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Stiglitz writes: "Why won't America's 1 percent - such as the six Walmart heirs, whose wealth equals that of the entire bottom 30 percent - be a bit more ... selfish? As the widening financial divide cripples the U.S. economy, even those at the top will pay a steep price."

The one percent will feel the effects of inequality. (photo: Getty Images)
The one percent will feel the effects of inequality. (photo: Getty Images)

The 1 Percent's Problem

By Joseph E. Stiglitz, Vanity Fair

02 June 12


et's start by laying down the baseline premise: inequality in America has been widening for dec­ades. We're all aware of the fact. Yes, there are some on the right who deny this reality, but serious analysts across the political spectrum take it for granted. I won't run through all the evidence here, except to say that the gap between the 1 percent and the 99 percent is vast when looked at in terms of annual income, and even vaster when looked at in terms of wealth - that is, in terms of accumulated capital and other assets. Consider the Walton family: the six heirs to the Walmart empire possess a combined wealth of some $90 billion, which is equivalent to the wealth of the entire bottom 30 percent of U.S. society. (Many at the bottom have zero or negative net worth, especially after the housing debacle.) Warren Buffett put the matter correctly when he said, "There's been class warfare going on for the last 20 years and my class has won."

So, no: there's little debate over the basic fact of widening inequality. The debate is over its meaning. From the right, you sometimes hear the argument made that inequality is basically a good thing: as the rich increasingly benefit, so does everyone else. This argument is false: while the rich have been growing richer, most Americans (and not just those at the bottom) have been unable to maintain their standard of living, let alone to keep pace. A typical full-time male worker receives the same income today he did a third of a century ago.

From the left, meanwhile, the widening inequality often elicits an appeal for simple justice: why should so few have so much when so many have so little? It's not hard to see why, in a market-driven age where justice itself is a commodity to be bought and sold, some would dismiss that argument as the stuff of pious sentiment.

Put sentiment aside. There are good reasons why plutocrats should care about inequality anyway - even if they're thinking only about themselves. The rich do not exist in a vacuum. They need a functioning society around them to sustain their position. Widely unequal societies do not function efficiently and their economies are neither stable nor sustainable. The evidence from history and from around the modern world is unequivocal: there comes a point when inequality spirals into economic dysfunction for the whole society, and when it does, even the rich pay a steep price.

Let me run through a few reasons why.

The Consumption Problem

When one interest group holds too much power, it succeeds in getting policies that help itself in the short term rather than help society as a whole over the long term. This is what has happened in America when it comes to tax policy, regulatory policy, and public investment. The consequence of channeling gains in income and wealth in one direction only is easy to see when it comes to ordinary household spending, which is one of the engines of the American economy.

It is no accident that the periods in which the broadest cross sections of Americans have reported higher net incomes - when inequality has been reduced, partly as a result of progressive taxation - have been the periods in which the U.S. economy has grown the fastest. It is likewise no accident that the current recession, like the Great Depression, was preceded by large increases in inequality. When too much money is concentrated at the top of society, spending by the average American is necessarily reduced - or at least it will be in the absence of some artificial prop. Moving money from the bottom to the top lowers consumption because higher-income individuals consume, as a fraction of their income, less than lower-income individuals do.

In our imaginations, it doesn't always seem as if this is the case, because spending by the wealthy is so conspicuous. Just look at the color photographs in the back pages of the weekend Wall Street Journal of houses for sale. But the phenomenon makes sense when you do the math. Consider someone like Mitt Romney, whose income in 2010 was $21.7 million. Even if Romney chose to live a much more indulgent lifestyle, he would spend only a fraction of that sum in a typical year to support himself and his wife in their several homes. But take the same amount of money and divide it among 500 people - say, in the form of jobs paying $43,400 apiece - and you'll find that almost all of the money gets spent.

The relationship is straightforward and ironclad: as more money becomes concentrated at the top, aggregate demand goes into a decline. Unless something else happens by way of intervention, total demand in the economy will be less than what the economy is capable of supplying - and that means that there will be growing unemployment, which will dampen demand even further. In the 1990s that "something else" was the tech bubble. In the first dec­ade of the 21st century, it was the housing bubble. Today, the only recourse, amid deep recession, is government spending - which is exactly what those at the top are now hoping to curb.

The "Rent Seeking" Problem

Here I need to resort to a bit of economic jargon. The word "rent" was originally used, and still is, to describe what someone received for the use of a piece of his land - it's the return obtained by virtue of ownership, and not because of anything one actually does or produces. This stands in contrast to "wages," for example, which connotes compensation for the labor that workers provide. The term "rent" was eventually extended to include monopoly profits - the income that one receives simply from the control of a monopoly. In time, the meaning was expanded still further to include the returns on other kinds of ownership claims. If the government gave a company the exclusive right to import a certain amount of a certain good, such as sugar, then the extra return was called a "quota rent." The acquisition of rights to mine or drill produces a form of rent. So does preferential tax treatment for special interests. In a broad sense, "rent seeking" defines many of the ways by which our current political process helps the rich at the expense of everyone else, including transfers and subsidies from the government, laws that make the marketplace less competitive, laws that allow C.E.O.'s to take a disproportionate share of corporate revenue (though Dodd-Frank has made matters better by requiring a non-binding shareholder vote on compensation at least once every three years), and laws that permit corporations to make profits as they degrade the environment.

The magnitude of "rent seeking" in our economy, while hard to quantify, is clearly enormous. Individuals and corporations that excel at rent seeking are handsomely rewarded. The financial industry, which now largely functions as a market in speculation rather than a tool for promoting true economic productivity, is the rent-seeking sector par excellence. Rent seeking goes beyond speculation. The financial sector also gets rents out of its domination of the means of payment - the exorbitant credit- and debit-card fees and also the less well-known fees charged to merchants and passed on, eventually, to consumers. The money it siphons from poor and middle-class Americans through predatory lending practices can be thought of as rents. In recent years, the financial sector has accounted for some 40 percent of all corporate profits. This does not mean that its social contribution sneaks into the plus column, or comes even close. The crisis showed how it could wreak havoc on the economy. In a rent-seeking economy such as ours has become, private returns and social returns are badly out of whack.

In their simplest form, rents are nothing more than re-distributions from one part of society to the rent seekers. Much of the inequality in our economy has been the result of rent seeking, because, to a significant degree, rent seeking re-distributes money from those at the bottom to those at the top.

But there is a broader economic consequence: the fight to acquire rents is at best a zero-sum activity. Rent seeking makes nothing grow. Efforts are directed toward getting a larger share of the pie rather than increasing the size of the pie. But it's worse than that: rent seeking distorts resource allocations and makes the economy weaker. It is a centripetal force: the rewards of rent seeking become so outsize that more and more energy is directed toward it, at the expense of everything else. Countries rich in natural resources are infamous for rent-seeking activities. It's far easier to get rich in these places by getting access to resources at favorable terms than by producing goods or services that benefit people and increase productivity. That's why these economies have done so badly, in spite of their seeming wealth. It's easy to scoff and say: We're not Nigeria, we're not Congo. But the rent-seeking dynamic is the same.

The Fairness Problem

People are not machines. They have to be motivated to work hard. If they feel that they are being treated unfairly, it can be difficult to motivate them. This is one of the central tenets of modern labor economics, encapsulated in the so-called efficiency-wage theory, which argues that how firms treat their workers - including how much they pay them - affects productivity. It was, in fact, a theory elaborated nearly a century ago by the great economist Alfred Marshall, who observed that "highly paid labour is generally efficient and therefore not dear labour." In truth, it's wrong to think of this proposition as just a theory: it has been borne out by countless economic experiments.

While people will always disagree over the precise meaning of what constitutes "fair," there is a growing sense in America that the current disparity in income, and the way wealth is allocated in general, is profoundly unfair. There's no begrudging the wealth accrued by those who have transformed our economy - the inventors of the computer, the pioneers of biotechnology. But, for the most part, these are not the people at the top of our economic pyramid. Rather, to a too large extent, it's people who have excelled at rent seeking in one form or another. And, to most Americans, that seems unfair.

People were surprised when the financial firm MF Global, headed by Jon Corzine, suddenly collapsed into bankruptcy last year, leaving victims by the thousands as a result of actions that may prove to have been criminal; but given Wall Street's recent history, I'm not sure people were all that surprised to learn that several MF Global executives would still be getting their bonuses. When corporate C.E.O.'s argue that wages have to be reduced or that there must be layoffs in order for companies to compete - and simultaneously increase their own compensation - workers rightly consider what is happening to be unfair. This in turn affects their efforts on the job, their loyalty to the firm, and their willingness to invest in its future. The widespread sense by workers in the Soviet Union that they were being mistreated in exactly this way - exploited by managers who lived high on the hog - played a major role in the hollowing out of the Soviet economy, and in its ultimate collapse. As the old Soviet joke had it, "They pretend to pay us, and we pretend to work."

In a society in which inequality is widening, fairness is not just about wages and income, or wealth. It's a far more generalized perception. Do I seem to have a stake in the direction society is going, or not? Do I share in the benefits of collective action, or not? If the answer is a loud "no," then brace for a decline in motivation whose repercussions will be felt economically and in all aspects of civic life.

