The Benefits In Richistan

Dubai, United Arab Emirates

We pulled our Ferrari-red, four-door subcompact next to the gleaming, pearl-white McLaren sports car and handed the valet the key. He would park it — for FREE.

Trembling with anticipation I walked to the Hilton Honors desk at the Dubai Jumeirah Beach Resort. Courtesy of Hilton, because we’re Diamonds, we had three nights FREE accommodation at the ritzy beach front property.

The Benefits In Richistan

Mission Imposter at the Yas Hotel, in Abu Dhabi. The three free nights at the Hilton Dubai Jumeirah Beach Resort allowed us to pay for the Sheikh package that included a one-bedroom suite, full-breakfast, free parking, smoking fast Internet and two tickets to Ferrari World where MacGyver rode the fastest rollercoast in the world.

“Wealth begets wealth,” Pulitzer Prize and Emmy Award journalist Hedrick Smith says in his jolting book, Who Stole the American Dream?, which details the systematic and systemic theft of jobs and money from the middle class by the rich and the multinationals over the past 40 years.

I chose this hair puller, a middle class must read, over a bodice ripper, as my first holiday book because we were indulging in the rarified existence of the top five percent where a good corporate road warrior easily achieves Hilton’s Diamond club. Thirty stays in a year, increased this year from 28, at any of their almost a dozen properties, is the key to lavish rewards. For three days we marveled at the benefits given to the already affluent who can afford to pay.

We’ve been hearing a growing drumbeat from Wall Street — which has been using free money bestowed in taxpayer bailouts and cheap money from the US Federal Reserve to pump up the stock market — trumpeting the revival of the US economy since the moneymen sent it into a tailspin.

The business news happy talk of economic recovery, now gushing DOW 17,000, in an attempt to arouse the burned up and burned out middle class off the investing sidelines, doesn’t square with what we see on the ground across America.

This week, another study, by a University of California, Berkley economist, who found in 2011, excluding investment gains, the One Percent took 46.5 percent of all income, the highest proportion since 1917. He says 2012 will be more of the same.

Smith reports the chasm between the haves and havenots has grown deep. Across America, and in Smith’s book, I see three groups. the One Percent of really rich, the 44 percent of affluent and upper middle class, who could still lose their foothold on the American dream in the multinational drive for profits with its continuing technological outsourcing and the remaining 55 percent of middle class and economically disenfranchised.

The bottom group includes those over 50 and those under 25. The over-50s’ jobs were zapped. They may never work again or are working for a fraction of their pre-2008 income with little or no benefits and they may never retire. Young people are stalled with huge education debts and no jobs, finding themselves in their childhood bedrooms or homeless when their parents can’t help.

The best analogy we’ve heard to describe the difference in classes is a moving sidewalk versus a regular sidewalk, and now reading Smith’s book, a third path, of dirt and gravel.

The rich and the middle class are both walking, both expending the same energy, but the rich on the moving sidewalk are powering ahead with great ease. And if they stop walking, they continue to move ahead. The middle class must keep walking to keep moving. Those that have stumbled onto the dirt and gravel use more energy to walk on the uneven ground, fighting the dust and the inevitable pebbles which slip into shoes. Progress is difficult.

The Benefits In Richistan

It might have been because it was a Thursday, or maybe because we were booked for only one night, but the best score of 2012, making me want to high-five the Hilton Honors clerk, was this palatial one-bedroom suite at the Scottsdale, Arizona DoubleTree for $88.94 including tax, breakfast, two happy hour drinks, Internet and parking for the Vespa.

“We have a room now with two queen-size beds,” the Honors associate said. “A king-sized bed room will be ready in an hour.”  We decided to enjoy the magnificent buffet lunch in the restaurant, where, with one latte and one glass of Malbec, tip and tax it cost $98.02. This was not an inexpensive place.

Before we had finished, the same woman found us to personally hand us the key and tell us our bags had been sent to the upgraded room, a Diamond benefit, with a king-sized bed, balcony, ocean view and a stunning marble bathroom featuring a deep soaker tub. This is how the top lives.

The fleecing of the American middle class, Smith says, began in the 1970s and has culminated in the now polarized Congress where our elected representatives are at war to claim the prize of ultimate power with little regard to the society they are entrusted with guiding. The beneficiaries are the rich and corporate multinationals.

Following the money, Smith puts meat on the bones of Warren Buffet’s famous, yet largely dismissed statement, that there is indeed a class war in America. “But it’s my class that’s making the war and we’re winning,” Buffet said.

Smith laments the growing caste society, an “increasingly stratified” society, where people at the bottom are almost frozen there. “While people at the top are more and more frequently passing on the self-fulfilling advantages of high status to their children and grandchildren.” At Hilton, we can see that once we’re in the club, it’s easier to stay.

Virtually everything in Smith’s book has been reported, from USA Today to the New York Times, but the historic timeline, aided by hindsight and analyzed data, is demoralizing.

We know manufacturing jobs have gone overseas and that corporations obtained and brutally wielded bankruptcy laws to eliminate pensions, smother unions, and squeeze wages.

