Socialism, Capitalism Seen in New Light by Younger Americans

Surveys show a leftward tilt, and pessimism about the future, among millennials

Young people taking part in a protest against the Trump administration in New York Nov. 4. PHOTO: KENA BETANCUR/GETTY IMAGES

By 

Eli Stokols, The Wall Street Journal

Dec. 6, 2017 7:00 a.m. ET

ELON, N.C.—John Della Volpe, who has been polling millennials for 17 years, stood before about 150 students in a gleaming new center at Elon University this fall in search of an answer.

In his 2016 survey for Harvard University’s Institute of Politics, 42% of younger Americans said they support capitalism, and only 19% identified themselves as capitalists. While this was a new question in his survey, the low percentage of young people embracing capitalism surprised him. He had come here, in part, to better understand why.

“Maybe it had to do with the ‘American Dream,’ and how capitalism was correlated with it, but a lot of young people don’t believe in it anymore,” said Ana Garcia, a junior at the Elon event. “We don’t trust capitalism because we don’t see ourselves getting ahead.”

Largely because of such millennials, generally those born in the 1980s and 1990s, socialism has moved from being a taboo because of its associations with the Cold War to something that has found rising appeal among those polled by Harvard and in other surveys that compared different generations.

More Accepting of SocialismYounger Americans have a more favorableview of socialism than older age groups.Positive views ofcapitalism/socialismSource: Gallup telephone survey conducted May 2-4,2016 of 1,544 adults. Margin of error +/-4 pct pts.

Grace Magness, an Elon freshman, has experienced the shift firsthand. Her great grandfather, she said, was named Eugene Debs after the labor leader who ran for president five times for the Socialist Party at the turn of the 20th century. “He was so embarrassed about it when he was older that he would never introduce himself using his full name,” Ms. Magness said.

For her, she says, “socialism has gotten less spooky; it’s no longer associated with communism the way it was.” She adds: “straight-up capitalism seems like it has a lot of potential to be really corrupt.”

Young people across the generations tend to be viewed as more left-leaning than their elders. Underlying the millennial generation’s leftward tilt is angst about the future, Mr. Della Volpe said. In a new smaller Harvard survey, released Tuesday, 67% of those polled said they are more worried than hopeful about the direction of the country. The fall survey sampled 2,037 peopled aged 18 to 29 in live interviews.

“If something unites these young people,” Mr. Della Volpe said, “it’s fear,” driven by their perception that they have limited economic opportunities and that society as a whole has become more unequal.

The 2016 poll also found that the millennial generation is less religious than their parents and losing faith in institutions—a finding consistent with other polls that track some of that loss of faith to the slow recovery from the deep recession that began in 2008.

“Every new group of voters is disproportionally affected by whatever was salient when they were growing up,” said Celinda Lake, a long-time Democratic pollster. “That’s led this group to be really cynical about institutions: military, government.”

In the view of Kristen Soltis Anderson, a Republican pollster and the author of, “The Selfie Vote: Where Millennials Are Leading America and How Republicans Can Keep Up,” the idea that young people tend to be liberal and become more conservative with age is misguided. “The oldest millennials are actually the most left-leaning,” she said. “If you came of age, graduated college and were job hunting around the time of the financial crisis, you might be asking, What have free markets done for you? The easy rhetoric that ‘markets are bad, government is bad’ is appealing.”

The Harvard survey has polled roughly 1,000 respondents between 18 and 29 years old annually since 2001. The sample size has grown over time. In the spring 2016 survey, it was a measure of nearly 3,200 people. The survey has a margin of error of 2.5 percentage points.

Still, millennials polled say they want a bigger role for government in making conditions better for their future. The number of young people who believe that tax cuts spark economic growth, which had held fairly steady for years, fell seven points over the past two years, according to the 2016 Harvard survey.

That may be an ominous portent for the GOP, which is on the verge of passing a major tax overhaul that is projected to add $1 trillion to the federal deficit and cut taxes for corporations. According to the new Harvard poll released Tuesday, 67% of respondents oppose the way President Donald Trump is handling the tax measure. And a Quinnipiac University poll also released Tuesday showed that 78% of millennials, defined in the survey as 18-to-34 year-olds, believe the GOP tax overhaul would mostly benefit the wealthy.

“We are on the verge of a very significant political movement led by millennials,” Mr. Della Volpe of Harvard said. “This generation does not believe in trickle-down economics.”

Democrats may appear poised to capitalize on these trends in midterm elections next year and the presidential election in 2020. An NBC News poll of millennials released last week showed that just 19% of young people identify as Republicans and 71% don’t believe the GOP cares about people like them. By comparison, 53% said Democrats care about people like them.

