The Zeitgeist

In a Free-Market Economy “Income Inequality” will Always be a Fact of Life.

Thomas Jefferson famously wrote in the Declaration of Independence that “We hold these truths to be self evident that all men are created equal.” Only three divine “inalienable” rights were then named, those being “Life, Liberty and the pursuit of Happiness.”

Ever since the Occupy Wall Street events of a couple of years ago there seems to be a clamoring for an additional sacred right to add to the original troika – that being income equality. The mantra of income equality was recited to great effect by then candidate and now New York City Mayor Bill DeBlasio and has subsequently been picked-up by President Obama.

It is true that the overwhelming majority of Americans are not rich. The U.S. Census Bureau reports that in 2010 per capita income was $40,584 nationwide. Even affluent states like New York and California are at $48,821 and $43,104 respectively. While Massachusetts (at $51,552) and Maryland ($49,025) which have even higher income numbers can’t guarantee the good life for all its residents.

The Census Bureau also reports that 42 percent of households in the U.S. have dual incomes which would account for the high percentage of Americans in the middle class and upper middle class. The Census Bureau also reports that as of its 2006 statistics (which will show higher numbers for 2010 and beyond) only the top 25 percent of households earned in excess of $77,500. Further refining this, the top five percent of households earned $167,000 or better; the top one percent had incomes exceeding $350,000, so, clearly, those earning a million dollars a year or more are a very rare breed.

On the tax front it seems that the bigger earners are paying a heavy chunk of U.S. income taxes. For 2009, the top one percent paid 36.73 percent of all federal income taxes. The top five percent were carrying 58.66 percent of the tax burden and the top 10 percent were bearing almost 71 percent of the tax load. So 10 percent of Americans are paying more than 70 percent of the taxes.

According to 2006 Census figures, the top 10 percent of households earn $118,200 or more whereas the top 10 percent of individual earners were at the $75,000-plus level and only 5.63 percent of individuals were exceeding $100K. So what constitutes the “wealthy”? It is really the guy in New York or San Francisco who earns $100,000 a year?

There has always been a top five percent and a top one percent in the U.S. In any free market capitalist society there are always going to be some folks who do exceedingly better than others.

Part of getting into the top five percent or higher is a combination of hard work, education, talent, pluck and luck. And not everyone is going to get there. The percentage of high school and college athletes who get into professional sports is miniscule and these athletes are on the whole very well compensated deep into the top one percent. Very few pretty girls will become a super model or appear in the Sports Illustrated swimsuit issue.

There are very few aspiring broadcast journalists or actors who will make it onto the big networks and fewer yet who will be in Hollywood’s top 100. and believe it or not, there are very few people working on Wall Street who will crack the finance stratosphere.

The tenth of the Ten Commandments reads as follows from the King James Version of the Bible: “Thou shalt not covet thy neighbor’s house, thou shalt not covet thy neighbor’s wife, nor his manservant, nor his maidservant, nor his ox, nor his ass, nor any thing that is thy neighbor’s.” According to Merriam-Webster’s dictionary, one of the key definitions of “covet” (and meant in the biblical sense) is “to desire (what belongs to another) inordinately.” Because coveting leads to resentment.

The authors of the Bible put the prohibition on coveting into the top 10 because jealousy of those who have more than you can be both self-destructive and damaging to society as a whole. There will always be someone you know who earns more, has a bigger house, drives a better car, wears better clothes or takes better vacations. There is no way to assure equal money and equal stuff for everyone. They tried that in the 20^th Century. It was called Communism and Socialism and as George Orwell wrote, still “some pigs were more equal than others” which is why it failed.

Yet we currently have a political environment where the term “income inequality” is being bandied about prolifically with the intention of arousing the resentment of the masses against all those who’ve done well for themselves. What American equality has always stood for first and foremost has been equality before the law, equality in voting, equality of opportunity (a country where anyone can become President, for example) and surely equality in education to the greatest extent possible.

What is not guaranteed in life are equal outcomes for one’s life and career efforts and as a consequence, equal incomes. That’s why the Declaration of Independence only guarantees the right to pursue happiness, not happiness itself. Life isn’t fair. We don’t always get what we want or what we deserve. Government has to provide a climate of equal opportunity for all to excel but ought not be fomenting resentment against those who have succeeded or succeeded spectacularly. Government needs to have an impartial, non-discriminatory playing field that doesn’t discriminate or vilify any of its citizens, including those who’ve done well.

The Zeitgeist

Joe Lhota (left) and Bill de Blasio mix it up on WABC debate

Lhota Dead on Arrival for Televised Mayoral Debate;

Historic GOP Loss in the Offing.

On Tuesday evening October 15^th Bill de Blasio hammered in the nails on Joe Lhota’s coffin. In a televised debate on WABC Channel 7, de Blasio was animated, forceful and forthright while continually tarring Lhota with the brush of “Republican trickle-down economics,” “Tea Party extremism,” “Giuliani Administration divisiveness” and as a shill for “Bloombergian corporate welfare.” De Blasio continually rebutted anything Lhota had to say even if de Blasio wasn’t supposed to be speaking. Lhota was so painfully polite that de Blasio always got in the last word and the last jab.

