I particularly like the headline in the online edition, “Rich are feeling pinched too,” but the simple fact that this story makes the front page of the Seattle Times tells you all you need to know about the life experience and day to day perspective its publisher.
Oh no… the rich are “spending less on luxury goods and are being more thrifty with their credit cards!” In fact, I understand that things have gotten so tough for the ultra wealthy, that some are even being forced to sell off their extensive newspaper holdings in Maine! Can you feel their pain? (I suppose the Blethens might chafe at my description of them as “ultra wealthy,” but that just shows how out of touch they really are.)
And… that the Times editors thought this fabulously wealthy human interest story worthy of front page placement is even funnier in light of the tiny little teaser they squeezed into the bottom right hand corner:
Grow your food City dwellers across the country are planting gardens to save money
Yeah sure, the working and middle class are farming their backyards so that they can afford to feed their families… but at least they’re not being forced to suffer the humiliation of shopping around for the best deal on private jets. I suppose that explains the relative placement of the two stories.
Reads about the poor rich people.
Rolls eyes into the next state.
And don’t you just love that reference to, and blind acceptance of, the “trickle down” theory?
The Republicans have been playing that game for decades, arguing that whatever is good for the rich is good for the middle-class and poor is well. Well, we’ve tried that experiment, and there is NO CORRELATION between giving rich people tax breaks or other advantages with the general wealth of the majority of the population. On the contrary, great accumulated wealth in the hands of a few tends to create a host of other problems, which eventually, unfortunately, only gets resolved by revolution.
So the next time a Republican starts talking about “trickle down” economics, remember that the “golden shower” he’s talking about falling upon you isn’t a mineral, it’s a liquid.
Here in Bellevue, you can see the pain! Little Kaylie at Bellevue Square is so upset! Her parents just told her she won’t be getting a brand new Lexus for her 16th Birthday! Instead, her mother will be getting the new Lexus, and giving Kaylie her two-year-old one! How embarrasing!!!! How can she ever drive to school in a USED CAR????? She would be mortified, a social outcast!!!! Her counselor is going to write her a note saying that it would cause a lifetime of psychological damage!!!!!
Meantime, over in South Seattle, Jerome is just getting off his paper route and catching a quick shower before he goes to his summer job at the local McDonalds. He hopes that by the end of the summer he will have enough saved up to buy the fifteen-year-old gas hog his neighbor is willing to sell to him. But the manager keeps cutting back his hours. When he was hired she promised him at least 35 hours a week, but these days it is more like 25 hours a week, scattered among three different shifts which makes it difficult for him to get another job to make up the difference.
Of course, according to the Republicans and the Blethen family, we should be just as concerned about Kaylie’s financial problems as we are about Jeromes. More so, in fact, because according to them, if we solve Kaylie’s parent’s financial problems, then somehow Jerome’s problems will also be solved.
Gee, somehow, I doubt it.
“The problem is that when the wealthy get stingy, it trickles down do the rest of us.”
Uh, no. It doesn’t. Not to any meaningful extent.
Trickle-down theory assumes the rich create jobs as a favor to the rest of us. That’s nonsense. They act in their self-interest like everyone else, and lately they’ve been destroying or shipping overseas far more jobs than their activities have created domestically.
Trickle-down theory also assumes that consumption by the rich lifts the economy and creates mass employment. In fact, building items like fancy yachts, private jets, and mansions only creates work for a very small skilled workforce, and doesn’t create new jobs because of the skills required. Instead, an upswing in this sector of the consumer market creates order backlogs for specialized companies that serve it. Right now, if you want to buy a new Gulfstream corporate jet, you get put on a 2 to 3 year waiting list.
How many times does trickle-down economics have to be debunked by everyone from David Stockman to eminent economists before newspaper editors striving to ingratiate themselves to their rich right-wing publishers stop publishing this propaganda? It’s bullshit.
This article is nothing but Frank Blethen trying to make himself look like an “I feel your pain” populist, and I strongly suspect the hidden message buried between its lines has something to do with inheritance taxes and his perception of his own mortality.
For you new people on this blog, the Seattle Times Co. is worth about $900 million, the Blethen family owns 51% of it, and Frank Blethen lives in a Lake Washington waterfront home with an assessed value of about $4 million — he’s not exactly in need of food stamps yet, and it’s not likely he feels like paying taxes for those who are. To people like Blethen, a “recession” means having to cut back on jet fuel expenditures a bit.
rhp6033;
You were being sarcastic, but I knew a woman exactly like little Kaylie. Rather than settle for the used Mercedes, she browbeat her mother until mom traded mom’s new Mercedes for a different colored one and gave it to her daughter.
