Friday, October 26, 2012

On Equality


   This blog is entitled equality, but most of my information comes from articles on inequality, a real source of wealth. I am fortunate in that my last blog told about Moral Principle and its opposite, Material Interest. Moral Principle ended up in the drink.
    On the  subject of equality we have one of the World’s best exclamations in the Declaration of Independence, which I’m presenting below:
The unanimous Declaration of the thirteen united States of America,
When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. --That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. —Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains,
    You will recognize the phrase, “all men are created equal” which most scholars will agree comes from the several books of J.J. Rousseau a 17th century French Philosopher. I apologize that a lot of this paragraph has to do with sufferings of people with the ‘class’ form of government which they were throwing off.  Vestiges remained as one of my ggggrandfathers had the title Gent. When he signed his census takers form in 1794 (1784).
    Rousseau came up recently when my daughter, LeighAnn Griffith wrote a paper titled ‘Philosophy’ at Penn. U. where she was taking a course in that subject. I will give you a couple of paragraphs from the beginning:
“Hegel and Rousseau on the Origin of Inequality


  Rousseau, in his treatise “Discourse on the Origin and Foundations of Inequality Among Men” demonstrates a theoretical, normative, 
historical progression of how inequality originates and develops, 
whereas Hegel in “The Philosophy of Spirit” presents a conceptual 
moment of the origins of inequality and the precise line of events 
that bring people to have feelings of inequality.  Though both 
Rousseau and Hegel propose the idea that man’s mutual dependence on 
each other for esteem is what leads to inequality, Hegel advances the idea that it is the feeling of exclusion that causes the injury to self-esteem.  He also adds strength to Rousseau’s mutual dependence theory by demonstrating that the concept of owning property necessarily requires that another man recognize your ownership.

   Both philosophers take us back to their versions of the State of 
Nature to investigate whether there are any natural causes for 
inequality.  If there were, there should preside some type of natural law.  Rousseau defines ‘Natural Law’ by dissecting the term.  For it to be law, it should follow that “the will of anyone who is bound by it must be capable of submitting to it knowingly, and that, furthermore, for it to be natural, it must speak directly by the voice of nature.” (Rousseau 6)  He proposes that the two basic principles “prior to reason” that are inherent in man that “give rise to the rules of natural right” are 1) self-preservation and 2) an aversion to see others suffer (compassion). (Rousseau 6)  Taken together, Rousseau’s Natural Law is “Do what is good for you with the least possible harm to others.” (Rousseau 29) He explains that compassion moderates self-preservation, thereby contributing to the “mutual preservation of the whole species.” (Rousseau 29)  Compassion in the State of Nature “takes the place of laws, moral habits, and virtue.” (Rousseau 29)  Another important facet of man in the State of Nature is that he has no “known duties” so he could not be said to be neither good nor evil. (Rousseau 26) Primitive man is distinguished from animals in that he has a will, which can override the messages that nature is giving him. (Rousseau15)”
    Whew, that was a load! What I got out of it was that since Socrates, and  Plato’s essay ‘MENO- On Virtue,” about the best thing to do about inequality is discuss Philosophy! The path now is for us to return to our subject – equality. There is  nothing better than to recite the 14th Ammendment:
Section 1. All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.
Section 2. Representatives shall be apportioned among the several States according to their respective numbers, counting the whole number of persons in each State, excluding Indians not taxed. But when the right to vote at any election for the choice of electors for President and Vice President of the United States, Representatives in Congress, the Executive and Judicial officers of a State, or the members of the Legislature thereof, is denied to any of the male inhabitants of such State, being twenty-one years of age, and citizens of the United States, or in any way abridged, except for participation in rebellion, or other crime, the basis of representation therein shall be reduced in the proportion which the number of such male citizens shall bear to the whole number of male citizens twenty-one years of age in such State.
Section 3. No person shall be a Senator or Representative in Congress, or elector of President and Vice President, or hold any office, civil or military, under the United States, or under any State, who, having previously taken an oath, as a member of Congress, or as an officer of the United States, or as a member of any State legislature, or as an executive or judicial officer of any State, to support the Constitution of the United States, shall have engaged in insurrection or rebellion against the same, or given aid or comfort to the enemies thereof. But Congress may, by a vote of two-thirds of each House, remove such disability.
Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.
Section 5. The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.

