Richest 1 Percent Get Biggest Share of Income Ever; Inequality At Record High: What Do We Do?
| Thu Jul. 31, 2008 11:32 AM PDT
In 2006, the richest one percent of Americans garnered the largest share of the national income since 1929, the Wall Street Journal reported last week. The Journal, which based its conclusions on the most recent available IRS data, also noted that in 2006 the richest one percent's average tax rate fell to its lowest level in 18 years. Who are these richest one percenters we hear so much about? Well, in 2008, the richest one percent of Americans make at least $462,000 a year, and the average income of the group is almost $1.5 million. Bush administration tax policies have been especially kind to this group, which has reaped the bulk of the country's economic gains since 2001. That has led to record income inequality, and, of course, to hearings on Capitol Hill. More on that after the jump.
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Today the House Workforce Protections Subcommittee, chaired by Lynn Woolsey (D-Calif.), called in economists and policy experts to testify at a hearing called "The Growing Income Gap in the American Middle Class." Robert Greenstein, the Executive Director of the Center on Budget and Policy Priorities, had some especially interesting things to say. Greenstein noted that high-income households had not only benefited disproportionally from the economic expansion after 2001, but also from the Bush tax cuts. The Right likes to claim that since the rich are paying a higher share of income tax now, the tax system must be more progressive than it was in the past. Greenstein explained why that's not true:
A progressive tax cut, like a progressive tax system, is one that reduces inequality. The 2001-2003 tax cuts have done the opposite. When fully in effect, those tax cuts will boost after-tax income by more than 7 percent among households with incomes of more than $1 million, but just 2 percent among middle-income families, according to the Urban Institute-Brookings Institution Tax Policy Center. That is an average tax cut of $158,000 in 2010 for households with incomes of over $1 million, but just $810 for middle-income families. Tax analysts know that effective tax rates and shares of after-tax income, not the share of taxes paid, are the proper indicators of progressivity.
So what to do about all this? Greenstein points to the work of MIT professors Frank Levy and Peter Temin, who argue (gasp!) that the decline in union membership has played a major role in the decreasing ability of our society to distribute the gains from economic growth. That's not a reason to try to duplicate the structures of the postwar economy (likely an impossible task, anyway), but, "Reducing barriers to labor organizing, preserving the real value of the minimum wage, and the other workforce security concerns of this committee would surely be a part of the kinds of institutions and social norms that would contribute to an economy with less glaring and sharply widening inequality," Greenstein notes.
Despite a rough couple decades for the labor movement, reducing barriers to organizing is still a major goal for many on the Left. In his syndicated column last week, liberal writer David Sirota explored one of the ways unions might be able to claim a bigger role in the American economy.
Speaking with legendary labor lawyer Tom Geoghegan (author of the classic 1992 history of the labor movement, Which Side Are You On?), Sirota stumbled upon an interesting idea. Geoghegan thinks that instead of seeking to reform the National Labor Relations Board (the unions' current goal), labor should just get "six little words" added to the Civil Rights Act. What are those six words? Amending the act to prohibit discrimination "on the basis of union membership." That would create a legal cause of action, allowing workers to sue if they were discriminated against for trying to organize. The NLRB—seen by labor as slow, ineffective, and anti-union—would be out of business, and union-busting managers would be just as dangerous to hire as racist ones. Finally, Sirota says, "Companies would have a reason—fear of litigation—to respect workers' rights."
More union members in an economy generally means higher wages and less inequality. Geoghegan's solution might actually create more union members in America. That's probably why Sirota and others are now trying to draft Geoghegan to serve as a hypothetical Obama administration's Secretary of Labor. That would definitely put union busters on notice.
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Horrified at what I believe to be unwholesome economic and political trends in our country, I wrote my novel, REMEDY: D.E.T.O.X.X. AMERICA, because I realized that novels have a far wider audience than scholarly journals or the college classrooms where I spent my professional career teaching philosophy. The novel is a vehicle for consideration of contemporary United States economics and politics, using the culture of an alien planet to highlight what seem to me to be unwholesome conditions in the United States.
