[Sorry, the video for this story has expired, but you can still read the transcript below. ]
RAY SUAREZ: If you’re a luxury car dealer in Alexandria, Virginia, the economic boom is nirvana.
MICHAEL LINDSAY, Lindsay Lexus of Alexandria: Our business has never, ever been better. We can’t keep cars in stock. People are writing orders on cars that we can’t deliver. This is clearly a boom time for us, and it’s been great for everybody. I hope these times continue forever, but I have a feeling maybe 30 years from now, I’ll look back and say, you know, the 1990’s were the most incredible years ever to be in the car business.
RAY SUAREZ: The current economic expansion, which today set a record in duration, began in March 1991, eight years and 11 months ago. Since then, the U.S. economy has expanded without pause.
During that period, the unemployment rate has declined from around 7% to 4%; inflation has come down and remained low; and stock market levels have tripled. In this age of prosperity for many, a lot of Americans are spending their time… Well, spending. Americans are moving into bigger homes, charging more on their credit cards, and buying more expensive cars, especially sport utility vehicles, whose sales in the 90’s have tripled.
But the good news “in the aggregate,” as economists say, may not be good for everybody. Personal bankruptcies in the U.S. are near all-time highs, and the country’s income gap may be widening. A recent report based on census data found that the wealthiest Americans saw their incomes rise 15% in the last decade, while the lowest-income Americans gained 1%.
HOST: — of Who Wants to be a Millionaire?
RAY SUAREZ: Still, most of the attention is on reaching the top. Whether it’s quiz shows that create millionaires in half an hour, or traders looking for the next hot dot-com explosion, the idea is to get rich now. CNBC, the stock market cable network, has seen its viewership grow more than 200% in the 1990’s. The allure of stocks and personal success stories has created a casino environment, according to stockbroker Bob Mann.
BOB MANN: The whole society is more comfortable with gambling, so these big swings in the stock market are creating excitement — plenty of chances to win and lose money. And, clearly our society is moving in that direction.
RAY SUAREZ: Today, half of all Americans own stocks, up from 36% in the early 90’s, when the expansion began.
RAY SUAREZ: Joining us now: Michael Saylor, CEO of Microstrategy, a software and Internet company; Jean Bethke Elshtain, a professor of social and political ethics at the University of Chicago; Alan Ball, a screenwriter, playwright and writer for television , who authored the screenplay for the movie “American Beauty”; and James Twitchell, Professor of English at the University of Florida, Gainesville. He is the author of “Lead us into Temptation: The Triumph of American Materialism.” Professor Twitchell, it used to be that it was a term of derision to call someone a nouveau riche. Now the newly rich are celebrated throughout the culture. What’s changed?
JAMES TWITCHELL: Well, the shame of consumption has now been removed from consuming the wrong things to not consuming enough. We’ve essentially sort of moved the markers on status.
RAY SUAREZ: And to what effect? Is this creating a more equal, a less equal society?
JAMES TWITCHELL: Well, it’s hard to say. Certainly the bottom fifth is unaffected by this, but the rest of American culture is able for better or for worse to consume very much the same stuff. In other words, if you can’t buy us outright, you can at least lease it. And if you can’t lease it, you can use your credit card. So whereas it used to be that only a relatively few people could have a Lexus car, for instance, now hundreds of thousands of people can do it and they can do it in any number of sort of intriguing new financial ways.
RAY SUAREZ: Professor Elshtain, if you look at other periods in American history where there were large run-ups in wealth, there was also at the same time a critique of that wealth was very strong at the same time.
JEAN BETHKE ELSHTAIN: That’s right.
RAY SUAREZ: This time it seems to be missing. Could it be because now one out of every 40 Americans or so is a millionaire?
JEAN BETHKE ELSHTAIN: That could be part of it, but I think that we’ve lost a sense along the way of the concept of enough. What counts as enough? What’s too much? The money culture, which is what we’re talking about, is a culture that prides itself on a kind of excess and is dominated by envy — those who are just a rung below somebody else want more of what the person just above them has. So we run faster and we run farther and we strive to get ahead. The worry, certainly an ethical worry would be that it creates a distortion of human life when it’s all focused in that direction, when that becomes an obsession, and we lose a sense of proportion and of limit and of the other goods in life. And when the dominant question becomes how much more can I get rather than what’s right, what’s good, what’s fair, what’s just.
RAY SUAREZ: Well, Michael Saylor, is there also a salutary effect of that striving for more?
