the discussion. Thanks for reading and commenting. We have a good group of commenters. All the best, BTG

  7. Some intial thoughts on the 10 highlights you posted: I will definitely have to look for this book. I agree that poverty is not a character flaw. Laziness is a character flaw and it can be found across all classes and income levels. People use the welfare stereotype to point to laziness as the reason for poverty. Yes, some poor people are lazy, so are some middle class and rich. However, most poverty stricken people are anything but lazy – working 2, 3 or 4 jobs just to make ends meet, trying to survive and provide for their families. The abuses of the welfare system are always documented and used as examples. I have seen them firsthand and they make me very angry. Push pops and soda are not nutritious food items and should not be purchased with an EBT card -its fraud, plain and simple. Fraud and abuse make it that much harder for people who genuinely need help to get it. That said, I truly believe those in power are using these examples to keep the majority of us focused in a wrong direction, because I’m also sure that the majority of people using the EBT program are using it appropriately.
    .
    American manufacturing, I think CAN bounce back – if and only if 1) Americans begin accepting work at the wage the work is worth – one of the reasons jobs get sent overseas is that they’ll work much cheaper. 2) Wage disparity is decreased between executive level and manufacturing level jobs. In the US; corporate level execs make anywhere from 200-500 times more than their employees. In Europe, the same level executives make perhaps 10-40 times more – which is much more in line with a prosperous company and a prosperous economy. The American people- at all levels of business – are pricing themselves right out of the game. 3) Investment is encouraged by keeping the capital gains tax level pretty much where it is right now (we may have to agree to disagree on this one) In general there’s nothing wrong with being rich. Isn’t that the American Dream? And the well off don’t stay that way for long unless they invest their money wisely. They have a considerable amount of buying power also. What the rich must do more of, in my opinion is charitable giving to programs that address hunger, homelessness, and assisting the disabled in particular (just my personal choices there btw) “Noblesse Oblige”, for lack of a better term. They should do so after careful research and with some guarantees that the money will be used as it was intended.

    In general I have no issue with someone being well off. They worked for it.Romney did, and has a record of charitable giving in the area of about 14% of his income over about the last 10 years or so. (most Churches require a 10% tithe) He paid taxes in accordance with federal and state laws and while MA governor closed corporate tax loopholes as part of his plan to close the MA budget deficit. He had no need for, and in fact refused salaries for his term as MA Governor, and CEO of the 2002 Olympics in Utah – which was quite successful under his leadership. It annoys me when people say they hate him because he’s rich – that’s just dumb. Its his money. I’m not thrilled with his personal stances on women’s issues and civil rights and still have not a clue who I will end up voting for – but I digress. What I do have an issue with is conspicuous consumption’s vulgarity. Its a slap in the face to all hardworking people who are struggling.

    Another point I’d like to make is that I think we’d all be better off if we lived within our means and stopped trying to keep up with the Joneses. Its not our God given right to have HD TV and a laptop in every home. Volunteer and Give LOCALLY. Thats my rant for now Thanks for reading….. HUGS! D.

    • Donna, your thoughts are not a rant. You have offered well thought out commentary. Many thanks for taking the time. I agree with you on all of your points. The comment made in the book about manufacturing is directionally correct, but does not tell the whole story. Select manufacturing is coming back, but it won’t reach previous levels. Burlington Industries used to employ 100,000 people, now it is part of another company and employes under 10,000 in the US. Yet, they have certain innovative nano-technology being done here. The reason is pointed out in the book “That Used to be Us” which says for the US to come back, it needs to have more innovative manufacturing close to development and leadership. That book also advocates some mainstream manufacturing repatriated to the US, because the best ideas to improve processes come from the factory floor. If the factory floor is in Vietnam, e.g. then it is harder to glean that information and make changes. Well done and I agree we should not begrudge people being rich just because. Your voice is welcome anytime at this table. Thanks, BTG

  8. Very good post. I only have one area that I woud like to revise. Manufacturing jobs are coming back to the US. In my spare time I am the incoming chair of the San Diego Regional Economic Development Corporation. We track the business climate in our region and do our beat to attract new companies to our region as well as retain our current companies as they expand. 5 years ago, we were losing 10 companies per year to China and Vietnam. Back then, the coat differential was 12:1. As you said in your post, business people don’t need employees however if they do, cheaper is better.

    Today China’s differential is down to 2.5:1. Year-2-date for 2012, we have attracted 12 companies that had left over the past 5 years back to our region. Our proximity to Baja California means we can pull manufacturers to Tijuana and Tecate. Everytime a new maquiladora returns to Baja, the company always expands into South San Diego.

    China is in the early stages of what hit Japan back when we thought they would take over the industrial world back in the 80’s: a society that experiences explosive growth and begins to make expensive demands for services fromt he state. Japan had a small population back then but their lower costs back in 1980-2000 have evaporated. Today Japan’s coats are higher than ours. China has a huge population that used to be agrarian. Every passing day these folks are working infactories and are now demanding housing, transportation, sewer, water, healthcare, infrastructure and everything else that comes from growth. Even prison laborers make demands when they become the backbone of a country’s workforce. Everything evolves.

    My only point is Jobs was right back when he said what he said. Today, China is beginning to look like Japan and as a result, many that moved their jobs to China for the low costs are in fact returning to America. We just are seeing new manufacturing plants opening in Indiana, S. Carolina and elsewhere for Volkswagon, BMW, and Mercedes. We just expanded a Toyota Tacoma plant in our San Diego mega-region. These manufacturing jobs can and are supporting US working class folks.

    A small ray of sunshine.

    Sorry for hogging up your blog with the long post .

    As always, I love your posts!

    • Not long at all and most welcome. I do not entirely agree with that point in the book either, yet it is still directionally correct. Manufacturing will grow on these shores, but it will not be at the same magnitude as before. Select innovative manaufacturing needs to be close to leadership whereever it is as that is the next generation of market. But, we cannot focus on China alone, as people moved factories from China to Vietnam when China wages got higher. At the heart of the matter is companies will tend to chase cheap labor. In our favor is the shipping cost of doing business abroad is higher, which also negates the savings differential. I should add with the disappearing pensions and retiree medical benefits from employers, the cost of doing business here has lessened. Great comments. Thanks, Keith

      • I don’t think the future can, or, will be a better run version of the past. More jobs manufacturing more brightly colored plastic crap isn’t a future. If we can’t come up with something better than the plan yeast functions with, turning raw materials into toxic waste, our future is grim at best and big brains are a failed evolutionary experiment.

    • I agree. We need a healthy middle class and I do not see any solutions from the GOP that address these issues. It is certainly not trickle down economics. Thanks for writing. BTG

  9. Pingback: ThePolitics of Poverty « brainsections

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