Home / Industry / Banking & Finance / Snap Poll: Economy is rigged, most readers believe

Snap Poll: Economy is rigged, most readers believe

Presidential hopefuls Donald Trump and Hillary Clinton don’t agree on much, but there’s at least one opinion they share: The U.S. economy is rigged. And more than three-quarters of respondents to this week’s RBJ Daily Report Snap Poll agree.

In Trump’s acceptance speech at the Republican National Convention last week, the GOP presidential nominee said the “nation’s most powerful special interests … have rigged our political and economic system for their exclusive benefit.”

Clinton, the presumptive Democratic nominee, called the U.S. economy rigged in her primary season debates with Sen. Bernie Sanders, who made the fight against a “rigged economy (and) corrupt political system” central to his campaign.

Even Charles Koch, the billionaire chairman and CEO of Koch Industries whose political spending has been attacked by Democrats and others, has written that he agrees the economy “is often rigged to help the privileged few at the expense of everyone else.”

Many economists disagree, however. In their view, the U.S. economy is too complex to be controlled by the top 1 percent; and for those willing to work hard, the opportunity to succeed economically exists.

RBJ respondents seem to align closely with national sentiment on this issue. In a recent poll conducted by Marketplace-Edison Research, 71 percent of participants said the American economy is manipulated to their disadvantage.

Roughly 660 respondents participated in this week’s poll, which was conducted July 25 and 26.

Do you think the U.S. economy is rigged in favor of the wealthiest Americans?
Yes, the U.S. economy is rigged in favor of those at the top:  77% 
No, the U.S. economy gives all Americans fair opportunity to succeed:  23%

COMMENTS:
The economy is the set of rules and tax law established by government within which commerce and trade occurs. Those rules have been changed since the 1970s in ways that favor shareholders, brokers and business executives over workers and small business owners—as evidenced by the wage stagnation while productivity has increased significantly in the same time period.
—Kristina Rogers

If it were rigged, then my parents and one million other Cubans would not have made it as we did. There are innumerable stories of striving immigrants who made it big. Do some cheat to get to the top? Of course. But the U.S.A. is exceptional in that it affords anyone who works hard and is smart equal opportunity to achieve the American dream. The U.S.A. is about equal opportunity, and should never be about equal, mandated results.
—Luis A. Martinez, Pittsford

It is rigged to the extent that so many opportunities (investment, education, career) are available only to a minority of the population that already has those benefits. And it is rigged because of the influence money has on politics, so the rich (individuals or corporate) can effectively write their own legislation and get their own tax loopholes.
—Maggie Symington

Most of those at the top worked hard to get there. What is rigged at the top is the political elite—they take very good care of themselves.
—Gerry Van Strydonck

This seems like a joke question. The wealthiest 1 percent own more than 90 percent of assets. Plenty of research to show that it is harder than ever to “bootstrap” oneself to success. And considering the term “bootstrap,” it seems to me that if you could even do it you would fall on your face.
—Jim DeLuca

It pains me to say yes; yes, our economy is rigged. Not to say that hard work and innovation cannot still allow someone to make their own success, but more and more we are (not) the land of opportunity. Cronyism continues to grow; both political parties play the game. Hopefully we all open our eyes soon before we collapse.
—Matthew Connolly

You only need to look at the recent housing crisis. Banks created, marketed and sold high-risk loans as “investments.” When those “investments” fell apart everyone lost money, banks refused to negotiate with homeowners so they could save their homes, then they left vacant properties all over the U.S., further destroying property values. Any fines paid by banks were actually paid by taxpayers because the fines are a deductible expense from taxes owed by banks. And taxpayers are now paying to maintain and manage the zombie homes left behind. And has anything been done to stop this from happening again? No, banks have started selling the same “investments,” just under different names.
—Chris Juby

But the trickle-down effect makes us all winners, or so we have been led to believe!
—Jerry McCabe, Irondequoit

“Rigged” is too severe a word. Slanted is more like it. I’ve heard the definitions: “Socialism is the equal distribution of less. And capitalism is the unequal distribution of more.” I was never hired by a poor man. The rich get much of their money from capital gains, which for some good reasons are taxed at a lesser rate than regular income. I’d still like to live in the United States.
—Clifford Jacobson M.D., Vanguard Psychiatric Services PC

