Money isn't everything.. Until the bank fails.

    By Flavius on Mon, 02/07/2011 - 12:05am |

    Cmaukonen today
    Those that are struggling to make it are not going to listen to some ones ideas if these ideas come from people who ................................... pull in 6 figure salaries and justify to the nines their right to do so

    And rightly so

    I'd be hypocritical if I did not comment that most of those I know earning a 6 figure salaries are justified to claim it's justified..

    They earn it because they  work harder and smarter than those who earn less. And if we want the economy to do all the great things Obama praised in the SOTU that requires quite a few of those earning 5 figures to also work harder and smarter. Which they won't do unless they can believe they've got a shot at that higher number. Which requires that there are jobs paying 6 figures and people actually earning it.

     

    So, Should those who are struggling to make it listen to those pulling down 6 figures? Listen, yes.

    Some of what they hear will be right. And won't cease being right because the speakers are well paid. Most of those I know in that 6 figure cohort agreed with Obama on health care, banking reform, the Stimulus, Don't ask, don't tell and the nuclear disarmament treaty. It was worth listening to them even tho they're well paid.

    On the other hand most, not all, those six figure warriors dis a greed  (ah, there's the word) on repealing the Bush tax cut for income over $250K And they were wrong The Bush tax cuts have to go. And the Reagan ones, And the Carter ones.

    And in fact If you're gonna go, go first class. Go all the way back to Ike and reinstate Ike's tax code. Just take if off the shelf. Adjust the levels for inflation, but nothing else. Wipe out half a century of log rolling. See what that'll do to the deficit. What'll it do to H& R Block is put it out of business because under that 1959 tax code it took an hour to do your return.

    AOBTW the marginal rate was 90%. Which as well as taking a whack at the deficit would solve the banking bonus problem

    No one in a position to risk his bank should be offered a bonus so large that he can afford to arrange for it to take that risk. Because you can't win em all. And sooner of later one of those gambles will fail. And the Trader will feel a twinge while tacking past the breakwater.

    But if 90% of the big bucks were being taxed, no one would have enough bonus left after- tax to buy that house in the Caymans. Maybe the Rockaways. She's going to need a job next year. So she's going to have to think much harder about sticking the bank with that derivative that would get her a great bonus this year and the bank a bail out, next.

    The problem is not that too many people are earning 6 figures, it's that too many people are still left with seven ..

    Comments

    I have a six figure income, but it comes with a decimal point fixed to it.


    by Beetlejuice on Mon, 02/07/2011 - 12:13pm

    HA ! But it's the same old song and dance. Back when countries were ruled by Monarchies, there were those who helped keep them in power. The groupies as it were, who made out very well under these Kings and Queens and Tsars and what not. That is until the people underneath, the poor and wretched finally had enough. Finally felt they had nothing left to loose and everything to gain, one by one removed these Royal despots - sometimes quite brutally - and installed their own form of government in their place. Sometimes better but oft times just as bad, if not worse.

    Complete with a different or different appearing set of groupies to help keep them in power.  In other words people for some reason seem to want to replace one set of Robber Barron despotic slime with another set of Robber Barron despotic slime. Rather like an abused mate going from one abusive relationship to another. All the while telling themselves that this time it will be different.

    The truly negative aspect of this is that far too often we get people in power that see anyone who was doing well under the former regime as the enemy and removes them as well. Such as the purges under Stalin and Mao where even the educated and intellectual were seen as enemies of the people and sent into exile or shot.  That anyone who was not part of the movement was delt with harshly to say the least.


    by cmaukonen on Mon, 02/07/2011 - 8:11pm

    What exactly do those you know who earn six figures do?  To claim that they work harder and smarter than those who earn less without specifying what it is they actually do is more than a bit cheeky.

