Greed and Good: Understanding and Overcoming the Inequality That Limits Our Lives

Rating:
Summary: A Vitally Important, Mind-bending Book
Review: Did you know that in 1943, the highest marginal tax rate, on incomes above $200,000 (approximately $2.4 million today) was 94 percent?

That throughout the 1950s, the decade conservatives so often claim is their ideal, the top marginal tax rate was 91 percent (despite being mostly peacetime) and one out of every three American workers was unionized?

That in 1942, FDR actually called for a $25,000 ($300,000 in today's dollars) maximum income -- and the president of the U.S. Chamber of Commerce told reporters he had to "analyze the situation carefully" before he could make a "well-considered" comment?

As the Virginia Slims ads say (do they still say this?), "You've come a long way, baby." In the wrong direction. This spring, Fortune magazine reported that the 587 billionaires on the planet, who are collectively worth 20 *trillion* dollars, actually increased their wealth by a half-trillion dollars -- that's almost a billion dollars each -- in the year 2003.

In other words, a group of people who already had more wealth than they could personally spend in a thousand years each had their wealth increase by $100,000 an hour, 24 hours a day, seven days a week -- and nobody said boo, no one raised an eyebrow. No one, as far as I know, even wrote a protest song about it -- not even a funny one. We have all been so thoroughly brainwashed to believe that millionaires generate many times more wealth than they keep that we can barely dare to think, much less say out loud, that most of those billions are in fact, taken -- legally stolen -- from the rest of humanity.

Greed and Good is a mind-bending book. Its premise, taken from the introduction, is simple. "That some people have too much," writes the author, "is not just *a* problem. It is *the* problem, the root of what ails us as a nation, a social cancer that coarsens our culture, endangers our economy, distorts our democracy, even limits our lifespans."

The book is a tour de force that panoramically (perhaps too panoramically) builds the case for that point. In the process, it debunks both the conservative and the neoliberal economic myths that have turned extreme wealth into a non-issue. You probably didn't know, for instance, that a solid body of epidemiological evidence shows that inequality is strongly correlated with poorer health and lower longevity within populations. Not poverty -- inequality. And not just for poor people, but for middle-class people as well. In short, unequal societies are bad for your health -- but don't expect a Surgeon General report on this anytime soon, even if (or when) Kerry is elected.

In situation after situation, the author shows how the potential to make extreme wealth has warped our society. In his chapter on the professions, for example, he talks about how this phenomenon has affected smart young college aged people. If you're a high-achiever -- and you want to follow the sciences -- but scientists start at $50,000, while corporate lawyers are starting at $80,000 and up -- and the lawyers are then pricing up all the local real estate, so a scientist may end up living a second-class life -- what do you do? Not surprisingly, the "best and the brightest" aren't going into science the way they used to. As for investment banking - would you believe that in 1966, an investment banker started with a salary of $9,500?

Pizzigatti, a labor journalist, builds his case meticulously, yet for the most part, quite readably, carefully explaining any and all technical terms or arguments. If anything, he is too careful -- the book could have benefited from an editor to chop some of the less convincing arguments and the over-explanations, to make it move a little more quickly. But especially in the first third, where he debunks the arguments for greed ("greed as an incentive," "the greedy as deserving" and "the greedy as benefactors"), he makes many arcane topics clear and engaging.

As a liberal baby boomer, it's infuriating and yet strangely affirming to read this book and realize the extent to which an incredibly reactionary counterrevolution happened stealthily behind the scenes while I was going about my life. I didn't realize that back when I was a kid, CEOs did not make more than the President. Now they feel it is their right to make $3 million, or $15 million, or have stock option windfalls of $69 million, while their companies go down in flames (as several stories in the book describe). If you've had the feeling that something terribly wrong happened over the last thirty years, but you can't quite put your finger on just what it was, this book will feel like a revelation to you. While many excellent books on the right-wing takeover of our politics explain what happened politically, this book does something unique -- it explains what happened to society as a whole as a result. It answers such questions as why, in a society that is by far the richest in human history (and many times wealthier than it was in our childhoods) we supposedly can't "afford" universal healthcare, and why we all seem to be working harder and are more anxious about our material well-being than ever.

The book ends with an absolutely audacious proposal -- for America to adopt a "Ten Times Rule," for the most part lowering or holding steady all taxes on income up to ten times the minimum wage, then taxing all income above it -- FDR's "maximum wage." I'm not sure of all of his math -- this would at this moment be a top individual income of $107,120, which seems too low to me (although if this were somehow suddenly the law of the land, you KNOW the minimum wage would be doubled in an instant). Even though I think it's unrealistic to imagine that a society will tax away everything at the top (I'll settle for a top marginal tax rate of 95 percent), his vision of a possible world, which he lays out quite credibly (and which, he shows, will not result in economic apocalypse and is wholly compatible with modern capitalism) is the most hopeful vision I have read or heard about in decades.

