Stephanie Ruehl devoted the bulk of her show today to Patriotic Millionaires, and their demand to be taxed enough to address income inequality. Good for her! One guest was Peter Georgescu, Chairman Emeritus of Young & Rubicam. It was educational, and gratifying that he sees public education as the trouble spot:
"Here's the situation, business must change," Georgescu said.
"What we don't talk about enough is the seriousness or the crisis in the other America -- call it a zip code America. We are in deep trouble. These people are suffering. GDP is a terrible measure. It doesn't measure the health of the country, it measures how well us 20% do. That's what it does, so America is in trouble.
"And, in fact, if you really look -- I was telling you how well free enterprise capitalism, for 40 years in this version of free enterprise capitalism, the top 10% grew about 120, 30% and the bottom 90% lost 3%."
"Then how did you do this? Your personal story from being here in Romania without your parents, how did all of this work? Ruehl asked.
"It worked for me because I got a good education and most everybody else had a good education in those days."
"And why did you get that education?"
"Because it was available to all. Because we used to have one high school per town. Everybody went to the same high school. Today we have almost 100% segregation of education by income. So these kids don't have a chance. They don't have early education from the age of 3. We do, our kids do and grandkids do. There is hardly a kindergarten in that zip code. So these kids go to the 1st grade, it's a dilapidated plant. There is no money for after-school programs. There is no money to pay teachers well. Because there are 35 kids now in one classroom with teachers that are harassed, that's not well educated. It's a problem," he said.
"Then who is responsible for changing this and how? You can't get elected if the argument is, 'My name is Stephanie Ruhle, I'd like to change your taxes.' "
"They borrowed 1.5 trillion from the future and handed it to the donor class, right? Peter's view is philanthropy can't fix that problem of education," finance guy Dan Nathan said.
"That seems like that's ground zero. But maybe philanthropy can fix education. Right? We've heard that. Jamie Dimon can't come on the first quarter call and say our margins are down because we are paying this, we are doing that, we are trying to make this country a better place, because his stock will get hit. He can personally take some of his $1.3 billion in wealth and do the sorts of things I think so that we can fix an educational system within a certain area."
"Philanthropy, could it be enough?"
"No. Philanthropy is fabulous, fabulous, fabulous, my friend Ken Langum gave hundreds of millions to NYU. I work for a rival. I applaud him for doing that. But we are talking about scale here. So philanthropy is not enough. Philanthropy will always be welcome and needed. It's not only about taxes, it's businesses importantly, who has the wherewithal. We have to change our attitude about how we treat people in business. We're not paying them fairly for 40 years, wages have been flat. Innovation goes up. Profit turbo charged up and wages are flat.
"And, in fact, that's why Donald Trump got elected in '16. He saw the problem. That's why Bernie Sanders gave Hillary a hard time. But what has happened in the last couple years, nothing?"
"Well, Donald Trump saw the problem. Then he hooked up the donor class when it came to policy. Dan, Peter, thank you so, so much. We all know the problem. What we need to do is find a solution," Ruehl concluded.
Georgescu is right: It's all about the wages.
Look how, in the past 20 years, federal, state, and local tax credits larded the runway with massive tax credits for hedge funds etc. to invest in charter schools, with returns that beat the market. And what did we get? Segregation, both by color and income, all over again. Even less opportunity for poor people's kids. In Philadelphia alone, we had charter schools closing suddenly on a regular basis, with tales of criminal waste everywhere.
Let's get back to strong public education everywhere, not just where people can pay high real estate taxes.
