Columnists

We are now caught up in “The Holidays.” That is “holidays” with an “s” because the pace of our society has accelerated. We have lost the ability to celebrate one holiday — Thanksgiving, pause, and then savor the next — Christmas. We have bundled them together and created a two-month period of high activity and low productivity.

As for me, I have long believed that Thanksgiving and Christmas come far too close together. This may be a common feeling among people like me who have lived for an extended period of time some distance from home — home being that place where the family gathers on these special occasions. Creating holidays that call for making the trek back home for two major gatherings within the course of about 30 days seems like ill planning at best. And how about the desire to see and visit with family and friends during the other 11 months?

 

If Thanksgiving and Christmas must be so close together, suppose we reversed the order. Christmas first and then Thanksgiving. I know this proposal would addle religious literalists who would argue that if the Bible says Jesus was born on December 25 (it is in there someplace, isn’t it? in one of the Gospels?), then that is that. We have to celebrate his birthday on December 25. We can’t change it.

But with enough money, I bet we could prove that Jesus was actually born on the fourth Thursday in November, even though there was neither a November nor a December when Jesus was born. This raises a question I have never pondered before — when did we get our current months of the year? Since earliest time we have divided time by lunar cycles. But when did the months get their names? I know they were in place when Chaucer wrote his Canterbury Tales in the 14th Century, beginning with “When fair April with his showers sweet….”

My proposal is not as unreasonable as it sounds. And if it is unreasonable, there is nothing new or inherently bad about tilting at windmills. There are people who have spent great fortunes and their professional careers trying to prove that Shakespeare did not write the plays attributed to him. I am reminded of this fact each time I go to Oxford, Mississippi and see the Gertrude Castellow Ford Performing Arts Building on the Ole Miss campus. Supposedly my very wealthy “Cousin Gertrude” (my grandmother was a Bertie County Castellow so we must be kin) funded efforts to try to solve the Shakespeare mystery.

But why switch the holidays? I make my argument in seismographic terms. Christmas is the greater event and Thanksgiving is the lesser — sort of like an earthquake and the after shock. If getting together with family at Christmas doesn’t open old wounds and completely destroy complex relationships, then the aftershock of Thanksgiving will. If you think I have lost sight of the meaning of Thanksgiving. I have not. Having Thanksgiving last gives one more great reason for giving thanks. You can thank God that Christmas and all the surrounding hubbub is over.

I have another great fear. We already have rolled Thanksgiving and Christmas together. That’s bad in my eyes. Now we may be about to create the Holiday Trinity. Halloween has become one of the nation’s most popular celebrations, generating billions of dollars in economic activity and causing people to do absolutely ridiculous things in their carefully manicured yards. This celebration has overtaken Thanksgiving. It is just a matter of time, in my opinion, before “The Holidays” will include Halloween, and we will have a three-month period of high energy. Serial celebrants will in a frenzy switching bales of hay and witch cut-outs for strings of lights and Santa Claus blow-ups. “Dear, are we doing pumpkins now or a Christmas tree?”

But, stop. A Holiday Trinity would be an unholy thing. Halloween is rooted in a 2,000-year-old pagan Celtic celebration that the Catholic Church tried without success to pre-empt with its All Saints Day. The Druids beat the Priests in this religious jousting contest, and the whole senseless mess got rolled together in a celebration that prompts moms to dress their kids up in cute costumes and take them begging.

It just wouldn’t do to have the Holiday Trinity book ended by a pagan celebration at the beginning and a Christian celebration at the other. Lord only knows what the manger scene would look like if all this got confused. Joseph could end up being dressed as a dower-faced pilgrim, blunderbuss in hand, and the Virgin Mary costumed as a ballerina. The crèche might be a haunted house, and Lord only knows what the three Wise Men would arrive costumed as – rubbah dub dub, three men in a tub? The angels could come as themselves. We have seen a million of those little darlings knocking on doors on Halloween.

Wouldn’t that be sight on the front lawn of the Baptist Church? And think about the traffic problems the drive-bys would create.

Since I have started writing I have had another notion about holidays. It’s about poor Columbus. Poor Columbus, you ask? Yes, bless his heart, “poor Columbus.” He is honored with his own day every year and hardly anyone seems to notice except federal employees, who hold dear every federal holiday — they take off for holidays the rest of us don’t even know exist — and the Knights of Columbus who use it as an excuse for a fancy dress parade.