At the very least, this book will make you, too, yearn for an America that has far fewer millionaires and far happier, healthier and more involved citizens. Sometimes visions come out of nowhere and catch hold, eventually changing whole societies. I truly hope Pizzigati's vision is one of these.

Rating:
Summary: Most important book I've read this year
Review: The past 30 years have seen tremendous growth in the United States in productivity and wealth, and yet we don't all seem very appreciative. In fact, as Yale political scientist Robert Lane has documented, surveys have found Americans' assessment of their level of happiness declining significantly. The same is not the case in other developed countries.

The United States contains less than 5 percent of the world's population and spends 42 percent of the world's health care expenses, and yet Americans are less healthy than the residents of nearly every other wealthy nation and a few poor ones as well, as documented by Dr. Stephen Bezruchka of the University of Washington.

What's going on? We spend more on criminal justice and have more crime. How can that be? We're richer and have more poverty. Why is that?

Sam Pizzigati, author of a new book called "Greed and Good," thinks he has both an answer and a solution to these and several other riddles. Pizzigati focuses on the extreme increase in inequality that the United States has seen over the past generation. The Federal Reserve Board has documented gains by America's wealthiest 1 percent of more than $2 trillion more than everyone in America's bottom 90 percent combined. We are now the most unequal wealthy nation on earth and have reversed the relationship we had to Europe when the founders of this country rejected aristocracy. Today Europeans come to the United States to marvel at the excesses of wealth beside shameful poverty.

Many of us would like to lift up those at the bottom. Few of us want to bring down those at the top. Pizzigati argues that you cannot do one without the other, because the super wealthy will always have the political power to avoid contributing to bringing the bottom up. This will leave it to the middle class to assist those less fortunate even as their own situations are slipping and their concept of success -- based on the lifestyles of the CEO-barons -- is being driven further out of reach. The middle class won't want to do this, and instead will support policies that benefit the super wealthy.

But the existence of the super wealthy, Pizzigati argues, has a long list of negative impacts on all of our lives. Get rid of vast concentrations of wealth, and all sorts of things happen, including lower murder rates, lower blood pressure, and lower housing prices. Or so says the extensively documented research gathered together in "Greed and Good".

Take the few points I mentioned above: happiness, health, and crime. Research suggests that when people see their situations improving over time and when they see their situations as acceptable by the standard of those around them, they tend to be happy. We had this in the 1950s and 1960s, a period when working families prospered and income over $200,000 was taxed at roughly 90 percent.

Developed societies with the healthiest and longest living people, extensive research shows, are not those with the highest average wealth, but those with the greatest equality of wealth. Explanations for this fact vary from consideration of the levels of stress caused by economic insecurity, to the focusing of health care on plastic surgery and other luxuries at the expense of treatment of actual illnesses.

Research also shows that a country's murder rate varies with its inequality, not its overall wealth or its criminal justice spending.

Pizzigati proposes a new system of income tax that would lower taxes on 99 percent of Americans and allow the wealthiest 1 percent to lower their taxes by lobbying to raise the minimum wage.

Pizzigati calls his proposal the Ten Times Rule. It would work as follows. If your household brought in less than the income of two full-time minimum wage workers, you would pay no income tax. Above that level you would pay 1 percent. Above twice the minimum wage you would pay 2 percent. And so on up to 10 percent. Any income above 10 times the minimum would be taxed at 100 percent.

This would mean significantly lower taxes on 99 percent of us. It would also mean an economy focused on products for a once-again expanding middle class, rather than our new aristocracy. It would mean a country without what Senator John Edwards has called the two Americas.

Rating:
Summary: Of Utmost Importance
Review: This excellent book is a thorough exploration of how unbridled greed is undermining the essential fabric of our society. If we have any hope of renewing and saving our democracy (let alone deal with the issue of terrorism in an unjust world) we must face head-on the greed that is polluting the very soul of our own nation. "Greed and Good" carefully examines the deep roots that greed has planted and offers alternative approaches to how wealth is distributed in our country. Most importantly, the author makes an excellent case for the concept of establishing a maximum wage. President FDR brought this idea to Congress back in 1942- today, in the age of the ENRON scandal, and in the age of modern-day billionaire kings, perhaps the time for a maximum wage has arrived. "Greed and Good" provides much food for thought and is written in an easily readable style. I highly recommend it.

Rating:
Summary: Of Utmost Importance
Review: This excellent book is a thorough exploration of how unbridled greed is undermining the essential fabric of our society. If we have any hope of renewing and saving our democracy (let alone deal with the issue of terrorism in an unjust world) we must face head-on the greed that is polluting the very soul of our own nation. "Greed and Good" carefully examines the deep roots that greed has planted and offers alternative approaches to how wealth is distributed in our country. Most importantly, the author makes an excellent case for the concept of establishing a maximum wage. President FDR brought this idea to Congress back in 1942- today, in the age of the ENRON scandal, and in the age of modern-day billionaire kings, perhaps the time for a maximum wage has arrived. "Greed and Good" provides much food for thought and is written in an easily readable style. I highly recommend it.