MICHAEL SAYLOR: I’d like to be a strong advocate for the modern economy for a couple of reasons. One is that each of these ten million people that might be doing online brokerage today and is fixated upon stocks is not just exercising a trading machine. We’ve actually set 10 million voting machines up, which means we’re engaging the entire economy, the entire society, in making progressive decisions about how to make the economy work more effectively today than ever before. People are betting their money on new techniques. And never before in the history of our civilization have been able to put in place quicker change and make more aggressive moves than we have right now in the 21st century.
RAY SUAREZ: So those voting machines where people use a dollar as a vote, that is a democratizing moment, politicians sort of waning on the American scene while the new celebrities are people like yourself?
MICHAEL SAYLOR: Consider what we’re replacing. Instead of spending our time thinking about gambling or arguing over politics in our parlors where we don’t really have an effect on the economy, now if you feel strongly about anything or anyone, you could immediately vote for or against them and you can have a meaningful impact. When has the society allowed the common man to become so engaged in the future and have such an impact as the modern day?
RAY SUAREZ: So you would advise us to pay more attention to the fact that now, for the first time, half of all households own stock than we should to the fact that fewer than half of all households vote?
MICHAEL SAYLOR: I would say that the exciting thing here is that we have solved the problem of how to get people to take an interest in their economy and in their country. About half the people vote and they vote once every two or four years. They’re not clear that they have any impact on the way our civilization evolves, but when people start to buy stocks, they can sell them any given day. They don’t have to wait four years. They don’t have to trust anybody. Any public company CEO is in essence a politician. He’s got a platform. He’s running for office everyday of his life. If he walks out of his room, says something stupid, anybody reads about it, they can dump that stock and disenfranchise that politician or that CEO in a moment. What’s more fair or equitable than that?
JEAN BETHKE ELSHTAIN: Ray, may I jump in here? I mean –
RAY SUAREZ: Well, I want to hear from Alan Ball for a moment because a lot of what’s going on in the culture now, very closely equates being rich with being happy and asks us to accept that whatever is good for getting richer is good by definition. Are you okay with that?
ALAN BALL: I would disagree with that. I think we are encouraged in this culture to believe that success equals happiness and that striving for success is going to bring us a kind of personal satisfaction, almost a spiritual satisfaction. I really don’t think that’s the case at all. I think a lot of people get confused and get sort of lost in the pursuit of success and they lose themselves in the process — not everybody but a lot of people.
RAY SUAREZ: So, what should fill some of that gap that’s left when wealth doesn’t satisfy?
ALAN BALL: Well, I think we’re spiritual beings. I think we need some sort of notion of what our lives are about and why we’re here on this planet. I think that it’s got to be more than just to make money and rack up material possessions. I do feel like our culture tends to value that more than being a member of the community and reaching out to people and being generous and that kind of thing. And I think people tend to not consider those options as much because they’re just not… they’re not publicized as much. They’re not aware. I mean, we grow up in America now believing you have to strive, strive, strive for success, and that’s what it’s all about. That is, you know, there’s nothing wrong with that but it’s not the only thing that makes one’s life meaningful.
RAY SUAREZ: But isn’t there also a tendency to focus on the other guy? I’m sure a lot of people went to see your movie, “American Beauty,” which contains some scathing critiques of modern life — assumed that you were talking about somebody else and drove home to that kind of life.
ALAN BALL: Well, yeah, I’m sure people did do that. First of all, the movie was never meant to be a scathing indictment of anything. It was meant to be the story of one particular family who got lost, who just got hopelessly lost by pursuing the wrong kinds of things and they lost sight of each other and they lost touch with each other. That’s what I think is tragic is I think that happens all the time in our culture now.
RAY SUAREZ: Professor Elshtain, you wanted to say.
JEAN BETHKE ELSHTAIN: I wanted to say that this economic triumphalism that we hear so much about really is in is sense a triumph of economics over politics. Politics is the way that we think about our life and coming together and what’s fair, as I said, what’s equitable, how we can work toward a common good and not just towards self-interest. And I would like to align myself with the recent comments, that is, that there’s a yawning gap. People talk about it all the time, even as we have these indices of economic success, we also hear reports about people saying they feel in a sense lost and lonely in this new world, that they’ve lost a sense of community, that they think something is wrong. They don’t have enough time for their families. They don’t have enough time for their children, and yet they can’t stop, they can’t get off this treadmill. It’s a kind of obsession. I think we haven’t begun to come to grips with this and the effect that this will have on our culture, on our common life over time.
