Morning Read: A middle class nation led increasingly by millionaires
CORRECTION: I incorrectly cited numbers describing Democrats as seven of the ten wealthiest lawmakers in Congress. They are, in fact, seven of the ten wealthiest Senators, with John Kerry wealthiest there at roughly a quarter billion dollars in assets.
But in the House, Republicans rank in the top tier, with Republican congressman Darrel Issa of California worth nearly $450 million and congressman Michael McCaul of Texas worth roughly $380 million.
ORIGINAL POST
The Washington Post and the Center for Responsive Politics have issued a fascinating report that examines the fact that our elected politicians — in the House and Senate — don’t look much like the rest of us when it comes to their pocketbooks.
It turns out the people who we hope will reflect our ideals, our values, and our needs often live in a secure and comfortable financial world that the vast majority of American will never achieve.
And the gap is widening.
Between 1984 and 2009, the median net worth of a member of the House more than doubled, according to the analysis of financial disclosures, from $280,000 to $725,000 in inflation-adjusted 2009 dollars, excluding home equity.
Over the same period, the wealth of an American family has declined slightly, with the comparable median figure sliding from $20,600 to $20,500, according to the Panel Study of Income Dynamics from the University of Michigan.
Here in the North Country, two of our congressmen are millionaires, with Republican Richard Hanna (NY-24) worth more than $12.8 million and Democrat Bill Owens (D-23) worth more than $3.3 million.
Both were businessmen before taking office.
By contrast, freshman Republican Chris Gibson (R-20), a former Army officer who lives now in Kinderhook has a net worth of only $175,000, according to the report.
The report includes some surprises, including the fact that seven of the ten richest lawmakers in the US Senate are Democrats, topped by Sen. John Kerry who boasts more than $250 million in assets.
On that scale, however, New York Senators Chuck Schumer and Kirsten Gillibrand’s both have a net worth that is relatively down-to-earth, each clocking in at under $1 million.
What do you think? Is it a good thing for a nation that is mostly middle- and working-class to be led by (mostly) wealthy lawmakers? Is this state of affairs inevitable? Your comments welcome.
“Is it a good thing for a nation that is mostly middle- and working-class to be led by (mostly) wealthy lawmakers?”
It is not a good thing to have career politicians, period.
The electorate has the potential to enact “term limits” by virtue of their vote. However, the waskely waskels in office have stacked the deck in favor of the incumbent.
It’s time to enact term limits on Representatives and Senators in Washington.
Rich or poor are subjective. $3.3mil seems “rich” until you look at some of the representatives who are worth $100mill +.
Term limits are concrete.
I don’t have a problem with a skilled and well-liked political figure being re-elected, but in a nation where money buys connection, and corporations are counted as citizens, we can only go in the wrong direction. Those with money will ultimately serve those with money, while we without become ever more invisible. I’m not sure term limits will solve this equation.
Our over concern with “The Economy” has led to the election of too many money heads, and not enough real representatives who are concerned with our place in the world and our place in history. We pay attention to the economy, even though it really reflects the workings of those with riches to play with, and we ignore those things that we might all share…like the future for instance.
Hasn’t anyone been listening? Lots of us have been talking about this for a very long time. Occupy Wall Street?
And don’t worry about Gibson, his money is as good as … I was going to say “in the bank” but only a sucker keeps money in a bank anymore.
And when is NPR going to stop with the stock market updates every hour? They are nothing but a form of propaganda designed to make people with even a very modest amount of money in stock or mutual funds, IRAs, etc ( and by modest I mean, their life’s savings ) into believing that they are part of the Investor Class, and that somehow the market is working for them.
It is news designed to work at our reptilian brain where we process only the most basic of instincts, fear and gluttony.
Yes Knuck, i’m listening. In fact i asked what percentage of our political representatives were in the 1%, ABOUT TWO MONTHS AGO!!….
JDM: Term limits don’t really address this issue (not saying I support or oppose, just that it’s not germain to this particular question). Without fundamental changes, all term limits would do would re-arrange deck chairs on the Titanic with different members of the One Percent in them.
The fundamental problem is that members of the One Percent are the only ones who can afford to run for office in the first place.