For Americans, one key aspect of fairness is opportunity: everyone should have a fair shot at living the American Dream. Horatio Alger stories remain the mythic ideal, but the statistics paint a very different picture: in America, the chances of someone's making it to the top, or even to the middle, from a place near the bottom are lower than in the countries of old Europe or in any other advanced industrial country. Those at the top can take comfort from knowing that their chances of becoming downwardly mobile are lower in America than they are elsewhere.

There are many costs to this lack of opportunity. A large number of Americans are not living up to their potential; we're wasting our most valuable asset, our talent. As we slowly grasp what's been happening, there will be an erosion of our sense of identity, in which America is seen as a fair country. This will have direct economic effects - but also indirect ones, fraying the bonds that hold us together as a nation.

The Mistrust Problem

One of the puzzles in modern political economy is why anyone bothers to vote. Very few elections actually turn on the ballot of a single individual. There is a cost to voting - no state has an explicit penalty for staying home, but it takes time and effort to get to the polls - and there is seemingly almost never a benefit. Modern political and economic theory assumes the existence of rational, self-interested actors. On that basis, why anyone would vote is a mystery.

The answer is that we've been inculcated with notions of "civic virtue." It is our responsibility to vote. But civic virtue is fragile. If the belief takes hold that the political and economic systems are stacked, individuals will feel released from their civic obligations. When that social contract is abrogated - when trust between a government and its citizens fails - disillusionment, disengagement, or worse is sure to follow. In the United States today, and in many other democracies around the world, mistrust is on the ascendant.

It's even built in. The head of Goldman Sachs, Lloyd Blankfein, made it perfectly clear: sophisticated investors don't, or at least shouldn't, rely on trust. Those who bought the products his bank sold were consenting adults who should have known better. They should have known that Goldman Sachs had the means, and the incentive, to design products that would fail; that they had the means and the incentive to create asymmetries of information - where they knew more about the products than the buyers did - and the means and the incentive to take advantage of those asymmetries. The people who fell victim to the investment banks were, for the most part, well-off investors. But deceptive credit-card practices and predatory lending have left Americans more broadly with a sense that banks are not to be trusted.

Economists often underestimate the role of trust in making our economy work. If every contract had to be enforced by one party taking the other to court, our economy would be in gridlock. Throughout history, the economies that have flourished are those where a handshake is a deal. Without trust, business arrangements based on an understanding that complex details will be worked out later are no longer feasible. Without trust, each participant looks around to see how and when those with whom he is dealing will betray him.

Widening inequality is corrosive of trust: in its economic impact, think of it as the universal solvent. It creates an economic world in which even the winners are wary. But the losers! In every transaction - in every encounter with a boss or business or bureaucrat - they see the hand of someone out to take advantage of them.

Nowhere is trust more important than in politics and the public sphere. There, we have to act together. It's easier to act together when most individuals are in similar situations - when most of us are, if not in the same boat, at least in boats within a range of like sizes. But growing inequality makes it clear that our fleet looks different - it's a few mega-yachts surrounded by masses of people in dugout canoes, or clinging to flotsam - which helps explain our vastly differing views of what the government should do.

Today's widening inequality extends to almost everything - police protection, the condition of local roads and utilities, access to decent health care, access to good public schools. As higher education becomes more important - not just for individuals but for the future of the whole U.S. economy - those at the top push for university budget cuts and tuition hikes, on the one hand, and cutbacks in guaranteed student loans, on the other. To the extent that they advocate student loans at all, it's as another opportunity for rent seeking: loans to for-profit schools, without standards; loans that are non-dischargeable even in bankruptcy; loans designed as another way for those at the top to exploit those aspiring to get out of the bottom.

The "Be Selfish" Solution

Many, if not most, Americans possess a limited understanding of the nature of the inequality in our society. They know that something has gone wrong, but they underestimate the harm that inequality does even as they overestimate the cost of taking action. These mistaken beliefs, which have been reinforced by ideological rhetoric, are having a catastrophic effect on politics and economic policy.

There is no good reason why the 1 percent, with their good educations, their ranks of advisers, and their much-vaunted business acumen, should be so misinformed. The 1 percent in generations past often knew better. They knew that there would be no top of the pyramid if there wasn't a solid base - that their own position was precarious if society itself was unsound. Henry Ford, not remembered as one of history's softies, understood that the best thing he could do for himself and his company was to pay his workers a decent wage, because he wanted them to work hard and he wanted them to be able to buy his cars. Franklin D. Roosevelt, a purebred patrician, understood that the only way to save an essentially capitalist America was not only to spread the wealth, through taxation and social programs, but to put restraints on capitalism itself, through regulation. Roosevelt and the economist John Maynard Keynes, while reviled by the capitalists, succeeded in saving capitalism from the capitalists. Richard Nixon, known to this day as a manipulative cynic, concluded that social peace and economic stability could best be secured by investment - and invest he did, heavily, in Medicare, Head Start, Social Security, and efforts to clean up the environment. Nixon even floated the idea of a guaranteed annual income.

So, the advice I'd give to the 1 percent today is: Harden your hearts. When invited to consider proposals to reduce inequality - by raising taxes and investing in education, public works, health care, and science - put any latent notions of altruism aside and reduce the idea to one of unadulterated self-interest. Don't embrace it because it helps other people. Just do it for yourself. your social media marketing partner


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+187 # corallady 2012-06-02 11:12
One cannot remove the foundation of a structure without eventually bringing down all above it. In a capitalist society, the workers--and spenders--are the foundation. Money has no real function unless it is spent; it must circulate. Middle and lower classes make money circulate and thus make all classes prosper. They keep the foundation intact. The U.S. is going to take a terrible tumble if this extreme inequality continues because the foundation will crumble--and the whole structure will fall. Why don't the rich and the wannabe rich (aka Republicans oftentimes) understand this? It's pretty simple. One doesn't have to have a degree in economics to "get it" at a basic level.
+117 # jlohman 2012-06-02 11:33
The top 1% will never get it, at least not until they have to worry about their physical safety. Not protection from the pirates, but from their security guards. Things will have to get worse before they get better. When their lives are at risk they (maybe) will wake up.
+89 # Barbara K 2012-06-02 12:02
It is possible that if the bottom 99% doesn't get some relief and jobs, the top 1% may lose what they have too. They need to think of that. When people get desperate they will do desperate things.
+31 # dquandle 2012-06-02 21:55
I'm opting for a return of the guillotine.
+19 # Mrcead 2012-06-03 14:38
History teaches us this same lesson over and over and over and over.
+82 # DPM 2012-06-02 13:52
I hate to say it, but until their assets are burned and their lives are in peril, they will go their merry way. Just read your history books.
+61 # dbashaggy 2012-06-02 16:21
They should read up on the French Revolution.
+43 # John Locke 2012-06-02 16:21
Sort of like France circa 1789, it may well end the same way.
+56 # Jorge 2012-06-02 15:41
It may be that the top 1% elitists in control, all or nearly all, are Sociopaths. Dr. Martha Stout does a good job of discussing the sociopath problem and has concluded that 4% of Americans are sociopaths (born with no conscience, live with no conscience/empa thy and die with no conscience). Read "The Sociopath Next Door" for better understanding of our current situation and how to fight back.
+24 # John Locke 2012-06-02 16:24
The real issue that they have not considered is that they can't take their fortunes with them. They will return to the earth in one suit the rest will most likely be given to the salvation army!
+29 # Virginia 2012-06-02 11:58
It's just a matter of week or in 6 months. Zerohedge has been correct predicting the saga well before the 2008 collapse. This article puts the eminent future into perspective.

It's going to be a tough equalizer - new money is going to have the opportunity to revisit and live among the 99%.
+44 # jlohman 2012-06-02 12:56
The link shows not a pretty picture. Most certainly the only savior for the US is public funding of campaigns, which will free politicians from the 1% that is pocketing most of our wealth and let them make decisions free of negative pressure. They CAN make good decisions if they are not being paid to keep the system broken. The question is, will they?
+66 # ayfkm? 2012-06-02 12:43
Corallady, the foundation of a modern economy is the movement of "money". Some time back we had "local" commerce. As transportation and "banking" improved we developed "interstate" commerce. We now live in a world economy and have "global" commerce. As the pool of consumers has expanded globally, the "power" of said consumer has become diminished. U.S. consumers are no longer irreplaceable. Meaning we are fast becoming a nuisance to these companies that built their businesses "locally". PepsiCo now does over 65% of its business outside the U.S., this is fast becoming the norm for other companies. This reality means that the U.S. economy can fail nearly completely yet U.S. companies will still remain alive. Oh, I forgot to mention the tax breaks these companies get by generating profits abroad. Bottom line, we are not much on their minds and in many cases they would prefer we just go away.
+6 # Cliff 2012-06-02 12:54
That is too simplistic. You say don't spend money and you will have money. If NO ONE spends money where will it come from?
+32 # Virginia 2012-06-02 12:55
The collapse will be global and most of these companies are so highly leveraged they too could bankrupt. Plant a garden folks and learn how to make soda pop, beer and up on how to make clean water and keep a stock of t-paper (preferably not Koch brands), along with died foods like rice and beans. Discuss sustainability programs with your community. If you've got extra money invest in solar panels for your home and generator. It's better to be prepared than the alternative... Better to be safe than sorry.
+20 # Duster 2012-06-02 17:49
It is not the consumer that is the issue, it is the worker. Workers create value, consumers merely dissipate it. The use of the term "consumer" in business highlights the "wealth extraction" orientation of modern "business administration. "
+20 # ayfkm? 2012-06-02 18:51
Duster....very good points. Speaking to the worker, a business prospers by making things worth more than they cost. That is the "value added" you speak of. The "who" of consumption of that value added is something most miss. Companies take advantage of workers to keep the cost of "value added" as low as possible. But the equation has an end at some point. And those "harvesting" the efforts of the many have no fear that the end will be well beyond their life expectancy. The "drug dealer" mentality. Screw you! I got mine!!!
+5 # RLF 2012-06-04 06:40
That mentality is also caused when people hear that they pay a higher percentage of taxes than rich people , like Romney! How about a tax strike of the 99%?
+4 # sgmp 2012-06-03 09:20
ayfkm? I agree SO what to do? Depressing.
+6 # ayfkm? 2012-06-03 13:35
Quoting sgmp:
ayfkm? I agree SO what to do? Depressing.