@3
Yeah but, if Jerome just worked a little harder and saved a little more then he could be rich too…
Shorter Times: give the rich what they want, or you’ll lose your job.
@6- Sadly, I don’t think rhp6033 was being sarcastic, because I know women like Kaylie too. Michael@7 was being sarcastic.
This is also why I don’t buy a newspaper anymore. When the moguls that own print media can try to sell us trickle-down economics in Seattle of all places, I lose any trust I may have had in their ability to report news.
Don’t forget that the way people drive on the Eastside, little Kaylie’s going to be burning up more gas in her “poor-little-me” Mercedes than Jerome will in his old police cruiser.
We stopped into Restoration Hardware the other day, and the usual collection of cool, moderately priced gadgets that ordinary people buy as gifts for each other was almost absent. Instead, they’re pushing their fall line of furniture, all overstuffed leather chairs and massive case goods styled to look like something off the set of a 1940’s period movie. Some of the stuff is pretty good, but it’s all premium priced (and curiously, much of it was made in Vietnam).
Evidently, they’re going after the people who still have plenty of cash, or who still have high enough limits on their plastic to keep pretending they’re rich for a while.
What did we buy? A new set of oiled-bronze house numbers, which they still carry and are actually a pretty good deal.
@2: If the trickling up of economic hardship is what the “Republican” Politburo is now calling “trickle-down”, then isn’t “trickle-down” theory really trickle-up theory? “There are some ideas so wrong that only a very intelligent person could believe in them.” -George Orwell
@4: If the point of “trickle-down” theory is for the “Republican” Politburo to provide social welfare to the rich so that some of it can eventually trickle-down to the “masses”, wouldn’t it be more efficient for the government to just give the money to the people and skip the rich middleman? Better yet, get rid of social welfare in support of capitalism altogether, since it’s tautological (and counter-productive) to begin with.
@0: The “rich pinch” is B.S. anyway. Just Google “gulfstream jet pilot jobs” and you’ll see the “pinch” hasn’t “trickled-down” enough to cause much concern. On the other hand, instead of keeping the money circulating here in the US, like us “plebian” poor folk (doctors, professors, systems analysts, etc–anyone who actually works for a living) would do, the mega-rich are likely transferring their investments overseas to take advantage of the weak dollar. I think that’s called “trickle-out” theory…
A$$holes.
I noticed the “trickle down” BS, too. I don’t know much about the Associated Press, but I’m beginning to think they’re the Fox News of wire services. Ron Fournier who is AP’s Washington editor was recently exposed as a shill for McCain. I’m not surprised to see other Republicans in the AP press ranks spewing nonsense like this article.
an alternate name for this thread should be –
“WAAAAAAAAHHH!…… My name’s goldy and I hate the rich people who won’t share with me…..WAAAAAAAAH!!”
David @ 6: Actually, I wasn’t trying to be sarcastic.
I work in Bellevue, and Bellevue High apparantly has an open campus lunch policy. If I go out for lunch in the area at the right time, I’m likely to find my old 1993 Explorer competing for parking with brand-new Lexus and BMW’s driven by 16 and 17 year-olds. It’s not hard to hear the conversations, and the one I related was one of several such conversations I have heard over the past ten years.
It’s a strange environment for me. When I was in high school, nobody drove a car unless they either had a job and worked for it, or it was handed down to them from their parents and was at least ten years old. Somebody driving a relatively new car (less than five years old) would get met with cries of “Daddy’s Car! Daddy’s Car!”. They would be too embarrased to drive it after a couple of days unless everyone knew you had worked for it yourself.
Households with over 1 million dollars a year in income take in something like 59 percent of all capital gains.
That’s a stunning statistic about the concentration of wealth in this country. It’s just not good. Anytime when such a small group has that kind of a lock on the wealth of a country it usually means bad things like oh the great depression in 30’s.
Yep things were that concentrated back in those days.
Traditionally, the rationalle between giving the rich tax breaks was that they would be more likely to “invest” in business which would spur job creation. Of course, notice how that works – they get money for free, and everybody else has to work for it (again).
As a backup, it was argued that the rich spending money on their toys eventually “trickled down” to benefit everybody else, as they built more homes, bought yachts, gold-plated their bathroom fixtures, etc. But notice that what you have then is a disruption of the economy on a macro-scale, as more resources are diverted towards luxury goods and services, leaving less available for the middle and lower classes, and therefore raising their prices.
Example 1: If you need the plumbing fixed on your 1950’s rambler and the guy in the $4 million dollar mansion on top of the hill wants new fixtures to go with the new kitchen remodel, what do you think this does to the price of plumbing services?
