Month: March 2016

In recent years, much has been made of the super affluent – the so-called “one percenters.”  Obviously, the derivation of this term is that these are households that earn more than 99% of the rest of American households.  Many people have been demonizing OPs.  Most of the characterizations of them have been negative, such as “greedy,” “self-absorbed,” “out-of-touch with reality,” and having “too much power and influence.”   These criticisms have been promulgated by the media (movies, journalists and tv commentators), social activists, such as the “Occupy Wall Street” movement, and politicians, such as Bernie Sanders and, to a lesser extent, Hillary Clinton with an agenda.  The one percenters are generally portrayed as rich, old white men who control the financial system, exert undue influence on the government through massive political contributions, and spend their days thinking up ways to bilk the rest of Americans.

Are these characterizations accurate, or are they misleading falsehoods perpetrated by others with an agenda?  My extensive research into the OPs disclosed the following:

1. There is no universal agreement as to the income level at which one becomes a OP.  I found publications that reported the minimum annual income level for entrée to that group as anywhere from $250,000 to over $600,000.  But, the latest figures from the IRS and the Congressional Budget Office from 2009 both put the threshold at about $340,000, so I will go with that amount.  This is household income, not individual income, and for you financial “mavins” out there we are talking about adjusted gross income, not necessarily total income.
2. This low threshold may surprise some people, particularly those who live in high tax, high expense areas such as NY or San Francisco, where those who earn that amount will tell you they don’t feel rich.
3. The latest data discloses that African Americans, which comprise about 14% of the country’s population account for less than 2% of the OPs.
4. According to the IRS, in 2009 the OPs reported 17% of the total household income and paid 37% of households’ taxes.  I suspect both percentages are higher now.
5. The wealth disparity between the OPs and the other 99% appears to be growing.  In 2009 a study by the Economic Policy Institute disclosed that the average OP’s wealth was 225 times greater, which was the largest gap it had ever recorded.  This is disturbing to a lot of people, and rightly so, but I don’t believe the solution is to confiscate wealth from the rich as some have been advocating.
6. Studies show the vast majority of people in the lower echelon of the OP category do not feel they are in that august group.  As I said, they would describe themselves as “comfortable,” not rich.  According to a recent Mendelsohn Affluent Barometer survey most of them rank themselves much lower, perhaps, in the top 20%.  One possible reason for this is the financial and social circles in which they travel.  Undoubtedly, they know many people who earn the same or more than them,  so they don’t feel as rich as they really are.  It would be more accurate to say that these people identify with the 99%.  They don’t realize that the various criticisms of the superrich are being levelled at them.
7. According to the CBO, one percenters earn approximately 50% of their income from salaries, 25% from self employment and business income and the remainder from “passive” sources, such as interest, dividends and capital gains.
8. While it’s accurate that financial occupations, such as investment banking and hedge-fund management, are the fastest growing occupations of OPs, the latest data puts them second at 14%, just behind physicians at 16%.
9. Most people would be surprised to learn that membership in the club is not 100% static from year to year.  According to the “Economist,” in a typical year 25% of the OPs will drop out.
10. Yes, in order to be rich, it helps to be born rich.  Rich parents tend to provide a stable home environment, stress education and hard work and provide valuable connections.

CONCLUSION

What I learned from researching this blog, or more accurately, relearned, is not to believe everything you read and hear.  OPs are not some homogeneous group of rich, white men who were born with the proverbial “silver spoon” in their mouth, nor are they static from year to year.  They are not all greedy, self-absorbed, out of touch and power hungry.  Yes, some of them exhibit some or all of those traits.  But, many are self-made individuals, men and women both, who started at the bottom rung and worked their way to their present station.  These would include three of the men running for president in this election cycle – Ted Cruz, John Kasich and Marco Rubio – as well as countless entertainers, athletes and others too numerous to name whose life stories have been well documented.

One final point.  Recently, there has been much criticism of the growing income gap.  I agree that the growing gap is a problem.  Some have advocated solving that problem by confiscating assets from the rich, legislating equality as it were.  At the risk of being obvious, I would like to denote that America has been built on capitalism, free enterprise, ingenuity, self-reliance, and hard work.  In fact, the title of my blog is based on these concepts.  Smart, well-educated, hard-working people always have and always will outdo lazy, poorly educated people.

The constitution guarantees us equal OPPORTUNITY to succeed; it does not guarantee that all of us will succeed equally.  That, my friends, is up to each individual.  The idea is not for the less fortunate to confiscate from the rich to drag them down to some median level.  That would be Socialism, which, it has been demonstrated time and again, does not work.  Rather, it is for the poor to strive to become rich themselves.

Many professional Republicans disagree strongly with Donald Trump’s comments, political views, and lack of their perception of political correctness.  They are prepared to say and do anything to thwart his nomination.  They are afraid he would lead their party to a devastating defeat in the general election.  They are desperate to find a more “suitable” candidate.  Some party insiders have been floating the idea of a third party candidate.  I get all that.

Nevertheless, history tells us that running a third party candidate would be extremely foolhardy.   Third party candidates have run for election many times.  Often, their primary purpose was to highlight a particular issue that they feel both major parties had ignored, such as states’ rights in the cases of John Breckenridge and George Wallace or consumer activism in the case of Ralph Nader.  Other times, it was to promote an extreme agenda, either far right or far left, that was outside the political mainstream.

None of them has ever come close to winning.  Even the popular and successful ex-President Teddy Roosevelt failed in 1912.   Dissatisfied with the performance of his hand-picked successor, William Howard Taft, he ran under the Progressive (nick-named “Bull Moose”) Party.  Although he was the most successful third-party candidate in history winning 88 electoral votes, all he really accomplished was to swing the election to Woodrow Wilson.  Incidentally, for you history trivia buffs, Taft is chiefly remembered for three things: (1) his considerable bulk, (2) initiating the “seventh inning stretch,” albeit by accident, and (3) being the only person in history to have served as both President and Chief Justice of the Supreme Court.