It’s a sad day when the ever-growing number of victim groups bemoan their situation—as a result of their own doing—that this question gains so much of a foothold to see the light of day.
—Richard Phelps, Victor

Government regulation hinders the ability of Americans to succeed.
—Stuart Small, Pittsford Insurance Agency

The U.S. economy rewards all Americans who work hard and improve their value by educating themselves on something the marketplace needs. If you don’t, you won’t!
—Peter Bruu

I don’t see how that’s possible when taxes are paid as a percentage of earnings, and they are paid in brackets on top of it, and more than 50 percent pay no tax at all.
—Doug Strang

Absolutely! And that is not all bad. Who among us—if we were in the same situation—would do otherwise? It is the old saying all over again: “You cannot help the small trees grow by cutting down the ‘big’ trees!”
—J.A. DePaolis, Penfield

The U.S. economy is too big to be fully rigged. Those who are the special interests only rig what they are especially interested in. Leave it to both Clinton and Trump to take a problem, an issue, a fact and talk it into distortion.
—Jay Birnbaum

It is up to us New Yorkers to get involved in this battle against special interests and not idly stand by as the wealthy continuously blunt the progress of the middle class. By electing officials that will fight special interests, we are taking a critical step to supporting the middle class and minimizing the gap between the rich and poor.
—Steve Glickman, State Senate 55th District candidate

Both answers are correct. The U.S. economy is rigged in favor of those at the top and the U.S. economy gives all Americans a fair opportunity to succeed. Rich and powerful individuals and corporations can afford to lobby politicians for favorable treatment. Tax breaks are generous for those who can afford to own real estate and other assets. Lobbyists influence legislative outcomes that favor big oil, big pharma, trial lawyers, unions and many other special interests. However, that doesn’t mean that one can’t take advantage of the free enterprise system and become successful.
—John Calia, Fairport

Timely quote on this topic from New York Times article on closing of the Batavia yogurt plant three years after it opened with the help of lots of incentives: “One of my criticisms is that short-term thinking in politics is the same pathological thinking as in business,” said Gerald Benjamin, a professor of political science at the State University of New York at New Paltz. Not sure that I would refer to the system as rigged. I feel that all people have a chance to abuse and/or take advantage of the system for a quick buck or sustainable success. People are “rigged,” not the system.
—Barbara Randall

Yes and no. Yes, government has become too large and way too powerful. Power leads to corruption, and crony capitalism and other forms of favoritism are alive and well at federal, state and local levels. No, the U.S. economy still gives everyone who will work hard the opportunity to succeed. Their paths won’t be as greased as for those with ties to powerful people, but it’s still there and is still the envy of the rest of the world.
—Karen Zilora, president, Creative Scanning Solutions Inc.

The U.S. economy has always been rigged for those who are willing to take some risk, to become educated, to show up for their job, to respect all work, and are willing to fairly trade their time for their employer’s dollars. And for those that need a hand, they take it for as long as they need it and not a minute longer.
—Bob Miglioratti

The system is definitely rigged to benefit those in the top 1 percent. It is also rigged for various special interests that enjoy extensive support from the government, including energy interests. This has only worsened since Citizens United. Corporations aren’t people and don’t deserve the same free speech rights people do, and the overall system makes rich individuals (or corporations) have more of a say in how things go than those less well off. This used to be a country where anyone could attain a comfortable life with enough hard work. But the drain of dollars from the middle class to the wealthy has made that impossible for most these days. People are angry and rightfully so. That is what you see in Trump supporters, and in Sanders supporters as well. Now thinking that a billionaire is going to help you to get rid of, well, billionaires is pretty much wishful thinking.
—Lee Drake, CEO, OS-Cubed

It is not the economy that is rigged. It is the tax laws and lack of punitive measures when things go wrong that are rigged to benefit the very rich. How many were punished for the Great Recession—not one bank executive or mortgage broker. Trump himself has taken advantage of liberal bankruptcy laws to eliminate debt at the expense of those he owed money to, which included small contractors.
—Irene Burke

Of course the economy is rigged. The only question is how you address it. You can give more power to the politicians so they can “fight” the crony capitalist who they are doing favors for. Or do you try to reduce the impact of the politicians so they can’t do the bidding of the crony capitalist? It would seem the incentive for the politicians would be greater if they could do more for the crony capitalist.
—Kenya Burn-Moore, Rochester

