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Skin In The Game

It is called “skin in the game”. Speaker of the House, John Boehner, who is worth somewhere between $2.7 and $6.7 million, freely admits spending at least $1 million dollars at luxury hotels, gourmet restaurants, and exclusive golf resorts the last few years, thinks the American people are ready to sacrifice to reduce the debt. Well, he does not mean himself or his fellow Congressmen. Let’s not get foolish here. Granted, their $174,000 a year salary is not that outlandish in the great scheme of things, but the benefits are gold plated and diamond encrusted. I will not even get into the vacations and social lives they are able to enjoy because of lobbyists. It is easy to talk about suffering when it is other people’s suffering while you quickly roll past the poor in your limousine on the way to play golf at your private country club.

Since Congress believes the American people are ready to feel the pain, I think they should join in on the suffering. What I want to suggest is a rather modest and very symbolic proposal. While only one percent of Americans are millionaires, almost half of our Congressmen are. Of the 535 members of the House and the Senate, 261 have a personal worth of at least seven digits or more. Fifty-five have a net worth of more than $10 million a piece. (Sen. Tom Harkin is worth $10.50 million and Chuck Grassley, $5,266,999.) While the economy has been in the toilet the last couple of years and unemployment has skyrocketed, our Congressmen have seen their wealth increase dramatically. Between 2008 and 2009, they saw their wealth increase by 16 percent. Even Scrooge McDuck would envy the money vaults some of them get to dive into.

Here is what I propose. The 261 millionaire-Congressmen and Senators work for $1 a year until the debt is cleaned up. I would settle for just the fifty-five super, super rich ones. I think Darrell Issa (R-Calif., $303.5 million), Jane Harman (D-Calif., $293.4 million), and John Kerry (D-Mass., $238.8 million) could survive without that $174,000. That kind of money makes Olympia J. Snowe (R –Maine, $28.5 million) and John McCain (R – Arizona, $45 million) look like they must shop at Goodwill, at least the one in Darrell Issa’s neighborhood. I am not about Paul Tonko (D – NY, $4,999), Jerrold Nadler (D –NY, $4,999), or Keith Ellison (D – Minn., $5,999). They need the money. (If you bump into Yvette D. Clarke (D – NY), you had better pick up the check, because you have more change in your pocket than she is worth ($0).) Just the uber-rich, those who might accidentally leave $174,000 in the pocket of the pants they send to the cleaners. It is not unheard of. It has been a long tradition for some rich Congressmen, and certain families like the Kennedys, to either accept $1 a year, or to give their salaries to various charities. Think of the symbolic message it would send as these Congressmen stand arm-in-arm at a press conference to announce their sacrifice, be it a small one.

Here is the thing. We will eventually have to deal with our debt crisis. Our living off our children and grandchildren’s credit cards is going to have to stop. (While I do not think a shaky economy is the right time, it seems the mantra in Washington right now.) What bothers me is it appears that only certain segments of our society are going to pay the bill – government employees who never made great salaries but were promised a generous retirement package are going to see their packages whittled away to nothing. Young people are now the first generation of Americans to discover that a public university education is too expensive to swing and that a retirement package might not be there for them. There are the poor, small farmers, those that care about the environment, and eventually the middle class who are slowly washing out already.

I am not saying that these segments should not feel a little pain, but shouldn’t the segment that our current tax structure helped the most also feel a little, if not most of the pain? Should not the people who made out like bandits at the public party help foot the bill? Conservatives are not going to like acknowledging this, but, there has been a redistribution of wealth in this country over the last thirty years. The government has promoted this through taxes and other governmental policies. Since Ronald Reagan assumed office, our tax structure has been geared towards increasing the net worth of the richest Americans with the notion that their wealth would trickle down like one of those champagne glass pyramids.

One little problem, …it has not worked out that way. Any trickling down that has occurred has been what Lyndon Baines Johnson stated should never be confused with rain. In fact, these conservative policies have had the exact opposite effect. Since Reaganomics took ahold in the 1980s, the rich have gotten richer, the poor poorer, and what remains of the middle class has been treading water and slowly disappearing. A rising tide has not lifted all boats. In fact, a lot of hard working Americans have headed for Davey Jones’ locker. Princeton economist Paul Krugman has labeled this 31-year trend “The Great Divergence.” Not since the Gilded age of the 1920s has income disparity been so egregious. In the last quarter of a century, 80 percent of all newly created wealth has gone to the richest 1 percent of Americans; and they now earn 23 percent of all income. The top 10 percent control nearly 70 percent of our wealth. The bottom 50 percent of Americans control just a little over 2 percent of the wealth. These numbers are approaching third world status. Those are the facts. A person can ignore them, which we basically have the last few elections, but there is no debating them.

The conservative solution to the debt is to increase this trend of unequal wealth distribution by cutting back on government spending towards those on the margins, instead of engaging in a cost/benefit analysis of spending and taxes. This is dangerous, because a strong middle class is a buffer against class warfare and the backbone of democracy. Having a good education and a stable career generates attitudes and behaviors that lead to reasoning for settling arguments, rather than violence. Middle class values and attitudes reduce the vice in society, lessen divorce rates, and provide children with the stability to mature in. Shrink the middle class, and eventually the economic costs of their absence will be untold and crippling.

It is simplistic and ultimately suicidal to blame the debt solely on government spending, much of which has actually increased the tax base and moved families into the middle class who would not have been there without assistance. Now, being a conservative, as I have always understood it, means examining the past, discovering what has worked, holding on to what has worked and discarding what has been a failure. Between 1929 and the late 1970s our middle class grew and poverty lessened. This was especially true during the 1950s and 60s. Since the election of Reagan, the middle class has slowly washed out. Now, one would think, that if an individual was intellectually honest, they would examine these trends and want to retain the successful policies and attitudes that made this country a superpower. There is going to be a lot of pain coming down the road. When the government cuts back on its spending, like it or not, the economy is going to slow down. The problem is our economic and tax policies. For the last thirty years, they have been like pumping nitrous oxide into an engine. While it has certainly been a marvelous ride for some people, not everyone, eventually the engine is going to have trouble. It breaks down. Notice who gets the blame and who is asked to pay. There are a lot of people who made out like bandits over the last three decades. Somehow I doubt they are going to have any skin in the game.