Do? You are already on your way to what is a 1st step. You are looking and learning about the "current situation". Obviously you are seeing things concerning you. You, and we all, should be at the point in this reality to ask some "why" questions. Who do we work for and why? What kind of home, car, boat, toys do we have and why? I am amazed at the expectations of some people who think the more junk they own the happier they will be! What do we really NEED to get through life? And if you finance "junk" who (what) makes money off the interest. Ugh! The "do" then comes down to something very simple. Keep your "money" away from those who would use it against you. Pay as little in taxes and interest as feasible! Hey, that's what the 0.1% do!!! :)
+36 # Vardoz 2012-06-02 14:26
And if Mitt gets in and the GOP is not kicked out we will be in for very hard times, Now will look up to us as Mitt, Rove and Wall St wioe out any shred of prosperity we may have hoped for. Those at the top and big money will sacrifice more and more of the majority to enrich themselves. Whoever thought that a new president could change the game from top to bottom in 4 years is just naive. And now because of Citizens United our Supreme Court has embrassed even more power to the pigs. So Obama, inorder to get money, has to bend over to Wall Street to survive. It will at the very least take four more yrs for this blood thirsty elite and ravonous military, oil and coal companies, chemical companies and big banks to be reined in. This is why the GOP is working so hard to steal the election. But in the end, if Mitt and the GOP have their way, the house of cards will fall and the world along with it.
-19 # dquandle 2012-06-02 22:00
Obama doesn't bend over to Wall Street to survive. He bends over to them because he believes in what they believe in. He believes in inequality, the ascendancy of parasites, and a dictatorial presidency. And by god, he got it. He is a power hungry criminal and murderer in the pay of criminals and murderers.
0 # RLF 2012-06-04 06:41
Agreed. He is just another good ole boy from Harvard.
+1 # Innocent Victim 2012-06-07 12:46
He may be a sociopathic narcissist. There is an analysis of BO on youtube that was listed in October, 2008, before the nomination. The author uses a pen-name, Ali Sina. He seems to be a mental health professional, possibly a pyschiatrist. If you go to youtube and search for Ali Sina you will find it. It is astute, and was one of the warnings about BO that went unheeded. Too bad for us!
+13 # The Voice of Reason 2012-06-02 22:13
The sooner it crashes, the better. But the top toppers know how to keep pushing the envelope so it doesn't.

Ours is the most easily manipulated system, full of cheaters and vote riggers, and everyone thinks their team doesn't do it. It is violent and sees human beings as things that just get in the way of "the display of their magnificence."

Russia, China, Islamic republics, Europe and South America on only a hair's breadth away. This whole system needs to crash. But it will drag on until every dollar has been sucked out of us.
+1 # Innocent Victim 2012-06-07 12:52
The crash will not be good. The Fed will declare a bank holiday. You will not be able to access your funds. The same for businesses and state and local accounts. That means that pensions will be interrupted, and salaries amd wages will be unpaid. While you are living on what you have in your pantry and can barter, the exchange value of the dollar will plummet. When banks reopen, after weeks or months, the cost of living will have skyrocketed with the dollar valueless to buy imports, including energy. You will find your standard of living sharply reduced. Crime will have increased as people are desperate to feed their families. It will not be fun at all. The 1% will be far better able to manage it than we.
+3 # The Voice of Reason 2012-06-04 08:43
Actually, I read that the Oil Companies said that they were going to step up to the plate and give back some of the billions an hour they have been stealing from us, and admit that cars are designed to waste fuel only to enrich them.

Ha! Like that will ever happen.

Imagine, 5,000 years of recorded history, and we still hearken to the economic model of Pharaoh and his people.

What could possibly go wrong???
0 # Innocent Victim 2012-06-07 20:18
About cars wasting fuel, I have never understood why they are not designed to slow down when one takes his foot off the gas pedal. They do slow down very slowly, but they could be designed to let the engine's compression slow them down more when approaching a red light or an obstacle. Instead, they require using the brake, which is more wasteful, I would think.
-158 # jimattrell 2012-06-02 12:11
If you taxed the 1% all of their income (100% rate) you wouldn't "dent" the huge deficit. The old saying is "if you are digging yourself into a hole ..... Quit digging!" still applies. The problem is govt waste and 50% of us not paying any federal taxes!
-30 # Virginia 2012-06-02 13:02
Taxes are not going to help a $700 TRILLION Wall Street Ponzi rape.

Where it becomes laughable is that we, as a nation, are beyond the brink of another collapse - larger and this time global - and NOBODY has mentioned cutting the salaries and perks of the political officials that allowed this to occur. Federal and State.

Everybody wants to tax - for what? To raise more money to pay corrupt politicians?
+42 # Wailuku1 2012-06-02 16:28
I think Virginia has a point. And not only are we paying members of Congress ridiculously high salaries, we are funding their bloated staffs...with a large number of staffers taking home six figures annually. For instance, there is no reason why the Chief of Staff for a member of the Senate should be making in the neighborhood of $165,000 per year.

Maybe the large staffs are needed to deal with the thousands of lobbyists that have set up camp in Washington.

Nevertheless, there is probably well over $1-Billion dollars a year spent on staffs and committees for House and Senate members.

And back to the issue of congressional pay...

Someone mentioned to me a few years ago that we should pay Senators and Representatives $75,000 a year, give them a allowance to rent a apartment in DC, and health benefits just like any other government employee. If they needed more to live on, the spouse could get a job...just like the rest of America. That sounded fair to me.

It's probably hard to have empathy for, and effectively represent, the 99% when you're living like the 1%.
+6 # RLF 2012-06-04 06:44
If those in congress and the senate didn't have a million people working for them...just maybe we wouldn't see these 5 million page bills, with loopholes for every industry!
+11 # Duster 2012-06-02 18:14
Quoting Virginia:
... Everybody wants to tax - for what? To raise more money to pay corrupt politicians?

Actually to get that money to work instead of allowing stagnant pools of it to force inflation on the rest of us. It isn't politicians - not even corrupt ones - that are problem. It is the corruptors - and those fellows simply see politicians as fall guys.
0 # Jerry 2012-06-02 18:22
That's nominal value, not market value - 700n = about 20m. And it isn't the taxpayers responsibility.
+27 # bluepilgrim 2012-06-02 18:27
A good place to look for truth is the humor of the USSR.

A party offical went to see a farmer. "How's the wheat doing?" he asks.

The farmer says " it doing very well, as the party is saying. We had a wonderful harvest last year, and even better this year, and God willing it will be better yet next year".

"Now, comrade", says the party leader, "You know there is no God".

"Of course", says the farmer, "and you know there is no wheat".

The waelth is not only absurdly, lopsidedly, distributed, but the money which should represent real wealth is bloated even more absurdly. Derivative overhang is $1,200 Trillion -- that's far more -- like 20 times more -- than the entire world's yearly production.

So yes -- tax the rich, but there is ALSO the bankster's ponzi scheme to deal with. We are probably looking at some kind of remonitization to fix this -- or maybe a jubilee. The whole economic system has to be rebalanced.
+21 # dquandle 2012-06-02 22:05
Huge prison terms for corporate parasites and their quisling political footmen will help!
+42 # Feral Dogz 2012-06-02 13:04
Quoting jimattrell:
If you taxed the 1% all of their income (100% rate) you wouldn't "dent" the huge deficit. The old saying is "if you are digging yourself into a hole ..... Quit digging!" still applies. The problem is govt waste and 50% of us not paying any federal taxes!

The real question is where did all that deficit money go?

Billions to war profiteers, the failed war on drugs resulting in incarceration of millions for minor offenses in for-profit prisons, corporate welfare to big oil, coal and big agriculture, bailouts to banks and the auto industry.
+13 # Virginia 2012-06-02 15:30
Try off shore Wall Street related LLCs. Check out the banks' March 2012 -10k(s) ...However, taxing isn't going to retrieve that money.

