| Number 61 | March 3, 2000 |
|
This Week:
|
|
Greetings, This week I return to the topic of how the "generosity" of the wealthy shapes the society we live in. The effort yields more evidence that "wealthy" and "generous" are two words that are not terribly comfortable being in the same sentence. Next week I plan to introduce a new regular feature called "Website of the Week." In the course of doing the research that I do, I have accumulated literally hundreds of website addresses that may be of interest to readers (and not just those with computers; you paper subscribers can go to the nearest library for Internet access). Thank you to all the new subscribers this week, and welcome aboard. Some of you sent in your subscription requests some time ago, and I apologize for taking so long to get you on the list. Nygaard Notes is still being done in my spare time, which is my excuse for all sorts of things, including all the little typos and grammatical oddities that conscientious readers keep pointing out to me. I am trying to train my readers to interpret those typos and grammatical oddities not as "errors," but rather as charming eccentricities. I don't think it's working. See ya next week, Nygaard |
- Governor Jesse Ventura, announcing on the February 27th edition of "Meet the Press" that he no longer favors the death penalty. This quote was buried on page 8 of the Star Tribune (Newspaper of the Twin Cities!) on Feb. 28th, in a continuation of a front-page article about the real news, which was Ventura saying he would "listen" if John McCain asked him to be his vice president. |
|
I didn't have room to add this little tidbit about Senate incumbent Rod Grams last week... The day before the announcement of his running for re-election ran in the Star Trib, that paper ran a letter to the editor from Minnesota Senator Rod Grams, entitled, "Do call or write." It read as follows:
This letter brought to mind the last time I called the office of Senator Grams to register my opinion on some issue (I forget which). Much to my surprise, rather than recording my opinion and thanking me for my input, the staff person actually began arguing with me, telling me how uninformed and misguided I was! I had to shout to interrupt him for the purpose of pointing out that I was not calling to convince him of anything, but rather to express my opinion as a registered voter from his state. He seemed to want to argue, however, so as I recall I had to hang up on him, something I've never done before with an elected official. Then again, I've never had one argue with me when I made a constituent call. |
|
"In a rare show of bipartisanship," the front pages said this week, the U.S. House of Representatives unanimously passed a law enabling American seniors to earn "as much money as they want" without losing federal retirement benefits. Under current law, people aged 65 to 69 lose $1 of their Social Security benefits for every $3 they earn above $17,000 a year. That limit is set to go up to $30,000 shortly. If you read the papers you wouldn't know that this new law affects only 3% of retirees. Or that anyone who was making $30,000 per year at retirement is also already receiving about $12,000 each year in Social Security benefits, for a total income of about $42,000. The median income in the United States is about $19,000 (one-half of the population makes more than this, one-half makes less). The Congress is thus addressing with this law the needs of a pretty-comfortable minority of older Americans, despite the claim of "moderate" Republican House Speaker Dennis Hastert that the passage of this legislation is "a time of salvation for our seniors." Could this fact help to explain the "rare" display of bipartisanship? I think it could. There are a lot of things that can be better understood if you have a basic understanding of who earns what and who owns what. That's why I talk so much about money and wealth in Nygaard Notes. As I point out elsewhere in this issue, we live in a "spectacularly unequal society." I hesitate to throw numbers at people, since the eyes quickly begin to glaze over. But just a few numbers can go a long way toward understanding the world we live in and your and my place in that world. So allow me to talk a little bit about... Income I just filed my taxes (early!) and found out in the process that my adjusted gross income (Line 33 on form 1040) was $8,633 last year. Does that seem low? Let me tell you what "low" is: One quarter of the human population of the earth lives on less than one dollar per day, which is about four percent of what I made last year. Fully one-half of everyone in the world makes less than $1,000 per year. It's not like I'm some kind of aberration. One out of eight Americans earned less than $10,000 last year, with the average in that group being $6,600. Ponder for a moment the fact that I have less income than 90% of all Americans, and also make more money than two-thirds of the people on the planet. This is just a fact. Perhaps some readers would like to know where they stand in terms of income. Here's a handy list: If you make:
Want to place yourself in the greater world? If you make $25,000 a year, you make more than 98% of the world's population. Those of you who minimize the suffering that lies behind these numbers have probably not been out of the United States very much. When you look at the numbers on wealth in the United States and the world (that is, what people own, as opposed to what their income is) the inequities are even more mind-boggling. I'll look at that next week. |
|
