This Week

The final verdict on Mexico’s presidential election, we now know, may not come for months. But the verdict on the economic policies advanced by the election’s initial top vote-getter has already been delivered — by economists at the United Nations. We have the story in this week's Too Much.

This week's issue also marks a Too Much publishing milestone. With this issue, we begin our third year as an online weekly. To all our readers, both newcomers and veterans alike, our deepest thanks — and a request.

We've put together a brief online readership survey, to help us evolve Too Much into an ever more useful vehicle for inequality news and views. We hope you'll consider clicking the link below and taking a moment to let us know what you think. “Too Much” obliged!

Take the Too Much online readership survey

Greed at a Glance:
Want Your Tub in Avocado or Copper?

Bathrooms are booming, news reports from the world's two most unequal developed nations last week confirmed — at the luxury end. In the United States, notes the Washington Post, spending on bathrooms that run $8,000 and more will hit $22 billion in 2006, almost triple the $7.3 billion spent on luxury bathrooms in 2003 — and “10 times what the U.S. government will spend on AIDS research this year.” In the UK, observes a Telegraph report, spending on bathroom fittings and fixtures leaped to $1.8 billion last year, up 50 percent from 1998. British deep pockets appear to have the hots for the “Agape spoon bath,” a $9,200 tub shaped like “a halved avocado.” American swells seem to prefer luxuriating in the Waterworks Clothilde, a $29,000 hand-hammered copper bathtub with a tin-lined basin . . .

State and local governments in the United States, says the Education Trust, are spending “about $900 less per pupil on students educated in our nation’s poorest school districts than those educated in the wealthiest.” The spending gap between rich and poor school districts has hit considerably higher in some states, $2,280 per pupil in New York and $2,065 in Illinois. But Education Trust researchers stress that even small gaps, like Colorado's $101 per student differential, can make big differences. Notes a Trust official: “If Colorado closed its funding gap, a typical low-income high school of 1,500 students would have an additional $151,500 to fund school improvements.”

Pay for Minnesota's 100 highest-paid corporate execs, the Minneapolis Star Tribune reports, soared 59.3 percent last year. Meanwhile, notes former Trib publisher Joel Kramer, the state government and local governments in Minnesota have $3 billion less in budget capacity, as a share of personal income, than a decade ago. Kramer and over 200 affluent Minnesotans want to change that. Last month, they all signed a full-page ad that called on wealthy Minnesotans to pay an extra 2 cents in tax on every dollar of income over $275,000. Says Kramer, the founder of Growth and Justice, a Minnesota think tank: “We need to invest more in our future.” Adds the affluent activist: “There are plenty of wealthy people who disagree with this.”

Etihad Airways, the three-year-old national airline of the United Arab Emirates, has just introduced the ritziest seat in the skies. The “revolutionary” new “Diamond Seats” on Etihad's specially outfitted new Airbus planes will each feature a 23-inch personal LCD, pneumatic lumbar support, and a “privacy shell.” Each seat will also recline into a six-foot-long flat bed “at the touch of a button.” Less drowsy travelers can opt to swivel their seats a full 180 degrees, a neat move, says the airline, that lets guests “conduct group meetings and discussions, and then turn away to relax in the luxurious seat in total seclusion.” No word yet on ticket price . . .

Etihad Airways has plenty of competition for the luxury traveler dollar, with much of that coming from “private-jet brokers,” wheeler-dealers who match up celebrities and their entourages with idle private plane capacity. Blue Star Jets, one undustry pacesetter, is booking 1,000 flights a month, charging up to $30,000 for a New York-Florida roundtrip. Blue Star has scored 100 percent revenue gains each of the past six years. The company's CEO, Ricky Sitomer, sees plenty of good times ahead: “There are more millionaires around and they're demanding a more personalized luxury. If they want a massage or flowers for their wife or girlfriend or if they want lobster or caviar, we'll provide any service on board.”

Recklessness Revealed:
The Fiscal Impact of George W

Sometimes, borrowing money makes sense. A family that borrows to pay for college is usually making a wise choice. A family that borrows to play the slots is not.

Governments can be wise, too, if they borrow for schools and other investments that pay off in the long run. But governments can also be incredibly reckless — if they borrow and then give the money they borrow away, no questions asked, to people who hardly need taxpayer help.