But in the most recent survey for Harvard, Mr. Della Volpe asked the same question and found that just 34% of millennials believe the Democratic Party cares about them.

“Democrats can’t take these voters for granted,” Mr. Della Volpe said. “They have a year or so to focus on this generation, but if they fail to do so in the 2018 cycle, someone else will in 2020.”

Millennials also say they consider themselves socially conscious, which has ramifications for potential employers.

“They see where they work as an extension of who they are and what they value,” said Whitney Dailey, the director of marketing and research at Cone Communications, a firm that advises on corporate-responsibility strategies. “They’re looking to work with companies that align with their values.”

According to Cone’s 2016 millennial-engagement study, which surveyed more than 1,000 employees at large companies, 76% of respondents between ages 20 and 35 consider a company’s social commitment when searching for a job; 75% are willing to take a pay cut to work for a company that suits their values.

When recruiting new employees, Don Slager, chief executive of waste-management company Republic Services Inc., emphasizes diversity training for managers, a 10-hour workday for employees and investments in recycling programs.

“I think there’s more commitment and I think that is absolutely tied to the millennials because the younger generation just inherently cares more about it,” Mr. Slager said. “And I think that kind of consumerism will drive companies to make different decisions.”

Following the 2008 crash,Citigroup Inc. changed recruitment efforts to offer a better work-life balance. These programs, including one that lets employees defer their job responsibilities for a year to do philanthropic or volunteer work and be paid 60% of their salary, arose from a recognition of the younger generation’s heightened social consciousness.

“When we go to college campuses, we tell the students we work with a purpose, that we’re trying to do good for society,” said Jamie Forese, Citigroup’s president. “And students don’t want apologies; they want a plan that’s forward looking.”

Write to Eli Stokols at eli.stokols@wsj.com

Congress Must Change Fundamentally Flawed Tax Policies in Final Bill, Says U.S. Bishops Chairman

December 2, 2017

WASHINGTON— As the U.S. Senate passed its tax reform bill, Bishop Frank J. Dewane of Venice, Florida, chairman of the U.S. Conference of Catholic Bishops' Committee on Domestic Justice and Human Development, called for Congress to fix fundamentally flawed tax policies as the House of Representatives and Senate attempt to reach agreement on a final bill. 

The full statement follows:

"Today, the U.S. Senate passed its tax reform legislation, and it will now be reconciled with the House of Representatives' passed bill in an effort to reach agreement on the details of a final piece of legislation. Congress must act now to fix the fundamental flaws found in both bills, and choose the policy approaches that help individuals and families struggling within our society.

We are reviewing the final Senate bill and will soon provide analysis about key improvements that are necessary before a final agreement should be reached and moved forward. For the sake of all people—but especially those we ought, in justice, to prioritize—Congress should advance a final tax reform bill only if it meets the key moral considerations outlined in our previous letters."

The November 9 USCCB letter analyzing the House of Representatives tax reform bill can be found at:  http://www.usccb.org/issues-and-action/human-life-and-dignity/federal-budget/upload/Tax-Cuts-and-Jobs-Act-Letter-11-9-2017.pdf

The November 22 USCCB letter analyzing the Senate tax reform bill can be found at:  http://www.usccb.org/issues-and-action/human-life-and-dignity/federal-budget/upload/Senate-Tax-Cuts-and-Jobs-Act-Letter-2017-11-22.pdf

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Keywords: U.S. Conference of Catholic Bishops, USCCB, Bishop Frank J. Dewane, Committee on Domestic Justice and Human Development, Tax Cuts and Jobs Act, U.S. House of Representatives, tax reform proposal, comprehensive revision, tax code, moral principles, tax policy

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Media Contact:

Judy Keane

202-541-3200

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My Thoughts:

If you consider the drastic corporate tax rate reduction from 35% to 20% without a corresponding reduction in tax deductions, corporations will end up paying little if any taxes.  The reason the corporate tax rate is at 35% is that there are so many tax deductions.  Most corporations already have an effective tax rate of around 15% after deductions.  In fact, in 2012 GE legally paid "zero" taxes due to clever accounting and tax write-offs. There's NO corporation in America that pays 35% in taxes!  When this new bill becomes law, corporations will likely have an effective tax rate of around 5%.  Moreover, most experts seriously doubt corporations will reinvest in their companies by hiring more workers; rather, they'll take their tax savings and use it to pay greater dividends to shareholders or to buyback stocks thus increasing the value of the remaining shares.  Further, the corporate tax reductions are permanent while the individual tax reductions are only temporary and will expire in a few years.  This tax bill is a boom for Wall Street but a bust for Main Street.  Only time will tell if the new tax law will accomplish its intended objectives of growing the economy, but I seriously doubt it will succeed in the long-run.