I know a guy that owes the IRS $1.4 million - he's in bankruptcy, his industry has totally collapsed and he'll likely never make enough money again to pay the debt... He was a 1% - but not anymore.
+9 # Duster 2012-06-02 18:05
IT never existed. Money is not "printed" in significant amounts by governments. It is created through fiat by banks. When you take a loan, you really aren't borrowing someone's savings (venture capital) you are borrowing a promise from the bank and making one to it. "Fractional reserve" at this time means effectively that banks create money by fiat as they wish. Most services, all infrastructure construction and maintenance, create value. A babysitter for example may be necessary for a parent to work. You barter some of your productiveness for some of her time. In short that work should create money. Since you could not work as much without a baby sitter, your productivity is in some measure - negotiated between you and the babysitter - dependent upon her service. The deficit is a fiction perpetrated by banking interests that need to "loan" money. Since banks have positioned themselves as the sole source of _money_, regardless of the fact that both you and the babysitter worked and your work created value, they may well demand that you pay a "service charge" if you pay the babysitter wit a check. They will likely also find some means to charge the babysitter some small amount when she deposits it. The bank however is not negotiating with you about what their "service" is really worth to you. That servioce charge is the deficit.
+10 # bluepilgrim 2012-06-02 18:37
Much of it was never real in the first place. It was accounting scams, creating money out of thin air, with the only reality being to transfer real wealth from the 99% to the rich. That's one of the things inflation does, and makes ordinary inflation look almost insignificant.

It's sort of something like if the hyperinflation we have seen in the past was where all those wheelbarrows of cash was instantly transferred to the vaults of the rich. It's where the working class have to work to get money but the rich just create it for themselves whenever they want. It's like playing poker where the dealer has a little printing press under the table to print up whatever cards he decides he can use.

The problem with the economy is that it's intrinsically phony.
+3 # jimattrell 2012-06-02 20:23
Wealth is not created out of nothing. A good business grows in the right environment and increases share value for its (usually retiree) shareholders who are paid a dividend (many retirees live on this) from profits with the normal being 35% of the profits. The balance goes back into the business to grow and increase the value if the shares. That increase is how wealth is created. When that happens everyone benefits. The employee has a paycheck, the Govt collects tax revenue, the retirees (who risk their money) get a small return and increasing value, the business buys goods and services helping other businesses and customers have a source of supply. Trading in derivatives is not the same. In that case there is a winner and a loser. It's gambling.
+15 # bluepilgrim 2012-06-02 22:26
Forget the noise to distract, like the retiree stuff: the rich are the major shareholders of companies.

Wealth is created by two and only two ways: it comes from the earth (originally all of this was commonly held by the the people), or it comes from labor. There are two kinds f labor: productive, which makes things or provides a needed service, and unproductive, which is necessary overhead, such as accounting or security guards.

Any increase in a companies value comes from these two sources -- but lots of games can be played, such as using market power to increase stock prices, and, of course, owners and managers using the surplu value of labor in ways which hurts the workers (and in THAT game the capitalists are the winners and the workers are the losers).

Note that I didn't say wealth in my comment, but money. Money can be and is created from nothing, representing nothing, with no real wealth behind it.

BTW, what is paid in dividends is strictly arbitrary, and none need be paid at all; neither does anyhting have to be funneled back into the business. Shares can go up in proces through pump and dump, and numerous other manipulations using market power or scams. Money is useful as an exchange medium and marker for wealth, but it also allows any number of phony manipulations, including magically multiplying it with decpetive faith (confidence games) and debt.
+18 # jlohman 2012-06-02 13:21
Yes, govt waste, of which the top 1% are a major contributor. Get the bribery out of the political campaign system and you'll see wonders from our politicians. They may be corrupt, but they aren't stupid.
+33 # vgirl1 2012-06-02 13:28
Absorbed that CONservative FAUX propoganda we see.

No one ever claimed that by taxing the top 1% more, the problems of the nation would be solved.

What is true is that this additional taxation is a needed part of the overall balance of additional revenues and balanced spending cuts.

A start needs to be made, and this is part of that.

To suggest one would not do something because it doesn't solve the entire problem is inane nonsense.

But too many in the American populace seem all to eager, for what some see as obvious reasons, to need to continue to soak up that TPrepublican, Faux BS.
+42 # MrGoodrant 2012-06-02 13:51
jimattrell, either you are very young, or you have a very short memory. Just a little over a decade ago, we taxed the highest incomes at 39.5%--nowhere near 100%!--and not only did we have a surplus, we were on track to pay off the national debt entirely within about 20 years. We can do it again--and we don't have to raise taxes the poorest among us. But we do have to raise taxes on the highest incomes. As Prof. Stiglitz says, they should want us to!
+23 # bluepilgrim 2012-06-02 18:39
Go back further and there was a top tax of 94%, and it went a long way to getting us out of the last depression.
-3 # Virginia 2012-06-02 20:43
Let's face it...if they didn't have such a surplus of taxed income and pension withholding funds the state and federal fund managers wouldn't have had so much money to invest in those fraudulent securitization deals.
+33 # dwainwilder 2012-06-02 14:01
The vast majority of those not paying taxes in your datum are below the poverty level! They have no taxable income!

And please give up on the cliché of government waste, unless you can bring forward some figures. Ever contemplated the waste of corporations, those CEOs who lay waste to entire communities on their way to "improving" the local employer? The devastation to people as their jobs are shipped overseas so the zombie capitalists can pay dimes instead of dollars for wages?
+10 # MrGoodrant 2012-06-02 14:47
Good point about government waste: if there were so much of it that it was the main cause of our deficits, you'd think the Republicans would have gotten rid of it when they were in power--after all,they were the ones campaigning so stridently against it!

However, I don't think it's true that the majority of those who do not pay income tax (and yes, jimattrell's 50% figure does apply to INCOME tax, not federal tax generally, as he mistakenly claimed) are below the poverty level. That would imply that 25% of U.S. households (half of 50%) are in poverty! (It's actually about 15%.) Also, to say that those 50% do not pay income tax because they have no taxable income is circular: "taxable income" is income that our government has seen fit not to tax. In other words, the bottom 50% DO have income that could be taxed, it's just that (appropriately) we as a nation have decided that they have too little income to pay income tax.
+3 # MrGoodrant 2012-06-02 15:20
I meant to say "'taxable income' is income that our government has seen fit to tax" (drop the "not").
+16 # Skippydelic 2012-06-02 16:26
Quoting MrGoodrant:
Good point about government waste: if there were so much of it that it was the main cause of our deficits, you'd think the Republicans would have gotten rid of it when they were in power--after all, they were the ones campaigning so stridently against it!

You'd think, wouldn't you?

The problem, though, is that Republicans NEVER rail against government waste when THEY'RE in power; it's ALWAYS when there's a Democratic Administration, Congress, or both.

If the GOP put as much time and effort into *solving* the waste problem as they did *bitching* about it, something *might* get done!
-32 # phantomww 2012-06-02 17:48
A family of 4 (married with 2 kids under 17) will pay Zero federal income tax until they make around $45,000. I don't think they are below the poverty line. And I don't think that making $45,000 is too little to be able to pay some federal income tax. (Yes, I know they are paying other taxes but we are talking about INCOME taxes)
+12 # MrGoodrant 2012-06-02 19:35
That doesn't sound right, unless maybe they have a lot of deductions and itemize. Four personal exemptions at $3,800 plus a $17,000 standard deduction is more like $32,000, which isn't much to live on here in the Northeast.

I'm not a tax accountant, so maybe I'm missing something, but, hey, whatever--maybe there's room for agreement here. phantomww, would you agree to raise taxes on the highest incomes back to Clinton-era levels (which, again, turned the Bush 41 deficit into a surplus) in return for slightly higher taxes on those making, say, $35-$50K, since you seem to think they're not poor enough? If in addition you can show us some of that government waste, I'm sure the rest of us would be willing to cut it to seal the deal. What say you?
-10 # phantomww 2012-06-02 19:58
It is right since I do taxes for a living. 2011 numbers std ded of 11,600 plus personal exept of 14,800 (3700 times 4) gives taxable income of 18,600. Then they get 2000 child tax credit to wipe out the tax on the 18,600.

Next, I will agree to go back to Clinton era levels but you do realize that means the lowest bracket goes from 10% to 15% and the child tax credit drops from 1000 for each to 400 or 600 (forgot which). That would raise taxes on lower income. But in exchange (compromise) I want to go back to Clinton era spending levels (plus inflation). Also, I want to get rid of the Dept of Education (it educates no child) and Dept of Energy (it produces no energy).
In addition, I am willing to let cap gains go to 20% except for those in the 15% bracket which will stay at the current Zero rate to encourage middle income to buy (invest) stocks and mutual funds for their own retirement and other needs.
So do we have a deal?
+1 # MrGoodrant 2012-06-02 21:39
DEAL! Except (1) I'm not ready to drop those two departments until you or someone persuades me they do no good. Just saying "it produces no energy" isn't enough. Since together they are only about 2% of expenditure, I'm sure you won't quibble.(2) Yes to Clinton-era spending BUT on a cyclically adjusted basis: i.e., when the economy is booming again, spending can be allowed to fall to what it was in the Clinton boom years. You gotta allow some extra spending during a downturn like now.

Your tax numbers look right. I forgot about the child tax credit. Thanks. But you do realize that under our agreement, a lot of people with slightly lower income than your example would still pay no federal income tax--which is OK with me.
+1 # bluepilgrim 2012-06-02 22:33
Did you know that, among other things...
Our National Security Priorities
•Insuring the integrity and safety of the country's nuclear weapons
•Promoting international nuclear safety
•Advancing nuclear non-proliferation
•Continuing to provide safe, efficient and effective nuclear power plants for the United States Navy.

