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Democrats Won, but the Class Struggle Continues

Economics reporter Louis "Double the Minimum Wage" Uchitelle on "conspicious consumption" by the new rich.

Well, the Times can't be accused of fomenting classconflict only while Republicans are in ascendance.



Last week Eric Konigsberg penned "A New Class War: The Haves vs. the Have Mores" for the Week in Review. Today, economics reporter Louis Uchitelle makes Monday's front page with "Lure of Great Wealth Affects Career Choices."



"In an earlier Gilded Age, Andrew Carnegie argued that talented managers who accumulate great wealth were morally obligated to redistribute their wealth through philanthropy. The estate tax and the progressive income tax later took over most of that function - imposing tax rates of more than 70 percent as recently as 1980 on incomes above a certain level.



"Now, with this marginal rate at half that much and the estate tax fading in importance, many of the new rich engage in the conspicuous consumption that their wealth allows. Others, while certainly not stinting on comfort, are embracing philanthropy as an alternative to a life of professional accomplishment.



"Bill Gates and Warren Buffett are held up as models, certainly by Dr. Glassman. "They are going to make much greater contributions by having made money and then giving it away than most, almost all, scientists," he said, adding that he is drawn to philanthropy as a means of achieving a meaningful legacy.



"'It has to be easier than the chance of becoming a Nobel Prize winner,' he said, explaining his decision to give up research, 'and I think that goes through the minds of highly educated, high performing individuals.'



"As Bush administration officials see it - and conservative economists often agree - philanthropy is a better means of redistributing the nation's wealth than higher taxes on the rich. They argue that higher marginal tax rates would discourage entrepreneurship and risk-taking. But some among the newly rich have misgivings.



"Mark M. Zandi is one. He was a founder of Economy.com, a forecasting and data gathering service in West Chester, Pa. His net worth vaulted into eight figures with the company's sale last year to Moody's Investor Service.



"'Our tax policies should be redesigned through the prism that wealth is being increasingly skewed,' Mr. Zandi said, arguing that higher taxes on the rich could help restore a sense of fairness to the system and blunt a backlash from a middle class that feels increasingly squeezed by the costs of health care, higher education, and a secure retirement."



But while Uchitelle labels "conservative economists," his articleprovides no ideological labeling for the left-wing economists he quotes (Edward Wolff of New York University and Robert Frank of Cornell) orfor Zandi, one of the newly rich who wants other people to pay more in taxes.



There was more liberal slant from Uchitelle the day before in a piece on "economic populism," that avoided the word liberal when describing politicians like Sen. Ted Kennedy who favor raising the minimum wage. (In a book earlier this year, Uchitelle suggested doubling the federal minimum wage, Sunday Week in Review, "Here Come the Economic Populists.")