     


    by EmmaZahn on Mon, 02/07/2011 - 8:49pm

    Actually it is down right snotty.


    by cmaukonen on Mon, 02/07/2011 - 9:19pm

    As someone who's making a lot more now than he did as a public high school teacher while working at a much easier and less stressful job, I have to concur. One could say I'm working "smarter", but only if one employs the tautology of saying that working smarter = earning more money, so those that earn more money are working smarter.


    by Verified Atheist on Mon, 02/07/2011 - 10:58pm

    That formula, in a nutshell, is why our government sucks. We've allowed the quantity of wealth someone accumulates become a stand-in for positive human traits when judging merit.


    by kgb999 on Mon, 02/07/2011 - 11:54pm

    However it sounds, it's what I have observed so it would be dishonest  to deny it. I'm not making any attempt to evaluate who is most charitable or loyal or any of a whole list of other characteristics, which I in fact value more. I am saying that the people I know earning six figures work harder and are smarter than others in their age group.


    by Flavius on Tue, 02/08/2011 - 10:06am

    What I have found is that people who have and earn more money care more about having and earning money. They base most of their decisions on how it might affect their financial status. Hence you have the middle class people who are going under because they don't think it is right to walk away from a mortgage, and the wealthier people that see it as strictly a money matter. Some people buy cars they like, others buy cars that are good investments. Some spend their free time on hobbies or socializing, others work second jobs or spend their off-hours on business-related activities.

    On a bit of a tangent, I was playing tennis once, and overheard the doctor on the next court talking to his practice partner. He had been offered quite a large salary to run some department at a college or hospital, but he said, "I decided against it because, you know ... I could actually be fired."


    by Donal on Tue, 02/08/2011 - 10:25am

    One is an attorney with the EPA. One is installing a system in the credit card subsidiary of a bank . One runs a fund which invests in start ups.


    by Flavius on Tue, 02/08/2011 - 9:54am

    I think the problem is that not enough people are making six figures ... or even reasonable five figures. The point of contention is not that some people have accumulated a lot of wealth - the point is that some people have manipulated the situation to enrich themselves by bringing down the entire rest of humanity in a brutal fashion.

    I think for the most part, people are comfortable with the traditional economic view of the middle class making between 50-150K at good union jobs or in management (with salaries based on a scale set by union wages). So I don't think most people view earners at six figures as horribly affluent. It hasn't sunk in to most Americans that less than 1% of us make $250K or better anymore.

    The thing is though, we're getting "solutions" almost exclusively from people making high sevens .... or even high eights. Anyone making that kind of money in this economy should be ostracized from society - not asked to find solutions. I think there is a reasonable consensus on this - even amongst the tea-party types (remember, just a month ago, an overwhelming majority of REPUBLICANS wanted to tax the bajezus out of executive bonuses). I could be wrong, but I think Obama's decision to rely so visibly on the most hated class in America to dig us out of the hole they themselves created (while lining their bank accounts every step of the way) is going to prove his most damaging miscalculation from a political standpoint. Very few Americans trust ANY of the people he's appointed besides Liz Warren (Bair has a bit of credibility too) - and the general consensus is that they aren't treated much better than unwanted stepchildren.


    by kgb999 on Mon, 02/07/2011 - 10:36pm

    I agree with your first two paragraphs. 

    Anyone making that kind of money in this economy should be ostracized from society. 

    ... is as I'm sure you agree too broad. It would include Soros and Olbermann whom should not be ostracised.

    As to Obama's team,I agree he'll pay a political price  but he had no choice. The world was trembling over an economic abyss and he wasn't going to have two bites at that apple. Summers and Geithner were very smart guys who knew where the bodies were buried. If he chosen Reich and Stiglitz the US might be experiencing 20% unemployment now and overwhelming republican majorities who would be intent on passing legislation that would not only make that higher but would also impose disastrous social policies. And the developed world at least might be worse.

    Sure, if he had taken over with unemployment at 4% I would be horrified by the political philosophies of his financial team (except perhaps for Christy Romer) but he did what he had to do.

    I agree about Warren and Blair.  He should change that.


    by Flavius on Tue, 02/08/2011 - 10:36am

    IMO, the US is experiencing 20% unemployment now. U-6 is at 16% and that doesn't include those scraping by in the grey market.


    by Donal on Tue, 02/08/2011 - 10:52am

    Your assumption, 

     If he chosen Reich and Stiglitz the US might be experiencing 20% unemployment now

    You assume it would be worse, based on what criteria? Would it have been worse for the banker class or the homeowner class?

    Summers and Geithner knowing where the bodies of evidence lay, served whom?  They knew how to clean and scrub the books, in order to protect the banker class from the serious charges. With the banker class' sins covered over;  then all that remained was to blame the poor homeowners. If there was no evidence conjure it up, but the goal was discernable, blame the homeowners, preserve the banks. Obfuscation .........“See here folks, the evidence (that remains uncorrupted,) points clearly at the homeowner class.”