The five action-packed days of the book center on the Living Wage Movement and our country's growing income disparities. The Movement has organized a bus caravan from Iowa to a huge Labor Day rally in Washington, D.C. The rally's organizers plan to demonstrate support for raising the national minimum wage to a living wage and for detoxifying our economy and corporate power structures. Through ballot initiatives and legislative action, the LWM has already succeeded in raising the minimum wage in its Iowa hometown and in neighboring towns and states. In doing so, it has had to contend with opposition from corporate power structures, most notably that of Megamart, the country's retail superpower. Factor in a sabotaged space station, the cutthroat clash of media empires, collapse of our country's financial institutions, and intrusion of humanoid aliens from the planet Pisces II. Result: the didactic thrust of REMEDY: D.E.T.O.X.X. AMERICA is subordinate to a fast-paced, complex plot which tests the insight and capabilities of all its characters to save Washington and our country.
My passion and hope is that the variety of voices addressing these issues and proposing alternatives might have a significant impact on the future direction of our country. I would like my novel to be one of those voices.
The novel will be published in about six weeks by PublishAmerica.
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Richest 1 Percent Get Biggest Share of Income Ever; Inequality At Record High: What Do We Do?
Sack and torch their castles. Carry off their silver, gold and other valuables.
Put them to the sword.
Hey, it ALWAYS works!
It's been a permanent fix every time we did it in the past, from the middle ages right down to the Bolshevik revolution, No??
Or, if we're too squeamish to bloody our own hands any more, we can press the government to take away their riches and redistribute them to us.
That's a 'socially acceptable' way to sack the castle and turn the rich into the poor.
Dear Dr. Kuester, I am looking forward very much to reading your novel.
However, as a former student of yours I must disagree somewhat as to the impact that you made in the classroom while teaching philosophy.
You had a tremendous influence on my life and you are the primary reason that I finally went back to school to obtain my teaching certificate.
Again, I look forward to reading the novel. Thanks again for the passion and clarity that you taught with. I have always been very greatful
Best regards, Dave Cleland
Don't believe one optimistic word from any public figure about the economy or humanity in general. They are all part of the problem. Its like a game of Monopoly. In America, the richest 1% now hold 1/2 OF ALL UNITED STATES WEALTH. Unlike 'lesser' estimates, this includes all stocks, bonds, cash, and material assets held by America's richest 1%. Even that filthy pig Oprah acknowledged that it was at about 50% in 2006. Naturally, she put her own 'humanitarian' spin on it. Calling attention to her own 'good will'. WHAT A DISGUSTING HYPOCRITE SLOB. THE RICHEST 1% HAVE LITERALLY MADE WORLD PROSPERITY ABSOLUTELY IMPOSSIBLE. Don't fall for any of their 'humanitarian' CRAP. ITS A SHAM. THESE PEOPLE ARE CAUSING THE SAME PROBLEMS THEY PRETEND TO CARE ABOUT. Ask any professor of economics. Money does not grow on trees. The government can't just print up more on a whim. At any given time, there is a relative limit to the wealth within ANY economy of ANY size. So when too much wealth accumulates at the top, the middle class slip further into debt and the lower class further into poverty. A similar rule applies worldwide. The world's richest 1% now own over 40% of ALL WORLD WEALTH. This is EVEN AFTER you account for all of this 'good will' 'humanitarian' BS from celebrities and executives. ITS A SHAM. As they get richer and richer, less wealth is left circulating beneath them. This is the single greatest underlying cause for the current US recession. The middle class can no longer afford to sustain their share of the economy. Their wealth has been gradually transfered to the richest 1%. One way or another, we suffer because of their incredible greed. We are talking about TRILLIONS of dollars which have been transfered FROM US TO THEM. All over a period of about 27 years. Thats Reaganomics for you. The wealth does not 'trickle down' as we were told it would. It just accumulates at the top. Shrinking the middle class and expanding the lower class. Causing a domino effect of socio-economic problems. But the rich will never stop. They just keep getting richer. Leaving even less of the pie for the other 99% of us to share. At the same time, they throw back a few tax deductible crumbs and call themselves 'humanitarians'. Cashing in on the PR and getting even richer the following year. IT CAN'T WORK THIS WAY. Their bogus efforts to make the world a better place can not possibly succeed. Any 'humanitarian' progress made in one area will be lost