Poor Columbus, he made a dreadful miscalculation, stumbled across the New World and then made history by having the only holiday that celebrates an accident created in his honor. But we can retrieve poor Columbus from the celebratory trash. Let’s rename his day, “OMG! Day” and celebrate all the colossal mishaps in our individual lives and our nation’s history — for example, Kennedy’s Bay of Pigs, Carter’s helicopter crash in the desert and Dick Cheney’s shooting his hunting companion. Columbus could be rediscovered and transformed into the Patron Saint of the Gauche, the Accident Prone, and the Profoundly Misdirected. And we could use the same day to honor the creation of the Internet and the not-so-hip-now high tech acronym OMG! Hidden in legislation creating the holiday will be a provision forbidding federal employees from observing it and eliminating several of their other paid holidays.

I don’t know why I am obsessing about holidays. At this point in life, every day is like a holiday to me. When I feel like working, I do it on my own schedule and usually on my own terms. My computer is just steps from my bed. I have no traffic to fight in the mornings and the exclamation, “Thank God it’s Friday,” never comes from my lips. I lock my door on Halloween and dare children to knock. When I start missing those dearest to me, I don’t have to wait for Thanksgiving or Christmas, I just call or go to see them. Though I would love to sit down at a table laden with food my mother prepared for Thanksgiving and Christmas, there are few things that I cannot come reasonably close to duplicating in my own kitchen if I get a craving for collards, potato salad, string beans, country ham, sweet potato casserole, turkey and oyster dressing. I do wish I could master the meringue that she put on her Christmas plantation sweet potato pie, but I know that will never happen.

This said, nothing can take the place of family — brothers and sister-in-laws at this point in time — sitting around the table commenting on the good eats, sharing remembrances and calling up memories of those family members who have gone on.

So, thanks for holidays that bring us together, wherever they may fall on the calendar. Be whimsical and take flights of fantasy on Halloween. I hope you were thankful on Thanksgiving. And please have a very Merry Christmas.

There is an elephant in the room. This elephant is hard to ignore, but we are doing so in part because of one powerful group in the country. Not surprisingly, that group has a lot to lose if the elephant were to be clearly perceived as a root cause and contributor to our economic woes. The elephant is a maldistribution of income, and the group that doesn’t want to talk about it are the wealthy Republicans — ironically represented by an elephant — who shout “class warfare” whenever maldistribution of income is mentioned.

I want to talk about maldistribution of income as an economic and political issue, not a class issue. The first thing to realize is that no one claims that there is not an unequal distribution of wealth in this country. There are people who argue it doesn’t make a difference and those who argue that, for one reason or another, rich people ought to be richer. Well let me tell you why it makes a difference and give you a scary historical analogy.

The economy of this country is built on consumer spending, which accounts for about 70 percent of our economic activity. Rich people — the 1 percent of the population with incomes over $398,900 (in 2007) and those really wealthy 14,988 families in the top 0.1 percent with income of at least $11.5 million — can only, no matter how hard they try, buy so many things. There is no way they can make up for the buying power of the other 90 percent of Americans. So a hyper-concentration of wealth in the hands of the very few can only be bad for the economy.

There used to be a conservative belief called “trickle down,” which held that putting money into the hands of the wealthy insured that they would spend it and thus it would “trickle down” into the hands of the butcher, the baker and the candlestick maker. Not so; again because they can only eat so much bread and meat or buy so many candles, but also because rich people tend to save a lot of their money. If increased wealth led to increased spending and therefore more prosperity, how do you account for the fact that the wealth of the top 0.01 percent increased from 5.46 percent in 2006 and then to 6.04 percent in 2007? 2007, you will recall, was the beginning of our current economic collapse. Apparently the wealth didn’t trickle down fast enough.

