Tag Archive: Income inequality

Governor Christie: “Yes he can”

Gov. Christie is well on his way to challenging Harold Hoffman as one of the worst New Jersey governors (1935-1938) in the past 100 years. It doesn’t have to be that way. Hoffman blundered into the Lindberg kidnapping case. He “discredited himself enough by corruption throughout his political career, in particular, he wasted $300,000 from a South Amboy bank and blackmailed for $150,000 … He got into at least two fist-fights with reporters – a dark spot in New Jersey history.”

Great leaders are forged in the crucible when they are confronted with serious challenges that they successfully overcome. (Think of Churchill and FDR.) In times of peace and prosperity governors can be successful, but they are less likely to achieve greatness.  

Christie today governs a state in peril. He has a magnificent opportunity to concentrate on the problems, work with the legislature, and secure a legacy for which he can be proud.  

Creating solutions for Pen/Ben, our ailing economy, credit downgrades, crumbling infrastructure, Atlantic City’s financial morass, Bridgegate actions, low income housing, homeless Sandy victims, income inequality, and deteriorating environment would transform him from a villain to a hero. Just solving a number of these problems would allow him to be viewed for years forward as one of New Jersey’s great governors. Few governors have such an opportunity.

What’s Wrong with Our Economy?

April 15th is Tax Day. Many Americans part with their hard-earned cash and send it to the federal or state government in the form of taxes. Many wonder why we owe still more than we already have paid with every paycheck throughout the year and what our latest tax payment will purchase and it just doesn’t seem fair. We work so hard and have so little to spare, but still our government takes about 55 cents out of each dollar we pay to spend on the military, with only 6 cents on education and 3 cents on energy and the environment.

What’s wrong with this picture? The government’s priorities don’t match with what we see as our community’s needs. While there always seems to be more money for war, or expensive fighter plans like the F35s or “modernizing” the B61s, our nation’s oldest nuclear weapons, there never seems to be enough money to maintain the current level of food stamps or government-subsidized health care or a city’s public schools or a county’s community colleges or to create jobs that pay a living wage.

The movement to increase the minimum wage in New Jersey and nationwide continues to grow and receive broader support. New Jersey Peace Action (NJPA) is honoring 15NowNJ at its upcoming Annual Dinner on Sunday, April 19th because of 15NowNJ’s ongoing efforts to persuade New Jersey’s public officials to increase the state’s minimum wage to $15 an hour.  15NowNJ held five events in New Jersey on Tax Day, joining more than 60,000 low-wage workers, unions, community groups and allies nationwide calling for a $15/hour minimum wage and the right to unionize.  

The work to raise the minimum wage closer to a living wage and a shift from a war economy to a more peaceful one is essential in creating a more inclusive economy. Economist Richard Wolff, featured speaker at NJPA’s Annual Dinner, (www.njpeaceaction.org/drupal/dinner2015),  will address both in “The Economics of War: Endless Violence, Peace and the Economy.”

“Because when you look at what families like that can actually afford, they have to deny huge parts of the American dream to their children and to themselves as a necessary consequence of where they are put,” writes Wolff.

“And I don’t need to be an economist to put it as starkly as I know how. We can read every day that in the major cities of the United States, apartments are changing hands for $10 million, $20 million, $30 million, $40 million. People have enormous yachts that they cruise — we all see it. We all know it. We even celebrate it as a nation. How does that square with millions of people in a position where they can’t provide even the most basic services and opportunities?

We don’t have equality of opportunity. Because there is no shortcut. If you want equality of opportunity, you’re going to have to create equality of income and wealth much closer to a genuine equality than anything– we’re going in the other direction.”

Governor Christie’s comments at a U.S. Chamber of Commerce meeting, published in the 10/21/14 Talking Points Memo (http://talkingpointsmemo.com/livewire/chris-christie-tired-minimum-wage-debate), reveal much about the politics of this issue in New Jersey. “I gotta tell you the truth, I’m tired of hearing about the minimum wage, I really am…I don’t think there’s a mother or father sitting around a kitchen table tonight in America who are saying, ‘You know honey, if my son or daughter could just make a higher minimum wage, my God, all our dreams would be realized.’