On February 15th there appeared in the Star Tribune (Newspaper of the Twin Cities!) a story about St. Thomas University receiving the largest gift in their history - $50 million - from the richest man in Minnesota, Richard Schulze. I'll be darned if I hadn't just mentioned Mr. Schulze that week (Nygaard Notes #59) in the context of talking about money and influence in Minnesota. The Star Trib's article appeared on the front page ("Best Buy founder donates $50 million to St. Thomas; Donation meant to foster the entrepreneurial spirit") and was the usual fawning piece about the generosity of the rich. "We are humbled by this extraordinary gift," etc. Time, once again, to do some arithmetic. $50 million is about 2.3% of Mr. Schulze's net worth of $2.2 billion. My own net worth? About $3,000, figuring in my bikes, my computer, and my massive savings account (if you add in the equity in the house I live in, we get all the way up to about $6,500). So, how much would I give if I donated the same proportion of my wealth to St. Thomas? Gosh, I guess that comes to about 69 bucks. ($150 if you count home equity) Granted, I'm on the low end in terms of assets. The average American family, with a net worth of about $37,000, would have to give $850 to equal Mr. Schulze in generosity. The point is, neither my 69 bucks nor the middle-class $850 would be considered front-page news. We'll get back to Mr. Schulze in a moment, but keep this arithmetic in mind as we turn our attention to the plight of the Art Building at the University of Minnesota. Arts vs. Business Four weeks ago, in Nygaard Notes #57 ("Overtaxed? Or Underfunded?"), I mentioned the Art Building at the University of Minnesota. Governor Jesse Ventura's budget proposal for the current year did not include funding for a new Art Building at the U, despite the fact that it is a well-known disgrace ("outmoded, unsafe, and environmentally hazardous") and was thus near the top of the University's priority list. The University made a total of ten requests for capital improvements in the current year, ranked in order of priority and totaling $134 million. Of this amount the Governor has recommended approving only 4 of them, for a total of $54 million, or about 40 percent. (The bigger picture is that the total requests to the legislature for funding came to $1.5 billion this year, and the Governor has recommended that only $462 million, or about 30% of the total, be approved.) It's worth noting that the Governor did not simply take the top four requests and recommend full funding, despite massive state budget surpluses. Here are the University's requests and what the Governor recommended for approval:
Is this a random reordering, this skipping over of the arts to fund Genomics? Possibly, but it also just happens to mirror the priorities of the wealthiest Minnesotans among us. Patterns and Priorities In an era in which public funds for higher education are increasingly hard to come by, colleges and universities are forced to rely more and more on donations of private funds for their continued vitality. A large percentage of such donations comes from wealthy individuals, as might be expected, and most of their wealth derives from ownership of businesses. Is there a "pro-Business" pattern in the giving to higher education? Let's look. Mr. Schulze gave "the largest gift ever to a Minnesota college or university" to St. Thomas University, with most of his cash "earmarked to strengthen the university's entrepreneurial education programs and to launch its new law school." The second-largest donation to higher ed in Minnesota history, $30 million, also went to St. Thomas, "to benefit its Graduate School of Business." Why is St. Thomas such a magnet for money? As the Star Trib puts it, that college "has won acclaim for its work educating future business leaders." Donations to a school like this are thus a form of "investment" in a Business-friendly state. Turning our sights to the University of Minnesota, what is the pattern of private money donations at the state's largest institution of higher learning? The largest single donation - $13 million - was given to the Pharmacy School by a couple of pharmacists in 1997. (13 million bucks seems like a lot of money for a couple of pharmacists, doesn't it?) The late Curt Carlson, whose heirs are the 2nd-wealthiest people in the state after Mr. Schulze, gave $38 million dollars over his lifetime to the Carlson School of Management (the Business school), including a single gift of $10 million (see NN #39) which tied him for 2nd-place in history with... The Cargill Company, which is the largest privately-owned company in the world and makes its money in agribusiness, including the development and sale of genetically modified organisms. Their donation to the University, also of $10 million, came directly from the corporation rather than any individuals, although it is worth noting that the MacMillan family, whose fortune derives from their majority ownership of Cargill, is the third-richest family in Minnesota, after the Schulze and Carlson families. The Cargill donation was given specifically, as reported in Nygaard Notes #45, to fund the Microbial and Plant Genomics Institute at the U of M. Does that sound familiar? Recall that Governor Ventura skipped over the University's 3rd priority of funding a new Art Building so he could fund the U's 4th priority, which was...the building of the Microbial and Plant Genomics Building. "OK, Nygaard, So What's Your Point?" Their wealth reserves for these powerful people and institutions the power to shape the economic and educational environment of the state. Just this short list of huge donations to higher education totals some $100 million, all of which have gone either directly to business education, or to the science and technology education which provides the technical training that business interests demand and for which they lobby incessantly. Free Marketeers like their taxes low, but in a spectacularly unequal society like our own, the only way we "sub-billionaires" can direct any significant investment to address our priorities - whether they be Arts education or low-income housing or anything else - is by pooling our money together with others who have similar interests. While this can be done to some extent through our unions, churches, and other associations, the single best, and most effective, way to do this is through public spending, funded by taxes. This is why the mantra of Freedom From Taxes embraced by our Governor, and which is derived from the libertarian ideology of "smaller government," will inevitably lead to a higher education system that increasingly serves the short-term interests of Business at the expense of such educational "luxuries" as art, culture, and developing the skills of democracy. |