But how much income disparity is there? The top 10 percent of the population, those with incomes over $109,600, account for 49.7 percent of all income in the country; and of that 49.7 percent, 6.04 percent is held by the top 0.01 percent or 14,988 families. The other 50.3 percent of income is shared by the other 90 percent of the population or 69,750,000 families. An even greater disparity exists if you consider wealth distribution. Between 80 and 90 percent of wealth or all of the stocks, bonds, trust funds, business equity and commercial real estate is controlled by 10 percent of the people in the country. It was not ever thus, in the post-WWII era from 1945-1970 the share of top 10 percent was about 33 percent. Then things began to take off, accelerated by the Reagan tax cuts, after which we saw the rich get richer and richer. At the other end of the spectrum, wages of non- farm employees have remained stagnant; in 1981 when Reagan took office the average weekly wage was $277.35 and in 2004 it was $277.57 (US Bureau of Labor Statistics). A recent Congressional Budget Office report showed that the wealth of the top 1 percent increased by 275 percent between 1979 and 2007. The top 20 percent saw a 60 percent increase. Those in the bottom 20 percent saw a 20 percent increase.

These figures alone help explain why Americans became so indebted in the last several decades and ran up credit card balances and home equity loans. In order to keep up their quality of life, the average American had no choice but to go into debt.

Why, you may ask, have the great mass of the public been willing to accept this situation, and even, in the last elections, flock to the party that endorses the tax policies which helped bring about this maldistribution? There are many reasons, but perhaps the most prevalent is the “American Dream” that everyone can get wealthy in this country. Aside from the fact that most people have no realistic idea of what “wealthy” is, a considerable proportion — maybe as many as 33 percent — think they can become very rich. If “very rich” is defined as over $300,000 per year, then 32 percent of those people are wrong. 

America’s vaunted role as the home of upward mobility is also wrong. Recent studies would show that people living in many countries, including Canada, Australia, Germany, Finland and even France have a greater chance of upward mobility than those living in the United States. One of the primary reasons given is that the graduated income tax is higher in these other countries (the personal income tax burden in the US is lower than in virtually every other industrialized country), and they also tax inherited wealth more steeply. Yet in this country taxes are virtually off the table when discussing government policies, and even Democrats balk at increasing taxes for even the wealthiest of the wealthy.

In this last case, the political reasoning is pretty clear and pretty distressing. With everyone aware that political races are becoming more and more expensive, and with recent Supreme Court rulings that money is speech and therefore can’t be restricted in political campaigns and that corporations are people, why would politicians want to alienate potential donors? Poli-Sci 101 would teach you that these tax policies and these rulings give the top 10 percent of Americans potentially control over the political process. According to Sen. Dick Durbin, D-Ill., one wealthy group, bankers, already wield that influence in Congress. “They own this place,” he said. 

Now I started by saying I’d give you a scary parallel to our current situation. In graduate school I read John Kenneth Galbraith’s The Great Crash, an economics examination of the Wall Street crash of 1929, which led to the Great Depression. He contended that the first among five of the primary causes of the crash was maldistribution of income. As I’ve already stated, currently 50.3 percent of incomes goes to 10 percent of the population; the last time we reached that degree of disparity was in the fall of 1929. If Galbraith was correct about the causes of the crash, we ought to be very, very worried.

At least CBS “60 Minutes” is on to the national fury that the criminals who brought down the American economy have not been identified personally and brought before the bar of justice. But a week after a broadcast that bore in on the issue, interviewer Steve Kroft let President Barack Obama off the hook when the president disingenuously stated that the financial shenanigans by Fannie Mae, Freddie Mac and banking firms were legal — that his administration was instrumental in passing new regulations encompassed in the Frank-Dodd legislation to prevent it from happening again.

Wait a minute. It is now known Fannie and Freddie, the government-connected mortgage packaging giants, threw out the requirements for qualification to allow home ownership for all, an idealistic social goal pushed by Democrats — from Jimmy Carter via the Community Reinvestment Act of 1977; to Bill Clinton in the 1990s who enlisted ACORN to badger banks to make bad loans to minorities; and to Rep. Barney Frank and his fellow travelers in the 2000s who put the full weight of the Congress behind the creation of bad mortgage loans.

The large investment and commercial banks saw an opportunity and concocted securities backed by dicey “sub-prime” loans in which borrowers paid higher interest based on questionable credit. These mortgage-backed instruments were a hot item, yet when the banks learned the underlying values had vanished, they lent money to mortgage origination firms to gin up even more bad loans — at higher and higher interest rates to shape into even more mortgage-backed securities to sell to their customers — and each other.

