pan·der (păn′ dәr)
intr.v. pan·dered, pan·der·ing, pan·ders
1. To act as a go-between or liaison in sexual intrigues; function as a procurer.2. To cater to the lower tastes and desires of others or exploit their weaknesses.
For an instructive example, see Paul Krugman's 'New York Times' blog post on January 29, 2014, where he attempts to make it seem like teachers are somehow being exploited by hedge fund managers --
http://krugman.blogs.nytimes.com/2014/01/29/hedgies-versus-teachers/
https://web.archive.org/web/20181118222834/https://krugman.blogs.nytimes.com/2014/01/29/hedgies-versus-teachers/?_r=0
Hedgies Versus Teachers
So one thing I learned last night is that the right has a new meme: inequality is the fault of the government — you see, it’s all those overpaid government workers.
I made the mistake of replying on the substance, which is that once you correct for education, government workers are paid about the same as their private-sector counterparts; basically, government workers are school teachers, which means that they need college degrees.
But there is a better answer, and a teachable moment here, which gets at the real nature of inequality in America. It’s not about overpaid teachers.
Let’s start by looking at the real winners in soaring inequality — the people who not only make incredible amounts of money, but get to pay very low taxes (and if you suggest closing their loopholes, you’re just like Hitler.) According to Forbes, in 2012 the top 40 hedge fund managers and traders took home a combined $16.7trillionbillion.
Now look at those supposedly overpaid government employees. According to the BLS, the median high school teacher earns $55,050 per year.
So, those 40 hedge fund guys made as much as 300,000, that’s three hundred thousand, school teachers — almost a third of all high school teachers in America.
OK, teachers get benefits, so their total compensation cost is higher than their wage, so maybe it’s only 200,000.
But you should keep numbers like these in mind whenever anyone tries to shift attention from the one percent (and the .001 percent) to Americans who aren’t even upper-middle class.
It is fascinating how many misleading or false statements Krugman can pack into such a short blog post.
He starts out by writing that he made 'the mistake of relying on substance' (actually, he's not one for substance), in that government workers — mainly school teachers — are supposedly paid the same as those in the private-sector when you correct for differences in education.
This is false. Teachers work fewer hours, mainly due to their shortened work year, so on an hourly basis teachers earn an above average salary among those with similar levels of education — and this is ignoring public-sector benefits, which are widely known to be superior to those in the private-sector. Krugman mentions teacher benefits as part of their total compensation, but makes no mention of them as critical to doing a fair salary comparison.
Notice that in the private-sector, pension plans are almost nonexistent — most people working in the private-sector would love to get a teacher's pension --
http://www.ebri.org/publications/benfaq/index.cfm?fa=retfaq14
https://web.archive.org/web/20180225054140/https://www.ebri.org/publications/benfaq/index.cfm?fa=retfaq14
Here's a comparison of teacher's salaries by Nick Gillespie at the reason.com blog from back in 2011 —
http://reason.com/blog/2011/08/02/is-matt-damon-right-that-teach
...
More to the point, Bureau of Labor Statistics and other surveys that take into account the reported number of hours worked in a year consistently show that on a per-hour basis, teacher income (again, not including fringe benefits, which are typically far more robust than those offered other workers, including college-educated professionals) is extremely strong.
...
And regarding wealthy hedge fund managers paying low taxes, it is easy to look up the relevant statistics at irs.gov, to see which income levels pay the bulk of the income tax collected by the U.S. Treasury — it certainly is not people with the high school teacher salary that Krugman mentioned --
http://www.irs.gov/uac/SOI-Tax-Stats-Individual-Income-Tax-Rates-and-Tax-Shares
http://www.irs.gov/file_source/pub/irs-soi/11in01etr.xls (requires Excel viewer)
The figures in the table above are not tax rates — they represent the portion of the actual revenue collected by the U.S. Treasury for those income groups, so those figures show the net result of all tax payments, after all the tax games that everyone plays.