It’s not a yes or no. But the concentration of power is troubling and escalating. So many companies are in bed with government regulators (state and federal) who write regulations to freeze out competition. Net government is too big, controls too much and enables the largest corporations. Look at the concentration in so many industries: airlines, telecom, avionics, pharma, internet, broadcasting, etc. Plus, all the non-job creating tax abatement and giveaways (by) COMIDA here locally.
—Dave Giambattista, Fairport

Seriously? Corporate income tax rates have never been lower. Very wealthy people, for whom much of their income is in the form of carried interest, pay an income tax rate of 15 percent. Ordinary people, who earn their living by the sweat of their brow, pay more than 15 percent federal income tax when they earned as little as $38,000 per year. “According to an analysis that excludes pensions and Social Security, the richest 1 percent of the American population in 2007 owned 34.6 percent of the country’s total wealth, and the next 19 percent owned 50.5 percent. Thus, the top 20 percent of Americans owned 85 percent of the country’s wealth and the bottom 80 percent of the population owned 15 percent. The very wealthy own the lion’s share of property and money in this country, and they have the financial means to keep things that way. The average American has very little leverage to fix their situation.”
—C. Lewis, Perinton

As with most complex issues, “yes” or “no” fails to truly answer the question. The political system certainly seems to be rigged as evidenced by the emergence of Clinton and Trump, who are disliked by a majority of Americans. Open primaries and superdelegates result in fail-safe methods for the elites to win. With more than 3,000 new federal regulations built upon the structure of bloated 1,000-page laws, the barrier to entry for the economic system continues to rise higher as well. However, most Americans seem to be uninterested in effecting real change until it’s too late, and we fail to turnout in great numbers for local elections, where we have a real opportunity to make a difference.
—Tim Altier

I think this is a false question. Globalization has indeed exported the jobs requiring the lowest skill levels to workers in countries that will do them for the cheapest wages. This, and technological innovations that have increased our productivity have in-turn given the U.S. its greatest comparative advantage in high-skill industries requiring high levels of education (college and often more). A child born to a wealthy family is more likely to have regular educational adult interactions; they are likely to hear and understand many more words in their early development: by the time they are ready to read, reading is likely to be easier and more enjoyable. When they switch from “learning to read” to “reading to learn,” wealthier children (statistically speaking) will tend be ahead of less-affluent children, and the gap will widen from there. Tutors, extracurricular, the ability to go to college without the distraction of working are but some of the factors that widen the achievement gap and make that affluent child more LIKELY to get the education and skills that are financially prized by the laws of supply and demand. Does this mean the system is “rigged”? “Rigged” implies intent and execution of a plan—visions of a cabal of old silver-haired white men sitting in a room deciding who wins and who loses. This is far too simple an answer to be remotely true. Are poor kids statistically less likely to be able to escape the socioeconomic level they were born into? Unfortunately so. Is it impossible for poor kids to succeed? Certainly not. Are there things we can do to rectify this moral inequity? I certainly hope so. The issue of the wealth and achievement gaps is a complicated one—there are hundreds if not thousands of contributing factors—many subtle and nuanced. We would do well to start looking at the problem for the complex set of cause-and-effects it is, instead of reducing it to a false choice as presented here between “everything’s fine” and “everything’s rigged and corrupt.” I sincerely hope the media and our politicians begin to frame complex topics in ways that recognize complexity and nuance.
—Jonathan P. LaRue

I believe the use of the term “rigged” is misleading in that it characterizes nefarious and orchestrated activities that intentionally bring about a desired result. The use of the word “fair” is also misleading, in that it characterizes we all begin at the same station in life. In the end, we are not all placed on a level playing field in the game of life and are initially a product of people/places/events beyond our control. However, I still believe success in the U.S.A. is earned through sacrifice, risk and hard work…with a little bit of luck thrown in. Unfortunately, some of us must make more sacrifices, take greater risk, and work harder than many to achieve comfort and success. Those that succeed without such efforts are, well, just plain lucky.
—M. Chatfield, Webster

