October 30, 2006

The elections are nearing, and we explore, in this week's Too Much, why certain Americans seem to have plenty of incentive to maintain the congressional status quo.

Also this week, we spotlight the going price for ostrich, the Sunbelt's inequality heartland, and the 20th anniversary celebration of the British “Big Bang.”

Greed at a Glance: A Revolt of the Fairly Rich?

Don’t pick up that menu. You might get sticker shock. Upscale restaurants the nation over, a news report noted last week, are now routinely charging over $40 for single entrees. Add extra, on top of that, if you want vegetables with your hunk of steak or fish. Overall, prices at San Francisco’s top 200 restaurants have slid up 14 percent over the past two years, with the same boost evident in New York, where an “ostrich scramble” at davidburke & donatella currently goes for $44. That’s still a bargain, of course, compared to a meal at the Guy Savoy in Las Vegas, “where desserts alone are $22 each and a meal for two can easily run $500.”

Just how much did last year’s top-paid CEO make? More than originally thought. Initial pay reports for 2005, released last spring, listed the $280.1 million take-home of Capital One Financial’s Richard Fairbank as the year's top windfall. But the spring reports only covered firms that filed their required disclosures early in the year. Subsequent reports gave top pay honors to Barry Diller from home-shopping giant IAC/Interactive. Diller’s take-home: $295 million. But Diller actually “ran” two companies last year. From the second, Expedia, an IAC/Interactive spinoff, Diller pocketed $173 million in option earnings, bringing his total CEO pay for 2005, with base salary, to $469.7 million. And that total doesn’t count the 7.6 million new stock options Diller also collected. The reason for these additional options? To “motivate Mr. Diller for the future,” noted the IAC/Interactive official explanation . . .

Fortune magazine's Matt Miller is now predicting, with tongue only half in cheek, a political revolt against the ultra rich led by the “fairly rich,” a group that includes doctors, lawyers, and other highly educated professionals who “can’t help but notice how many folks with credentials like theirs are living in Gatsby-esque splendor they'll never enjoy.” Agrees pollster Doug Schoen, an adviser for New York Mayor Michael Bloomberg: “If you look at the lower part of the upper class or the upper part of the upper middle class, there's a great deal of frustration.” One example: A Los Angeles doctor with two kids charges that ultras, with their effortless ability to shell out vast sums for tuition and donations, “have raised the ante for private school slots to the point where he can’t get his kids enrolled.”

Was Jesus rich? The “Prosperity Gospel,” a once marginal credo that challenges the “traditional image of Jesus as a poor, itinerant preacher,” is gaining considerable steam, reports the Atlanta Journal-Constitution. Prosperity preachers now range from televangelist Oral Roberts and Bishop Eddie Long, the pastor of Atlanta’s largest church, to Rev. Creflo Dollar, the Rolls-Royce-driving senior pastor of the 23,000-member World Changers Church International. Their contention that God rewards the faithful with wealth, notes ethicist Sondra Ely Wheeler of the Wesley Theological Seminary in Washington, D.C., offers “people divine sanctification to be greedy.” Adds Wheeler: “You tell them what they want to hear: The reason you have a Mercedes is because God loves you.”

Move over, Imelda. Meet Khunying Shinawatra, the wife of the Thai telecom tycoon-turned-prime minister punted out of office last month in a bloodless coup. A special National Counter Corruption Commission reports that Khunying and her husband Thaksin left office worth a combined $397 million. Khunying personally owns 18 luxury watches, 11 cars, and four homes. Not counted by the commission: the $3 billion cleared last January when Thaksin sold his telecom empire, after transferring title to it to relatives. Thailand’s new prime minister, Surayud Chulanont, seems intent on charting a different course. He has announced his admiration for the Himalayan kingdom of Bhutan and its innovative Gross National Happiness index, a development yardstick that seeks to uncouple social progress from a single-minded preoccupation with increasing consumption.

