Restoring Tally

le-emmeth:

By paul krugman

The New York Times

First published Nov 05 2011 01:01AM
Updated Nov 5, 2011 01:01AM

Inequality is back in the news, largely thanks to Occupy Wall Street, but with an assist from the Congressional Budget Office. And you know what that means: It’s time to roll out the obfuscators!

Anyone who has tracked this issue over time knows what I mean. Whenever growing income disparities threaten to come into focus, a reliable set of defenders tries to bring back the blur. Think tanks put out reports claiming that inequality isn’t really rising, or that it doesn’t matter. Pundits try to put a more benign face on the phenomenon, claiming that it’s not really the wealthy few versus the rest, it’s the educated versus the less educated.

So what you need to know is that all of these claims are basically attempts to obscure the stark reality: We have a society in which money is increasingly concentrated in the hands of a few people, and in which that concentration of income and wealth threatens to make us a democracy in name only.

The budget office laid out some of that stark reality in a recent report, which documented a sharp decline in the share of total income going to lower- and middle-income Americans.

We still like to think of ourselves as a middle-class country. But with the bottom 80 percent of households now receiving less than half of total income, that’s a vision increasingly at odds with reality.

In response, the usual suspects have rolled out some familiar arguments: The data are flawed (they aren’t); the rich are an ever-changing group (not so); and so on. The most popular argument right now seems, however, to be the claim that we may not be a middle-class society, but we’re still an upper-middle-class society, in which a broad class of highly educated workers, who have the skills to compete in the modern world, is doing very well.

It’s a nice story, and a lot less disturbing than the picture of a nation in which a much smaller group of rich people is becoming increasingly dominant. But it’s not true.

Workers with college degrees have indeed, on average, done better than workers without, and the gap has generally widened over time. But highly educated Americans have by no means been immune to income stagnation and growing economic insecurity. Wage gains for most college-educated workers have been unimpressive (and nonexistent since 2000), while even the well-educated can no longer count on getting jobs with good benefits. In particular, these days workers with a college degree but no further degrees are less likely to get workplace health coverage than workers with only a high school degree were in 1979.

So who is getting the big gains? A very small, wealthy minority.

The budget office report tells us that essentially all of the upward redistribution of income away from the bottom 80 percent has gone to the highest-income 1 percent of Americans. That is, the protesters who portray themselves as representing the interests of the 99 percent have it basically right, and the pundits solemnly assuring them that it’s really about education, not the gains of a small elite, have it completely wrong.

If anything, the protesters are setting the cutoff too low. The recent budget office report doesn’t look inside the top 1 percent, but an earlier report, which went only to 2005, found that almost two-thirds of the rising share of the top percentile in income actually went to the top 0.1 percent — the richest thousandth of Americans, who saw their real incomes rise more than 400 percent over the period from 1979 to 2005.

Who’s in that top 0.1 percent? Are they heroic entrepreneurs creating jobs? No, for the most part, they’re corporate executives. Recent research shows that around 60 percent of the top 0.1 percent either are executives in nonfinancial companies or make their money in finance, i.e., Wall Street broadly defined. Add in lawyers and people in real estate, and we’re talking about more than 70 percent of the lucky one-thousandth.

But why does this growing concentration of income and wealth in a few hands matter? Part of the answer is that rising inequality has meant a nation in which most families don’t share fully in economic growth. Another part of the answer is that once you realize just how much richer the rich have become, the argument that higher taxes on high incomes should be part of any long-run budget deal becomes a lot more compelling.

The larger answer, however, is that extreme concentration of income is incompatible with real democracy. Can anyone seriously deny that our political system is being warped by the influence of big money and that the warping is getting worse as the wealth of a few grows ever larger?

Some pundits are still trying to dismiss concerns about rising inequality as somehow foolish. But the truth is that the whole nature of our society is at stake.

Copied from the Salt Lake Tribune.

youthiswasted:

After we’ve spent decades condemning this sort of behavior on the part of petty dictators and thug warlords around the world, that we need to “urge restraint” to American police officers when facing peaceful protesters in unthinkable.

These protests are, by the very friction that they generate, forcing us to rethink the relationship that American citizens have with their government. The disproportionate violence that is clearly being authorized and condoned is a reflection of how deeply these peaceful protests are threatening the status quo by exposing the systemic culture of corruption.

cartonplanet:

Via Daily Kos:

So how do I feel about what I’ve witnessed?

I am absolutely SICKENED by the images of police assaulting unarmed American civilians simply engaged in exercising their right to freedom of speech and assembly.  It makes me sad to the core of my being to see this kind of highly organized violence against non-violent people by police in the United States of America.

As a University police officer, I likely would not be in a position to engage anyone as part of a ‘Riot Squad’.  But even so, I share a bond with police of all stripes, and my inability to understand these actions leaves me at a great loss.  I can’t imagine ever taking up arms against an unarmed peaceful citizen. 

fullspeedroar:

We can’t afford this any longer. We need to focus on four reforms that don’t require new bureaucracies to implement.

