The Kids Are Not All Right

By JOEL BAKAN

Published: August 21, 2011

Vancouver, British Columbia

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Ruth Gwily

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• Times Topic: Children and Youth

WHEN I sit with my two teenagers, and they are a million miles away, absorbed by the titillating roil of online social life, the addictive pull of video games and virtual worlds, as they stare endlessly at video clips and digital pictures of themselves and their friends, it feels like something is wrong.

No doubt my parents felt similarly about the things I did as a kid, as did my grandparents about my parents’ childhood activities. But the issues confronting parents today can’t be dismissed as mere generational prejudices. There is reason to believe that childhood itself is now in crisis.

Throughout history, societies have struggled with how to deal with children and childhood. In the United States and elsewhere, a broad-based “child saving” movement emerged in the late 19th century to combat widespread child abuse in mines, mills and factories. By the early 20th century, the “century of the child,” as a prescient book published in 1909 called it, was in full throttle. Most modern states embraced the general idea that government had a duty to protect the health, education and welfare of children. Child labor was outlawed, as were the sale and marketing of tobacco, alcohol and pornography to children. Consumer protection laws were enacted to regulate product safety and advertising aimed at children.

By the middle of the century, childhood was a robustly protected legal category. In 1959, the United Nations issued its Declaration of the Rights of the Child. Children were now legal persons; the “best interests of the child” became a touchstone for legal reform.

But the 20th century also witnessed another momentous shift, one that would ultimately threaten the welfare of children: the rise of the for-profit corporation. Lawyers, policy makers and business lobbied successfully for various rights and entitlements traditionally connected, legally, with personhood. New laws recognized corporations as legal — albeit artificial — “persons,” granting them many of the same legal rights and privileges as human beings. In an eerie parallel with the child-protective efforts, “the best interests of the corporation” was soon introduced as a legal precept.

A clash between these two newly created legal entities — children and corporations — was, perhaps, inevitable. Century-of-the-child reformers sought to resolve conflicts in favor of children. But over the last 30 years there has been a dramatic reversal: corporate interests now prevail. Deregulation, privatization, weak enforcement of existing regulations and legal and political resistance to new regulations have eroded our ability, as a society, to protect children.

Childhood obesity mounts as junk food purveyors bombard children with advertising, even at school. A recent Kaiser Family Foundation study reports that children spend more hours engaging with various electronic media — TV, games, videos and other online entertainments — than they spend in school. Much of what children watch involves violent, sexual imagery, and yet children’s media remain largely unregulated. Attempts to curb excesses — like California’s ban on the sale or rental of violent video games to minors — have been struck down by courts as free speech violations.

Another area of concern: we medicate increasing numbers of children with potentially harmful psychotropic drugs, a trend fueled in part by questionable and under-regulated pharmaceutical industry practices. In the early 2000s, for example, drug companies withheld data suggesting that such drugs were more dangerous and less effective for children and teenagers than parents had been led to believe. The law now requires “black box” warnings on those drugs’ labels, but regulators have done little more to protect children from sometimes unneeded and dangerous drug treatments.

Children today are also exposed to increasing quantities of toxic chemicals. We know that children, because their biological systems are still developing, are uniquely vulnerable to the dangers posed by many common chemical compounds. We also know that corporations often use such chemicals as key ingredients in children’s products, saturating their environments. Yet these chemicals remain in circulation, as current federal laws demand unreasonably high proof of harm before curbing a chemical’s use.

The challenge before us is to reignite the guiding ethos and practices of the century of the child. As Nelson Mandela has said, “there can be no keener revelation of a society’s soul than the way in which it treats its children.” By that measure, our current failure to provide stronger protection of children in the face of corporate-caused harm reveals a sickness in our societal soul. The good news is that we can — and should — work as citizens, through democratic channels and institutions, to bring about change.

Joel Bakan, a law professor at the University of British Columbia, is the author of “Childhood Under Siege: How Big Business Targets Children.”

Stop Coddling the Super-Rich
By WARREN E. BUFFETT


OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.

While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.

Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.

To understand why, you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.

Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.

I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.

Since 1992, the I.R.S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent.

The taxes I refer to here include only federal income tax, but you can be sure that any payroll tax for the 400 was inconsequential compared to income. In fact, 88 of the 400 in 2008 reported no wages at all, though every one of them reported capital gains. Some of my brethren may shun work but they all like to invest. (I can relate to that.)

I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.