in another. EVERY SINGLE TIME. IT ABSOLUTELY CAN NOT WORK THIS WAY. This is going to end just like a game of Monopoly. The current US recession will drag on for years and lead into the worst US depression of all time. The richest 1% will live like royalty while the rest of us fight over jobs, food, and gasoline. So don't fall for any of this PR CRAP from Hollywood, Pro Sports, and Wall Street PIGS. ITS A SHAM. Remember: They are filthy rich EVEN AFTER their tax deductible contributions. Greedy pigs. Now, we are headed for the worst economic and cultural crisis of all time. Crime, poverty, and suicide will skyrocket. SEND A "THANK YOU" NOTE TO YOUR FAVORITE MILLIONAIRE. ITS THEIR FAULT. I'm not discounting other factors like China, sub-prime, or gas prices. But all of those factors combined still pale in comparison to that HUGE transfer of wealth to the rich. Anyway, those other factors are all related and further aggrivated because of GREED. If it weren't for the OBSCENE distribution of wealth within our country, there never would have been such a market for sub-prime to begin with. Which by the way, was another trick whipped up by greedy bankers and executives. IT MAKES THEM RICHER. The credit industry has been ENDORSED by people like Oprah Winfrey, Ellen DeGenerous, Dr Phil, and many other celebrities. IT MAKES THEM RICHER. Now, there are commercial ties between nearly every industry and every public figure. IT MAKES THEM RICHER. So don't fall for their 'good will' BS. ITS A LIE. If you fall for it, then you're a fool. If you see any real difference between the moral character of a celebrity, politician, attorney, or executive, then you're a fool. No offense fellow citizens. But we have been mislead by nearly every public figure. We still are. Even now, they claim to be 'hurting' right along with the rest of us. As if gas prices actually effect the lifestyle of a millionaire. ITS A LIE. IN 2007, THE RICHEST 1% INCREASED THEIR AVERAGE BOTTOM LINE WEALTH AGAIN. On average, they are now worth over $4,000,000 each. Thats an all time high. As a group, they are now worth well over $17,000,000,000,000. THATS WELL OVER SEVENTEEN TRILLION DOLLARS. Another all time high. Which by the way, is much more than the entire middle and lower classes combined. Also more than enough to pay off our national debt, fund the Iraq war for twenty years, repair our infrastructure, and bail out the US housing market. Still think that our biggest problem is China? Think again. Its the 1% club. That means every big name celebrity, athlete, executive, entrepreneur, developer, banker, and lottery winner. Along with many attorneys, doctors, politicians, and bankers. If they are rich, then they are part of the problem. Their incredible wealth was not 'created', 'generated', grown in their back yard, or printed up on their command. It was transfered FROM US TO THEM. Directly and indirectly. Its become near impossible to spend a dollar without making some greedy pig even richer. Don't be fooled by the occasional loss of a millionaire's fortune. Overall, they just keep getting richer. They absolutely will not stop. Still, they have the nerve to pretend as if they care about ordinary people. ITS A LIE. NOTHING BUT CALCULATED PR CRAP. WAKE UP PEOPLE. THEIR GOAL IS TO WIN THE GAME. The 1% club will always say or do whatever it takes to get as rich as possible. Without the slightest regard for anything or anyone but themselves. Reaganomics. Their idea. Loans from China. Their idea. NAFTA. Their idea. Outsourcing. Their idea. Sub-prime. Their idea. High energy prices. Their idea. Oil 'futures'. Their idea. Obscene health care charges. Their idea. The commercial lobbyist. Their idea. The multi-million dollar lawsuit. Their idea. The multi-million dollar endorsement deal. Their idea. $200 cell phone bills. Their idea. $200 basketball shoes. Their idea. $30 late fees. Their idea. $30 NSF fees. Their idea. $20 DVDs. Their idea. Subliminal advertising. Their idea. Brainwash plots on TV. Their idea. Vioxx, and Celebrex. Their idea. Excessive medical testing. Their idea. The MASSIVE campaign to turn every American into a brainwashed, credit card, pharmaceutical, medical testing, love-sick, celebrity junkie. Their idea. All of the above shrink the middle class, concentrate the world's wealth and resources, create a dominoe effect of socio-economic problems, and wreak havok on society. All of which have been CREATED AND ENDORSED by celebrities, athletes, executives, entrepreneurs, attorneys, and politicians. IT MAKES THEM RICHER. So don't fall for any of their 'good will' 'humanitarian' BS. ITS A SHAM. NOTHING BUT TAX DEDUCTIBLE PR CRAP. In many cases, the 'charitable' contribution is almost entirely offset. Not to mention the opportunity to plug their name, image, product, and 'good will' all at once. IT MAKES THEM RICHER. These filthy pigs even have the nerve to throw a fit and spin up a misleading defense with regard to 'federal tax revenue'. ITS