Example 2: If faucet manufacturers have a choice between selling 100 chromed kitchen faucets at $50.00 compared with selling one gold-plated kitchen faucet for $8,000, which one will he do? The latter, of course.
Example 3: If a real estate developer with five acres of land has a choice between building and selling five houses at $4 Mil. each (total sales $20 Mil, for a profit of $4 Mil.), or building and selling 20 smaller homes for 500K (total sales of $10 Mil, profit of $1 Mil), which will he do? Of course, he will build and sell the larger homes, as long as buyers are available. But what does this do to the cost of the lower-priced homes? It causes them to rise, and it also causes the price of the higher-priced homes to fall, do to the greater allocation of resources into that price catagory.
So should government get into the business of controlling home prices? Of course not. But should government undertake policies which encourage the accumulation of a larger percentage of the nation’s wealth into an increasingly smaller percentage of the nation’s population? Of course not.
But that’s what trickle-down economics says we need to do.
@16
I’m in Gig Harbor. Same deal here, kids driving around in Land Rovers. Weird. The teenage boys seem like total mommas boys.
I went to a high school that was heavily divided between rich and working class kids. Some of the rich kids had to learn the hard way that picking on working class kids was a bad idea. That there was that much friction between the two groups has always stuck with me. It’s a gulf that’s only widened in the last 20 years and one that we need to close.
13 Those corporate-jet gigs are going to be filled really fast by laid-off “big-iron” drivers as the major airlines continue to fall apart.
“Traditionally, the rationalle between giving the rich tax breaks was that they would be more likely to “invest” in business which would spur job creation.”
That is a wish verging on propaganda. There is no macroeconomic theory which demonstrates a direct linkage between savings and investment. The lack of this linkage was the basis of much of JM Keynes’ work.
@18:
Example 1: That depends.
Example 2: Ignores or assumes away the concept of marginal cost = marginal revenue.
Example 3: Confuses “price” with “value”.
Interesting article, showing the need for “balance” between private and public ownership:
Private property vs. getting things done: Sure, public ownership causes overuse, but the reverse can also be true
18/22 Well, if I’m lucky, the guy in the mansion will have a garage sale and I’ll be able to pick up his old out-of-style marble-topped vanity for my bathroom, because granite’s the in thing this year. Maybe I’ll also talk to the plumbing contractor and see if he wants to do some work for me while he’s over this way, and I’ll save a buck or two–particularly if the plumber’s not quite as busy as he used to be because he’s not finding any gigs plumbing 25 new tract homes at a time.
Then again, if the whole economy continues to go in the dumper, I’ll be out of work and not spending money on much at all other than to keep a dilapidated roof over my head and vittles in my tummy.
Steal from the rich and give to the poor.
“Trickle down” means every once in a while the common folk get to partake of the table scraps and spittle of the hoi polloi.
I seem to recall a, possibly apocryphal?, story from a few years ago, about a Dem politician who thought that everyone deserved to make an above average income.
27 If we’re headed for something like the early 1930’s, then you damn betcha everyone will “deserve to make more than the average income”, because the “average income” will be approximately zero.
Even the Cheap Labor Conservatives(tm) might grudgingly admit that you have to pay people something, because they’re not terribly productive once they’ve starved to death.
Many many small business owners fall into the category of 1 million per year revenues…
And yes, it is good to give them tax breaks. Too often THE RICH is cast on few individuals… How many jobs does little Kaylies parents company provide?
@5
The Seattle Times employs ~1900 people. How many do you employ? or do you take more than you put in?
@29
How many jobs does little Kaylies parents company provide?
Thousands. Unfortunately, they’re all in the Philippines.
In addition, using the unemployment rate as the sole barometer for economic performance is a highly flawed approach. When people have jobs, but still can’t provide for their basic needs, is when an economy is in trouble. That’s what eventually happens when we all believe that giving the wealthy everything they demand is what drives progress. It does not. Instead, it creates large wells of non-productivity in the form of spoiled rich children who don’t produce shit.
Sorry for the dup
“load comments failed”
Many many small business owners fall into the category of $1 million per year revenues…
And yes, it is good to give them tax breaks. Too often “THE RICH” is a label cast on individuals… How many jobs does little Kaylies parents company provide?
@5
The Seattle Times employs ~1900 people. How many do you employ? or do you take more than you put in?
Anyone want to see Microsoft leave WA? Should we cancel the tax credits and roads infrastructure allocated to them? All becuase Bill Gates is “Evil Rich”?