This reckless course, unfortunately, just happens to be the course the United States — throughout the George W. Bush years — has been taking. The national debt, by next year, will have jumped $3 trillion in just five years, and the only beneficiaries from that ballooning debt, says a new economic analysis from Citizens for Tax Justice, will be America's wealthiest 1 percent, taxpayers who this year will average $1,272,000 in income.

“The vast majority of Americans are worse off now than before President Bush's tax cuts were enacted,” notes CTJ director Robert McIntyre. “Only the very rich are net winners.”

How can that be? Haven't most Americans seen cuts in their federal income taxes since 2001? Most Americans have indeed seen tax cuts, the new CTJ analysis acknowledges, but “these tax cuts are being paid for entirely with borrowed money.” And these borrowed dollars “will ultimately come out of taxpayers’ pockets, either through spending cuts or future tax hikes.”

Those cuts and hikes will totally wipe out, and then some, any tax savings that average Americans have received over the past five years. Between 2001 and 2006, for instance, the typical middle-income American has received federal tax cuts totaling $1,855. But that person's added debt burden from unfunded tax cuts amounts to $8,936.

America's wealthiest 1 percent, by contrast, come out ahead even after figuring in the added debt burden. Their net gain: $30,352 per family member.

In Mexico's Election, a Clear Losing Proposition

Felipe Calderón, the presidential candidate of Mexico's conservative PAN party, currently enjoys a razor-thin advantage in the July 2 election's initial vote tally.

But average people throughout Latin America and the rest of the developing world, suggests a new UN report released just two days before the Mexican election, are enjoying precious little advantage from the economic policies that Calderón has vowed to implement once in office.

These policies reflect what has become known, in international economic circles, as the “Washington Consensus,” the notion that poor nations can get a leg up by cutting taxes and government spending, privatizing public services, and wiping away anything that could possibly be dubbed a “restraint” on free trade.

This “Washington Consensus,” the new UN World Economic and Social Surveynotes, has been driving international economic policy making since the early 1980s — with not much positive to show for the effort.

“In 1950, the average Ethiopian had an income 16 times less than that of someone living in Europe or the United States of America,” notes José Antonio Ocampo, the UN undersecretary-general for economic and social affairs, in the new report. “Half a century later, Ethiopians have become 35 times poorer. Most of the world’s poorest nations are falling behind in more or less similar degrees.”

Since 1980, the UN report adds, the number of developing countries suffering “growth collapses” — periods of at least five years that see either no growth or an actual decline in per capita income — has more than quadrupled, from fewer than 10 in the years right after World War II to “no less than 40.”

What’s the problem with the free-market-first-last-and-always Washington Consensus? We have more.

Stat of the Week:
The Estate Tax, Charity's Best Friend

America's rich, for generations now, have been giving away money to charity to lower their federal estate tax liability. How much would estate tax repeal impact this charitable giving? Here's a new clue, from just-published research conducted by Pulitzer-prize winning reporter David Cay Johnston.

In 1995, estates worth $20 million or more gave away over a quarter of their assets, 25.3 percent, to charity. In 2004, estates worth over $20 million gave away just a fifth of their assets, 20.8 percent. In 1995, 42.4 percent of these large estates left nothing to charity. In 2004, 47.7 percent.

What changed between 1995 and 2004? Among other things: the estate tax rate. In 1995, massive estates left behind by wealthy Americans faced a 55 percent top tax rate on bequests over $3 million. By 2004, that rate had dropped to 48 percent.

Quote of the Week:
Queries Andrew Carnegie Couldn't Answer

“While we can only applaud the decision by Mr. Buffett and Mr. Gates to give away so much of their fortunes, their gifts raise questions not unlike those that confronted Andrew Carnegie a century ago. Is society served by permitting so much capital to be accumulated by so few? Should we have to rely on the usually unfulfilled hope that fortunes of this magnitude will be put to a good cause? What becomes of a society that must rely on 'gifts' from a handful of socially conscious billionaires to save its schools, cure disease and alleviate poverty?”
David Nasaw, professor of history, City University
of New York Graduate Center, July 4, 2006

---

Want to receive the Too Much online newsletter in your email box every Monday? Learn more about Too Much and then sign up here for a free subscription!