    It is curious that this amendment parallels the 14 sections of the Virginia Declaration of Rights, proposed by George Mason and adopted by the old House of Burgesses, in 1776, as additions to the Virginia Constitution. Nor did George Mason let the matter rest for he was foremost in recommending to the Constitutional Convention that their document left the people out which could only be rectified by enacting the first 10 amendments, now called the Bill of Rights.
    It is also curious that rights were granted by Feudal Monarchs to their vassals in a complex class system that runs down through Clergy, Barons, Lords, and then to the peasants if there are any left. One would think that Moral Principle was gone from the scene, but Bishops were there to rectify omissions but “The regular collection of tithes and other taxes from their dioceses made many bishops extremely wealthy.”    Material Interest is alive and well!
    I promised you a sizeable dose of inequality. I think I will start from a NYT article sent me by my daughter, Connie:

Income Inequality May Take Toll on Growth

By ANNIE LOWREY
WASHINGTON — Income inequality has soared to the highest levels since the Great Depression, and the recession has done little to reverse the trend, with the top 1 percent of earners taking 93 percent of the income gains in the first full year of the recovery.
The yawning gap between the haves and the have-nots — and the political questions that gap has raised about the plight of the middle class — has given rise to anti-Wall Street sentiment and animated the presidential campaign. Now, a growing body of economic research suggests that it might mean lower levels of economic growth and slower job creation in the years ahead, as well.
“Growth becomes more fragile” in countries with high levels of inequality like the United States, said Jonathan D. Ostry of the International Monetary Fund, whose research suggests that the widening disparity since the 1980s might shorten the nation’s economic expansions by as much as a third.
Reducing inequality and bolstering growth, in the long run, might be “two sides of the same coin,” research published last year by the I.M.F. concluded.
Since the 1980s, rich households in the United States have earned a larger and larger share of overall income. The 1 percent earns about one-sixth of all income and the top 10 percent about half, according to statistics compiled by the respected economists Emmanuel Saez of the University of California, Berkeley and Thomas Piketty of the Paris School of Economics. (More on request).
    I guess there is no more pressing problem in our country than the income gap, (she left out Bush’s ‘Have-mores’) I give Reagan credit for dropping the top marginal rate from 70 to 50%.
  Hey, he had a tip, Kennedy dropped it from 91 to 77%, the excuse being that lower taxes stimulates the economy. See – I told you so. Reagan had to increase other taxes to keep the deficit from running out of control because of large Cold War Expenditures. Another current topic is Sensata Tech. and Bain Capital’s plan to disassemble it. Only they now say the employees will be fired in December instead of 5 Nov. Oh, goodie! Below:
Romney's Bain Capital Is Sending a Bunch of High-Tech Jobs to China on the Day before the Election
          By Joshua Holland
October 16, 2012  |  
On the day before an election that's supposed to hinge on jobs, taxes and the middle class, Bain Capital, the company Mitt Romney founded, will close the doors of a factory in Freeport, Illinois, and ship 170 good, high-tech jobs to China.
The employees of Sensata Technologies were forced to train their Chinese replacements, and the American flag that long flew over the factory was reportedly removed while the Chinese engineers were visiting the site. A group of workers have set up camp across from the factory -- calling it “Bainport” -- and some supporters have tried to block the trucks hauling equipment out of the plant. According to Dave Johnson [3], there have been several arrests.
Sensata workers have asked to meet with Mitt Romney and hoped to enlist his help keeping their jobs in the United States, but he has refused, instead remaining on the campaign trail, where he speaks often about “getting tough” with China.
The most important part of the story is that Sensata Technologies is profitable operating in Illinois. Net income last year was $355 million, up 16 percent from 2010. The company reported total revenues of $1.8 billion in 2011, up almost 19 percent from the year before. According to a company financial statement [4], “both 2011 net revenue and adjusted net income represent record levels for the company.”
So this has nothing to do with “making hard choices” in the process of turning around a failing business, which is how the Romney campaign describes Bain's corporate raiding. Bain's partners are looking for a modest boost in profits by locating the plant closer to the booming Asian automotive market (Sensata makes high-tech automotive parts). They'll get a small tax break [5] for relocating the plant – the one Mitt Romney insisted did not exist during the first debate – and possibly defer taxes on some of the income the company generates.
It takes both capital and labor to make a successful business like Sensata Technologies. In order to make a few more bucks, 170 of the people who helped make the company thrive will be cast aside like so much trash. The layoffs will surely have a ripple-effect in Freeport [6] – a town of 25,000 with a declining population and a poverty rate well above the national average. The move is the epitome of corporate America's lack of patriotism – it's capital unmoored from any sense of responsibility for the people that make the profits or the communities where they live. The city passed a resolution Monday asking Romney to intervene.
But the Sensata story has, so far, had little impact on the presidential race, mostly because Mitt Romney has no direct involvement in the operations of the company he established (despite continuing to make millions as a “passive retired partner”). But this is reading the story of Bain Capital too narrowly. Mitt Romney is directly responsible for its business model.