Fact is we live in a country with the freedoms that allow for anyone to achieve great monetary wealth. If that’s what makes you go, then there is opportunity for you here in the USA.
“In addition, using the unemployment rate as the sole barometer for economic performance is a highly flawed approach.”
Who did that?
I am merely pointing out that “rich” is thrown around like an evil term. Facts are that many small businesses that have less than 10 employees are a huge segment of our economy.
Is it terrible for the business owner to reap rewards for his efforts and risks?
Does a $1 million annual income really qualify as “rich” any more? Certainly that much in assets doesn’t, if you include someone’s primary residence. If you did, you’d find some “rich” retirees eating dog food on toast.
will–
When you are panhandling for “donations”….would you take money from Rich People?
Seriously will…would you?
When someone gives you money, do you check to see if they are rich or not??
I doubt it.
“Trickle-down” is Economics 101.
I know it angers the LEFTIST PINHEADED KLOWNS…but it is quite logical (albeit offensive to the KLOWNS).
The LEFTIST PINHEADED KLOWNS are stuck in a vacuum where they believe the Economic Pie is finite in size. KLOWNS simply cannot and will not acknowledge that the PIE can grow. Hence they focus on how to Legislate more of a pretend-finite PIE….rather than look at growing the PIE. By Legislating, they take away investment incentives. KLOWNS think rich folks will and MUST invest to create jobs despite the lack of incentives.
The failure to understand fundamental Economic Principles is why I call you LEFTIST PINHEADED KLOWNS.
You KLOWNS are constantly scffing and attempting to defy the laws of basic economics.
You are stupid!
@31
Who did that?
I am merely pointing out that “rich” is thrown around like an evil term.
Your statement implied a belief that we should measure economic health through the presence of jobs every bit as much as any of us has made “rich” seem like an evil term.
Facts are that many small businesses that have less than 10 employees are a huge segment of our economy.
And I would contend that many of those businesses suffer in an environment where the extremely rich are rewarded with tax breaks and corporate welfare.
Many large companies in the country have become inefficient and overly bureaucratic, but the thinking still goes that if we keep giving them more money, more tax breaks, more of what they want, they’ll move the economy forward. That won’t work. Someone who’s already made their millions isn’t going to sacrifice and work as hard as someone who hasn’t. It’s just basic human nature.
@31 Right Stuff: There is no requirement to be obscenely rich in order to run a company and employ people. The CEO of MTW was paid “only” $700k/year when I bought their stock in 2004 and the value increased over 400% when I sold some of it in 2007. Many CEOs pull 20 times that while driving the company into the ground.
There’s no shortage of CEOs to take the reins of any given company. Investors put-up with their thieving ways only because those who can vote enough shares to make a difference are buddy-buddy CEOs of other companies, and they vote salary increases and golden parachutes for each other.
And I doubt Bill Gates would say he wouldn’t have built Microsoft to its level of preeminence if he could have made only $100 million doing it. Even that is probably more than he thought he’d ever make. This country was built by leaders who made no more than 40 times what the average salary was. Today it’s around 350X (down from over 400X a few of years ago).
If all the rich people want to leave the area or the country… Fine. And they can take all the money we threw at them with them too. We’ll make more, thank you very much. Entrepreneurs are one (very important) cog in the machinery, starting-out with scratch. And everyone knows that nobody can do it alone. There’s also the folks who “actually do the work”. And then there are CEOs who move into positions created for them by the entrepreneurs and the people who worked with them to build new companies.
I’ve yet to see any company that hasn’t been able to fill a CEO position for lack of qualified applicants. They’re a dime a dozen… going for millions and millions of dollars per each.
Maybe Mr. Cynical can explain the simple Economics of that?
@34: So why don’t we tax the hell out of the plebs (say a marginal tax of 95% on income less than $1 million and zero above $1 million) and send it on up so it can “trickle-down”? Would that “trickle down” socialism make us really, really prosperous?
Hmm… Now, if we tax income over $1 million at 95% and zero below, that leaves everyone with the first $1 million tax free to buy all kinds of American products. And the billionaire-earner still has $50 million. That’s “trickle-up”.
Trickle-down = Econ 101. Bullshit. No numbers, no example, no sources cited = B.S. Trickle-down is just more socialist “Republican” Politburo propaganda. Get a real job and get off the government dole, you socialist “Republican” pan-handler!
Dave–
You sound like a real envious prick.
Perhaps no one has ever offered you a CEO job…can’t imagine why!
Listen…I disagree with plenty about Corporate American. But the last thing we should seek is government control over management of private enterprise.
A lot of stockholders are running away from companies that “overpay” CEO’s.
There stock prices become stagnant.