Bad Job Why corporate America is so much more awful than it used to be

Slate

INTERROGATION

INTERVIEWS WITH A POINT.

SEPT. 29 2017 11:57 AM

Bad Job

Why corporate America is so much more awful than it used to be.

By Isaac Chotiner

A worker assembles a 2013 Cadillac ATS on the assembly line at a General Motors plant in 2012 in Lansing, Michigan.

Bill Pugliano/Getty Images

There is no shortage of theories about why modern American life is beset with a stagnant middle class and a lack of good jobs. Indeed, this reality served as one of the backdrops of the last presidential campaign, in which Donald Trump blamed bad trade deals and a hollowed-out manufacturing sector for all the things that ail us economically. In his new book, The End of Loyalty: The Rise and Fall of Good Jobs in America, Rick Wartzman offers a different primary culprit: corporate culture.

ISAAC CHOTINER

Isaac Chotiner is a Slate staff writer.

This culture, Wartzman argues, has “explicitly elevated shareholders above employees.” Looking at issues like the rising disdain for unions, the emergence of Ronald Reagan, and, quite simply, less corporate focus on the common good, Wartzman makes the case that the increasing focus on top salaries and shareholder returns has warped American life.

I spoke with Wartzman, who is the director of the KH Moon Center for a Functioning Society at the Drucker Institute, recently. During the course of our conversation, which has been edited and condensed for clarity, we discussed why the corporate culture of postwar America was more beneficial to workers, what’s gone badly wrong in corporate culture today, and what really scares corporate America.

Isaac Chotiner: What is it specifically that you think has changed about American corporate and business culture?

Rick Wartzman: The four big companies that I use to tell this story are GE, GM, Kodak, and Coca-Cola. There was a shift from a stakeholder orientation, where the CEOs of these giant corporations talked in terms of balancing all their constituents in this postwar era. They talked about taking care of their customers and the communities they operated in; they even bragged about how much they paid in taxes. Corporate America shifted to a model that is now largely centered around maximizing shareholder value. Investors have explicitly been put quite above all of these other stakeholders, so when you carve out the pie, a bigger share is now going to investors, and a smaller share is going to labor. That’s what happened.

Why do you think companies 50 years ago were not interested in maximizing profits given that many people think of doing so as human nature?

One argument is that companies could afford to be generous and balance the interest of their workers in that era because the U.S. had global competition on its knees and the big American companies produced an inordinate amount of the world’s goods. This was an extraordinary time. Another reason is that they were forced to the table by the power of organized labor, and indeed unions did have a lot to do with creating a social contract, and not only for those carrying union cards. Another is that there was a belief then that was pretty prevalent among CEOs that we have to pay workers enough to keep the consumer economy humming. We’ve got to put enough wages in their pockets, as Charlie Wilson, the president of General Electric, said in the ’40s, so that they’ve got enough to buy my refrigerators. This was the kind of logic that went back to Henry Ford when he famously raised workers’ wages, and lo and behold they could afford to buy cars, including Ford.

There was also an element of fear; specifically, there were tens of millions of service men about to return home from war. A number of executives talked about how if we don’t provide good jobs with good security, good benefits, we may well invest in another depression, perhaps one even worse than what unfolded in the 1930s. If that happens, we might end up with socialism or God forbid even communism on American soil. Those were of course very real alternatives at that time, or seen being by many as such.

There is also a big cultural reason. I am quite convinced in doing all the research that I did that there was just more of a “we’re all in this together” effort at that time in America. I think it was more of a “we” culture than an “I” culture. Remember, this was a generation that had come through the depression and World War II together. I think that corporate culture in that way both kind of reflected and reinforced those larger societal norms.

I think that there’s a lot of nostalgia for the ’50s and early ’60s, a nostalgia for the kind of shared ethos you were talking about. Obviously the giant lacuna in that sort of analysis is that there was segregation in the country, the status of women, status of gay people, etc.

Thank you for raising that. It’s exactly what you’ve said. The American workplace was openly hostile to women and people of color through this era, so it’s mainly a golden age for white men. That is a hugely important point to make, and you know from reading the book there’s a whole chapter that deals with incredible discrimination. Women and blacks—they were coming into the workforce in the ’60s, but it’s still terrible, frankly, today for all too many people of color and women, and there are all kinds of issues we have not really corrected. But it is better in many, many ways.