Right there criminal fraud is manifest, contradicting Obama’s claim the scam was legal. But there was more. The banks, knowing the instruments were worthless when they sold them to their own clients, purposefully bought “insurance” (credit default swaps) against their own products, thus doubly swindling their customers — and made millions doing it: first on the commissions from the sale, and then from their short position as the securities tanked. In 2008 the house of cards came tumbling down, taking with it the American economy.

Then enters Treasury Secretary Hank Paulson, formerly chief of Goldman Sachs — the ubiquitous investment banking firm that has left fingerprints all over the meltdown — who insisted we must save the hides of the big banks (his compatriots) with the stimulus bail-out to “rescue the financial system”. Originally stated to be $787 billion, the total, according to Bloomberg research, reached $11.6 trillion — all secured by American taxpayers. The result was the near destruction of the consumer sector, which represents 80 percent of the economy, all to save the criminals who committed the illegal acts that brought down the economy. But worse, commercial and community banks are still burdened with bad real estate loans and investments. Consequently, they are under orders from banking regulators not to lend, which further exacerbates the decimation of the middle class and small business owners who cannot find loans to recover and grow. The stimulus should have been distributed — via tax breaks and rebates — to households to stimulate consumer spending, which in turn would have stabilized the small business sector that could have kept workers and hired for new positions.

Thus Obama’s claim on “60 Minutes” that Paulson’s policies averted another Great Depression is ominously premature. Big bank economists and government policy wonks do not understand the US economy — that all new jobs are created by the small business sector. After three years of pain and suffering, someone saw the light and Obama set out in 2011 to claim he was now pushing small business recovery to create jobs. Yet his approach widely misses the mark by proposing federal money to create bogus “green energy” firms (like Solyndra) or the pitiful and outdated plan to re-build the nation’s infrastructure and dump billions into high speed rail transit. Obama and his cohorts — like Paulson, now replaced at Treasury by Timothy Geithner, another investment bank rent boy — have not only failed in their approach to the recession, they may be the architects of an economic calamity more painful than the Great Depression when all is said and done. The European Union debt crisis is just one of the continuing manifestations of the global economic crisis set off by the American financial scandal. Add in the inability of real estate values in the US to recover, and unemployment figures that boggle the mind, the worst is yet to come.

But the central question Steve Kroft asked Obama must be addressed before Americans can begin to regain hope for the future: What is being done to expose and prosecute the criminals who caused the economic collapse? The Securities and Exchange Commission (SEC) has tried to wipe the shame from its face by investigating some of the sleazy practices, but this comes well after the fox has left the coop with all the eggs. And indeed fines have been levied against some of the best known bank brands in the world: JP Morgan Chase, CitiGroup, Morgan Stanley, Bank of America, and others to come. But the fines are paltry, the banks are not required to admit guilt and the individual culprits are not identified.

It turns out the SEC cannot bring criminal charges under its charter, and Congress has refused to haul the perpetrators in front of an investigative committee. Obama dodged and weaved and said to “60 Minutes” it is not up to him to punish the culprits. Instead, he threw the ball back into Attorney General Eric Holder’s lap, who has yet to bring a single charge against the conspirators. Why are these two and Congress avoiding the justice Americans demand? Are they under the influence of the mandarins at the Federal Reserve, the Treasury and the New York Fed who regulate the big New York banks? Do they believe criminal prosecution or Congressional hearings will divulge even more nefarious behavior that could shake financial markers even more? Are they taking hush money, or fearful of losing campaign contributions? The US may be a polyglot nation today, but even newcomers understand the national belief that justice must be done.

Notes From La-La Land

Obama got away with another question by Steve Kroft, who asked about the president’s role in the divisiveness in Congress. Obama once again took on an avuncular visage and said the ill will was caused by special interests and the Republican refusal to budge on new taxes — mentioning Grover Norquist, author of the “no new taxes” pledge taken by a clique of Republican Con­gressman. But our wily and mendacious president failed to mention his role in dividing the country by introducing his healthcare plan when citizens were reeling from the first throes of the financial meltdown. Indeed, it was the president and a Democrat-controlled Congress who split the country with Obamacare, a far-reaching and frighteningly expensive overhaul that challenges core constitutional and free market values held strongly by most Americans. And it was Obama who added to the disharmony on spending cuts and the budget by failing to acknowledge the findings of the debt reduction commission he created, co-chaired by Erskine Bowles and Alan Simpson. As an old friend once said of a cheater: “he bears watching”.