In the United States, all nuclear weapons deployed by the United States Department of Defense (DoD) are actually on loan to DoD from the DOE/NNSA,[3] which has federal responsibility for the design, testing and production of all nuclear weapons. NNSA in turn uses contractors to carry out its responsibilitie s at the following government owned sites:

Design of the nuclear components of the weapon: Los Alamos National Laboratory and Lawrence Livermore National Laboratory
Engineering of the weapon systems: Sandia National Laboratories
Manufacturing of key components: Los Alamos National Laboratory, the Kansas City Plant, and Y-12 National Security Complex
Testing: Nevada Test Site
Final weapon/warhead assembling/dism antling: Pantex
+2 # phantomww 2012-06-03 09:32
blue, yes I knew most of that. My point is that Dept of Energy was created in 1977 yet we had both nuc weapons and nuc power before that. I want to get rid of the cabinet level position and the overhead. Let the military handle weapons and their reactors on ships. Go back to a federal agency (not a cabinet position) fornuc power. Cut overhead. And yes I know it is a VERY SMALL amount of money but we have to start somewhere.
+3 # Anarchist 23 2012-06-03 15:31
would you like a drink while re-arranging the deck chairs on the titanic? The entire system of capital and labor needs to be rethought-coope ratives with labor owning and collectively sharing in the profits might be a great place to start.
-3 # Anarchist 23 2012-06-03 15:29
Hi phantomwww-sinc e you dod taxes for a living maybe you can settle a bet for me here in the Reddest of red countys-did or did not congress and the country really pas the amendment that sets up the income tax? some buddies here say 'no way' and there is no law on the books that can compel you to pay the tax although to be fair it is true that the gumment can arrest you and take everything you have because of the tax even if the tax law was never voted on or accepted by the 2/3 states majority. Just wondering.
+7 # carolsj 2012-06-03 12:40
obviously you have never had to support a family of 4 on $45,000. It's bare bones, even with benefits.
+1 # Cassandra2012 2012-06-05 10:52
Yes, and I am not sure why anyone would want to continue to support the oil corp. 'welfare queens' subsidies with middle class tax money ....
+7 # bluepilgrim 2012-06-02 18:45
There is no more waste now than in the 1950s, when the top tax was much greater -- and the 50s had a booming economy. Those two factors are obviously not the problem now. What we did have in the 50s was a huge industrial base that way outperformed (produced real wealth) what was produced overseas. Europe has gotten better in the meantime, while the US has gotten worse. One has to look at the tangible wealth, not the nonsense of the financializatio n that has occurred.
-9 # jimattrell 2012-06-02 20:07
Just 1% of our workers went on disability 50 years ago and now it is 8%. Another small example is that 90% of the motorcycle cops in California claim disability. Why is that? What has changed?
+6 # bluepilgrim 2012-06-03 00:24
There have been changes in law to recognize more people who are disabled, and there may be other factors such as greater chemical hazards.

But I was talking about government waste. You consider government seeing to the needs of the disabled as government waste -- but I don't. I don't see disabled people as waste.
+4 # letsfixit 2012-06-03 06:52
In the "old" days govt spending was predicated on the previous years spending. If you didn't spend what allocated at least as a minimum the same amount you were reduced in budgeted program amounts.
What that created was frivolous purchases. New carpet that didn't need replacing. $1000 office chairs that were the new rage. Exaggerated needs...

Now we have inflated values for needs to conduct business. -Towers of marble like the Reagan building in downtown DC.

I'm sorry but we did it to ourselves. WE created this trillion dollar deficit and NO ONE in congress lifted a finger to stop it.
+22 # DPM 2012-06-02 14:05
The deficit is not our only problem! Taxation is not the only answer!
These are singular ideas used to keep the 99% arguing amongst ourselves. You like old sayings? Here's one: "Divide and conquer". Those in charge care ONLY about wealth and they do not care how they accumulate it. It is to their advantage to keep you focused on the deficit. Someone else on abortion. Another on school tuitions. Each, in of its self, important, but all by themselves divisive issues that are meant to keep us from the real problems that are spelled out in this article. You will find out just what those are when/if those at the top have their wealth threatened. Then they WILL become the "job creators"and wealth "equalizers". But, only when they are directly threatened!
+10 # MrGoodrant 2012-06-02 19:56
RIGHT ON, DPM! Let's not let the 1% and the GOP divide us progressives by getting us to disagree about the deficit. Instead, let's take that issue away from them, by AGREEING that we SHOULD reduce the deficit and the debt, just like we progressives did in the 1990s! Let's show them that we understand that every dollar the government spends on interest on the debt is a dollar that we CAN'T spend on the things we progressives care about, like education and the environment. Let's show them that we AGREE that deficits put us at the mercy of our Chinese and other foreign creditors. Let's show them yet again that we progressives ARE responsible, that we CAN add and subtract! But let's also agree that right now is not the time to be too aggressive about the deficit--as Mitt Romney admitted just the other day, if you cut spending too much when the economy is weak, you tip us back into recession. Instead let's agree--no, let's COMMIT ourselves--to cutting the deficit when the economy is strong again--in Obama's second term! What say you, DPM?
+8 # Duster 2012-06-02 18:11
The wealthy ARE a hole into which wealth vanishes, yet persists. It is inherently inflationary to hoard anything. As the potential availability grows, the value is reduced for new production. The wealthy are hoarders and their non-circulating wealth raises costs for you and me, since it inflates cost (reduces value of money incirculation).
+10 # Jerry 2012-06-02 18:18
Make the top rate 50%, even on capital gains, and the deficit wouldn't be a problem in 30 years, unless a comparable event to the financial collapse occurs again - which is growing more likely. Cutting government spending in a recession will make the deficit worse, as the slump worsens and government revenue falls more than the spending cuts.
+14 # dquandle 2012-06-02 22:03
So tax their filthy ill-gotten WEALTH, and force their kids to fight in our adventurous murderous little wars on their behalf. The "waste" is waste on war and corporate welfare bailouts.
+1 # ShamanX 2012-06-03 16:11
Don't forget that pesky Federal Reserve that keeps creating trillions in new debt... giving it to their world banking friends and borrowing it back from them at higher interest rates... oh yes and putting the American working class (or what's left of it) on the hook for all of it.
+2 # rjsross 2012-06-02 12:33
Too cute
+24 # tswhiskers 2012-06-02 12:59
I suspect it will be a hard sell to convince the billionaire donors to the Reps. that it is in their self-interest to be fairly taxed and to actually invest in business start-ups because the actual reason for our current woes is selfishness. The more the wealthy have the more they want. Where they put it and what they do with it, no one seems to know. I think one of the best points the Dems can make this election year is to keep pointing out that Romney is known to have private accounts in the Caymans and to ask the question, When has any American presidential candidate or president felt the need to hide his wealth outside this country before? This probably not illegal but it leaves a nasty taste in the mouth. The Roosevelts and JFK were very wealthy men but they never thought to keep their money in Swiss accounts. It would have been considered unAmerican and undemocratic. It clashes with the political ideals this country was founded upon. Tea Partiers, think about it.
+22 # dick 2012-06-02 13:16
It is a propaganda LIE that 50% do not pay any federal taxes.FU.
Granny's homegrown simpleminded homilies may not apply to modern complexity. They reassure the smug & simpleminded.

The U.S. is becoming an Indian Reservation to the Global 0.01%.
Extract the resources; squeeze the labor; act paternalistic; invest elsewhere; move your $$/family safely offshore; CONTROL the natives. If we do not reverse this soon, the technology of control will make it impossible.
-23 # phantomww 2012-06-02 13:19
So how does higher taxation on the wealthy solve the problem of "income" inequality? If a person makes 20 million and another makes 20 thousand, taking more from the rich does not give the one making 20,000 more income. It MIGHT mean that the richer one has less "wealth" left over but taxation does not effect "income" and we have an "income" tax, not a wealth tax. Giving the one who makes 20,000 will NOT increase his "income" just like a person today who gets $5,000 in earned income tax credit does not increase that person's "income". At the end of the day there is still one person making 20 million and another making 20 thousand. So what is the answer?
+29 # MrGoodrant 2012-06-02 14:33
Higher taxation is not supposed to "solve" the problem of income inequality. It is supposed to reduce the budget deficit. That said, higher taxation can also HELP with the problem of income inequality if, by reducing the deficit, it allows the government to invest more in things that work to reduce inequality inequality--bet ter schools, for example.
-24 # phantomww 2012-06-02 17:34
Sorry that makes no sense. According to many Keynesian economist the debt is NOT a problem because we owe most of it to ourselves. thus the government should be deficit spending (which they are but to little effect) to improve infrastructure (remember the stimulus package and Obama talking about shovel ready jobs?). Also, even if we went to 100% taxation of the rich we would still not have a surplus. I still don't see where taking one person's money and giving it to another solves the income inequality issue or the wealth issue.
+15 # MrGoodrant 2012-06-02 18:51
phantomww, you seem to have some ability to read English, so I am puzzled by your last sentence. In reply to my comment that raising taxes does NOT solve the income inequality issue, you object that raising taxes does not solve the inequality issue. I find that odd.

