I recall a minor earthquake in Southern California which was actually kind of fun. It seemed simply to make a series of circles. My first impression was that I was dizzy. I sat down but still seemed to be moving in gentle circles. And then I noticed that the hanging light fixtures were also swinging. It was the earth that was dizzy, not me!
Culturally, we all know that we are in a time of a variety of very radical changes. We worry about Russia, with Putin sounding very much like the barbarian Hitler from 80 years ago and seeming to begin a re-creation of the Soviet empire of 50 years ago. We worry about morality, with our apparent loss of the ability to generate culturally accepted moral standards. We worry about the rapidly rising economic inequality, which is diminishing slightly if measure it between nations but is rising very, very dramatically within nations, especially in the West.
A review in the current issue of The New Yorker discusses the about-to-be-published book, Capital in the Twenty-First Century. The books author, Thomas Piketty a French economist, makes the now familiar point that the wealthy are getting richer at an accelerating pace while the middle and lower economic classes are barely holding their own, if that. The reviewer writes, “The main factor, [Piketty] insists, is that major companies are giving their top executives outlandish pay packages.”
This trend was easy to establish, once companies started filling the chairs of their Boards with executives from other companies. Executives are setting the salaries of fellow executives. A whole new kind of company has emerged, the “salary consultants,” who tell these executives whether their salaries are keeping up with one another’s. So, if I am on the Board of Company A while running Company B, it benefits me to grant a big pay raise to the leaders of Company A. Soon someone will remind my Board in Company B that my own salary is lagging a bit behind that of others.
It also has become the case that a tremendous amount in wealth moves from the pocket of ordinary people into that of the wealthy by the increasingly common practice of one company buying another. The seller makes a huge profit and the buyer knows that he soon will reap a great profit from his purchase. Where does the money originate for all these profits? The pockets of the consumers. When people like take-over mogul Carl Icahn make enormous profits without improving — and sometimes even harming — productivity, the economy as a whole suffers.
Oddly enough, in our currently skewed system, even major recessions don’t hurt the wealthy. They can cause severe economic problems for a whole people while in fact making huge profits off people’s problems. Piketty observes that “almost all of the income growth in the economy between 2010 and 2012 — ninety-five per cent of it — accrued to the one per cent” at the top.
Conservative economists such as the late Milton Friedman like to argue that while the wealthy are generating riches for themselves they are creating jobs for others. That makes a nice theory but it turns out to be a mere rationalization. If nothing else, the last few years have proven the theory to be false. The income of the wealthy has not resulted in expanding job opportunities for anyone else.
Other conservatives argue that we are simply seeing capitalism in action and that we would all be better off if we would just grant the capitalists ever-greater freedom to do what they like. That makes for a nice, neat portrait of an ideal capitalism but it utterly fails to account for the reality of the human heart: Greed is an all-consuming sin. America has come to celebrate greed, even while it is devouring us. Imprisoned insider-trader Ivan Boesky had once been cheered for saying in a now famous graduation speech (at the University of California School of Business), “I think greed is healthy. You can be greedy and still feel good about yourself”.
One might hope that our political leaders would be able to create restraints on corporate greed. There is little chance of that until we effect major campaign finance reform, since a great many of our politicians are receiving enormous amounts of money from wealthy people and large corporations. Sadly, we seem to be moving in the wrong direction: Our laws are making it easier than ever for rich people to buy votes.
Some people are eagerly anticipating a Republican takeover of the Senate at the 2016 elections. If that happens, I believe the greed of the wealthy will be unleashed even more than it is now. For all their talk about creating jobs and saving the middle class, the policies they advocate clearly favor the wealthy. The so-called “job creators” will be freed to continue creating a handful of jobs at enormous cost to the American people.
Meanwhile, the quiet voice of Jesus Christ continues to whisper in the ears of our conscience, “Do not store up for yourselves treasures on earth. . .but store up for yourselves treasure in heaven, . . For where your treasure is, there your heart will be also”