The CEO gets canned.
See how it works??
I want the CEO of any company I invest in to have excellent incentive programs…..something that benefits stockholders!
You libs are a bitter, bitter group. I don’t
envy your position or thoughts.
@37
A lot of stockholders are running away from companies that “overpay” CEO’s.
There stock prices become stagnant.
The CEO gets canned.
See how it works??
No, that’s not how it works. What happens is that the government decides to bail out the failing company in order to make sure shareholders don’t lose their investments. Then, the overpaid CEO gets a huge severence package which he spends on a house in the Caribbean.
You need to step away from your Economics 101 for Dummies book for a second and see how the real world works.
Mr. Cynical: I am a CEO.
Example? Otherwise, it’s just more B.S.
Me too! Typical compensation packages and golden parachutes, however, are disincentives. Most of the best CEOs would work for the thrill of accomplishment, once they have enough to be comfortable. The idea of having to throw tens of millions at them is a mistake. That’s never been done until recently (like the last 20 years or so).
“Trickle-down” socialism is both unnecessary and counter-productive.
@12 “Some of the stuff is pretty good, but it’s all premium priced (and curiously, much of it was made in Vietnam).”
That’s because they won the war. Curiously, every time a Republican president runs a war, we lose.
@22 The concept of marginal cost = marginal value is fascinating when applied to healthcare. Classic capitalist economic theory assumes that a certain percentage of the population won’t get health care because there isn’t enough profit in serving them. The same theory applies to food and other necessities of life. From a humanist standpoint, that makes capitalism an inherently evil social system.
Practical psychology theory argues that a person who can’t earn food will take it. Therefore, making society responsible for providing basic necessities is merely a practical means of protecting private property from expropriation and maintaining social peace.
Rog–
Your getting cranky because your investments in NOV and BOOM have tanked.
How could you hang onto these KNOWING oil prices were grossly inflated by oil speculators.
What a dumb rabbit.
Dave @ 40: An old “Shoe” Cartoon:
Why should a CEO need to be “incentivized” to do what he is paid to do? Why isn’t a salary of $750K per year enough incentive for someone to do the job they were hired to do?
I think the current emphasis on quarterly earnings, a lot of it tied to executive incentive bonuses, has been detrimental to a lot of U.S. companies. “To hell with the long-term health of the company, just do something to help get my numbers up this week, when my next round of stock options vest!!!!”
I remember the Boeing layoffs in the mid-1990’s was timed to occur right before the CEO’s retirement stock offerings vested. Since cutting payroll costs tends to (temporarily) lift earnings, Boeing stock took a big bump just in time for him to make a few million dollars more as he retired. Of course, a couple of years later Boeing was trying to hire people back off the street, and training green workers right while they had a huge back-order of 777 orders. It didn’t work too well for them, as I recall.
Looks like the Everett Herald decided to pick up the same story in today’s edition:
Even the wealthy feel pinched
There seems to be one “incentive” that doesn’t always apply to CEO’s. Take as an example, Washington Mutual, which is by all admissions in serious trouble, its management having steered it into joining the dicey-mortgages-and-derivatives binge. The result has been bad for the customers, worse for the shareholders, horrible for the employees (many of whom are now “ex-“), and a major contribution to dragging our entire economy into the shitter. So….why the hell does Kerry Killinger still have his job?
One of the increasingly frequent evening-news features leading up to the opening of the Olympics revealed that the Beijing taxi fleet now consists mostly of late-model Hyundai Elantras.
When you think about it, that’s not a bad alternative to the typical four-wheeled behemoths we’re used to seeing as cabs. A reasonably compact, rugged 4-door car with a roomy back seat and a cavernous trunk, that goes like a bat out of hell and doesn’t slurp a whole lot of gas. You know, the kind of car that Ford and GM can’t seem to make and still turn a profit.
Don’t forget, a lot of the companies having trouble with “back-dated options” got into that fix because they wanted to set up a stock option benefit for top executives which looked like a performance-based bonus, but which actually rewarded them if the stock stayed the same – or in some cases, actually declined.
Why would any Board of Directors, which presumably looks out after the stockholder’s interest, agree to such a fool-hardy scheme? Why wasn’t there oversight to prevent such an abuse?
Oh, yea. Most of the directors are also CEO’s of other companies, and the CEO receiving a back-dated stock option is a director on their own boards. Next week, he will be deciding their own compensation.
Want to guess how that’s going to turn out?
Consumer spending is about 70% of GDP. When we start seeing this kind of disarray in the retail industry, things are starting to look rather bleak.
Funny how the CEOs don’t lay themselves off when business drops off.