The title and premise of this post are misleading. According to Census numbers as reported by the Associated Press “Squeezed by rising living costs, a record number of Americans — nearly 1 in 2 — have fallen into poverty or are scraping by on earnings that classify them as low income.”
So if almost half of Americans are in poverty or low income we are in no way a “middle class nation”.
Brian-MYOFYC
I think it is germain.
Since we can’t limit “rich”, I propose we limit “time”.
John –
Two points. First, even by that article’s suggestion, most Americans are either middle class or wealthy, albeit by narrow margins.
But I also found the premise of the report you cite to be questionable, for two reasons.
First, it offered this yardstick for the American economy on the tail-end of a brutal recession, and didn’t indicate whether the higher number of low income families was likely to be permanent.
I suspect that at least a significant number of those families will muddle their way back toward more solid middle class footing if unemployment continues to decline.
But the dodgier part of the article was that it offered $45,000 (for a family of four) as the cut-off for a middle class family.
I grew up in a household of five and for the first decade of my life, my parents earned well below $45,000 a year between them.
Yet we still lived a lifestyle that was, while hardly affluent, recognizably middle class.
Would you honestly rank a family in that income level as low income? I wouldn’t.
–Brian, NCPR
There’s a good graphic on this here: http://front.moveon.org/how-many-millionaires-directly-create-our-laws/?rc=daily.share&id=33869-20179487-PxZYNbx
JDM: If it makes you feel better… I just don’t see what the difference is. It’s a waste of energy that should be devoted instead to reform that will actually democratize the process.
Brian Mann: though I’m not sure why it’s surprising that 7 of the 10 richest lawmakers are Democrats. Occassional empty populist rhetoric notwithstanding, they represent the One Percent as much as Republicans do.
I’d rather not have most of them wealthy. Kerry married money so thus his net worth. Pelosi is certainly ok. When politicians thirst for re-election their hearing is better. Wealth can impair hearing among politicians…
The issue of political connections does come into play. A local fellow who merely ran for election a year ago and lost is up for two nominations in front of the Governor to boards serving in this region. He “maintains” a local residence as he bought his parents house in which they still reside. He was funded by his friends in New York City where he resides and works.
The problem with term limits is that it is blind to the quality and effectiveness of an elected representative.
While being elected may be an honor it is also being hired to do a job. Would any business with an ounce of sense get rid of good workers just because the company has employed them for X number of years? To do that would be stupid.
As to the wealth of elected officials, I don’t see it as important in and of itself.
By the way, term limits would limit the voters right to choose.
Brian, I used the AP report because it was simple and straightforward, based on US Census numbers.
I’m not sure what you describe as “recognizably middle class” is exactly, because that’s your opinion, but Wikipedia’s “Household Income in the United States” entry includes three recent studies that show that, even when combining lower and upper middle classes together, America’s middle class is roughly 45-47% of American households (those are numbers from 2002-2005).
So, less than half of Americans were “Middle Class” BEFORE the recession – less now – that is not a “Middle Class Nation”. A closer look at those studies show that many more people in America have no work autonomy, and low job and economic security. Those are true measures of class in my mind.
At any rate, saying that half the population is middle class makes us a “Middle Class Nation” is like saying that since half the population of America are women, we’re a “Nation of Women.”
FDR was rich. Didn’t stop him from trying to help the poor. JFK, RFK, we could probably start a list.
The problem isn’t just that there are rich people in positions of political power, the problems have been that the system is built around money much more so today than in the fairly recent past. In general you need to be able to raise enormous amounts of money if you aren’t wealthy yourself and once you are in you can use your contacts and the insider knowledge gained through your job of representing the People to: make favorable trades in stocks or real estate, get jobs and directorships and speaking fees when you leave office, start a consulting company based on your ability to network with your colleagues, start a lobbying firm, write a book that your election campaign buys tens of thousands of copies of… the scams go on and on.
How about a list of prominent politicians and what they get paid for speaking engagements? And please let’s start a list of what any ordinary person would pay to hear these people speak, then do the math. If the math doesn’t work it becomes obvious that there is something else going on.