A SHAM. THEY SCREWED UP THE EQUATION TO BEGIN WITH. If the middle and lower classes had a greater share of the pie, they could easily cover a greater share of the federal tax revenue. They are held down in many ways because of greed. Wages remain stagnant for millions because the executives, celebrities, athletes, attorneys, and entrepreneurs, are paid millions. They over-sell, over-charge, under-pay, outsource, cut jobs, and benefits to increase their bottom line. As their profits rise, so do the stock values. Which are owned primarily by the richest 5%. As more United States wealth rises to the top, the middle and lower classes inevitably suffer. This reduces the potential tax reveue drawn from those brackets. At the same time, it wreaks havok on middle and lower class communities and increases the need for financial aid. Not to mention the spike in crime because of it. There is a dominoe effect to consider. IT CAN'T WORK THIS WAY. But our leaders refuse to acknowledge this. Instead they come up with one trick after another to milk the system and screw the majority. These decisions are heavily influensed by the 1% club. Every year, billions of federal tax dollars are diverted behind the scenes back to the rich and their respective industries. Loans from China have been necessary to compensate in part, for the red ink and multi-trillion dollar transfer of wealth to the rich. At the same time, the feds have been pushing more financial burden onto the states who push them lower onto the cities. Again, the hardship is felt more by the majority and less by the 1% club. The rich prefer to live in exclusive areas or upper class communities. They get the best of everything. Reliable city services, new schools, freshly paved roads, upscale parks, ect. The middle and lower class communities get little or nothing without a local tax increase. Which, they usually can't afford. So the red ink flows followed by service cuts and lay-offs. All because of the OBSCENE distribution of bottom line wealth in this country. Anyway, when you account for all federal, state, and local taxes, the middle class actually pay about the same rate as the rich. The devil is in the details. So when people forgive the rich for their incredible greed and then praise them for paying a greater share of the FEDERAL income taxes, its like nails on a chalk board. I can not accept any theory that our economy would suffer in any way with a more reasonable distribution of wealth. Afterall, it was more reasonable 30 years ago. Before Reaganomics came along. Before GREED became such an epidemic. Before we had an army of over-paid executives, bankers, celebrities, athletes, attorneys, doctors, investors, entrepreneurs, developers, and sold-out politicians to kiss their asses. As a nation, we were in much better shape. Strong middle class, free and clear assets, lower crime rate, more widespread prosperity, stable job market, lower deficit, ect. Our economy as a whole was much more stable and prosperous for the majority. WITHOUT LOANS FROM CHINA. Now, we have a more obscene distribution of bottom line wealth than ever before. We have a sold-out government, crumbling infrastructure, energy crisis, home forclosure epidemic, credit crunch, weak US dollar, 13 figure national deficit, and 12 figure annual shortfall. The cost of living is higher than ever before. Most people can't even afford basic health care. ALL BECAUSE OF GREED. I really don't blame the 2nd -5th percentiles in general. No economy could ever function without some reasonable scale of personal wealth and income. But it can't be allowed to run wild like a mad dog. ALBERT EINSTEIN TRIED TO MAKE PEOPLE UNDERSTAND. UNBRIDLED CAPITALISM ABSOLUTELY CAN NOT WORK. TOP HEAVY ECONOMIES ALWAYS COLLAPSE. Bottom line: The richest 1% will soon tank the largest economy in the world. It will be like nothing we've ever seen before. The American dream will be shattered. and thats just the beginning. Greed will eventually tank every major economy in the world. Causing millions to suffer and die. Oprah, Angelina, Brad, Bono, and Bill are not part of the solution. They are part of the problem. THERE IS NO SUCH THING AS A MULTI-MILLIONAIRE HUMANITARIAN. EXTREME WEALTH MAKES WORLD PROSPERITY ABSOLUTELY IMPOSSIBLE. WITHOUT WORLD PROSPERITY, THERE WILL NEVER BE WORLD PEACE OR ANYTHING EVEN CLOSE. GREED KILLS. IT WILL BE OUR DOWNFALL. Of course, the rich will throw a fit and call me a madman.. Of course, they will jump to small minded conclusions about 'jealousy', 'envy', or 'socialism'. Of course, their ignorant fans will do the same. You have to expect that. But I speak the truth. If you don't believe me, then copy this entry and run it by any professor of economics or socio-economics. Then tell a friend. Call the local radio station. Re-post this entry or put it in your own words. Be one of the first to predict the worst economic and cultural crisis of all time and explain its cause. WE ARE IN BIG TROUBLE.