    The poor homeowners become the scapegoat, in order to preserve Capitalism. 

    To insure capitalism survives, Summers fights for Socialism for bankers; and crumbs for the peasants………Moral hazards you know?

    I as a homeowner, would have preferred Stiglitz. The stimulus plan offered by Krugman would have delivered results earlier, than this death buy a thousand cuts.

    A thousand cuts to government aid, to the peasant class, continues to preserve Capitalism.

    You see; government is good when it bails out the bankers and it’s bad when it helps the people

    Everyone knows we have the best government money can buy.


    by Resistance on Tue, 02/08/2011 - 12:36pm

    *Certainly* Soros should be! Only in a world where giving money to corporatist Democrats is considered a contribution to society does that guy deserve much credit. I don't think there is any justification in letting him craft the economic way forward - and certainly none for the money he's raking in day after day playing the exact same games we all criticize Goldman Sachs for playing. A Democratic soul-sucking bastard is still a soul-sucking bastard in my book.

    I totally disagree that Obama had no choice. More to the point, I disagree that what he chose to do is anywhere near the most effective course of action if his loyalty were to the (no longer) working majority of American citizens. If he had paid more attention to Reich or Stiglitz, it is equally probable we'd be approaching seven percent unemployment with a banking system who's practices had been stabilized to the point of sustainability. And have you noticed who holds an overwhelming majority in the House? It isn't the Democrats anymore ... although they sure did after 2008. From where I sit, we are looking at exactly the outcome you appear to believe Obama avoided. Of course, considering those earning six figures are the hardest working people you know ... maybe the outcomes we appreciate are a product of where we are sitting, and we're looking for different things.

    As for the developed world, at least, possibly being worse (with a course of action better tuned to the needs of most Americans). I would argue that a school of political thought that which places such a consideration over the good of American workers probably shouldn't be in placed in charge of looking out for the nation's best interests. It's kind of hard to argue an idea isn't anti-American while at the same time arguing Americans should celebrate being made to suffer to improve the situation for people in Bangalore or Germany or wherever. That's "latte liberal" thinking to the core ... or at least that's how I imagine it presented it in an attack ad. Both bad for America and simply bad politics

    Which kind of brings it back around to the original point I was trying to make. Regardless if it was the best course of action or if it was justifiable or whatever, I was trying to note that the "six figures" question isn't really indicative of the reality we are facing (in the context of C's observation). Were we getting solutions from this strata, or if it seemed that this strata even had a seat a the table, I think the American people would not be so instinctively hostile to the team. As things turned out (for whatever reason), it would be difficult for the team we ended up to be any less trustworthy in the eyes of voters or more likely to engender hostility within a very large cross-section of Americans ... but that is not because we've got a problem with someone making 200K.

    It is completely wrong to allow the ultra-wealthy folks who are truly dominating policy to perpetuate a false equivalence between themselves and the rapidly disappearing class of Americans they are trying to masquerade as (colloquially referred to as "six figure earners" in this thread).


    by kgb999 on Tue, 02/08/2011 - 3:03pm

    This exchange is pretty old but a couple of comments. Of the people I know earning six figures, and in fact there are many, none voted for McCain. If that election were repeated tomorrow, most would still do that. In a couple of cases they would be doing that reluctantly for lack of a further left opponent.

    I understand that living in comfortable circumstances insulates you from the anxieties of the less well off and the terrible pain of the poor. But if you need heart surgery, you go to a heart surgeon, not to Mother Teresa. Afterwards that heart surgeon might be the last person you'd want to listen to. I don't see how we can get away from having the economic decisions being made by someone who's been earning six figures  because anyone smart and experienced enough to make them will have reached that level.

    To repeat If we weren't in a crisis in 2008 I would have completely agreed with you that the economic reins should have been held by someone committed to e.g. a 90%  marginal tax rate. Jam today, not jam tomorrow... I'd hope they'd hire Larry Summers, or his equivalent, to help with tne nuts and bolts, but her over riding goal should be redistribution.

    I hope that when Obama is re-elected ( please!) he gives Geithner a great farewell party. Howard Dean would have the self confidence required for the sort of drastic changes that are required provided he had someone like Brad deLong for the nuts and bolts-as he did for Summers.


    by Flavius on Wed, 02/09/2011 - 8:42am

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