The Rich Work Around the Recession
Editor’s Note: Many Americans are suffering from the worst recession in 70 years, but the well-to-do and their Republican allies in Congress are expecting to come out okay.
As Michael Winship writes in this guest essay, the rich -- from LeBron James to wealthy homeowners to the Chamber of Commerce -- are still finding ways to get their way:
I may be one of the only Manhattan residents not disappointed with LeBron James’s televised announcement that, “This fall, I’m going to take my talents to South Beach and join the Miami Heat.”
You see, when the basketball superstar was contemplating signing with the New York Knicks last week, he came house hunting in my tragically trendy, downtown neighborhood, and news soon broke that he was looking at a $12.9 million fixer upper – with high ceilings – directly across the street from my apartment building.
Visions of permanently camped-out paparazzi and crazed fans – in an area already besieged by Carrie and Samantha wannabes on the “Sex and the City” bus tour – had me scanning the real estate Web sites for a cottage small by a waterfall, preferably near a subway stop.
Sure, there would have been advantages to LeBron James as a neighbor– carpooling, for one – but all I need at this stage of life is yet another reminder of someone far younger, richer, and better coordinated than I am.
James’s new deal reportedly is worth $110 million. And while fans in Cleveland are calling him all sorts of rotten names, depressed and angry that he’s deserting their beloved Cavaliers, nonetheless I presume that he would make a more congenial local resident than, say, other rich folk about whom The New York Times reported on Friday.
Many seem to have found yet another way to take advantage of the gruesome economy some of them helped to create, skipping out on their mortgages “at a rate that greatly exceeds the rest of the population.”
According to the newspaper, “More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.
“By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.
“Though it is hard to prove, the CoreLogic data suggest that many of the well-to-do are purposely dumping their financially draining properties, just as they would any sour investment.”
There’s little concern among the wealthy about the impact these defaults have on their communities.
“The rich are different: they are more ruthless,” Sam Khater, CoreLogic’s senior economist, told the Times. “If they’re going delinquent faster than anyone else, that tells me they are doing so willingly.”
Not entirely unexpected behavior, when the gap between the richest and the rest has becomes so vast that the highest percentile can barely see us, even when they stand on top of their wallets for a better view.
And not surprising at a time when the Supreme Court, through the Citizens United decision and other rulings, has determined that wealthy corporations are people, too, with license to run roughshod (albeit in very nice shoes) over the democratic process, freely spending their fortunes on candidates who will do their bidding, all in the name of the First Amendment right to free speech.
Sam Stein of The Huffington Post Web site reported last week about a chart circulating in Washington of ten “Republican aligned institutions,” the amounts of money they spent on federal elections in 2008 and the amounts they intend to spend on this year’s midterms.
Stein writes that, “If their pledges are fulfilled, these ten groups will unleash more than $200 million in election-focused spending – roughly $37 million more than every single independent group spent on the 2008 presidential campaign combined. This time around, almost every single penny will be going to Republican candidates or causes.”
He added, “A Democratic operative makes the case that the total could rise to roughly $300 million if it includes additional pledges for campaign spending from Americans for Prosperity, promising $45 million, the Club for Growth, $24 million, the National Rifle Association, $20 million, and the Susan B. Anthony List, $6 million.”
Jon Youngdahl, national political director of the labor union SEIU said, “We fear that due to Citizens United these numbers are only going to grow. I fear these are the first signs of that growth.” (The Washington Post reported last month that SEIU has budgeted about $44 million for federal and state political activities this year. The AFL-CIO had not released its figures.)
At the top of the “Republican aligned” list is the U.S. Chamber of Commerce, which has committed $75 million to the midterms, more than twice what they spent on federal elections just two years ago.
A profile of Chamber president and CEO Thomas J. Donahue in the current issue of Washington Monthly notes that while 96 percent of the Chamber’s membership is small businesses with fewer than 100 employees, “it is also beholden to a cadre of multinationals whose interests are often inimical to those of small business. In 2008, a third of its revenues came from just nineteen companies.”
Approximately eight of every ten dollars the Chamber gives in political donations go to GOP candidates.
Former Chamber economist Lawrence Hunter says the organization “views itself as a shadow-government policymaking body” and the Washington Monthly article notes that for big business, “a large part of what the Chamber sells is political cover.”
It cites the example of medical companies who were against health care reform. For manufacturers “who are too smart and image conscious to make public attacks of their own, the Chamber of Commerce is a friend who will do the dirty work.”
Quoth Tom Donahue, “I want to give them all the deniability they need.” Swell.
According to the Monthly, Donahue keeps a plaque on his desk that reads “SHOW ME THE MONEY,” a sentiment with which a hotly sought after athlete like LeBron James can identify. James is going to Miami to be with fellow free-agent stars Dwyane Wade and Chris Bosh.
Donahue knows who his Super Friends are, too: big business, the conservative, naysaying obstructionists in Congress and their candidates, poised to take back the majority. If successful, they’ll wind back the clock and make Democrats feel as if the last two years were an easy layup from under the basket.
Michael Winship is senior writer at Public Affairs Television in New York City.
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