That chapter ends with this idea that blacks and women had finally been let into the party and the party was about to end. By the late ’60s, they were in to a greater degree and starting to really flow into the workforce. And by the early ’70s or about, their wages are now going to stagnate and their compensation is going to definitely stagnate for the next 40 years.

You’ve already answered this question partially because some of the things you’ve listed are no longer existent today, but are there any other specific things about our more recent era that have exacerbated these downward trends?

I think it’s fair to say that in the ’70s and into the ’80s, America began to worship the marketplace more and more. We sort of looked to the market as a place with a kind of flawless rationality to solve all kinds of problems. We saw it rise right into business schools and law schools and politics. I think that there was something that again shifted from this “we’re all in this together” to much more of an “everybody is in it for themselves” kind of a thing. The marketplace will sort it out and take care of you if you deserve to be taken care of. This was the “greed is good” era.

Then the other thing that really reinforced and solidified it is CEO pay. CEO compensation began to be tied more and more to share price. So suddenly the people in charge, it was in their personal interest to see the stock price go up. There are a couple of ways to do that. You can really invest and you can build your business, and, over time, over the long term, the market should reward you for that. I think by and large it does reward you. But in the short term, the fastest way to make the stock prices go up is to make your profits go up. The fastest way to do that is to cut costs. In that scenario, workers start to look not like an asset you invest in. They look like an avoidable expense.

How big a difference to the average American have these things made?

A big one. A big one. Think of it this way: We know, if Americans were sharing in economic productivity gains as they did 30 years after World War II, 35 years after World War II, if the productivity gains had been shared the same for the last 40 years, somebody making $40,000 today would be making a bit over $60,000. To me, that’s a pretty big difference.

Culture is really hard to change. What sort of solutions do you see, given that that’s the case?

First of all, there’s a whole slate of public policy things that need to happen. I think we need to have a living wage and that we should index it to inflation so we can stop fighting about it. A truly living wage. We need to expand the earned income tax credit in different ways. I think we need portable benefits for the growing ranks of independent workers. I think we really need to rethink education top to bottom and really create a system of lifelong learning for people with a really much more robust workforce development piece and a way to take care of people that have been dislocated by automation or globalization. I think we can do some nudges in terms of tax policy to encourage corporations to invest more in training, treat that the same way we let companies expense and count as assets on their balance sheet big investments in equipment and doctors. Why don’t we do the same thing when it comes to the human side?

But the whole premise of my book is that the public sector is hugely important, but, ultimately, whether people live decent lives or not is really owed to what happens to them at work every day, how they’re treated there. Are they able to live with dignity? Are they able to get by economically? Those are largely determined by their employers. Ultimately, they have access to good health care because most Americans access their health care through an employers. Will they be able to retire with security and dignity? Those are all employer-based things. We’ve got to change that system. I think there’s some pressure that we can bring to bear as employees.

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A major reform not mentioned would be to adopt the German model of corporate governance.  More...

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And the big leverage I think has to be brought through the capital markets. So the more and more as individuals we can do socially responsible investing and think about not only the way the planet is treated by these companies and investment firms but also we can look at how they treat people and invest in firms that care about that. The real leverage should come from, it needs to come from, big institutional investors, foundations, the government, pension funds. And they’re starting to pay more attention to this. One in five investment dollars now in the U.S. under management—about $9 trillion have some kind of socially responsible investing kind of criteria around it. That’s important and powerful.

And I do think some CEOs are waking up to the fact that unless prosperity is shared more broadly and they take some responsibility for making that happen, things might get tougher for them politically.

This goes back to the point you were making at the beginning of this conversation about one of the things that drove people together originally was big companies were scared that the political system would take on a direction they didn’t want.

Exactly. I think there may be something there. So if we’re going to swing the pendulum back at all, I think that’s the way.

Downton Abbey

Downton Abbey

by Allen Laudenslager

While marathon watching the television series “Downton Abbey,” I was struck by the attitudes and mannerisms of the “rich.”  They seemed very sure of their positions on every subject and were shocked and defensive whenever their assumptions and decisions were questioned.  Then it dawned on me that they lived in a world of paid servants.  Nearly everyone around them was paid by them to do what they wanted to be done and to do it in the rich person’s time while following the rich person’s directions.

In many ways, it is much like the celebrity privilege we see in the news today.  Particularly, younger celebrities’ living hedonistic lives with seemingly no one trying to stop their excesses.  I attribute that behavior to their position as employers.  Their business managers, lawyers, and personal staff are not hired to tell them “no, don’t do that!”  Those people are specifically hired to enable the undisciplined celebrities to do what they want, when they want, and to buffer the celebrities from any negative consequences.