Notice that the bottom 50% make almost no contribution to the revenue collected by the U.S. Treasury via the income tax — less than 5% of the total revenue collected each year from 2001 to 2011, and less than 3% in 2009, 2010, and 2011.
Here is a table from taxfoundation.org that summarizes the data from the 2011 IRS spread sheet section shown above, and includes the income levels that bound each group --
http://taxfoundation.org/article/summary-latest-federal-income-tax-data
https://web.archive.org/web/20171124150933/https://taxfoundation.org/summary-latest-federal-income-tax-data
Using the high school teacher salary given by Krugman ($55,050), we see that teachers are among the 25% of taxpayers between the top 25-50% income level, since $55,050 is between the upper and lower 25-50% split points of $70,492 and $34,823, and that this group paid 11.5% of the total income taxes collected by the U.S. Treasury in 2011 — notice that the 5% of taxpayers in the top 5-10% group paid a slightly larger share of the total income taxes collected in 2011 (11.8% vs. 11.5%, or +0.3%), even though that group of taxpayers is one-fifth the size. This means that on average, each individual in the 5-10% group paid 5 times as much in income taxes as each individual in the 25-50% group, since the 25-50% group is 5 times larger, and yet in total that group paid slightly less in income taxes.
That is, each taxpayer in the 5-10% group paid on average: $122,696M Tax / 6.829285M Returns = $17,966 per taxpayer, whereas each taxpayer in the 25-50% group paid on average: $119,844M Tax / 34.146428M Returns = $3,509 per taxpayer.
And pay attention to the upper split point of the 5-10% group — it is $167,728 — this is in no way the kind of income that justifies the term 'independently wealthy', and the increased tax burden jumps dramatically from there.
Each taxpayer in the top 1% (those with incomes above $388,905) in 2011 paid on average:
$365,518M Tax / 1.365857M Returns = $267,610 per taxpayer.
This is over 76 times more than what those in the 20-50% group each had to pay (e.g. the average teacher).
These individuals that pay 76 times more in taxes on average are those that Krugman claims 'get to pay very low taxes'.
Of course, such extreme differences are obviously unfair. No one can give a convincing defense of this blatantly biased scheme, never mind how many times people repeat the asinine, bizarre, and unsubstantiated claim that the current system is unfair to the middle class, as Krugman wrote in his blog post above. This is just our old friend 'Director's Law' again. In short, the only reason such a tax scheme is possible is because there are so many more people in the middle class, and so they are the largest voting bloc (including the teachers), which politicians (and corrupt economists like Krugman) must pander to in order to retain power or influence. This is a demonstration of why democracy is an invalid form of government — without legal restrictions, majorities are free to violate the rights of any minority — like voting themselves a free lunch at the expense of a minority, and destroying the financial solvency of any democratic country that does not constrain the majority with a proper constitution. The U.S. has been marching down this path for many decades, as have been many other democratic countries (notice the large debts of the advanced democratic countries like the U.K., France, Germany, etc.).
Many people will point out that the bottom 50% still pay payroll taxes, but the payroll deductions that are not returned via a tax refund or the 'Earned Income Tax Credit', like Social Security and Medicare payroll taxes, are transfer payments that do not pay the operating costs of government. Those payroll taxes are used to pay retirement benefits, that a current working taxpayer is expecting to receive themselves in their retirement years, so it makes no sense to treat those payroll taxes as contributing to the tax burden required to pay for the operations of government. In short, transfer payments do not fund government — they fund individual beneficiaries.
And notice that the figures in that IRS table above, show that as of 2011 the top 1% pay more in taxes than the bottom 90% (the top 1% paid 35.06% of the revenue collected in 2011, whereas the bottom 90% paid only 31.74% (100% - 68.26%)).
Not only do the top 1% pay more than the bottom 90% — they have for some time --
http://taxfoundation.org/blog/top-1-percent-pays-more-taxes-bottom-90-percent
https://web.archive.org/web/20170901155457/https://taxfoundation.org/top-1-percent-pays-more-taxes-bottom-90-percent
Given that Krugman is a professional economist, it is hard to believe that he isn't aware of these numbers.