RAY SUAREZ: Professor Twitchell, you just heard Professor Elshtain talk about the triumph of economics over politics but has economics accomplished something that politics couldn’t, blurred blood lines and family origins and what class you were born into and those kinds of things?
JAMES TWITCHELL: Well certainly that’s been the great power of American materialism, and that is that it has pushed aside many of the traditional markers — markers like religious affiliation or where you went to college or ancestry or concepts of blood now get sort of played out in terms of, well, what are you buying? Where are your consuming affiliations? To some degree this is really intense when you’re young and then when you get into your 40s, you start beginning to question it. That’s when the voluntary simplicity movement starts to take over. Then I think later in your 50s, you sort of turn away from the material world and look for something more spiritual in meaning.
RAY SUAREZ: And is it working?
JAMES TWITCHELL: Well, I mean, is it working? Well, for the young it’s really working because indeed the affiliations I mean with designer– one of the things I’m really intrigued with is the rise of stores like Prada, and Gucci where young people all over the world are uniting but they’re uniting in terms of brand affiliations. Now what happens when these kids get into their 40s? Who knows? But for right now, clearly if what you want is a global village, consumption is moving us there quicker than religion, certainly quicker than politics. I mean it is really, I have more in common with someone in Antwerp, who is buying the same products that I am than I do with my own next door neighbor. And that may be in terms of global peace a sign really of future tranquility.
JEAN BETHKE ELSHTAIN: This is an utopian projection that we’ve heard over the decade that happened in the 19th century with the notion of free trade being the sure and certain catalyst for world peace. I think it’s is a kind of best-case scenario, if you will, a kind of utopia that we should not put a lot of faith in. Consumption is very thin glue to hold people together. It’s a thin form of identification. It also spurs and inspires envy, among other things, and it leads us to forget the millions and millions who get left behind, including those who aren’t sharing the general prosperity in this country.
RAY SUAREZ: Michael Saylor.
MICHAEL SAYLOR: Yeah, Ray, I don’t think there’s anything wrong with envy. If we envy Bezos because it’s a billionaire because he’s changing the way that the industry works, I think the way that the economy evolved, we have a lot of very, very challenging issues to overcome in the next decade. We can change the way that medicine works. We can let people live longer. We can cure the traffic problem. We can actually cut the gross cost of all the goods and services in our economy in half; about half of everything we do is waste due to inefficiency and lack of proper technique. If an individual can come along and create a company which will cure the traffic problem in Washington DC and save 280 million hours per year, I think they deserve to make a few million dollars. If we hold this out as the greatest possible reward and we’ve got 22-year-old youths running around trying to make you live longer, cure cancer, cure traffic, save people money, cut everybody’s credit-card rates from 22% to 6% using technology, then I can’t think of a more constructive motivation than that. And that’s in essence what our economy is doing and all of these dot-com millionaires, they got that way because they reformed or restructured an industry and they did it ten times faster than the existing political system or the existing corporate infrastructure ever would have.
RAY SUAREZ: But for every dot-com millionaire who is doing something like curing cancer, solving the traffic problem, or setting up a new distribution system, there’s somebody who had a good idea, never made a buck, never even brought the idea fully to market fruition and managed to sell it for a bunch of money and bail out.
MICHAEL SAYLOR: That’s true. Even when they sell it, though, they pay a bunch of capital gains tax plowed right back into the government and lower the tax for everybody else. I would say there’s two ways this economic boom benefits even the lowest income class. One is that the extraordinary amount of capital gains being generated here are cutting the net tax rate of everybody else. The second is that many of these companies, they’re either giving away free goods and services like Yahoo is free and there’s free e-mail and we’re giving away free medical information and we’ll be giving away free traffic information, which everybody can benefit from. Even if you don’t even see it, you still benefit because someone around you may see it and may help you in some way in your life. The second way that people benefit is that the people making this money can’t possibly spend it all. And so they’re either going to a, pay it in tax or b, give it away to charity. Or c, they’re going to consume. When they consume, they create a whole raft of jobs for the people that feed the luxury industry.
RAY SUAREZ: Mr. Ball, quickly, before we go, is it art going to be where we see what misgivings exist about this new money culture?
ALAN BALL: Well, I would hope so. I mean, I think that’s one of the purposes of art is to sort of, you know, be a mirror to our culture and not just a blind endorsement. So I would hope so. But as art becomes more replaced by commerce, who knows?
JEAN BETHKE ELSHTAIN: I would also hope that religion and ethics and education would be sources of an evaluation and interpretation and criticism as well.
RAY SUAREZ: Guests, thank you all for being with us.