Tilting at Windmills

May/ June 2013 In praise of better government … Welfare for the Rockefellers … Whatever happened to truth in labeling?

By Charles Peters

“Churn that bill, baby.” This is a quote from an email from one lawyer to another at DLA Piper, the world’s largest law firm. The email is the latest, and one of the more delicious, examples of how major law firms run up the bill on their clients, whose fee is usually based on something called “billable hours.” These are the hours worked mainly by the firm’s young associates and billed at four or five times the rate paid the associate. The associate is therefore under pressure to either work fifty hours or more a week in order to report forty actual billable hours, or count part of his billable hours as time spent, say, chatting with pals on Twitter. If these tactics fail to pad the bill enough, unnecessary work will be performed. And this was the subject of the DLA Piper memo that was recently unearthed by Peter Lattman of the New York Times: “Now Vince has random people working full time on random research projects in standard ‘churn that bill, baby!’ mode. That bill shall know no limits.” In another email, another of the firm’s lawyers wrote, “I hear we are already 200k over our estimate—that’s Team DLA Piper!”

A survey of lawyers reported by Lattman found that “more than half acknowledged that the prospect of billing extra time influenced their decision to perform pointless assignments, such as doing excessive legal research or extraneous document review.”

Supersized

A couple of bulletins from the world of the wealthy: the Wall Street Journal, to meet the needs of its readers, now has a special sixteen-page section in its Friday editions, “Mansions,” filled with ads for luxury property. Care for a mansion in Santa Monica, California, for only $34.9 million? Or perhaps you’d prefer one of the Manhattan apartments listed by the real estate agency Brown Harris Stevens, a “park front classic nine on CPW” for only $10.5 million (the translation: that’s nine rooms on Central Park West) or, if that’s simply not enough space for you, “a full floor penthouse UWS” (Upper West Side) at
$19.5 million.

Excuse me, sir? May I trouble you for a mariachi band?

We also have the Journal to thank for news of another goodie for the well-to-do. This from the Boston Collegiate Consulting Service, offering concierge services to the more affluent students in the area. “College used to be a great equalizer,” observes the Journal’s Melissa Korn. “No matter their parents’ social status, students who came to campus tended to deal with basic life skills on their own—from frying up grilled cheese sandwiches to unclogging toilets and folding laundry.” But that was before companies like BCCS made it possible for them to “summon butlers, drivers and gofers with a click or a call,” with demands for everything from an “authentic mariachi band” to “300 bottles of a Merle Norman perfume,” which, by the way, were to be bought and shipped to the student’s mother in Saudi Arabia.

Keeping up with the Joneses in the third millennium

Of course, most of us can’t afford mansions or concierges. But the spending of the rich has, nonetheless, had an impact on us, according to research by the University of Chicago’s Marianne Bertrand and Adair Morse, reported by the Washington Post’s Brad Plumer. They call the effect “trickle-down consumption.”

As the very rich spend more, the slightly less rich spend more to keep up, and then each of the rungs below tend to do the same. It doesn’t take long for the spending to reach the average man, who since 1980 has not been making more income. “In areas where incomes of the top 10 percent are growing,” writes Plumer, “the supply of businesses and services that cater to the well-off also increase. Swankier bars replace cheaper bars. Expensive restaurants replace cheap restaurants. Whole Foods nudges out the local grocery store. And less-well-off residents end up spending more at these places.”

Meanwhile, as the rich bought their mansions and penthouses, those below bought larger homes. Another study by Cornell University’s Robert H. Frank, confirming the Bertrand and Morse finding, reports that the median size of homes grew 50 percent between 1970 and today.

If you’re spending more on everything from your home to your local grocery store, and earning less, bankruptcy and foreclosures are either just around the corner or have already arrived. Yet another study, unearthed by Plumer, reports that higher divorce rates and longer commutes came along with the bankruptcies.

Class, not race

Here’s what I hope the Supreme Court decides in the affirmative action case it’s now considering: affirmative action should be based on economic status, instead of race. It doesn’t make sense for an upper-middle-class black student from an educated family to get a 310-point increase in his SAT score that elite colleges now give on the basis of race, according to a study by Princeton sociologist Thomas J. Espenshade, while a lower-middle-class white student gains no such preference.

One realistic basis for my hope that I learned from David Leonhardt of the New York Times is that Justice Anthony Kennedy, who probably will cast the deciding vote in the current case, wrote a separate opinion in Grutter vs. Bollinger, the case that endorsed affirmative action for blacks, in which he said that race should be one factor “among many others” in college admissions.

Welfare for the Rockefellers?

Forty-two years ago, this magazine ran the first of many articles and Tilting items urging that Social Security be means tested. In 1985, Robert Kuttner and I debated this issue—I was for, he was against—in Mother Jones and at Harvard’s Institute of Politics. I had to concede that in terms of persuading people, he won, so over the years I argued the case less and less because it seemed so futile. The only reforms came in 1983, when Congress began to include the proceeds of Social Security in the total income subject to taxation, and in 1993, when the tax was increased under Bill Clinton. And even those successes were diminished as the tax code became less progressive.

Now there seems to be at last a ray of hope, as others are seeing the need for means testing. In the Washington Post, Harry J. Holzer and Isabel Sawhill ask, “Why won’t liberals back reform? Growing entitlements are hurting programs for the poor.” It just doesn’t make sense to waste Social Security and Medicare on the Rockefellers.

Some liberals argue that a reform of Social Security is not needed for deficit reduction. But even if it isn’t, means testing could make money available to lower the payroll tax for working people, or to raise payments for those who are struggling to make do solely on what they get from Social Security.

Hit the road, Jack (the severance alone makes it worth it!)

Charles Peters is the founding editor of the Washington Monthly and the author of a new book on Lyndon B. Johnson published by Times Books.