There have been many third-party presidential candidates, too many to list here.  Some have even achieved modest success.  For example, as mentioned above, TR garnered 88 electoral votes in 1912.  Breckenridge won 72 in various southern states in 1856 on the eve of the Civil War.  Finally, Wallace won 46 in 1968.  He was the last one to win any.

Curiously, there have been three presidents who did not have any major party affiliation (great quiz question).  Think about it.  The answer will appear below.

Although there has been much bloviating about a third-party candidate this year, in reality, in my opinion, the chances are remote for the following reasons:

1. The winner-take-all electoral system strongly favors the major party candidates.
2. The procedural hurdles in some states to even get on the ballot result in many third-party candidates failing to become eligible in all 50 states.
3. Who would the GOP run?  The voters have already rejected resoundingly obvious candidates such as Bush, Rubio, Christy, etal.   Cruz and Kasich, the only alternatives to Trump still alive for the nomination, will likely also fall short in the voters’ minds.  Romney is a proven loser.  Bloomberg does not want to run, and any other Republican would have to overcome a late start, lack of funds and minimal name recognition.
4. Trump supporters, who already harbor a deep distrust of politicians, would perceive the nomination to have been “stolen” from them and would be unlikely to support anyone else.
5. I believe that such a decision would fracture the GOP for the foreseeable future.

By the way, does anyone remember back last summer when the big issue was whether or not Trump would support the GOP nominee?  If memory serves, that very question was the first one asked at the first debate.  How ironic that the situation has completely reversed itself because of Trump’s unexpected success.

CONCLUSION

The answer to the quiz is George Washington, John Tyler, and Andrew Johnson.  Of the three, only GW was elected and served out his two terms as an independent.  He was such a hero and consensus choice he didn’t need a party, and in any case I don’t believe the infant nation had any, certainly not as we know it.  In the cases of Tyler and Johnson there were extenuating circumstances.  Neither was elected in his own right.  They were both VPs who ascended to the office upon the death of the President.  In addition, both had been booted out of their party, and, for the record, both proved to be among our worst presidents.

The bottom line is that in this quirky election year, the voters have spoken.  They have rejected the political establishment of both parties.  They feel angry, frustrated, and betrayed.  (Recall the famous line from the movie, “Network.”)  They don’t want a traditional politician.  They want a massive change, and that’s that.  How else would one explain the widespread appeal of Trump and Bernie Sanders’ surprising challenge to Hillary Clinton?  Trump has a hardcore support of 30-40 percent, not a majority, to be sure, but a solid plurality.  They will support him regardless of what he says or does.  Ironically, according to Gallup he also has the highest disapproval rating of any candidate ever surveyed.  The same polls have disclosed that Clinton also has a high negative rating, so we will likely have an election between two “high negatives,” as it were.

The GOP establishment  may not want Trump as its party’s nominee, but they are stuck with him.  If he closes the deal in Cleveland I would suggest that they hold their nose and support him, for better or for worse.

For many years, he was one of those familiar movie actors you would often recognize but not know his name.  Then, he hit it big with “Cool Hand Luke,” winning an Oscar as Best Supporting Actor for playing a tough chain-gang convict opposite Paul Newman in the title role.  Then, seemingly overnight, everyone knew who he was.

I’m talking about George Kennedy, who passed away recently at the age of 91.  Although most people only know Kennedy from his roles in “Cool Hand Luke, ” “Dallas,””Airport,” and “Naked Gun,” he appeared in over 200 films, tv shows, and stage productions in a career that spanned nearly 90 nearly years.  That’s right, I said 90.

George Harris Kennedy, Jr. was born on February 18, 1925 in New York.  He was born into a “showbiz” family.  His father was a musician and an orchestra leader; his mother was a ballet dancer.  His father died when George was only four years old, so he was raised by his mother.   He debuted on stage at the ripe old age of two in a play called “Bringing Up Father.”   At seven he performed as a NY DJ.  He spent 16 years in the military before a back injury forced him to retire.  So, back to the family biz.

At first, like most beginners, he then bounced around for many years, appearing in small supporting roles.  The movies and tv shows were well known (“Spartacus,” “Hush..Hush, Sweet Charlotte,” “The Phil Silvers Show,” ” Gunsmoke,” ” Bonanza,” to name a few), but Kennedy was not.  Chances are, you don’t remember him in most of those roles.  Then, as I said, he hit it big with “Luke.”  Other big roles followed – the “Airport” and Naked Gun” series, “The Dirty Dozen,” and “Dallas,” among others.  He wrote three novels, including his autobiography.  He has a star on the Hollywood Walk of Fame.

But, in my mind all of these accomplishments are secondary to his greatest role.  In addition to his two biological children, he and his last wife, the late Joan McCarthy, adopted four children.  One of them was actually the daughter of one of their other adopted children who was fighting drug addictions.  I guess that would make her his adopted granddaughter.

CONCLUSION

I maintain that when a loving family, even one that is not rich and famous, adopts a child, it is literally giving him or her the gift of life.  Normally, these children come from severely disadvantaged backgrounds – poverty, physical, sexual or drug abuse, etc.    We are all familiar with the stories.  Their life prospects are exceedingly dim.  Adoption is a life saver to them.  It is hard enough to raise one’s own children.  Anyone who voluntarily takes on the responsibility of four additional children truly has a big heart.  I was unaware of this aspect of Kennedy’s life, and I suspect many others of you were as well.

Rest in peace George.  You will be truly missed, not only by your many fans, but also by your extended family as well.