People reacted harshly, wondering if Governor Christie ever thought about how people making the minimum wage survive and how tired they feel trying to pay for their household’s basic expenses on the minimum wage?

In the Daily News of October 21, 2014 (http://www.nydailynews.com/news/politics/christie-tired-hearing-minimum-wage-article-1.1982653) Bill Hutchinson writes that Governor Christie and his wife earned $700,000 in 2013. At the same time, 16.5 million Americans worked for the minimum wage. Christie vetoed a bill in January 2013 to raise NJ’s minimum wage by only $1.25/hour claiming it would harm the state’s economic recovery.  

In the April 14th New Jersey Watchdog.org article by Mark Lagerkvist titled “Christie fails to report income, avoids $152,000 in taxes,”  (http://watchdog.org/211787/christie-avoids-income-taxes/)we learn that because Governor Christie did not declare certain expense allowances on his tax returns, he has purportedly avoided paying approximately $152,000 in taxes over the past four years. While disputed by Governor Christie’s press office, Watchdog.org stands behind the claims made in the article. If proven true, this is one more reason to be skeptical of the governor’s comments on the minimum wage.

Michael Palmieri’s April 10th article in OpEd News “2016 GOP Budget Speaks Volumes” (http://www.opednews.com/articles/2016-GOP-Budget-Speaks-Vol-by-Madelyn-Hoffman-Budget_Budget-Bill_Budget-Deal_Budget-Wars-On-The-Middle-Class-150410-869.html) adds a sobering perspective. “The U.S. is the most unequal developed nation and one of the most unequal nations in the entire world, yet neither plans to raise taxes on the highest income earners or to close corporate loopholes are included in the text. Indeed, the level of inequality we are now witnessing is greater than at any time since the Great Depression. Today, the top 1% of income earners captures 20% of all income and the top .1% own more than 1/5th of the wealth. Millions of Americans are still unemployed or working low wage jobs, yet no jobs program was included.”

It’s time to work for peace and economic justice!  

“The only life we’ve known is in the shipyard”

“We built battleships and cruisers for Her Majesty the Queen,

Super tankers for Onassis, and all the classes in between.

Steel in the stockyard, iron in the soul,

We’ll conjure up a ship where there used to be a hole.

And I don’t know what we’ll do if this yard gets sold,

For the only life we’ve known is in the shipyard.”

– Sting: The Last Ship (Shipyard)

Sting, whose fame first took off as a member of the Police (a punk, reggae, and jazz band), continues to surprise us. He now has a show on Broadway, The Last Ship, which deals with his childhood in the North of England where shipbuilding was the only industry, had employed thousands, but was coming to an end.

As we await a step in resolving the Pen/Ben public employees crisis, plans for strengthening AC’s economy, and an approach to increasing jobs, we are reminded of how over the years so much of our New Jersey manufacturing came to an end, jobs were sent off-shore and gradually both public and private unions were weakened. The lives of so many New Jerseyans have been devastated – people who worked hard with great pride only to find themselves jobless.  

The Path Toward Reducing Inequality in NJ – Part V

In Part IV of this series we concentrated on inequality in income (wages, salaries, dividends, etc.). In Part V we now look at inequality in wealth (cash, stocks, bonds, homes, land, etc) as well as examining the corporate world which contributes so much to inequality. Part V ends with a suggested first step.

Reducing inequality requires broad-based policies as no one legislative bill or regulation will address the varied responses needed. Thomas Piketty in Capitalism in the 21st Century ends his book with a call for a global tax on wealth, which theoretically makes sense. However as Clive Crook explains in a Bloomberg piece, flight to low-tax jurisdictions and the difficulty of creating an annual accounting of an individual’s wealth make the task daunting.  

The best approach to reduce wealth inequality is to change our low inheritance tax which is the single largest contributor to high wealth accumulation.  In NJ inheritance tax rises on a graduated basis to 16%, but there is no such tax for parents, spouses or children of a decedent, as with Donald Newhouse whose publishing empire inheritance came from his father. Creating such a state tax rising from 5% on $100,000 to 25% over $2 million would help to level the playing field for those whose parents are not wealthy.