"Let them eat cake!": Summer edition

The private jet industry is booming as GOP front-runners bemoan the plight of billionaires and corporations


David Sirota
August 17, 2011 9:01PM (UTC)

If the rest of us are sweating through a wretched climate-change-seared August, it's a good bet the super-rich and powerful are calm, air-conditioned and happily summering in the world's most posh retreats.

Of course, to paraphrase the late great Molly Ivins, most Americans do not employ the word "summer" as a verb, because such usage implies an annual season of luxury that the typical prole can only dream of during his few days off at the local state park (if he's lucky to have a vacation and lucky enough to live near a state park that hasn't been shuttered by budget cuts). But summering is what the wealthy do -- and when they do it so ostentatiously in such a pulverizing recession, it all but screams "Let Them Eat Cake."

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So, too, does the rhetoric of a presidential race beginning in earnest. As the 2012 candidates now romp through primary-state hamlets, they are already road-testing a carefully sculpted type of "Let Them Eat Cake" rhetoric that somehow makes them sound simultaneously like populist Huey Longs and loyal mouthpieces for their biggest corporate campaign contributors.

With that as a preview, let's look at this month in "Let Them Eat Cake."

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5. Replacing the Beach House With an Island

Back in the '80s, having an MTV-Cribs-grade beach house in a place like Malibu or Hawaii with a full-time chef and all-season hot tub filled with pure Cristal looked like the Great American Dream. But today that seems downright quaint. As the Wall Street Journal reports, the rich and famous are buying up whole islands in the Caribbean. "Despite the weak economy, the number of millionaires in the U.S. and their combined net worth hit record highs in 2010," the Journal reports, noting that while the foreclosure crisis continues to destroy the middle class, "several record-breaking real-estate sales this year have buoyed optimism in the ultra-high end of the market."

The market, in fact, is so wealthy, that there are entire "private-island real-estate companies" now doing business in places like the chain of cays 300 miles south of Florida. There, the Journal tells us that prices are "generally more affordable" than other locales. Indeed, "one of the least expensive" bargains is Nicolas Cage's former island, which can be had for the pittance of $8.5 million. How comforting that must be for the millions of Americans who have been thrown out on the street because they can no longer afford the monthly payment on their $150,000 mortgage.

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4. Let Them Fly on a Private Jet

For many Americans today, flying unto itself is a luxury. Sure, that's easy to forget, what with the cramped coach space and the constant nickel-and-diming fees for everything nowadays. But the $300 or $400 a typical economy-class ticket costs is increasingly $300 or $400 in disposable income most Americans don't have.

Luckily, for the rich, they don't have to worry about ticket prices -- or even, anymore, the hassle of being near the rest of us. As Businessweek reports, there's a new burgeoning industry bravely fighting through the country's economic doldrums: shared private jet travel.

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The piece tells us that "For Phillip Swan, forgoing the headaches of flying commercial was worth $146,000 for 25 hours of flight time on a private jet." Today, with access to an eight-person Learjet, he and other fellow CEOs can just "skip the lines and hop aboard a private aircraft with leather seats and grilled beef tenderloin meals." And business is booming: Sales of private jet flights are up sixfold even as the economy heads for a double-dip recession.

3. Social Security and the Myth of the Persecuted Billionaire

Throughout 2008, Mike Huckabee regularly hinted that Mitt Romney looked like "the guy who laid you off" -- and this week Romney lived up to that billing. The presidential hopeful grabbed headlines with his insistence that "corporations are people" -- but incredibly, that wasn't even the corporate raider's most "Let Them Eat Cake" moment. That honor goes to his earlier response to a question about eliminating the cap on what income can be taxed for Social Security.

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Today, no income above $106,800 is eligible to be taxed, meaning Warren Buffet pays the same amount of payroll taxes as someone making $106,800. At a time when politicians like Romney are sowing hysteria about Social Security going bankrupt, the question about raising the cap to make the tax slightly less regressive and generate more revenue for the system is perfectly logical. And yet, Romney used it as a rationale to lash out.

As if grasped by a moment of yearning nostalgia, Romney responded to the tax-cap question with a seemingly heartfelt lament, saying, "You know, there was a time in this country that we didn't celebrate attacking people based on their success, and we didn't go after people because they were successful."

The Myth of the Persecuted Billionaire is one of the favorite monikers of the larger "Let Them Eat Cake" movement. There have been many iterations of this narrative, but few reach this extreme. Somehow making a tax slightly less regressive can now be equated with "attacking people based on their success."

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2. "We're All Drowning in Cash"

This year, corporations have been pleading poverty as a means of setting the political stage for a spate of new corporate tax cuts. They basically argue that the United States has a high corporate tax rate, which is technically true. Our statutory tax rate is comparatively high. However, as empirical data prove, our nation has one of the lowest effective corporate tax rates in the world, meaning that the tax rate most corporations actually pay after exploiting writeoffs and loopholes is absurdly low.

We're not supposed to remember this, but the corporate world has let fly some "Let Them Eat Cake" bravado that shows what's really going on. Far from impoverished, corporations are, in fact, "drowning in cash."

That's the word from one big investment firm in a recent Businessweek dispatch headlined "The Stress of Carrying Cash." While the economic effects reported in the story are real (and problematic), the piece's timing makes it almost Onion-esque. Coming at a moment when a third of all Americans say they don't have more than $1,000 in cash to their name, the story asks: "Can too much cash possibly be a bad thing?"

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1. Let Them Eat Corporate Tax Cuts

During her recent "Meet the Press" interview, Republican presidential hopeful Michele Bachmann managed to articulate "Let Them Eat Cake" in as succinct a form as has been seen in modern politics.

During an interchange with anchor David Gregory, Bachmann first said her priority was a massive cut in corporate tax rates, which could substantially swell the national debt, even though these same corporations are, by their own admission, swimming in cash. Then, seconds later, when asked about extending jobless benefits for millions still out of work, Bachmann said "it would be very difficult for us to do because we frankly don't have the money."

So according to the GOP candidate, we can afford potentially massive debt-expanding corporate tax cuts, but when it comes to helping out-of-work Americans make ends meet, "right now, I don't think we can afford it."

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David Sirota

David Sirota is a senior writer for the International Business Times and the best-selling author of the books "Hostile Takeover," "The Uprising" and "Back to Our Future." E-mail him at ds@davidsirota.com, follow him on Twitter @davidsirota or visit his website at www.davidsirota.com.

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