So when Krugman writes that teachers are paid on a par with their private-sector counterparts, or that 'hedgies' pay very low taxes, is he lying, or merely ignorant? I have given him the benefit of the doubt by describing him as pandering — at least that leaves open the possibility (however slim) that he is honestly just trying to entertain ignorant readers.
But the more important point is that the overall appeal of Krugman's blog post (and much of what Krugman writes or says) will be to those who believe that they should be able to limit the success of others — that there is, as Krugman put it, 'soaring inequality', and that alone justifies making some successful people less successful.
Notice that Krugman gives no practical reason for objecting to inequality (I'm sure he would if pressed, or has elsewhere), but he doesn't have to give a practical reason — he can incite people just by mentioning inequality. To many people, just the thought that some others are more successful is a call to action, regardless of how any individual's particular success was actually achieved.
The supposed concern for income inequality is a kind of red-herring fallacy, to justify a desire to restrict freedom. It cannot mean anything else, since it is impossible to reduce inequality without restricting freedom, and violating individual rights.
The proper concern should be with rule of law, and lawful transfers between individuals — not inequality. Strict protections of individual autonomy give rise to inequality, since no two individuals have the same talents, intelligence, interests, or ambitions — it is inevitable that individual outcomes will be unequal in the absence of coercion. Inequality is an indicator of individuals having the freedom to pursue their goals without interference.
Not only is equality not a value to strive for, it is inherently unfair, and so immoral, because it requires forcing the more successful down to the level of others who are less successful. You cannot raise the unsuccessful to the level of the successful, because you cannot give them talent or ambition — the only way to reduce inequality is to reduce the success of the more able. That is, no one benefits from enforced equality, other than the government employees salaried to apply the force (and even they will suffer in the long run — see Cuba and North Korea for two obvious examples).
Attacking hedge fund managers is an old saw with Krugman. They make such a convenient target for anyone who wants to appeal to those who respond emotionally to discussions of inequality, and fancy themselves as a fighter for so-called 'social-justice'.
In a previous post, I wrote about a talk Krugman gave back in 2007, where he made it sound like hedge fund managers do not deserve to make more than teachers, since they have similar education levels. This is such obvious nonsense, it is surprising that people take this kind of talk seriously (see my previous post for details).
Another crude obfuscation in all this, is the notion that somehow by default, one person's wealth contributed to another person's poverty. Krugman plays on this with his irrelevant comment that 40 hedge fund managers made enough to pay the salaries of hundreds of thousands of teachers. So did many pop stars — what difference does that make, unless they stole that money from someone? The proper response to Krugman's comment is: 'So what — whom did they harm?'
Of course, many people will denigrate the source of the wealth of the wealthy people that they despise. But a pop star who can sell out a stadium, or a hedge fund manager who can make billions of dollars profitably investing client money, is certainly not stealing, regardless of how much some may resent their wealth.
I noticed these two comments to Krugman's blog post — it's nice to know that everyone isn't fooled by his nonsense --
Dan Nile
Los Angeles 30 January 2014
The wealthiest ZIP codes in the country are now clustered around Washington DC.
If one excludes local government and K-12 teachers, and includes state, federal, and college professors, the numbers tell a different story. The private sector is not dominated by hedge fund managers. Most of them would like to have the health care and retire-at-55 pension plans that many government workers enjoy.
J
Texas 30 January 2014
Nice to see Paul continuing to perpetuate the myth of the tax-free rich guy. Paul knows that every decile in the income distribution pays more tax than the decile preceeding it, AND ALSO pays more tax as a percentage of its income than the decile preceeding it. That's why Paul makes the statement but doesn't provide any tangible support. And before people start whining "what about capital gains?" Most "hedgies" as Paul likes to refer to them generate short-term capital gains which are taxed at the same rates as plain ole ordinary income.