Also, I know a lot of Keynesian economists (I am one, in fact), and not a single one of them says the debt is not a problem. Yes, we should be deficit spending now, when the economy is weak, but the time will soon come when the economy is strong and we should turn to reducing the deficit. And when we do, we should do so in part by raising taxes. On whether taxing the rich can contribute to achieving surplus, please go read what I wrote in response to another commenter: we taxed the rich in the 1990s--at 39.5%, not 100% percent--and we turned a deficit into a surplus. Please explain why you think we can't do that again. What is different today?
-14 # phantomww 2012-06-02 20:12
Well, I know a Dept Chair of Econ (a Doctor of Econ) who has told me and his classes that the debt is not a problem. He is very much a Keynesian. So I guess you two Keynesian economists can debate that issue. I personnally think the debt will destroy the dollar and it is very possible that we will no longer be the reserve currency which will have devastating effects on us (See UK after dollar replaced pound).
I am of the belief that raising taxes does not increase revenue, one taxes something to get less of that activity not more.
While I think Keynes was brilliant, his theory does not work in real life because one of the tenets is that government spending will decrease during good times and politicians almost never decrease spending (see US budgets for last 50 years or so).
Finally, I don't agree that we are not spending enough on education so increasing taxes to spend more on education makes no sense to me. The quality of education IS NOT directly proporational to the level of spending. I am enjoying what seems to be a pleasant discussion without a bunch of name calling which is unusual here.
+11 # MrGoodrant 2012-06-02 22:07
So you know one Keynesian department chair (from how long ago? Some older Keynesians do believe the debt doesn't matter). I'll see you and raise you: I know and have worked with 3 or 4 Keynesian Nobel Prize winners, all 4 of Clinton's chief economists, all 3 of Obama's, the last 3 CBO directors, and more department chairs than I can count. They all think the debt matters.

You say taxes don't raise revenue, and that politicians almost never decrease spending. Didn't revenue rise and spending fall in the 1990s, after Clinton and the Democrats raised taxes and cut spending? Why can't we do that again?

It's true that more spending on education does not necessarily improve the quality of education. But I don't see how you improve the quality of education WITHOUT more spending. It takes more spending AND good policy. We have in this country have slacked off on raising average educational attainment, and the rest of the world is catching up. That surely has more to do with our economic problems than higher taxes or rapacious banks or capitalism or any of the other boogybears that others in these comments have cited.

And yes, name calling just gets in the way. It doesn't help change people's minds, including one's own.
-3 # phantomww 2012-06-03 09:37
There were NO cuts in overall spending under Clinton. that is a myth. Real numbers are starting with 1992 in trillions: 1.38, 1.41, 1.46, 1.52, 1.56, 1.60, 1.65, 1.70, 1.79 (last one is year 2000). So even in the boom years politicians do not cut spending which is why Keynes's theory and your proposal does not work. Revenue did increase but we were in the middle of the dot com bubble which blew up in 2001. So it was kind of fake.
+5 # MrGoodrant 2012-06-03 13:34
Um, no, phantomww, those are NOT the real (after-inflatio n) overall spending numbers. Those are the BEFORE-inflatio n numbers. The real numbers are the ones 3 columns to the right in the same table ( And there you see that spending did absolutely fall in 1993. It also fell in several other years in proportion to U.S. population or GDP, which I’m sure you know are the relevant measures. (You HAVE to spend more when you have another kid, don’t you?) It also fell absolutely in 2010, and from 2009 to 2011, and it is slated to fall this year, when it will be lower than 5 years ago. So yes, spending does fall, even in the real world.

As for revenue, using the same table, please show me where the “fake” revenue surge falls back to prebubble levels after the bubble bursts in 2000 or 2001. I don’t see it.

More fundamentally, your claim that Keynesianism doesn’t work because politicians can't or won't practice it reminds me of what Dennis Kucinich one said to someone who said he wasn’t electable: “But I AM electable if you vote for me!” Can’t we make Keynesianism work if we elect politicians who will pursue it?
+6 # jimattrell 2012-06-02 18:57
Not true. American taxpayers owe $855.00 to each and every Chinese citizen. We finance our Government by selling treasury bonds to the Chinese. Check with the Congressional Budget Office. Our dollar has been in a steady decline for four years.
+9 # MrGoodrant 2012-06-02 21:01
Actually we do owe most of the debt to ourselves, but a big chunk to the Chinese, too. But that's beside the point. Any modern Keynesian would tell you that even if we do owe the debt to ourselves, that does not make it OK. Every dollar the government borrows is a dollar that the private sector cannot borrow, which means that government debt reduces private investment, which keeps the economy from growing as fast as it could. There are times, like RIGHT NOW, when the government should borrow and invest (in things like public infrastructure and education), because the private sector is in too much of a funk to borrow and invest. But these are not normal times.
+19 # medusa 2012-06-02 13:22
The argument can be put much more simply. What rich person wants to live in a downtrodden 4th world country, with cities full of slums and a countryside of undernourished people wandering around in rags; planes that don't fly on time, streets that look like gravel pits, and buildings with unidentifiable life in the stairwells? This is what happens to a country with no regulations, no civil service, and a tough army. If the rich want to live in a place where survival of the fittest is the rule of life, why not settle in one of the failed states?
+16 # Virginia 2012-06-02 16:00
They don't live here full time. Most have investments in various places around the world and travel extensively... Vacation in exotic places. They do business here because we've been so dumbed down by the media that they own that we don't savagely riot...yet. They wouldn't be safe in some other countries and I doubt if they flew commercial they'd find it very pleasant to be hassled by the 99%.
+12 # dick 2012-06-02 13:36
An achilles heel of economics: overestimating rationality. Our banksters would line their pockets with nuggets while jumping off a sinking boat, just to be the richest of the drowned. We have to lovingly save them from themselves, with policies that require that they act act rationally, humanely, or leave, or die. We'll at least save their kids.
-5 # dwainwilder 2012-06-02 13:57
I'm sorry to say I don't buy the premise of this article. Look at the rest of the world where stark inequality of wealth and you will see absolute indifference on the part of the oligarchs. They seem perfectly content to live, behind their walls, guards and chauffeurs, amid the squalor of general abject poverty.
+15 # jhadstate 2012-06-02 14:56
Which is why, when the inevitable correction comes, as it always has, it is paid for in the blood of oligarchs. And, unfortunately for your hypothesis, the sad part is that in far too many cases, the replacement governing unit is just as the oligarchs it replaces. They learned their lessons is wealth concentration capitalists all too well.
However, abandonment of the capitalist system for the socialist model would solve that problem, or at a minimum, mitigate it to a manageable level. And capable of being eliminated eventually. If not socialist, then a highly regulated capitalist system that includes a steeply graduated income tax and the elimination of the capital gains tax exception to a very limited number and narrowly defined areas.
+12 # bluepilgrim 2012-06-02 18:52
Many of those walls are paid for by the US and defended by the US military and arms industry. Those oligarchies do not survive all on their own -- and sometimes, when the people have had enough, they do not survive at all despite support from the US.
+7 # jlohman 2012-06-02 14:21
It's hard not to think of. Suppose we took every 1%er who makes $100M per year or more, and gave them a free gift of $1 billion with only one condition: leave the US lock, stock, and barrel; never return and never have dealings in the US again? Just leave! Go! We don't ever want to see you again! Or have your dealings screw up our economy!

I think the US would be the winner in that.