It’s the same kind of behavior we see in many business managers today.  They think that being conferred with decision-making authority and being surrounded by people paid to do what the boss wants somehow has also granted them universal knowledge and judgment in ALL subjects.  The problem, of course, is that while senior managers are making decisions at the strategic level they have lost contact with many of the day-to-day operational necessities of their business.  And that’s as it should be.  Very few people can hold a clear mental picture of every detail of a business and still shift “hats” to encompass the long-range thinking necessary to guide a business.

To overcome this, we must first admit that there’s a problem.  The problem is pride and the solution is humility.  In these situations, a manager has to accept that none of us can be the best at everything and that the larger the range of issues you are called to make decisions about, the more important it becomes to trust your subject matter experts and to follow their advice even when it runs contrary to your wishes.  Even the President of the United States does not make decisions in a vacuum.  He has subject matter experts to advise him on what to do.  A foolish manager surrounds himself with sycophants (yes men); a wise manager surrounds himself with people who will say, “no that’s not right!”

In the era of Downton Abbey, the servants had to be sycophants if they wanted to keep their jobs.  And hedonistic celebrities continue that tradition.  But today if you want to run a successful business or organization, managers can’t afford to be prideful like they were in Downton Abbey; they have to become humble and accept they can’t know everything and be willing to take the advice of their trusted employees on what to do.

Americans Are Retiring Later, Dying Sooner and Sicker In-Between

U.S. life expectancy is declining, new calculations show.

By 

Ben Steverman  Bloomberg

October 23, 2017, 2:00 AM PDT

The U.S. retirement age is rising, as the government pushes it higher and workers stay in careers longer.

But lifespans aren’t necessarily extending to offer equal time on the beach. Data released last week suggest Americans’ health is declining and millions of middle-age workers face the prospect of shorter, and less active, retirements than their parents enjoyed.

Here are the stats: The U.S. age-adjusted mortality rate—a measure of the number of deaths per year—rose 1.2 percent from 2014 to 2015, according to the Society of Actuaries. That’s the first year-over-year increase since 2005, and only the second rise greater than 1 percent since 1980.

At the same time that Americans’ life expectancy is stalling, public policy and career tracks mean millions of U.S. workers are waiting longer to call it quits. The age at which people can claim their full Social Security benefits is gradually moving up, from 65 for those retiring in 2002 to 67 in 2027.

Almost one in three Americans age 65 to 69 is still working, along with almost one in five in their early 70s.

Postponing retirement can make financial sense, because extended careers can make it possible to afford retirements that last past age 90 or even 100. But a study out this month adds some caution to that calculation.

Americans in their late 50s already have more serious health problems than people at the same ages did 10 to 15 years ago, according to the journal Health Affairs.

University of Michigan economists HwaJung Choi and Robert Schoeni used survey data to compare middle-age Americans’ health. A key measure is whether people have trouble with an “activity of daily living,” or ADL, such as walking across a room, dressing and bathing themselves, eating, or getting in or out of bed. The study showed the number of middle-age Americans with ADL limitations has jumped: 12.5 percent of Americans at the current retirement age of 66 had an ADL limitation in their late 50s, up from 8.8 percent for people with a retirement age of 65.

At the current retirement age of 66, a quarter of Americans age 58 to 60 rated themselves in “poor” or “fair” health. That’s up 2.6 points from the group who could retire with full benefits at 65, the Michigan researchers found.

Cognitive skills have also declined over time. For those with a retirement age of 66, 11 percent already had some kind of dementia or other cognitive decline at age 58 to 60, according to the study. That’s up from 9.5 percent of Americans just a few years older, with a retirement age between 65 and 66.

While death rates can be volatile from year to year, Choi and Schoeni’s study is part of a raft of other research showing the health of Americans deteriorating.

Researchers have offered many theories for why Americans’ health is getting worse. Princeton University economists Anne Case and Angus Deaton, a Nobel Prize winner, have argued that an epidemic of suicide, drug overdoses and alcohol abuse have caused a spike in death rates among middle-age whites.

Higher rates of obesity may also be taking their toll. And Americans may have already seen most of the benefits from previous positive developments that cut the death rate, such as a decline in smoking and medical advances like statins that fight cardiovascular disease.

Declining health and life expectancy are good news for one constituency: Pension plans, which must send a monthly check to retirees for as long as they live.

According to the latest figures from the Society of Actuaries, life expectancy for pension participants has dropped since its last calculation by 0.2 years. A 65-year-old man can expect to live to 85.6 years, and a woman can expect to make it to 87.6. As a result, the group calculates a typical pension plan’s obligations could fall by 0.7 percent to 1 percent.