A series of federal laws, including Sarbanes-Oxley and especially Dodd-Frank, combined with trial lawyers anxious to sue anyone who is not 100 percent successful with their venture, have had the effect of taking risk taking a crime. Notwithstanding their claims, banks are not lending to small businesses with any risk profile and the public capital markets have been closed down to smaller companies (the number of public companies has actually shrunk by half in recent decades). Therefore the only businesses with access to capital and therefore able to grow are those with very high net worth investors (Silicon Valley startups) or very low risk profiles (able to produce loan guarantees or otherwise enhance credit to reduce risk). The number of old-fashioned, up-from-the-bootstraps entrepreneurs is drastically down because they cannot get financing from banks that won’t accept any risk. It is the transformation of the American economy over a 40 year period from risk-taking vertically mobile entrepreneurs to business grow the only for the well-connected or the well-financed.
—Bob Sarbane

Prove: Special interests have rigged our political and economic system for their exclusive benefit. Given: 1. For four decades, there have been trade deficits. The annual trade deficit is now about $800 billion per year. 2. For more than three decades, a proposal to eliminate or significantly reduce trade deficits has existed. 3. For over one decade, business leaders (e.g., Buffett and Trump) have stated that trade deficits are suboptimal and that balanced trade is more optimal. 4. College economic textbooks are now stating that long-term trade deficits and budget deficits are suboptimal and that balanced trade is more optimal. 5. David Ricardo explained why trade deficits could be reduced through the principle of comparative advantage. However, this principle does not naturally lead to balanced trade, as we have seen over the last four decades. 6. Julian Keilson explained why trade deficits should be eliminated or significantly reduced and how this could be done using scrip. Scrip is similar to consumer reward programs, customer point systems, green stamps, etc. 7. Balanced trade is free trade plus just one constraint, i.e., scrip from exports is needed for imports. People can buy scrip on the open market from other people. 8. Using scrip to implement this constraint reduces the use of devaluation, which is another name for inflation. Inflation is another name for another tax. 9. To reduce trade deficits, Ted Cruz, Steve Moore and Donald Trump have recommended a consumption tax on imports and a reduction in the income tax on exports. 10. NAFTA was to be reviewed regularly and has not been reviewed or revised for two decades. 11. TPP has a provision that allows foreign owners of US companies to staff their companies with foreign workers. This provision has rarely been mentioned by the media. 12. Interest rates on Treasuries have been abnormally low. With scrip, trading partners would be more likely to buy goods and services rather than Treasuries. Interest rates on Treasuries may increase. This may improve resource allocation, which has been distorted by low interest rates. Proof: 1. For four decades, rather than balancing trade, agents, i.e., political and business leaders, have implemented, ignored, and benefitted from unbalanced trade. Agents have significantly benefitted from absolute advantage and the rest of the American people have not sufficiently benefitted from comparative advantage. 2. Both trade balancing solutions explained above require government solutions because unbalanced trade based on absolute advantage is more profitable to traders and is less work than balanced trade based on comparative advantage. 3. The media has largely ignored the failure of our politicians to reduce trade deficits, even though a proposed political solution exists. 4. In addition to the above, politicians have given significant crony capital to entrepreneurs and, in return, some of these entrepreneurs have given significant donations to politicians. Crony capital is not the property of politicians. The American people can make their own entrepreneurial decisions with their own money better than politicians can make with taxpayers’ money. 5. There appears to be a principal-agent problem at the highest levels. The agents, i.e., political and business leaders, are not doing what is right for, fair to, or sustainable for the American people. Supplementary Information: 1. William Meckling and Michael Jensen wrote a well-cited paper on the principal-agent problem, when they were at the University of Rochester. Competition among agents should reduce the principal-agent problem. If political parties reduce competition among political agents, as we just witnessed, we may never balance trade. 2. Scrip addresses the root cause of the unbalanced trade problem and can be implemented by markets in New York, Chicago, London, and elsewhere or by internet sites, e.g., PayPal, Bitcoin, Amazon, Google, etc. 3. Oba
—Chuck Masick, mit (magic institute of tutoring)

7/29/2016 (c) 2016 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.

