American meritocratic behavior versus Wall Street

One of the few things more American than apple pie and reality TV is our traditional faith in meritocracy.

It is embedded in our country’s very foundation, and it continues to be the key ingredient in the American dream — it is the idea that one’s lot in life should be based solely on ability, not birth, race, sex or anything else. For here in America, anyone can get ahead, it just requires hard work and determination.

However, over the past 30 years, it appears that a very small percentage of Americans are working much, much harder than the rest. Actually, it’s 1 percent of the nation who happens to hold 19.8 percent of America’s total pre-tax income. If the meritocratic tradition has held true over the years, this is the result of a true egalitarian process.

When it comes to income inequality, no other country in the developed world ranks higher than the United States.

And this has been no accident, as Washington is pretty much allied with the corporate elite — a fact that is no secret by any means. It has been the trend for years: cut taxes for the rich while increasing subsidies to wealthy corporations, the logic being that a healthy elite is beneficial for others in that it will create jobs and boost the economy. Yet if this were true, the record corporate profits that we are currently seeing would be translating into jobs.

The fact of the matter is that we currently live in a welfare state in which entitlements are given to people who don’t need them or deserve them. But I am by no means referring to those on the lower end of the socioeconomic spectrum. I am referring to that 1 percent on top. The 1 percent that continuously undermines the very idea of equal opportunity by lobbying for subsidies for their already bloated incomes and against any form of benefits for low-income families.

They continuously argue that any form of government dependence is bad for growth. And Wall Street is right on this one: Their dependence on our government is indeed bad for growth. For instance, it is estimated that corporate welfare costs the government about $100 billion per year, and while this may be positive for the growth of corporations, it is by no means helping to decrease the government deficit that everyone likes to talk about.

Furthermore, government subsidies are given out with the intent that there will be returns on the investment, such as jobs and economic development. However, corporations are notorious for creating jobs elsewhere in order to save money and increase their own profits, while also seeking tax havens for the same reason. Yet we continue to support this deplorable behavior.

Corporate elites continue to pursue maximum profits, even if it means eliminating the rights of workers and consumers.

A good example of this is the corporate crusade against raising the minimum wage. Leading the charge in this case is Wal-Mart. The average Wal-Mart employee makes an average of $15,576 per year with meager benefits on top of that. This forces many Wal-Mart workers to use government benefits such as food stamps and Medicaid. So even though the heirs to the Wal-Mart fortune are worth $93 billion dollars, the average taxpayer is paying for many Wal-Mart employees’ basic necessities.

In his book “Twilight of the Elites: America After Meritocracy,” Christopher Hayes used Major League Baseball as an analogy for this situation. He compared steroid users to the corporate elite, showing that the baseball world is a lot like the business world. They are both super competitive environments that breed people who are willing to do whatever it takes to get ahead. In baseball, athletes cheated nature by using performance-enhancing drugs in order to make themselves better players, and in Wall Street, corporations cheat the government and abuse labor in order to make obscene amounts of money.

The MLB recovered by holding users accountable and subsequently punishing them. The United States could learn something from this: If we continue to allow corporations to do whatever it takes to make a profit, our meritocracy may not be able to recover. 

Write Nick at njv10@pitt.edu.