On London, David Gergen and Our Basic Values

I was in London on July 23rd of this year. I lived in London for years. The riots have spread to the areas I lived in: the pubs I frequented, restaurants I ate in, theaters I watched movies at, and stores I shopped at are literally up in smoke. It makes me incredibly sad. My good friends, friends I dined with in the grey and ancient city on July 22nd, have sent me the most disturbing reports today, of teens running down their street in hoods and masks, breaking into local and family-owned businesses to steal puzzling items like Immodium AD as well as big ticket items like plasma TVs. These kids are throwing bricks into private homes, they are burning businesses global and local. MOST FRUSTRATING OF ALL: No one in America is covering this major story, which has wide repercussions globally.

Having lived in London, I think I can speak to a few socioeconomic factors: most of the city, with a few exceptions, is very integrated. What does this mean? In Notting Hill, where I lived, two doors down from multi-millionaires was a public housing block. A Richard Branson look-alike (maybe even the genuine article) would cruise our street in his blue Aston Martin. (In fact, he almost hit me one time and was completely without remorse, driving away and giving me the finger for daring to get in his way.) So, cheek to jowl, there was immense wealth and pretty serious poverty. And middle class earners like myself living in small, overpriced apartments.

Three weeks ago when I was there, I noticed how upmarket, built-up and frankly shiny so many areas of London were. A lot of the grit I remember was gone. I imagine some of that was the money spent on upgrading the city for the upcoming Olympics next year. I noticed on the street where I lived, again half a block from the massive tower of council housing, was parked a Porsche Cayenne, a Lamborghini and a number of Minis and BMWs. There is a lot of money in London, and a lot of no money. Having the two next to each other, in the midst of a serious recession, in the midst of many cutbacks in government services, I imagine, was like having kerosene next to a blazing fire. Am I excusing the rioters? Certainly not. They are stealing goods and services and destroying institutions that help local communities. They are lawless punks, destroying the fabric of society.

But what was their example? The wealthiest Londoners live large, dining in Spitalfields market (much gussied-up since the days of Jack the Ripper), they buy their underwear at Agent Provocateur, they drink the finest Malbec and Sancerres. They buy their fur coats and size 0 jeans at Joseph in the chicly refurbished neighborhood, where the inflated real estate has appreciated but not for the poorest, who still buy their lottery tickets and crisps and cigarettes at the local grocer next door. The rich, even in this economic disaster, maybe especially, in the catastrophe that we are living in daily, are getting richer. Visibly. And not just in London. In America as well. They buy their Range Rovers, join the 11-99 Foundation and pay less taxes than ever. Meanwhile, the average American has gotten poorer. The average American gets taxed more, whether through state trooper tickets, parking tickets, increased local and state taxes. Their homes have lost value. 62% of Americans think that the Debt Ceiling deal profits the richest.

I am not anti-capitalist. I think it is the only system that works. But not the current form of it. The richest .01% of the country should not be getting richer, while everyone else suffers. It’s not good for society as a whole. It’s not historically what we’ve done as a country. We are in deep shit, economically. EVERYONE should pay the price to dig all of us out of it.

“A huge share of the nation’s economic growth over the past 30 years has gone to the top one-hundredth of one percent, who now make an average of $27 million per household. The average income for the bottom 90 percent of us? $31,244.” (University of California, Berkeley)

Let me tell you a story about my in-laws’ recent trip to Manhattan. They are the types who spend their money on expensive dinners when they travel, often staying at budget motels to finance their foodie extravaganzas. They are also very gregarious. They befriended a man and his wife in a fancy restaurant in Midtown. The man, in his 80s, collects watches. Watches are becoming an outdated technology, now that iPhones and the like provide us with the time. But this man had bid $250,000 on a rare watch. He did not obtain it, as it went for over a million in an auction.

