November 6, 2006

Recognize the image to the right? Probably not. This thumbnail simply doesn’t do justice to the original image it represents, a massive four-by-eight-foot 1948 painting by one of America’s most celebrated 20th century artists, Jackson Pollock.

Pollock’s career, many contemporary scholars of fine art believe, holds a pivotal place in the cultural history of our modern world. This particular Pollock painting now holds an even more pivotal place in the history of modern inequality. We explore why in this week’s Too Much.

Also this week, we look at the high cost of maintaining a free press — and the even higher price of conducting a free election.

Greed at a Glance: The World's Most Expensive Canvas

Don’t call Angelo Mozilo, the sixth highest-paid CEO in the United States last year, just another overpaid executive. Run-of-the-mill overpaid execs get lavish pensions when they retire. Mozilo, the CEO at the nation’s largest mortgage lender, is getting lavish millions for not retiring. For delaying his retirement until 2009, reports last week revealed, the 67-year-old Mozilo will receive $10 million from Countrywide Financial as a “reimbursement” for the pension dollars he would have collected over the next two years. Naturally, Mozilo will also receive a bit of compensation for working until 2009, as much as $11.9 million annually, depending on the company’s profit picture. To help brighten that picture, Countrywide last week announced plans to cut its workforce by some 2,500 jobs . . .

Wise wealthy people worry, all the time, about the impact of enormous wealth — on their kids. The latest reason to worry: the guilty plea entered last week by Michael Pickens, the son of Texas billionaire oil tycoon and corporate raider T. Boone Pickens. Seems that Michael received a fax addressed to a “Dr. Mitchell” with a tip on a hot stock. Michael, a sharpie just like his old man, immediately realized the fax was a fake meant to trick people into buying the stock. Michael liked the trick, so much so that he put three of his own stocks on the letter and then faxed off about a million copies. The scheme worked. Michael eventually cashed out $300,000 in profits. Unfortunately, two of the fax machines that received Michael’s fake fax sat in offices of the federal Securities and Exchange Commission, “not a great idea for conducting an investment scam,” notes Wayne State white-collar crime expert Peter Henning. Pickens now faces up to five years in jail . . .

America’s major daily newspapers regularly spill considerable ink on stories that rank our nation’s top-paid business executives. But we seldom see stories that list our top-paid journalists. And who might be today’s richest scribe? That distinction, media watchdog Norman Solomon suggested last week, likely belongs to Thomas Friedman, the globe-trotting New York Times columnist and best-selling author. Back in 1978, Friedman married into “one of the 100 richest families in the country.” His current home in the Washington, D.C. suburbs, valued at $9.3 million, sits on seven-plus prime acres near a top D.C. area country club. Does any of this matter? Friedman, notes Solomon, has been a tireless cheerleader for global trade policies that “give very low priority to reducing economic inequality.” His “outsized economic privileges” may help explain his indifference to the ongoing impact of the policies he so glibly cheers . . .

Journalism needs more rich people. Only “hometown rich guys,” goes the argument now making the rounds in newspaper circles, can rescue big-city dailies from their cost-cutting corporate chain owners. Among the deep-pockets getting hailed as saviors of America's free press: mega millionaire PR executive Brian Tierney, who bought the Philadelphia Inquirer this past June. Up the seaboard, former General Electric CEO Jack Welch is dropping hints he'll bid for the Boston Globe. Wealthy individuals, fans of this trend claim, will be less likely than corporate owners to slash newsroom staffing to keep Wall Street happy. Count Edward Wasserman, an ethics prof at Virginia’s Washington and Lee, as a skeptic. Why should anyone imagine, he asks, that bliss “would be more achievable when news organizations are owned by hard-driving, fabulously wealthy individuals — who amassed great riches by cutting corners, cutting costs and, for all I know, cutting throats”? Tierney, Wasserman notes, has already announced plans to cut jobs at the Inquirer . . .

Buying your own daily newspaper, some of America’s most notable rich are finding, can put something of a strain on the family finances. That seems to be the case with David Geffen, the Hollywood tycoon anxious to buy the Los Angeles Times. To raise the cash for that purchase, Geffen is having to part with some prized personal possessions. Last month, Geffen sold two paintings off his walls, one by Jasper Johns and another by Willem De Kooning. The total sales price: $145.3 million. Last week came news that Geffen has cut a deal to sell an even bigger blockbuster, his Jackson Pollock “No. 5, 1948.” The price: $134 million, the most money ever paid for a single painting. The buyer: Mexican financial wheeler-and-dealer David Martinez. The Pollock figures to end up on a wall in the New York super-luxury apartment Martinez bought two years ago for $54.7 million.