One comment

  1. Prove: Special interests have rigged our political and economic system for their exclusive benefit.

    Given:
    1. For four decades, there have been trade deficits. The annual trade deficit is now about $800 billion per year.
    2. For over three decades, a proposal to eliminate or significantly reduce trade deficits has existed.
    3. For over one decade, business leaders (e.g., Buffett and Trump) have stated that trade deficits are suboptimal and that balanced trade is more optimal.
    4. College economic textbooks are now stating that long-term trade deficits and budget deficits are suboptimal and that balanced trade is more optimal.
    5. David Ricardo explained why trade deficits could be reduced through the principle of comparative advantage. However, this principle does not naturally lead to balanced trade, as we have seen over the last four decades.
    6. Julian Keilson explained why trade deficits should be eliminated or significantly reduced and how this could be done using scrip. Scrip is similar to consumer reward programs, customer point systems, green stamps, etc.
    7. Balanced trade is free trade plus just one constraint, i.e., scrip from exports is needed for imports. People can buy scrip on the open market from other people.
    8. Using scrip to implement this constraint reduces the use of devaluation, which is another name for inflation. Inflation is another name for another tax.
    9. To reduce trade deficits, Ted Cruz, Steve Moore, and Donald Trump have recommended a consumption tax on imports and a reduction in the income tax on exports.
    10. NAFTA was to be reviewed regularly and has not been reviewed or revised for two decades.
    11. TPP has a provision that allows foreign owners of US companies to staff their companies with foreign workers. This provision has rarely been mentioned by the media.
    12. Interest rates on Treasuries have been abnormally low. With scrip, trading partners would be more likely to buy goods and services rather than Treasuries. Interest rates on Treasuries may increase. This may improve resource allocation, which has been distorted by low interest rates.

    Proof:
    1. For four decades, rather than balancing trade, agents, i.e., political and business leaders, have implemented, ignored, and benefitted from unbalanced trade. Agents have significantly benefitted from absolute advantage and the rest of the American people have not sufficiently benefitted from comparative advantage.
    2. Both trade balancing solutions explained above require government solutions because unbalanced trade based on absolute advantage is more profitable to traders and is less work than balanced trade based on comparative advantage.
    3. The media has largely ignored the failure of our politicians to reduce trade deficits, even though a proposed political solution exists.
    4. In addition to the above, politicians have given significant crony capital to entrepreneurs and, in return, some of these entrepreneurs have given significant donations to politicians. Crony capital is not the property of politicians. The American people can make their own entrepreneurial decisions with their own money better than politicians can make with taxpayers’ money.
    5. There appears to be a principal-agent problem at the highest levels. The agents, i.e., political and business leaders, are not doing what is right for, fair to, or sustainable for the American people.

    Supplementary Information:
    1. William Meckling and Michael Jensen wrote a well-cited paper on the principal-agent problem, when they were at the University of Rochester. Competition among agents should reduce the principal-agent problem. If political parties reduce competition among political agents, as we just witnessed, we may never balance trade.
    2. Scrip addresses the root cause of the unbalanced trade problem and can be implemented by markets in New York, Chicago, London, and elsewhere or by internet sites, e.g., PayPal, Bitcoin, Amazon, Google, etc.
    3. Obama used a tariff to protect the remains of our steel industry. Cruz, Moore, and Trump proposed a consumption tax on imports and a decrease in the income tax on exports to improve the trade balance.
    4. Performance-based compensation of politicians may also help improve trade balance, if one of the performance measures used is total labor (i.e., wages, salaries, benefits, bonuses, etc.). Even without performance-based compensation of politicians, the politicians try to increase the minimum wage, increase health benefits, increase educational benefits, etc. to get votes. These efforts by politicians are interfering with markets and politicians are not as effective or efficient as markets. Unfortunately, unbalanced trade, i.e., the root cause of many of our economic problems, is not usually addressed. Scrip addresses the root cause of the unbalanced trade problem.

    The Benefits of Balanced Trade and Scrip:
    1. Balanced trade is beneficial to all trading partners.
    2. Balanced trade means overall balanced trade, not balanced trade between each pair of trading partners.
    3. Scrip reinforces free trade based on comparative advantage.
    4. Scrip redirects trade based on absolute advantage or strategic advantage toward trade based on comparative advantage.
    5. Scrip does not require tariffs or taxes.
    6. Scrip helps keep our currency stable.
    7. Scrip is not protective of any industry.
    8. Scrip can be executed with modern free market methods.
    9. Our country could be the leading player in the free market methods used to trade scrip.

Leave a Reply

Your email address will not be published.

x

Check Also

Hilda Rosario Escher

City, county partner with Ibero for Latino Summit (access required)

The Ibero American Action League Inc. will partner with the County of Monroe and the City of Rochester on the ...

blue-cross-arena

New at arena: Smoking area eliminated, security screening implemented (access required)

All fans entering Blue Cross Arena at the War Memorial will be subject to screening by hand-held metal detectors, and ...