DOES THIS SEEM LIKE A GOOD USE OF MONEY TO YOU? Of course it’s this guy’s money to spend as he likes. But this seems to be the choice of the super rich with their money. Buying ostentatious, outdated, useless items that don’t benefit the economy at large.

WHY shouldn’t they be taxed more?

There is a lot that is great about America. I am very proud to be an American. I recently read “Half Broke Horses”: that pioneer spirit of not wanting too much, not getting into debt, using what we have, saving, not being flashy – it’s in our nature. I know we as a people can do this. But we need to put away our selfish interests, like collecting rare watches, fancy cars, and silly material goods. I am just as guilty of this: I have bought ridiculous things. But the truth is: I am never going to be in the top .01% of the country. To buy goods to show others that I am not poor is stupid. Status is silly. And our obsession with it has gotten us into this mess.

During World War II, it was patriotic to be poor. Reusing and being frugal were virtues promoted at large. The richest were taxed at the same rate as the rest of us. We are in a crisis. We are a creative, hard-working people, united by our love of freedom and the belief that we are all equal.

“In 1945, households making a million dollars in non-investment income was 66%. Now, it is 32%.” The Tax Foundation

David Gergen, since you asked. We need to ALL contribute to pulling ourselves out of our debt mess. The richest among us can either pitch in, or move to Monaco in shame, their tails between their legs.

Or am I a foolish idealist? Tell me in the comments.

For more, go here.

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14 Comments

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14 responses to “On London, David Gergen and Our Basic Values

  1. It’s crazy and so unnecessary what’s happening in London at the moment. To be honest, I don’t really understand it. Regarding the economy, it would definitely help with a little more balance between rich and poor. But I don’t know how that could be possible right now. Interesting post anyway!

    • I’ve been thinking about you. I hope you are out of harm’s way and nowhere near these riots.

      • I’m alright, I live in a town about 30min train-ride from London Paddington. It’s just sad to see these teens get into this because they think it’s “exciting” or when looting the stores there’s free stuff to grab. They have used twitter as a tool to encourage others and give directions of what’s next.. Watching the news everyone blames everyone, no surprise. It seems like a giant lack of respect, moral and not grasping right from wrong.
        The Prime Minister stated yesterday (on national tv): “If you are old enough to commit these crimes, you are old enough to take the consequences of your actions. You will feel the full force of the law.”

        Of course that’s good but I can’t help but thinking if that’s what they really need. Maybe it’s just me but in Sweden we don’t put children in prison. That doesn’t mean they can behave however they like without being taken cared of. It’s just another system.

      • Glad to hear you’re OK. I was listening to some kids interviewed on BBC, and they admitted they knew what they were doing was wrong, but they “didn’t want to miss the fun”. Mob mentality really has taken over! I’ve never heard anything like it.

  2. you know, when I first moved to Canada, I was shocked how high the taxes are (whether the income taxes or the sales ones) – and shocked how active Canadians are when it comes to charity.

    But the longer I live here, the more I get it: we have really good health care, even the poorest have access to it because in most provinces for-fee medicine is forbidden (except for things like dentist and fertility and a few others).

    We have good (not great, but good) social support systems. If you lose your job, there will be unemployment insurance money to help you while you’re looking for another job. If, after a certain period, you still don’t find a job, there’s some minimal monthly allowance. It’s not much (I think about $500/month) – but it’s better than nothing.

    The public schools aren’t too bad.

    As in London, we all live together. There is government housing next to where I live. During the day, all kids play together in the sandbox. At night – well, sometimes it gets creepy with the teenagers from those apartments. There were some gunshots recently. But no one hurt, no one killed. And there are tons of programs to keep those teens occupied.

    I do pay LOTS of taxes. More than third of my income I never see. Sales tax is 13%. But I see where it all goes.

    And, on top of it, most people donate. There are over 80,000 charitable organizations in Canada, and about 1,000 appears annually. Which is a lot for 30 Mln population. And people participate – give money, or their time.