1) If a bank is too big to fail, it is too big and needs to be broken up. We can’t risk another trillion-dollar bailout.

2) If your bank’s deposits are federally insured by U.S. taxpayers, you can’t do any proprietary trading with those deposits — period.

3) Derivatives have to be traded on transparent exchanges where we can see if another A.I.G. is building up enormous risk.

4) Finally, an idea from the blogosphere: U.S. congressmen should have to dress like Nascar drivers and wear the logos of all the banks, investment banks, insurance companies and real estate firms that they’re taking money from. The public needs to know.

Capitalism and free markets are the best engines for generating growth and relieving poverty — provided they are balanced with meaningful transparency, regulation and oversight. We lost that balance in the last decade. If we don’t get it back — and there is now a tidal wave of money resisting that — we will have another crisis. And, if that happens, the cry for justice could turn ugly. Free advice to the financial services industry: Stick to being bulls. Stop being pigs.

I can stand behind the first three, but the fourth sounds good but it is unreal. Let’s make the first three happen.

advodude:

Back before we got all scared of communism, in 1956, America didn’t use In God We Trust as its motto. Instead, it was E pluribus unum,or (if you don’t speak Latin) Out of many, one.

To me, it meant that we are stronger when we all work together than if we are on our own. Throughout our history, Americans made sacrifices for the many. Sometimes that meant forgoing personal gain. During WWII, the wealthy were taxed at astronomical rates, and they made that sacrifice to make sure the country we loved survived a world war. The top tax bracket was at 91% until 1963. It didn’t get down to 50% until 1987. Currently, for the top 400 income earners, it’s around 17%.

I think the distribution of wealth is less important to Americans than accountability, fairness, and the solvency of the bottom 80% and their growth rate.

The rich getting richer isn’t an issue, unless there’s a direct correlation to the poor getting poorer.

Looking at more of Mother Jones’s charts:

Notice that payroll tax, which even the poorest of folks pay, continues to climb upwards at the same time. Notice how the folks at the top don’t have to pay into Social Security once they hit $106,800. Here’s a look at a Helmsley Building, where some of the richest folks in America live, compared to a janitor in the same building.

Capital gains and loopholes are neat. The salary differences aren’t what offends me. The effective tax rate does.

Notice also from that chart way up above how corporate taxes collected have been on a steady decline for decades, while they simultaneously have the most influence over policy.

Take a look at General Electric for example:

They reap the rewards of lobbying and government influence (far more than any voter), yet don’t have to pay in like the rest of us.

The biggest frustration for everyone in the bottom 80% is the rising costs have not coincided with rising wages. Wages since the 1970s have been stagnant for everyone but the elite.

They are working twice as hard for barely any more pay, while everything gets significantly more expensive than the cash they are earning… at least for the people who can still get jobs.

The last time it was this bad, there was a little something called the Great Depression. Say hello to Gilded Age #2:

So, distribution of wealth is merely a symptom of a larger problem. The lower and middle classes are sliding into oblivion, getting paid less for more work, paying more for the goods to survive with less jobs available while paying more taxes, meanwhile the top 1% is paying far lower tax rates, and the politicians continue to cut the services that keep the people at the bottom from falling into oblivion.

Stanislaw Lec once said, “The weakest link in a chain is the strongest because it can break it.”

If we don’t do something soon, we will repeat history, and all those big profits that the top 1% love so much will go out the window since the rest of us won’t be able to afford anything they sell.

We aren’t asking for socialism—we are asking for basic taxation fairness, accountability, and actual representation that protects all Americans interests, so that everyone can rise in success, together.

What does that entail asks Aaron Ginn? Here’s some ideas:

• Tax reforms: eliminate loopholes for the wealthy and bring taxes back at Clinton levels. We do not want Reagan’s insanely high rates of 50-70%, just the mid-30s like we did when everyone was moving up in wealth and the economy was booming for everyone.
• Regulation, banking reform, lobbying reform, etc. (What would be the effects of implementing Matt Taibbi’s suggested demands for Occupy Wall Street?)
• Taxing capital gains as you would any other income (Capital Gains Tax: Why are capital gains taxed less than other incomes?)
• Removing the ceiling on Social Security taxation http://www.nathannewman.org/arch…
• Making sure this never happens again:
  http://www.youtube.com/watch?fea…
  Putting white collar criminals away for a long time, holding the people who created the housing crisis accountable. No one is being punished for one of the most dangerous long term damaging actions in our countries history. Learn more about their negligent acts here: http://www.thisamericanlife.org/…

These are just a few ideas—there are plenty of ways to do it. DC just needs the will.

Sources:

• http://motherjones.com/politics/…
• http://motherjones.com/politics/…
• http://motherjones.com/politics/…
• http://motherjones.com/mojo/2011…
• http://www.thenation.com/image/e…
• http://en.wikipedia.org/wiki/Inc…

If the wealthiest 1% of Americans shouldn’t own 40% of the country’s financial wealth, what is a more appropriate breakdown?

A good video explaining the different forms of governments, including the republic that we have in the US.