Let’s start with Bill Clinton. I like hearing him talk. I might pay five bucks to attend a speech, but probably not, cause I can sometimes hear him for free on the radio. Still, if there is a room that holds 1000 people and each person is willing to spend 5 or 10 bucks that’s maybe $10,000. Round up to $20,000 just for kicks. So what does he really get paid? Far more than that.
What about Newt?
Brian Mann writes: “I grew up in a household of five and for the first decade of my life, my parents earned well below $45,000 a year between them.
Yet we still lived a lifestyle that was, while hardly affluent, recognizably middle class.”
Brian, you grew up, what, 40 or 50 years ago, right? Since then, everything has changed. Income inequality was virtually flat from 1942 to 1982; through those four decades, the top 10% took in roughly a third of the national income. Then in 1983, it started a steep upward climb, so that in 2007, the top 10% took in fully half the national income. (http://www.huffingtonpost.com/2009/08/14/income-inequality-is-at-a_n_259516.html See chart at the end of the study cited.)
And that’s income. The picture is even bleaker looking at total wealth.
Put it this way– if we’re still a middle class nation we’ve got some mighty funny looking company in the GINI rankings of wealth distribution, where lower numbers reflect greater equality.
In the 20s you’ve got Denmark, Sweden, Germany, Norway, Japan.
In the 30s are Netherlands, France, Canada, Switzerland, Belgium, Ireland, Australia, Britain.
Then, in the 40s you get to Djibouti, Chad, Burkina Faso, Trinidad and Tobago, Sri Lanka, and oh, yes, then the United States. Hmm…
Term limits seems to be a good start as JDM said. However there is also a good argument to be made for keeping really effective politicians who do a great job in place. Maybe something like non sequential term limits, like 2 consecutive terms then you have to get out but can run again after someone else serves a term. Just a thought.
“The report includes some surprises, including the fact that seven of the ten richest lawmakers in the US Senate are Democrats, topped by Sen. John Kerry who boasts more than $250 million in assets.”
Why is this surprising?
Despite the rhetoric we have today the democratic party is still the party of big business and Wall Street. It doesn’t surprise me at all that they continue to benefit from those ties.
The latest attempts to paint republicans in that manner is working but it is inaccurate.
John, Are those numbers looking at only income levels or net worth?
“Is it a good thing for a nation that is mostly middle- and working-class to be led by (mostly) wealthy lawmakers? Is this state of affairs inevitable?”
No and no.
How effectively can wealthy lawmakers understand average americans?
It costs almost 50,000 a year to send a kid to college these days at a good school. So if you have 3 kids you better set aside 600,000 dollars.
The problems is not what you take in but what you have to dish out!
Looking good for the GOP in the Senate with Ben Nelson’s retirement:
http://online.wsj.com/article/SB10001424052970203479104577124863039883298.html
With this, and if we can get Mitt Romney into the White House, we can finally start to see some things change for the better!
scratchy: “How effectively can wealthy lawmakers understand average americans?”
That’s why smart tax payers should turn off the money spigot to the government.
For example, Nancy Pelosi’s Net Worth Grew 62 Percent Last Year. How? On a congresswoman’s salary. Not hardly.
Limit their term. Limit their access to our money. Turn off the gravy train.
Having some wealthy people in congress is fine. The issue for me is the lopsidedness of the numbers, when almost every single person in Congress is wealthy I think it is a problem. I also believe that wealthy people can make very good politicians and it does not mean they can’t represent the middle class. But something is going on when ALL middle income people are basically shut out of congress, it does create a problem and I think it is indicative of a problem in our system.
The interesting point is the number of congressmen who became rich while in congress! Many of these guys have used their position to make a lot of money. This could be controlled and I think it is something we should look at; along with term limits AND making it illegal for former congressmen and women to work for the government or to lobby the government in any way after they leave office.
We have seen a change in our society to a more materialistic greedy place and I think congress has reflected that.
If you are interested in understanding JDM’s smear of Pelosi, above, see the Christian Science Monitor’s coverage of the issue: http://www.csmonitor.com/USA/Latest-News-Wires/2011/1115/Did-Nancy-Pelosi-profit-from-Visa-stock-purchases
One problem with that set of statistics is that they are using net worth, a comparison of assets to debt. If you knew everyone’s net worth you’d be surprised how many millionaires there are today. A lot of our local business owners would fall in the “millionaire” class but that’s not liquid assets. It includes things like real estate, inventory and retirement investments, even life insurance among other things.