As Tom Gaulrapp -- a lifelong resident of Freeport and 33-year employee of Sensata – told the Huffington Post's Amanda Terkel, “They're still using his business model. He's the one who taught them how to do this. These guys were put there by him. So you can say he doesn't run the day-to-day operations, but he's still at blame for the way they do business."
Mitt Romney started the firm, and built it up on a strategy of buying firms with little money down, loading them with debt, raiding their pension funds and breaking their unions and then “harvesting them” – in his words – for a profit. Romney is the only person to ever serve as Bain's CEO – since his departure, the firm has been run by a managing committee.
The story is bigger than Sensata, and bigger than Bain. The issue is the turn America's corporate culture has taken, and what the consequences of its model are for our economy and, indeed, our society. And it is Mitt Romney's embrace of that model – ravage capitalism that is loyal to no nation-state and blind to every human virtue but profit – that should be disqualifying.
In the New York Times, Chrystia Freeland, author of “Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else,” wrote [7] about the historical tendency of elites to self-destruct by extracting wealth from the broader community to such a degree that the society becomes dysfunctional and mired by social problems. She recalls how the Venetians became the most prosperous society in the world during the 14th century by opening their economy to a broad swath of the population. Then, at the height of its golden age, “the upper class acted to lock in its privileges, putting a formal stop to social mobility with the publication of the Libro d’Oro, or Book of Gold, an official register of the nobility. If you weren’t on it, you couldn’t join the ruling oligarchy.”
She then notes parallels to the United States, which featured one of the most egalitarian economies through much of the last century, but is now plagued by rising inequality and decreasing economic mobility. She writes:
The 1 percent cannot evade its share of responsibility for the growing gulf in American society. Economic forces may be behind the rising inequality, but as Peter R. Orszag, President Obama’s former budget chief, told me, public policy has exacerbated rather than mitigated these trends.
Even as the winner-take-all economy has enriched those at the very top, their tax burden has lightened. Tolerance for high executive compensation has increased, even as the legal powers of unions have been weakened and an intellectual case against them has been relentlessly advanced by plutocrat-financed think tanks. In the 1950s, the marginal income tax rate for those at the top of the distribution soared above 90 percent, a figure that today makes even Democrats flinch. Meanwhile, of the 400 richest taxpayers in 2009, 6 paid no federal income tax at all, and 27 paid 10 percent or less. None paid more than 35 percent...
Educational attainment, which created the American middle class, is no longer rising. The super-elite lavishes unlimited resources on its children, while public schools are starved of funding. This is the new [Venice]. An elite education is increasingly available only to those already at the top. Bill Clinton and Barack Obama enrolled their daughters in an exclusive private school; I’ve done the same with mine.
Much of this is the result of the 30-year assault on organized labor. It's worth noting that Sensata Technologies is a non-union shop, which is a big reason the firm can move profitable operations abroad without much resistance.
Employment, in raw jobs numbers, should not be the defining issue of this election viewed in isolation. We also need to consider what kinds of jobs are being created. A recent study [8] conducted by the National Employment Law Project (NELP) found that while only 21 percent of the jobs lost during the recession were low-paying (with median hourly wages from $7.69 to $13.83), a majority of those created during the recovery – 58 percent – have come with such low wages.
These trends are not Mitt Romney's doing, but he is the walking, talking personification of what's been happening in the American economy. Mitt Romney was an innovator in offshoring. He and his family will make a few more dollars as a result of shipping those jobs to China, at the expense of the workers who “built that” in the first place. That's why the story of Sensata Technologies should have an impact in this race.
    I will introduce you to another (Penna.) Declaration of Independence in Lycoming Co. about 1776. My Robert Walker, Gent’s cousin was in  the Fair Play Court, which was designed to protect properties of settlers who went off to join  the Penna. Militia.  He and his son owned land at the ‘Point’ of intersection of Pine Creek and the West Branch of the Susquehanna. At the point itself, another ancestor, Edw. McMasters, did enlist, served in the 1st Penna. Regiment, was captured at Prospect Ridge in Brooklyn, held for several years on a British prison ship before returning to Valley Forge, disabled. At Pine Creek, the Fair Play Boys had held a signing ceremony for the declaration under a large (Elm) allum tree. Which got its name from the Tiadighton, the Indian name for Pine Creek.
    He found his land had been sold while gone, and resorted to the Fair Play Court to get him restored to ownership. Wow, Moral Principle triumphed at last!
Other References (Online)
The Retirement Robbery, SANJOY MAHAJAN
Goldman Sachs VP explains why he quit, Greg Smith to 60 Minutes (CBS)





posted by James E. Opfell @ 12:48 PM

6 Comments:

At October 31, 2012 8:32 AM, Blogger Unknown said...

As we barrel down the road to Venice, I wonder how we lost our compassion for our fellow travelers. It has taken us as a country such a short time to wall ourselves off into "those like me" and "those not like me" gated communities. Past great leaders' messages that "we are all in this together" are now mouthed by our current candidates with minimal sincerity, and disregarded by a cynical populace. What can we do to change the trajectory?

 
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