    And while there are poor and rich, I do not think the gap is quite as big as in London, Moscow, or New York…

    • Canada is certainly getting a lot of attention as a better place to be right now. Thanks for giving such a good idea of what it’s like. It sounds pretty darn good!

      Interesting that the teens are somewhat troublesome there too. Huh. I’ve been thinking about teens a lot, since it seems like they are the main ones looting and spreading misery in the UK. Is it the climate, the parenting, the hormones, alcohol, drugs, bad judgement, the genes, the envy? Maybe a toxic cocktail of all of those things?

      • I think it’s the hardest on them – teens. When our parents were in their teens, it was pretty straightforward: you go to university, you pay a lot for education, but then you earn a lot.
        Nowadays, many tradesmen (and women) earn way more than all those university-educated people in the offices, especially early on their careers.
        The future for those teens is very uncertain, cost of education is ridiculous, cost of living is very high…

        But the biggest problem, I think, is that they were raised with an assumption, an expectation that they deserve everything in this life. With the thought they can do anything. But no one told them that they will have to work hard to get that.

        I look at the interns – they work 6 months and expect a promotion. If they don’t get a promotion in a year or two – they jump the ship.
        Because our schools don’t give them bad grades. We never tell them they suck at football or dancing. We always encourage them and sing serenades and tell them they’re the best.

        The problem is once they’re out of school, they’re up for a big surprise. Money doesn’t grow on trees and they aren’t, in fact, all that good. And probably won’t be rich – or even sufficiently financially stable – for another 5-10 years.

        That must be quite a blow.

        So I think – we (as in people) raised this generation with expectations not based on anything – and they’re angry when they realise the truth.

      • Interesting. I am really trying to instill in my kids the importance of working hard. It seems to be the single greatest determinant of success.

        Here’s some more interesting food for thought:

      • so true about the consumerism
        i read recently that we shop when we’re unhappy – but, really, visiting a friend would do a better pick-me-up job than a shopping spree… But we don’t visit friends anymore. Virtual life replaced that aspect of our lives – for many…

  3. Mo

    First – Hi! Welcome back! I missed your insightful blogging. Hope you’re doing ok. 🙂
    I think this phenomenon is spreading worldwide. It isn’t gaining much global coverage, but during the last two weeks there have been massive protests in Israel, demanding the lowering of housing prices and the restoration of social programs. In the last two decades, Israel has moved from a pretty socialist economic country, closer to America’s economy. Like the rest of the world, the gap between the rich and the poor grows bigger, and the middle class is shrinking day by day. As much as this violence is abhorrent, I feel a tide of change in the world, toward more economic equality. Hopefully, Obama has the balls to make some bold moves. Though if he continues at this rate, I highly doubt it.

    • It’s a start that a majority of Americans now want the richest to pay more taxes. I don’t know that a majority of Americans have felt that way, ever. I hope he’s able to make that mandate an action to take.

  4. I remember awhile back politicians thought it would be a good idea to tax the rich. I don’t remember the specifics of the tax, but i do remember it was dubbed the “yacht tax,” which sounds perfectly reasonable. Tax the people who have enough money to buy and sail yachts. Surely they can afford it.

    The problem was, the rich stopped buying the yachts here and bought them elsewhere, in places where yachts weren’t so highly taxed. The end-sufferers were the people who built the yachts, the blue-collar, middle class, whose jobs went away until the yacht tax was rethought and repealed. In addition, the yacht tax revenue was lost to the taxing authority, so it never even accomplished its goal.

    There are always unintended consequences when the government tries to raise more revenue. People will change their behavior in response.

    It’s horrible what’s going on in London. I can’t imagine how it must feel for you to watch it unfold

    • I remember the yacht tax, too. It was a total disaster, you’re right!

      I was mostly thinking about letting the Bush tax cuts expire. I’d love to get your take on whether that’s a good idea! 🙂

  5. I don’t have anything more to add because I agree with everything you said, but I wanted to say that this was brilliantly written.

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