Twelve members of Congress will soon take on the crucial job of rearranging our country’s finances. They’ve been instructed to devise a plan that reduces the 10-year deficit by at least $1.5 trillion. It’s vital, however, that they achieve far more than that. Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness. That feeling can create its own reality.

Job one for the 12 is to pare down some future promises that even a rich America can’t fulfill. Big money must be saved here. The 12 should then turn to the issue of revenues. I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.

But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.

My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.

Warren E. Buffett is the chairman and chief executive of Berkshire Hathaway.

The Wrong Worries

By PAUL KRUGMAN

In case you had any doubts, Thursday’s more than 500-point plunge in the Dow Jones industrial average and the drop in interest rates to near-record lows confirmed it: The economy isn’t recovering, and Washington has been worrying about the wrong things.

It’s not just that the threat of a double-dip recession has become very real. It’s now impossible to deny the obvious, which is that we are not now and have never been on the road to recovery.

For two years, officials at the Federal Reserve, international organizations and, sad to say, within the Obama administration have insisted that the economy was on the mend. Every setback was attributed to temporary factors — It’s the Greeks! It’s the tsunami! — that would soon fade away. And the focus of policy turned from jobs and growth to the supposedly urgent issue of deficit reduction.

But the economy wasn’t on the mend.

Yes, officially the recession ended two years ago, and the economy did indeed pull out of a terrifying tailspin. But at no point has growth looked remotely adequate given the depth of the initial plunge. In particular, when employment falls as much as it did from 2007 to 2009, you need a lot of job growth to make up the lost ground. And that just hasn’t happened.

Consider one crucial measure, the ratio of employment to population. In June 2007, around 63 percent of adults were employed. In June 2009, the official end of the recession, that number was down to 59.4. As of June 2011, two years into the alleged recovery, the number was: 58.2.

These may sound like dry statistics, but they reflect a truly terrible reality. Not only are vast numbers of Americans unemployed or underemployed, for the first time since the Great Depression many American workers are facing the prospect of very-long-term — maybe permanent — unemployment. Among other things, the rise in long-term unemployment will reduce future government revenues, so we’re not even acting sensibly in purely fiscal terms. But, more important, it’s a human catastrophe.

And why should we be surprised at this catastrophe? Where was growth supposed to come from? Consumers, still burdened by the debt that they ran up during the housing bubble, aren’t ready to spend. Businesses see no reason to expand given the lack of consumer demand. And thanks to that deficit obsession, government, which could and should be supporting the economy in its time of need, has been pulling back.

Now it looks as if it’s all about to get even worse. So what’s the response?

To turn this disaster around, a lot of people are going to have to admit, to themselves at least, that they’ve been wrong and need to change their priorities, right away.

Of course, some players won’t change. Republicans won’t stop screaming about the deficit because they weren’t sincere in the first place: Their deficit hawkery was a club with which to beat their political opponents, nothing more — as became obvious whenever any rise in taxes on the rich was suggested. And they’re not going to give up that club.

But the policy disaster of the past two years wasn’t just the result of G.O.P. obstructionism, which wouldn’t have been so effective if the policy elite — including at least some senior figures in the Obama administration — hadn’t agreed that deficit reduction, not job creation, should be our main priority. Nor should we let Ben Bernanke and his colleagues off the hook: The Fed has by no means done all it could, partly because it was more concerned with hypothetical inflation than with real unemployment, partly because it let itself be intimidated by the Ron Paul types.

Well, it’s time for all that to stop. Those plunging interest rates and stock prices say that the markets aren’t worried about either U.S. solvency or inflation. They’re worried about U.S. lack of growth. And they’re right, even if on Wednesday the White House press secretary chose, inexplicably, to declare that there’s no threat of a double-dip recession.

Earlier this week, the word was that the Obama administration would “pivot” to jobs now that the debt ceiling has been raised. But what that pivot would mean, as far as I can tell, was proposing some minor measures that would be more symbolic than substantive. And, at this point, that kind of proposal would just make President Obama look ridiculous.

The point is that it’s now time — long past time — to get serious about the real crisis the economy faces. The Fed needs to stop making excuses, while the president needs to come up with real job-creation proposals. And if Republicans block those proposals, he needs to make a Harry Truman-style campaign against the do-nothing G.O.P.

This might or might not work. But we already know what isn’t working: the economic policy of the past two years — and the millions of Americans who should have jobs, but don’t.