Category Archives: inequality

The American Dream, Ford Style

Remember that obnoxious Cadillac ad that debuted during the Olympics? The one where an actor smugly proclaimed that we work ourselves to death in order to buy high end stuff, like, I don’t know, this here Cadillac? Well, Ford just volleyed that sucker back like a rocket.

In their ad, they mimicked the structure, pacing, and shot composition of the Cadillac ad. Instead of using an actor playing a privileged guy who chooses to work and keep up with the Joneses, Ford uses a real person, Pasho Murray, to play the lead. Murray founded Detroit Dirt, which creates compost using waste materials and sells it to people who want to create organic gardens in the Detroit area.

She opens in front of a heap of composting dirt and asks, “Why do I work so hard? For this? For dirt?” This time, it’s personal. And over the course of the ad, she lays out why she works hard. Whereas the Caddy ad told us we work so hard for money and stuff, Murray says that she works hard to help entrepreneurs create locally grown organic food. To make the world a better place.

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To be fair, we are talking about two mega-corporations throwing jabs at each other. But it is interesting in how they do it using the framework of the American Dream. In the Cadillac ad, the American Dream is shallow, money-driven, and exclusionary. It’s the strong individual rising above the pack to reap personal rewards. In Ford’s ad, the American Dream is about building a better world. It’s a self-motivated individual working within a community to further an aim that benefits everyone. This American Dream is social, result-driven, and inclusionary.

Really, it’s no surprise to see this from Ford, though it is a surprise to see it from a modern day Ford. Henry Ford, founder of the company, used the assembly line and higher wages for his workers to create cars that his workers could buy. This was Fordism, way to lower the cost using mass production techniques while also paying workers a living wage. In doing so, they made the automobile something for regular joes, not just for the super-rich.

Their ideologies come directly from the markets that they target. While the Cadillac ad targets the super-rich, the Ford ad pitches a plug-in hybrid car that most middle class families can consider. The Cadillac 2014 ELR is about $75k and the Ford C-Max Energi is about $30k. This is the difference between the two brands – one pitches individual luxury and the other pitches working together to better the world. It’s capitalism with social responsibility. The rich that can buy the Cadillac only care about themselves, while the Ford market cares about everyone’s fortunes. That’s what these two ads are saying.

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The American Dream is about work and sacrifice so that you can improve your place in the world. The genius of the Ford ad is that it broadens this idea to apply to the world around you. You work hard and try to make the work better, as Murray says in the ad. Your place in the world will be better if the world becomes better. As Murray concludes, “That’s the upside of giving a damn.”

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Slouching Towards Oligarchy

Over on the NYT opinion page, Paul Krugman has breakdown of how the US government increasingly favors wealth – specifically inherited wealth – more than earned income. The whole column is great, you should read it and despair. Contrary to the line about hard-working Americans, here’s how the current crop of super-rich came about:

“…six of the 10 wealthiest Americans are already heirs rather than self-made entrepreneurs, and the children of today’s economic elite start from a position of immense privilege. As Mr. Piketty notes, ‘the risk of a drift toward oligarchy is real and gives little reason for optimism.'”

Most of the rest of the folks on there that earned their billions got it from hedge funds or software, both of which are big on using other people’s money to get rich. That is, the hedge fund manager invests and takes a cut, while the software entrepreneur takes venture capital funding to explode an idea across the world. Not that these jobs don’t take hard work, but let’s be fair, these guys aren’t making their money on wages.

Government tax policies have been encouraging this preservation of wealth since the tax cuts George W. Bush enacted early in his tenure:

“…the top rate on dividends fell from 39.6 percent (because they were taxed as ordinary income) to 15 percent — and the estate tax was completely eliminated.”

The estate tax was created to make the tax code fairer, to redistribute the tax burden so that it didn’t just fall on working stiffs and commerce, but on passive wealth, too. It’s had a redistributive aspect, sure, and helps to prevent any sort of oligarchy taking root from generations of accumulated wealth. And it helps prevent increased inequality, which has a lot of damaging effects on society.

The dividends rule is important, too. You get dividends on stock that you hold personally. Your 401k gets dividends on the assets that it holds, but you get taxed on the 401k as whole, not for the individual pieces in it. And who holds those stock? The wealthiest 10%. They own more than 80% of all stock:

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Drawn from the careful work of economist Edward N. Wolff at New York University (2012)

And the current crop of Republicans wants to make things worse. Republican darling and professional haircut Paul Ryan would eliminate all taxes on interest, dividends, capital gains, and estates. As Krugman states, “Under this plan, someone living solely off inherited wealth would have owed no federal taxes at all.”

If we give a damn about work and the people that perform it – and we should, because chances are, that’s us – then this path Ryan and the Republicans want to set us on should terrify us all. As more money concentrates in the hands of a shrinking few, more political power concentrates there, too. In the Citizens United v. FEC decision in 2010, the supreme court ruled that corporations could spend unlimited money in support of political campaigns. And rich individuals could set up a corporation through which they could funnel money to anyone. Because campaigns are so expensive, politicians will then favor those donors who give the most money. Money is power.

Is there a way to put the breaks on this? Sure, but it requires organized effort, it requires fighting people who can muster more resources, and it requires elected officials balancing their attentions. Will this reverse how things have been going? The current political winds have been shifting favorably, but public opinion is fickle and money is patient.

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