Jus' thinkin'.
+4 # MrGoodrant 2012-06-02 15:54
Tempting, but expensive. The top 400 earned an average of $270 million each in 2008, so the number earning $100 million or more is probably at least double that, possibly way more. (The IRS reports stats only for the top 400.) Say it's 1,000 total. That's $1 trillion just for their walking papers. Plus you forgo any tax revenue from them forever. If their effective tax rate is 20% (reasonable guess), that's a revenue loss of about $40 billion a year (assuming the average income for the poorer 600 is $150 million a year). So about $1.4 trillion total cost to the government over 10 years (which happens to about equal the 2012 deficit).
-12 # phantomww 2012-06-02 17:37
Yeah that is what we want, people like Bill Gates and the late Steve Jobs to just leave the US and take Microsoft and Apple with them. That will sure so those evil rich people who is in charge. What a joke!!!!!
+7 # MrGoodrant 2012-06-02 19:01
I think you're taking this particular exchange way too seriously, phantomww. Anyway my point was that it's a bad idea even if you believe that people like Gates and Jobs are on balance a minus to the economy--which I certainly do not! Though I can think of some megamillionnair es whom we probably WOULD be better off without, I don't know whether they are the ones who would take the offer.
+16 # dick 2012-06-02 14:38
I don't think enlightened self interest is a premise of the essay, I think it is a suggestion from someone with standing. However, the mega-rich don't want to be taxed to build better infrastructure for all of us, even if it will benefit them most. The mega-rich really are "different." That's one of the reasons they're mega-rich. They are psychiatrically GREEDY, & have capacities & resources to rationalize their greed, for the short term. "Every mega rich man on his island, ENTIRELY for himself, RIGHT NOW."
+7 # mdhome 2012-06-02 21:31
-1 # PeaceOrDestructionItsYourChoiceToday 2012-06-06 16:51
The original story came from a guy who bought his first house at 18 and worked his a$$ off to get there. He tells how most of his young life was wasted working overtime starting with a base of about $8.00 per hour. Anyway he was way ahead of all his peers until the economy took his job and he suddenly understood how impossible the situation is once you are in deep sinking fast. In any case he paid continually and never claimed BK and paid his 30K credit card debt 3x. At some point he was negative $300-$500 per month each and every month. He robbed his house with a 2nd and paid off his credit even though he thought that was foolish. Currently he is still struggling to make all his payments but now his house is under water and his net worth is effectively less than zero even after getting ahead early on in life. He is now out of work and has been raising his kids since. He helps people on the Internet for nothing. His advice has been golden for anyone but himself. He suggests actors for parts who get them. He suggests syfy ideas for movies and TV. He applies the science behind them in his descriptions. He suggests singers for bands who turn around and become top ten. He releases band names and lyrics to new bands and they move from unknown to top ten. Even existing artists have benefited from his gifts. Nobody knows his actual name. His writing is all over the Internet sometimes brash and crazy but almost always spot on. The golden child who can't get any love back.
-14 # jimattrell 2012-06-02 14:58
Dick, I double-checked the stats with the Congessional Budget Office and you are correct. It's not 50% that don't pay any Federal Income Tax.... It's actually 49%. If everyone paid 25% minimum tax as in progressive countries like Canada, and we eliminated all wasteful spending and jailed those that steal from Sicisl Programs, we'd be out of this mess in a generation. I have two kids in college and two grandchildren in college and I'm hopeful that there will be jobs for them when they graduate. Right now the unemployment rate for college graduates is over 25%. It's time for change...
+9 # MrGoodrant 2012-06-02 15:31
Are you sure Canada has a minimum tax rate for everyone of 25%? Wikipedia ("Income taxes in Canada") says the federal income tax is 0% up to about $11,000, and it only hits 25% (marginal) at about $85,000 in income.
-4 # jimattrell 2012-06-02 18:48
I checked with my sister who lives in Canada and who is my information source and she pays 15% Federal tax plus 10% provincial on her small secretary paycheck. See
+6 # MrGoodrant 2012-06-02 20:19
jimattrell, it's generally not a good idea to rely on one's brother or sister for tax information, unless of course he or she is a tax accountant. Your sister seems unaware that in Canada there is something called the "basic personal amount" (though it's the first item in Step 1 of Schedule 1 of the tax return!! The BPA is essentially the same thing as the U.S. personal exemption, and in 2012 it is about $11,000 for the primary taxpayer. The link you provided shows taxes due on "taxable income," which is income AFTER the BPA and other credits. So you are wrong. There is not a "minimum tax rate for everyone of 25%" on the first dollar of income. Sorry.
-2 # jimattrell 2012-06-05 07:57
You missed the point trying to blow my point up in the water. Let me make that point once again. In America, some people not only pay no federal taxes (49%) they get a check back for child tax credits. In Canada, everyone pays taxes. Taxing the top 1% more will get us nowhere. It's a puny amount. Everyone who works should pay taxes. That's my point.
+1 # MrGoodrant 2012-06-06 20:22
jimattrell, you made SEVERAL points. If the one I challenged was not important, you should have said so up front. Instead you first tried to defend it, and then when you couldn't, you tried to pretend it didn't matter. Bad form.

Worse, now you're trying to play a shell game on us--you're shifting the focus from federal income tax to taxes in general: "In Canada, everyone pays taxes," you say. Well, that at least is true--but it's also true in the U.S.! All workers in BOTH countries pay other federal taxes (e.g., payroll tax), and they pay state (or provincial) and local taxes (e.g., sales tax). "Everyone who works should pay taxes," you say. They do!!

You also say taxing the top 1% will get us nowhere. I've said elsewhere in these comments and will say again: It got us to surplus in the 1990s. Why can't we do it again?

Finally, did you know that when the modern federal income tax was introduced, ONLY the rich and the upper middle class paid it? Yes, the federal government was much smaller then, but the point is that exempting the poorest workers from income tax isn't something that postwar liberals came up with--it was part of the plan from the very beginning.
+5 # Virginia 2012-06-02 15:44
It's naive to think taxing is the answer. There is over $700 TRILLION dollars of unregulated debt... Only a complete collapse will begin to correct this financial force majeure. We're in for a long, bumpy ride no matter how it goes.

We can't keep pouring money into Wall Street in hopes to help them make a correction. We need to pull our funds and let them sink or swim. That's capitalism... Propping them up with public money is financial socialism - and nobody wants that but the banks.

Frankly, I don't want my tax dollars used to support Jamie Dimon's lifestyle and Wall Street's outrageous bonus programs - especially when they were so reckless and stupid as to allow TRILLION$ in securitization gambling to take down their industry at our expense.
+4 # bluepilgrim 2012-06-02 19:08
Look at it this way. It's 'sort of' true.

You have a well that supplies some finite amount of water. The rich divert most of the water for themselves, use a small part of that, and the rest falls to the ground and is wasted. In that sense that wasted water is not 'real' and does not function as water should.

What happens is the rich create huge amounts of money, with most of it phony, in the form of abstract debt, but still end up with much more than most people. The distribution of wealth is shifted.

Now, what happens when that abstract debt comes due and become 'real'? The bubble bursts.

Because of the shift to financializatio n from tangible production in the US the 'well' is running dry. What should have been used for productive purposes was largely wasted (productive utilization in the US is only about 75%, while unemployment is soaring), and there isn't anywhere near enough real wealth to pay off the debts created through manipulation and issuing money that never actually represented anything real. All that humongous debt can never be paid because it was never 'real' debt to begin with -- i.e., realistically representing future real wealth and production. It's like taking out a loan for a billion dollars when you make 50K a year -- that $50 billion is made of a fantasy.
0 # PeaceOrDestructionItsYourChoiceToday 2012-06-06 17:51
That would be fine except what about all the little people who have 401K's stuck underwater. Checking out will be a loss of half invested. Even I got suckered into things that were rising stars only to be at a third of their value today. What should I do with that? Take the loss? Take some loss this year and wait for next years write off? This will be a slow process over five years. I can say one thing Wall Street is a huge problem for all of us. Facebook IPO just illustrated the problems in Technicolor and W.S. was stupid enough to do this all at once. Even Jamie Diamond is getting nailed by his own people. Everything is broken we need to rethink the rules and the game and make sure it can't be cheated on. How many years has it taken Congress to finally do something about their own unfair access to information and investments? This movie is going to end with a French or Russian style revolution if things don't get better. Just my warning. One percenter's think they can hide in ARKS and underground bunkers and ride things out. If the new rules and leaders say that they are to be found and opened they will. If they are not around for their finance trials their accounts will be confiscated. There is no hiding from this. The best outcome is good and proper changes. It does not seem to mater who is right. Many screwed up the system and many more will pay for it.
Getting to the facts and the cause and effect may help fix this. Only truth and fairness can set us free.
+17 # PGreen 2012-06-02 15:47
Repeating it doesn't make it so. I'll answer with what I said last time:
"The top 1% of the population now owns 40% of the total wealth of the nation, so if you took even 90% of their wealth it would indeed go a very long way toward fixing deficit spending." (If you don't think that is the "American way," examine the confiscation of Tory land and property during the American revolution.)
"But I agree that we have waste-- just not in social spending. We could cut our defense spending (currently more than the rest of the world combined) by half and end our ridiculous wars of imperialism." The rest of our waste is mostly in giveaways to business, such as using insurance companies as part of a healthcare plan.
Fixes: A higher tax rate on the order of post WW2 levels would help us now immensely, just as it did then.
Another adage for you: "You can't get blood from a turnip." 50% of us (as you say) haven't got the income to pay taxes. Most people would prefer to be wealthy enough to pay taxes. You've got to fix that first.
+10 # kyzipster 2012-06-02 17:27
Although I question your statistics, I might support the idea of the working poor paying a minimum tax if they received all of the social benefits that Canadians receive. Socialized medicine could work much like SS & Medicare, every worker has to pay a fair share. There's a long list of other benefits in Canada beyond health care.

Republicans are proposing the "Fair Tax" in the US so we can keep tax cuts for the top 1% and keep the military/indust rial complex going. Tax the poor to pay off the massive debt that Republicans created with their failed policies. Of course these are issues that Canadians don't have to deal with. Republicans still gain votes by convincing simple minded people that food stamps are the problem. Much of their voters base benefits from the welfare system.
-14 # jimattrell 2012-06-02 18:54
My sister lives in Canada and earns a small secretary salary. She pays 25% consisting of 15% Federal and 10% provincial. See In the area where I live pretty much all social programs benefit areas that are heavily Democratic. If you look at the areas of the country that are in decline they are all heavily Democrat led. So why is that?
+2 # MrGoodrant 2012-06-02 21:02
Define "decline," and then we can look at the numbers and see if you're right.
-4 # jimattrell 2012-06-03 09:45
Decline would be higher than mean unemployment in spite of ourflow of citizens. Michigan and California as examples.
+3 # MrGoodrant 2012-06-03 11:35
OK, let's look. Says here ( there are 9 states today with both Democratic governor and legislature. (Michigan is not one of them, by the way--GOP is in total control. Plus, Michigan has had a GOP governor in 34 of the last 50 years, starting with Mitt's dad!) Of those 9 all-blue states, 7 have LOWER unemployment than the national rate, which is 8.2 percent ( Those 7 states are AR, CT, DE, HI, MA, MD, and VT. Only 2 of the 8 (CA and IL) are in "decline" by YOUR OWN definition.

Have you been getting your facts from your sister again, jimattrell?

Let me try to help. "Decline" by definition occurs over time, so it doesn't make sense to define it with reference to a single point in time, like "higher than mean unemployment" today, does it? You want to look at the CHANGE in some variable. And you don't want use unemployment as the variable, because that is defined as people looking for work--it misses all the people who have quit looking, which you would have a lot of in a declining state, right? Finally, you want to look at some period when the national economy was roughly in the same phase at the beginning and the end--NOT a period where the economy is in much worse shape at the end. Otherwise how do you know if a state's change in terms of your variable is due to "decline" or to a temporary nationwide slump?