I agree though that there appear to be few (if any) people from the working class and expecting that all those who are there are going to be altruistic FDR types is unrealistic. The Senate was designed by the founders to be and ‘upper house’ similar to the English House of Lords but the House was supposed to be representative of the common folk and it is growing to be more and more like the Senate. Not just in terms of wealth and position either. Since they froze the number of Representatives at 435 representation is becoming more and more disproportionate. But we’ve run around that barn on the In Box before.
Walker: your link points to Pelosi using information not available to general public in her investment moves. Here’s more:
Former Speaker of the House–and current Minority Leader–Nancy Pelosi apparently bought $1 million to $5 million of Visa stock in one of the most sought-after and profitable initial public offerings (IPO) in American history, thwarted serious credit card reform for two years, and then watched her investment skyrocket 203%.
http://biggovernment.com/whall/2011/11/13/revealed-pelosi-blocked-credit-card-reform-while-investing-millions-in-exclusive-visa-stock-offering/
Perhaps the title should be “A Nation of Poor Commanded By Millionaires”
The Christian Science Monitor concluded: “What this comes down to is a point of emphasis. If you think the appearance of impropriety is enough, then Pelosi has already blown herself up in the court of public opinion. If the specifics of how IPOs function and the actual way Pelosi has treated her investment is more important, that would make her guilty of being part of a piecemeal and highly subjective process, at worst, and not wielding undue influence.”
As to JDM’s biggovernment.com link, it insinuates that Pelosi killed the Credit Card Fair Fee Act, but fails to indicate how she accomplished the dirty deed. But the fact is that Republicans in the Senate along with blue dog Senate Democrats, would have made sure that no such bill would ever have become law. See, for example, http://politics.nytimes.com/congress/votes/111/senate/1/191
Today you can’t run for office unless you are very wealthy (with some exceptions). Both parties recruit candidates with access to lots of money. Frequently its their own. Thats the way it is in an era when corporations are people and there are no limits on spending.
I find it interesting that many of the people who are against raising taxes on the millionaires are also opposed to millionaires being in government.
I never take into account how “rich” someone is when I vote. I do take into account how they might vote.
If we must complain about people being rich, shouldn’t we also include those who are rich because they make movies, play sports or sing songs?
JDM wrote:
“Brian-MYOFYC
I think it is germain.”
Brian and JDM,
I think it is not germain, but that the word you’re looking for is germane.
Pedantically yours…
Let’s not confuse wealth with wisdom.
It’s a Wall Street Gov’t. Republican or Democrat. It’s a Wall Street Gov’t! Is wealth correlated to intelligence? loosely at best. I don’t care how rich our leaders are if they are intelligence and necessities to lead. It is alarming how wealthy they become once in office. Why are their stock people so much better then mine?
It would be a great sign of leadership if those with assets in the 100’s of millions were more philanthropic. How much does one person need? How many homes can one own? A good public servant is one who cares about their constituency. How better to care then to give away some of your own assets. This is coming from some one who has never really had a million let alone 100 million but it makes you wonder if they are really in it to help others or just for the power.
Never before has being a politian benefited so much financially. It is not just the connections that are created but also from the name or brand that is created. Look at Ms. Palin. Her brief foray into national politics led her into millions and she could barely identify the continents on a world map! Then there is Goldman Sachs. Look at all those who have worked there before and after their public service. Ever wonder why Paulson and Geitner refused to bail out Lehman brothers when all the other “to big to fail” banks got help? White coller crime is the hardest to catch. If you are smart enough to figute out what is going on they offer you a job.
I don’t care how wealthy they are but all those in congress should have to sell all stock holdings prior to office just like the Fed chairman. They could do so tax free and once they leave office they are free to do whatever they want again. It’s the only way to end the Wall Street Gov’t!
Sorry, Bob, but having those in Congress divest themselves of stock holdings prior to serving wouldn’t *begin* to end government of the people by the wealthy, for the wealthy. The dent it would make would be a very small one.