Joe Lhota, the Republican candidate for Mayor of New York never once turned to look de Blasio in the eye, allowed all charges, slights and insults to go un-refuted and unchallenged and never went on the offensive calling de Blasio a continuation of the David Dinkins administration since de Blasio’s City Hall experience was working for that former mayor. Lhota never raised the ominous specter of a return to those crime-filled days nor did he ridicule any of de Blasio’s proposals.

Lhota went out of his way to portray himself as the candidate of change while de Blasio successfully boxed him in as the candidate of continuity. Instead of vigorously defending the last 20 years of Republican control of City Hall, Lhota was trying to have his cake and eat it too, distancing himself while gingerly embracing a few GOP policies. A lot of New Yorkers are happy with how things have gone since 1993 but the only way you’d know Lhota was the Republican standard-bearer was hearing it from de Blasio.

Back in 2009, 1,550,000 of the more than eight million residents of New York City came out to vote in that year’s mayoral contest between the incumbent Michael Bloomberg and his Democratic challenger Bill Thompson.  The Board of Elections shows 4,366,746 registered voters in the city limits as of April 1, 2012.    Not a particularly high turnout last time around. Back in 1993 in the supercharged race between the incumbent David Dinkins and his challenger Rudy Giuliani nearly 1.9 million people voted. Voter apathy tends to breed low turnouts as in 2009. Turnout has been declining steadily for decades. From 1932 until 1969 well over 2.2 million people voted each time.

Thanks to the perception that the 2013 race is a fait accompli it is fair to assume that New Yorkers won’t be streaming to the voting booths. By “fait accompli,” I mean all the recent polls showing GOP candidate Joe Lhota getting trounced by the Democratic nominee Bill de Blasio. In the last Quinnipiac poll conducted at the end of September int margin that points to a mauling of historic proportions. If we take the 2009 voter turnout as an estimate for 2013 that would mean more than 1.1 million votes for de Blasio and a mere 325,000 for Lhota. For Lhota that would be fewer votes than there are registered Republicans, a rare feat given how few admitted Republicans there are in Gotham.

You’d have to go back all the way to the Koch years where Ed slaughtered the placeholder GOP candidates to find a more dismal looking picture for the GOP. In 1977 Roy Goodman only garnered 59,000 votes (Mario Cuomo got 588,000 on the Liberal Party line). In 1981 Koch ran as both a Democrat and Republican and in 1985 his Republican challenger only took 102,000 votes. That Joe Lhota seems to be OK with doing little better than Roy Goodman in ’77 rather than winning is a big part of the problem. No fight. No passion. Lhota just wants to be loved and cuddled. His pushing of himself so far away from the embrace and legacy of Rudy Giuliani is reminiscent of Al Gore’s similar strategy vis-à-vis Bill Clinton in 2000. We know how well that worked out for Gore.

The Lhota people are running a “sunny day in the Emerald City” type of ad campaign. There’s nothing to fear, nothing to worry about because like de Blasio, Lhota is pro-Choice. De Blasio is for Gay marriage, so is Joe; lo and behold, like de Blasio, Lhota supports decriminalizing marijuana. Candidate differentiation? Lhota wants to cut spending and not raise taxes but in the Lhota TV spot that got ridiculed by media critics everywhere, this one policy difference comes more than halfway into the commercial. At the end of his spots it’s all about “Democrats agree that Joe is New York.” The problem here is that you can really be a bona fide New Yorker and even be liked for it but yet give the voters no reason to support you. That you’re portraying yourself as a moderate Democrat? There already is a candidate from that party. That you “are New York”? So what, so are eight million other people. Is de Blasio not a New Yorker? Who cares?

Being pro-choice or pro-marijuana are not even issues that might mean something to Democrats and Independents to help sway their votes. The issues that matter are first and foremost public safety, then schools, then jobs. In the safety sphere, two cases in point are that of retaining Ray Kelly as Police Commissioner and Stop and Frisk. Lhota would keep Kelly, de Blasio would dump him but there’s nary a peep from the Lhota people about it. Stop and Frisk? Again on different sides of that issue but you’d never know it. Charter Schools? Lhota wants to keep them, de Blasio is opposed to them as elitist and diverting resources away from the general school population. Jobs? De Blasio wants to stop subsidizing businesses that locate or agree to stay here via tax breaks and subsidies. Lhota is on the other side of this, but, again, Lhota makes no forceful case for its necessity in attracting and retaining jobs. Is there any campaign targeted to public school parents? Nope. In Lhota-land the predominantly Democratic electorate can’t handle the tough issues. It’s more important that “Joe is New York,” whatever that means.

A kid-glove campaign without being in the least bit pugnacious won’t work in a tough town like New York. For the last 20 years New Yorkers elected Republican mayors, but Guiliani and Bloomberg were alpha dogs (although different stylistically). Absent a campaign that portends a return to the 1989-1993 chaos when New York was careening towards becoming Detroit if a “Democrat with a capital D” is put in Gracie Mansion, there is nothing to motivate “Democrats with a lower-case D” to vote GOP. And make no mistake, fear is a powerful motivator. New Yorkers also respect attitude, not passivity and Mr. Lhota’s full court press of passivity was on full display in Tuesday evening’s debate which is why the candidate with more passion, a clearer sense of who he is and a bigger vision will undoubtedly triumph on November 5^th and right now that isn’t Mr. Lhota.