That Wal-Mart, the largest employer in America, built itself on a policy of bludgeoning suppliers until American plants closed and jobs disappeared.

That China hoodwinked corporate America by opening their doors to the lucrative market with the proviso that US multinationals agree to technology transfer, building high-tech operations in China, grabbing short term gains, sacrificing US jobs.

And the growing offshoring of IT jobs, so that IBM now has more employees in India than it has in America.

And the particularly depressing trail of how Wall Street is stealing retirement from the middle class by continuing to shred their savings and wealth, beyond the 2008 stock market collapse, through destructive fee structures in 401Ks and IRAs.

Journalist Jim Lehrer said, “Hedrick Smith gives names, dates and actions behind the transformation from a corporate and financial culture driven by shared wealth to one of CEO/ownership greed. Read it and weep with profound sadness and then scream with red-faced anger. It seems almost too tame to call it simply a book. It is an indictment that is as stinging, stunning and important as any ever handed down by a grand jury.”

The rewards at the top of the economic chain are wonderful.

While the Hilton benefits include Internet access for all four of the devices we travel with — devices necessary today to running a one-truck business — two computers, an iPad and an iPhone, free use of the gym and free valet parking, it was the food and drink that turned our heads.

Diamond benefits are better overseas than in the US, where they are often on a hotel-by-hotel basis, but always include some breakfast. In Dubai, the full-service breakfast, served in the executive lounge between 6:30 and 10:30, fueled us the entire day. Unlimited lattes, one table of breads, croissants and danishes, jams and spreads, another of juices, fruits, cheese, smoked meats and fish, Middle Eastern staples, eggs to order and a third table of hot foods, sauteed mushrooms, roasted vegetables, bacon, ham and veal sausage.

We never tried the Afternoon Tea, but attended each evening happy hour for free spirits, beer, wine and sodas. The server told MacGyver that the bottle of red wine he was pouring was 250 Dirhams, $70US, in the restaurant. The food tables held cut vegetables and dips, breads, appetizers of prawns and mussels elegantly dunked in shot glasses, several hot hors d’oeuvres. Enough that we paid for only two meals in four days, one at the hotel, and one in Old Dubai, everything else was free, with the room, booked on points.

Here’s the moving sidewalk effect. The resort commands the top number of points. During our stay only Diamond members could use points for a multiple-night stay. Once a Diamond, the benefits come faster. We get a 50 percent bonus on all Hilton points, more points per stay, better value along the way and we save money. The points can be used for hotels anywhere. The rich get richer, faster.

Obama is pledging to lift the middle class, I don’t know how
. Like turning an ocean going ship, hitting the brakes does nothing. It takes years and years for the ship of state to change direction. In America, the rich and the multinationals have invested heavily in buying favor from our politicians and they have convinced  too many of us that they deserve more, at the expense of the middle class.

Smith lays out a plan for taking back America. The priority he says is to bring jobs back and restore fairness. But success, he says, requires that we get out the door and fight just like the middle class in the 60s and 70s fought for civil rights and the end of the Vietnam War. But there is a big difference between then and now.
The middle class then had good jobs, a sense of security, money in the bank, a continuously growing share of the economic pie. Today the middle class is fighting for survival, looking for work, for medical care and to hang onto their homes.

The One Percent will fight every change, every step of the way, that’s why there have been no court actions against the criminal activities of Wall Street and CEOs since 2008. We have government “of the 1%, for the 1%, by the 1%,” says Nobel-prize winning economist Joseph Stiglitz.

Buffet is right the One percent is winning.

6 thoughts on “The Benefits In Richistan

  1. Oops, I know you'll feel really sorry for me when I say this, lol, but, my excuse is, the wifi at the beach is a little in and out as I was working on this post. You'll need sedation to the read the rest of the story.


  2. One of the frustrating things about our current trajectory is the 1% were so blatant about what they were doing. I remember reading a copy of a Conrad Black speech to the Fraser Institute, saying how the newspapers in Canada were too far to the left, and that if they wanted to move the political agenda to the right, they would have to buy the newspapers and shift the debate. So then he did it, to the point where the debate is between the right and the right, and about what the lesser losses we will accept will be compared to the bogeymen they threw at the population to convince us to accept an agenda that goes against our best interests.


  3. Whew!I just read your entire blog in a single sitting (took about six hours).I am stunned. I am in awe. I am inspired.As a freshly divorced, 48 year old man, living in yet another foreign country (after the UK, USA and Mexico – now Canada) I am busily casting around for my next adventurous phase in life – having blogged and written about others, already.Thank-you! I think I know what I have to do now…


  4. Phil, One of the chapter's in the book is all about the money business has spent in the past 30 years to get their message heard by Congress. One little tidbit that goes to your point. Smith says that the media continues to talk about business and labor as being about equal in strength and pull. This has not been true in 40 years. There are more than 2,500 business Political Action Committees and there are 272 labor PACs. This is why I am always telling drivers to join OOIDA and keep paying their dues every year. A huge lesson fro the book is, if the middle class and workers don't have a voice, their needs will not be met.


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