Walker, I agree with you, partly, I got pontificating there. I don’t think it would end it and I am not saying wealthy americans can’t serve. However, it would help to seperate their personal interests from the larget lobby on Capital Hill, the Wall Street lobby. There is a reason the Fed Chair can’t own stocks, for obvious reasons. I think that same rational applies to the members of congress as well. It’s a good start.
The question of term limits is a complex one, many of the complexities have been mentioned in this thread …. one that bothers me is the affect on “institutional memory”. If the entire congress turned over in a set cycle a great deal of the institutional memory (read, power) would exist in the paid staff. Members of the paid staff often stay on when a new representative is elected. These people are not elected, are largely invisible to the public but really have great influence over the process.
Even with the discouraging bias toward the incumbent I’m in favor of letting the ballot box be the term limiter.
Agreed, it would certainly help. I’m sure you would get a counter-argument to the effect that good people would be dissuaded from serving by such a rule. I think I’d chance it, though.
Even better would be a lifetime ban on lobbying by ex-members of Congress. Since 1998, 43 percent of the 198 members of Congress who left government to join the private sector have registered as lobbyists. Not a good thing. (According to Wikipedia: http://en.wikipedia.org/wiki/Lobbying_in_the_United_States )
Walker, I agree on the lobbying. There are some limits but not enough. A middle income public worker has more restrictions on their post public career than those in congress. The head of the largest Health care lobby is Billy Tauzin, a Louisiana Democratic congressman who became a Republican, shepherded the Bush administration’s Medicare drug benefit through the House—then retired to become the top drug industry lobbyist at an annual salary of $2.5 million.
As far as limiting stock holdings for congress, the issue would be what to do with their holdings when they take office. If you allow tax free “cashing out” incentives like given the fed chair it would only let the rich get richer. Bernake, I believe got out of 40 million in taxes when he went into the public sector.
This post is really bothering me more and more. I took a deeper look today and found even more proof that the whole premise of this post is wrong.
The richest family among those under a $50,000 cut-off (even more than the $45,000 claimed in census numbers I already cited), has just $1,500 left over after taxes and basic household expenses – not including a car, insurance, savings, appliances, cell phone, loan repayment, or any rest or recreation whatsoever.
You can see the sources and read the full breakdown here:
http://www.commondreams.org/view/2011/12/27-0
I can understand how easy it is for people who are comfortable in this economy to see $45,000 as middle class, but in misunderstanding these facts they dismiss the struggles of low income people. (Not that I’m surprised by that!)
We need our media to accurately reflect the economic status of Americans. That means first understanding what that status actually is and not pretending we’re all middle class.
Where will they ever find the $600,000 dollars Paul tells us they’ll need to send their three children to a good school?
Pelosi is no different from Newt they have both used their positions for personal gain, they all do it, these guys are just a little better at it.
That is the nature of the game. Why would anyone spend so much money and why would people give them so much money to win an office if that office did not include a future stream of payments to everyone involved? Do we really think that huge donors and super-pacs pay for these campaigns expecting nothing in return? It is illogical; if they didn’t get anything in return they would stop paying for these guys to run for office, they are not some sort of super patriots who just love these candidates and want to do what is best for the country, there is far too much money involved.
It is not a smear of Pelosi or Newt to point out how well they have profited personally from being in public office, it is simply a fact. We always like the guys profiting from things that we support, but it is still profiting.
I have to say it is one thing to enter congress wealthy like Kerry and quite another to enter congress without much money and leave congress very wealthy.
Jack Abramoff anyone? George Bush never heard of him. Had his picture taken with him, but never heard of him.
Mervel, JDM. The bigger problem with Pelosi and other members of the house and senate is that what she did to make all the money on the stocks is that it is all perfectly LEGAL. Its not moral or ethical but it is legal.
Yes both made their money legally, that is why it is such a great financial boon to run for congressional office. I don’t think they are horrible people, but they don’t represent me and have nothing in common with things that most middle income people care about. Pelosi and Gingrich have much more in common with each other than they do average Americans. The sooner we all realize that the better of we will be and less divided.