So what can we do about it? Well, not much. Unfortunately, we are stuck on a runaway train. The problem has gone unchecked for too many years. The US/global depression is comming thanks to the 1% club. It would take a massive effort by the vast majority to prevent it. Along with a voluntary sacrifice by the rich. THATS NOT GOING TO HAPPEN. But if you believe in miracles, then spend your money as wisely as possible. Especially in middle and lower class communities. Check the Fortune 500 list and limit your support of high profit/low labor industries (Hollywood, pro sports, energy, credit, pharmaceutical, cable, satelite, internet advertising, cell phone, high fashion, jewelry, ect.). Cancel all but one credit card for emergencies only. If you need a cell phone, then do your homework and find the best deal on a local pre-pay. If you want home internet access, then use the least expensive provider, and share accounts whenever possible. If you need to search, then use the less popular search engines. They usually produce the same results anyway. Don't click on any internet ad. If you need the product or service, then look up the phone number or address and contact that business directly. Don't pay to see any blockbuster movie. Instead, wait a few months and rent the DVD from a local store or buy it USED. If you want to see a big name game or event, then watch it in a local bar, club, or at home on network TV. Don't buy any high end official merchendise and don't support the high end sponsors. If its endorsed by a big name celebrity, then don't buy it. If you can afford a new car, then make an exception for GM, Ford, and Dodge. If they don't increase their market share soon, then a lot more people are going to get screwed out of their pensions and/or benefits. Of course, you must know by now to avoid those big trucks and SUVs unless you truly need one for its intended purpose. Don't be ashamed to buy a foreign car if you prefer it. Afterall, those with the most fuel efficient vehicles consume a lot less foreign oil. Which accounts for a pretty big chunk of our trade deficit. Anyway, the global economy is worth supporting to some extent. Its the obscene profit margins, trade deficits, and BS from OPEC that get us into trouble. Otherwise, the global economy would be a good thing for everyone. Just keep in mind that the big 3 are struggling and they do produce a few smaller reliable cars. Don't frequent any high end department store or any business in a newly developed upper class community. By doing so, you make developers richer and draw support away from industrial areas and away from the middle class communities. Instead, support the local retailer and the less popular shopping centers. Especially in lower or middle class communities. If you can afford to buy a home, then do so. But go smaller and less expensive. Don't get yourself in too deep and don't buy into the newly developed condos or gated communities. Instead, find a modest home in a building or neighborhood at least 20 years old. If you live in one of the poorer states, then try to support its economy first and foremost. Be on the lookout for commercial brainwash plots on TV. They are written into nearly every scene of nearly every show. Most cater to network sponsors and parent companies. Especially commercial health care. Big business is fine on occasion depending on the profit margins and profit sharing. Do your homework. If you want to support any legitimate charity, then do so directly. Never support any celebrity foundation. They spend most of their funding on PR campaigns, travel, and high end accomodations for themselves. Instead, go to Charitywatch.org and look up a top rated charity to support your favorite cause. In general, support the little guy as much as possible and the big guy as little as possible. Do your part to reverse the transfer of wealth away from the rich and back to the middle and lower classes. Unfortunately, there is no perfect answer. Jobs will be lost either way. Innocent children will starve and die either way. But we need to support the largest group of workers with the most reasonable profit margins. We also need to support LEGITIMATE charities (Check that list at Charitywatch.org). This is our only chance to limit the severity and/or duration of the comming US/global depression. In the meantime, don't listen to Bernenke, Paulson, Bartiromo, Orman, Dobbs, Kramer, OReiley, or any other public figure with regard to the economy. They are all plenty smart but I swear to you that they will lie right through their rotten teeth. IT MAKES THEM RICHER. Like I said, you are welcome to run this by any professor of economics or socio-economics. If thats not good enough, then look up what Einstein had to say about greed, extreme wealth, and its horrible concequences. I speak the truth. GREED KILLS. IT WILL BE OUR DOWNFALL.
No more excuses for greed:
Have you read the papers lately? The greedy, over-extended, over buying Yuppies are being rewarded for their over-indulgence. We're going to bail them out so they can keep their megahomes and buy a new 50 inch TV before Christmas.
They've spent all their money and now they're working on the money of the people who didn't get themselves in debt, who lived within their means and who are buying a box so their old telly still works.
Better take those pills now or your head will explode.
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