Income at the Top: A Cross-Atlantic Perspective

Of all the developed nations in the world, concludes a variety of research highlighted last week in the Financial Times, only the United States has sported “high and rising inequality consistently from the mid-1970s.”

One particularly vivid measure of this inequality comes from Berkeley economist Emmanuel Saez. Back in 1963, his work documents, any random sample of 1,000 people in the United States, Britain, and France would have shown about the same income distribution at the top. The richest single person in all three samples would have gobbled up 2 percent of that nation’s total income, or 20 times more than that person would have received if all income were distributed equally across the board.

Over the next four decades, nothing changed — in France. At the end of the 1990s, the richest single person in any random French sample of 1,000 people was still taking in 2 percent of total national income. In the UK, meanwhile, change had taken place. The share going to the richest British tenth of 1 percent jumped by half, to 3 percent.

But the really significant change in income distribution took place in the United States. By the end of the 1990s, the richest single individual in any random sample of 1,000 Americans was collecting 6 percent of national income, triple the share going to the top tenth of 1 percent back in 1963.

Since 2000, the concentration of income at the top of America's economic ladder has only intensified. In 2004, the latest year with IRS numbers available, the top half of 1 percent of American taxpayers reported more income than the entire bottom 50 percent of American taxpayers combined.

Campaign 2006: A Glaringly Missing Issue

At least 17 different political candidates this fall, says the League of Conservation Voters, have run TV ads that prominently feature their personal commitment to supporting environmentally friendly windmills.

Not one single candidate, on the other hand, appears to have run a TV ad that features a commitment to confronting America’s top-heavy distribution of income and wealth.

Why the hesitation to take on excessive wealth at the top? This reluctance may reflect a sense among candidates, even progressively minded ones, that any time spent speaking out against plutocracy — so long as George W. Bush sits in the White House — amounts to an impractical tilt against windmills.

Or this reluctance might reflect simple financial reality. The sums of money needed to compete seriously for political office have become so high that few candidates feel secure enough to risk alienating wealthy contributors.

On TV ads alone, candidates are expending $1.58 billion this year, over $130 million more than the TV outlay in 2004, says the Connecticut-based PQ Media group. Total political spending, including direct mail and outdoor ads, will hit $3.14 billion, “nearly twice the $1.6 billion spent in 2002.”

Precious little of that money is coming from average-income Americans. Business interests, says the Center for Responsive Politics, are supplying three-quarters of the campaign cash for this year's House and Senate races, and at least 71 affluent Americans have so far “maxed out” and hit the $101,400 federal contribution limit.

This year’s prototypical big giver? That may be Richard Tarrant, the business executive reputed to be Vermont’s richest citizen. Tarrant, the Burlington Free-Press reported last week, has bankrolled his own campaign for Vermont’s open U.S. Senate seat — no limits apply to how much you can give yourself — with $6.85 million of his own money.

That likely won’t be close to enough to beat his opponent, Bernie Sanders, the independent Vermont congressman who has won widespread grassroots support for his years of waging often lonely battle against America’s grotesquely unequal distribution of income and wealth.

“I am prepared to talk about the growing gap between rich and poor,” Sanders told a campaign gathering earlier this fall. “I’m prepared to talk about the fact that, in many ways, we are becoming an oligarchic society with a few people on top who have tremendous wealth while the middle class is shrinking.”

Added Sanders: “How many people do you know in the Senate who talk about that issue?”

His audience knew the answer. Not nearly enough.

Stat of the Week: Would Death Derail Your Career?

Except for being dead, rock star Kurt Cobain of Nirvana has had a great year. His estate has collected $50 million, says the latest edition of the annual Forbes list of top-earning dead celebrities, from a deal that sold off rights to 25 percent of Cobain's song catalog. Cobain’s platinum returns shove Elvis Presley into second place in the new dead celeb money rankings. Moving up on the list: Ray Charles. His estate registered $10 million in earnings for the year, up from just $6 million in his first year of eligibility.

Quote of the Week: Let's Place Sharing First

“We now live in a time in America where the rich are richer than any time in history. There is more money going into corporate profit than any time in history, and less money going into wages. So America is growing apart, not growing together. It's not about growth, it's about distribution. It's about how we share the wealth. This is not Rwanda, this is not Bosnia. This is the richest country on Earth. We are not without resources: we have eight of the top ten research institutions in the world, we've won the Nobel Prize for science and economics, and yet we can't seem to figure out that America doesn't have a plan.”
Andy Stern, president, Service Employees International Union, Changing How America Works, Oakland, California, October 18, 2006

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