Election 2006 and the Gratitude of the Greedy

Some Democratic candidates have tried this fall to pin a “do-nothing” label on the current Congress. That label hasn’t really stuck. Maybe that’s because this Congress and every Congress since George W. Bush became President have actually done plenty — for Americans with deep pockets.

In fact, in nearly every annual session since 2001, Congress has passed a “tax cut” that bountifully rewards America’s wealthy.

These tax giveaways ought to stand front and center as an “issue” in this fall’s congressional election campaigning. By and large, they don’t. But these giveaways likely would be grabbing headlines if the sobering tax fact sheet just released by the Center for Budget and Policy Priorities ever found its way into average voter hands.

The new CBPP paper starts crunching numbers with the 2001 “Economic Growth and Tax Relief Reconciliation Act” and ends the heavy-duty number crunching with the “Tax Increase Prevention Reconciliation Act” that Congress passed just this May.

This last piece of legislation will save the 146,000 taxpayers who make up the richest one-tenth of 1 percent of U.S. taxpayers — average income, $5.3 million — an average $83,966 off their annual federal taxes.

Last year, these top-tenth-of-top-1-percent taxpayers averaged $185,533 in tax savings from the tax cuts enacted in 2001, 2003, and 2004.

So how much gratitude are America's wealthiest taxpayers spreading this election season? We have no way to answer that question exactly.

But we do know, thanks to monitoring work by the Center for Responsive Politics, that a bit under one tenth of 1 percent of adult Americans — 0.06 percent, to be exact — had contributed at least $2,000 in this year's campaigns as of October 10. GOP candidates took in $352 million of this loot, Democrats $304 million.

Proud Traders: They Have a Good Job in the City

This past week, throughout the British business press, the big news has been the “Big Bang,” the landmark 1986 deregulation of the London Stock Exchange.

Commentators have been celebrating the 20th anniversary of the historic move that made “the City” — the London square mile that functions as Britain’s Wall Street — the world’s hippest financial hotspot.

The Big Bang, as one analyst noted, “unleashed a frenzy of takeovers and mergers” and sent rewards for the UK financial elite towering over take-homes outside the City limits. The 134,000 men working full-time in the City last year averaged $198,424 in annual earnings. Outside the City, British men working full-time averaged $59,630. 

Also largely outside the City: 336,000 British workers, mostly women, making under the UK minimum wage, currently supposed to run $10.15 for workers over 22.

“The City of London,” British journalist Martin Kettle pointed out last week in the Guardian, “is surrounded by millions of people who know it is morally wrong, who would probably favor a maximum wage as well as a minimum one.”

The huge incomes available in London’s financial trading district — an estimated 3,000 traders drew over $1.9 million each in bonuses alone last year  —  have British graduates with science and engineering degrees abandoning traditional careers for the “record rewards of the City,” the London Evening Standard observed last week.

The “Big Bang has spawned a plutocracy, and the envy, greed and sense of grievance are almost palpable as the bonus season reaches its apogee in December and January,” adds Times of London analyst  Patrick Hosking. “Bigger and bigger sums are going to fewer and fewer people.”

Stat of the Week: A Sunbelt Swoon

More evidence of our unequal times — from a place usually considered a symbol of Sunbelt economic success, Florida's Sarasota County. Since 2000, the U.S. Census Bureau reports, the income of the median Sarasota County household has dropped 9 percent. At the same time, the number of county families making over $100,000 has jumped 29 percent. One consequence: The price of the typical home up for sale in the Sarasota-Bradenton market has nearly doubled since 2003, from $169,300 to $338,100.

Quote of the Week: A Golden Gated Existence

“This will be a home for people who feel like they've made it, and they want a lifestyle where they know their children can have just about anything they want. It's like God's little heaven.”
Jim Brown, president of Creighton Enterprises, the builder of a luxury gated community of $2 million homes, now rising in Northern Virginia, that will feature access to everything from an equestrian center and trout-packed streams to a Jack Nicklaus golf course and a Ritz-Carlton restaurant, all for annual homeowner dues that likely will exceed $30,000.
Washington Post, October 24, 2006

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