Care to try again?
+6 # MrGoodrant 2012-06-03 16:08
Also, California has had GOP governors for about 31 of the last 50 years. "Heavily Democrat-led"? Was it Democrats that promoted Proposition 13 and got it passed, devastating public investment?
0 # PeaceOrDestructionItsYourChoiceToday 2012-06-06 18:06
If prop 13 is crippling government income in CA how does the loss of nothing crash the government? I mean if you are getting nearly nothing from prop 13 and people stop paying their mortgages and prop taxes how can that little bit hit the state so hard? BTW I calculated these effects long ago when I wanted to stop foreclosures. It should have been the first thing done because once the dam of dominoes starts to fall everyone on the block is affected and nothing can stop the dominoes from falling after that. Dominoes being houses, businesses, jobs, and infrastructure etc.
0 # MrGoodrant 2012-06-06 21:07
I don't understand the comment. Can you clarify?
0 # jimattrell 2012-06-05 08:03
I used two states as examples and I should have used cities as examples. A very good friend of mine is a Dean in a local state college and one of his classes studied U-Haul traffic across the country and that's how they calculate areas of decline. Name a city that has a long-term record of Democratic rule and I can assure you that it's on his defined list of decline. People without jobs are moving rapidly to where the jobs are and those jobs are in areas under Conservative leadership.
0 # PeaceOrDestructionItsYourChoiceToday 2012-06-06 18:00
CA to Texas. Not only are the people moving there the jobs are headed there as well.
0 # MrGoodrant 2012-06-06 21:46
Why weren't states a good example? Apart from the fact that their evidence doesn't support your point, I mean.

Cities obviously aren't a good example, because an economy is not coterminous with a city--SMSAs probably better define a local economy. Problem is, people often leave cities for the suburbs to avoid sharing in the cost of city infrastructure. They continue to work in the city but live in the suburbs so they can escape paying the taxes that build the infrastructure that supports their jobs. So the city loses its tax base, can't maintain its infrastructure, and declines.

Another problem is that (I think) most large U.S. cities have either "a long-term record of Democratic rule" or a history of mixed rule. Not very many have a long-term record of GOP rule. If that's the case, then you're not going to find many long-term-GOP-r un large cities in decline, for the simple reason that there aren't many long-term-GOP-r un cities, period.

Also, if it turns out that mixed-rule cities do better than long-term-Dem cities, that could be because cities with two viable parties are less corrupt than cities with one-party rule, whichever party has the monopoly.

In short, if mixed-rule cities do better than 1-party-rule cities, and if there are few 1-party-rule GOP-led cities, then of course the 1-party-rule Dem-led cities will tend to emerge as the ones in "decline," but for reasons having little to do with Democratic ideology or policy.
+3 # Virginia 2012-06-03 12:13
Unemployment is more often related to corporate cash flow and credit than individual taxes or politics. Industries laid off thousands of employees after investing billion$ in unregulated securities and losing the bulk of the funds in the Wall Street securitization Ponzi scheme.

Corporation pension and retirement funds got sucked into these fraudulent investments and ended up gambling away so much money that the only way to survive was to reduce payroll. Federal, state and county pension funds were lost too and thats why services and benefits are being drastically cut and local taxes are rising.

High unemployment has more to do with concentrated industrial areas than political control. ...Not to mention stupidity and greed...and that's the real core of the moral hazard and irresponsibilit y.
+5 # mdhome 2012-06-02 21:39
"So why is that?" Because they get the low paying jobs, while their bosses get insane profits.
-10 # jimattrell 2012-06-03 09:46
Bosses meaning those that are realizing the American dream? Do you despise hard work and success? Shouldn't we be striving for that for all?
+8 # Virginia 2012-06-03 12:49
John Thain (former Merrill Lynch CEO) posted $28 BILLION in losses for 2008 and paid out $3 BILLION in bonuses...while the American public bailed them out propping up a forced bad deal for BofA that they probably shouldn't have gotten into. Their failed oversight, lack of control and greed helped to destroy the world's economy - and you are asking if we despise hard work and success?

I applaud entrepreneurs that work hard and build successful businesses without public money, be it gov't dole or stock market. But once you cross that line you have an obligation to live within your means and not take advantage of public trust... The problem lies in the fact that using public monies should be highly regulated - which we've allowed the criminal element to suppress.
+4 # bluepilgrim 2012-06-04 08:15
I know a really smart guy who used to work three jobs and couldn't get enough to live decently on. You think this hell-hole is a meritocracy or something? Forget about it.
+2 # kyzipster 2012-06-02 21:50
You probably mean that social programs benefit the very poor and the very poor are all Democrats. I can only guess.
-13 # jimattrell 2012-06-03 09:50
Good point, generally the Democrats appeal to the poor with their rhetoric and so they do vote that way. What I'm suggesting is that Unions have ruined large expanses of our country and left people without jobs because they've fed on business past the point if no return. Most social programs do not encourage a way out and so the circle continues.
+6 # kyzipster 2012-06-03 10:52
Unions had nothing to do with factories shutting down and moving to Mexico and China. No US state can compete with wages at pennies on the dollar. We actually give tax breaks to corporations for shutting a factory down and laying off their American work force. Unions did not force their hand, they could easily move to another state and in this conservative environment, there would be no backlash for destroying a union.

Of course low income people vote for Democrats, they're the only thing standing in the way of the total destruction of the social safety net by Republicans.
-4 # jimattrell 2012-06-05 08:15
I'm fortunate to live in a highly conservative area of our fine country where liberals are hard to find. We take care of our needy personally and through our business owners and our churches. We avoid Federal funding because there are to many strings attached. Almost everyone who wants to work can find a job. Our local charities insist that the needy work if they get help and they help them to find that work. It amazes me how people step forward when needed to be a part of the effort and how our unemployment has remained much lower than the national average. Our housing has always been affordable and cost of living is very good. Democrats don't even seek election here. Our primaries are pretty much our elections. My wish for America is that God opens all eyes to see what the American dream Is all about and that what we have where I live becomes contagious all across our great country for all to experience.
+3 # BVA 2012-06-02 19:50
Consider this quote from Mr. Stiglitz's essay: "the gap between the 1 percent and the 99 percent is vast when looked at in terms of annual income, and even vaster when looked at in terms of wealth - that is, in terms of accumulated capital and other assets".

The inequality problem is based on accumulated wealth more than anything else. As long as accumulated wealth is not taxed very much income taxes will correct the problem. In fact your 25% minimum tax would simply further impoverish the working class and remove their children even further from access to a middle class life! I suggest that you reread the article and more slowly this time.

The college graduate unemployment rate that you cite, if it is accurate (which I doubt, but I could be wrong), is almost surely the rate for recent graduates - not all college graduates.
+1 # letsfixit 2012-06-03 07:02
Isn't the unemployment rate 25% in their chosen degree? They have jobs except as wait staff and bartenders. That's the case for my son except in his case only 2 of the 200 have jobs in their degree fields.
0 # PeaceOrDestructionItsYourChoiceToday 2012-06-06 17:31
I know a woman who is working and makes maybe 69K a year gross. She is raising two kids and they have nothing left at the end of the month. They own their own house for now. Not sure if they missed any payments.Everyt hing goes on credit because there is nothing extra. She drives a hand me down from her parents. The AC is off most of the summer because its the easiest way to save money. There is no going out. No out to dinner,the movies,or anything that costs more than $5. As a matter of fact they have never used pay per view as any rental over $1.50 is just too much. One of the kids is nearly 10 and has never seen Disneyland or any amusement park. Car and house insurance go on the credit cards. Car registration goes on the credit cards. Most food bought is cheap store brands or on sale with coupon with credit. BTW she still pays at least 6-7K in taxes a year. This women is a graduate with a 4 year degree in science. This is the best it will ever get for them. There is not enough hours in the day to improve their lives. Would you work a second job and hand over the raising of your kids to a nanny or service? Would you risk your current stable job for a better unstable one? This I assume is the best it gets for many people.I'm sure many more would love 2 be in this situation.Now with far more people living less than this, how long until the system breaks down?How long before the riots?How long before the 1% are inconvenienced? How long before the govt can't pay it's workers?
+14 # The Buffalo Guy 2012-06-02 16:02
I have noticed that many stores and among them the baby stores and dollar stores and a new generation of dollars stores seem to sell items mostly made in China. Computer assistance?, Indian Indians will help you if you can get by their accent. Meanwhile American Indians are wanting for jobs. The Bush tax cuts did lead to investment and trickle down jobs but just not in the USA where we have ripped the heart out of most of the lower income job opportunities. Schwarzenegger avoided “Buy American” laws to award China the $7,200,000,000 bridge contract while our steel industry and its jobs struggle. I believe our unemployment problems begin with examples like these. Will we be able to continue calling our country "The Land of Opportunity"? Are we like the Titanic; too big to sink?
+12 # WilmingtonNCBiz 2012-06-02 17:07
Its interesting to read this from the "1%" side. Although very liberal and a democrat, I happen to be in the upper 0.1%. I sometimes feel when I read these articles that it is as if we are not real people. My feeling is often "what have I done wrong?" After spending most of my life struggling, I am finally at the point where I am financially successful. I am a business owner who employees approximately 50 people who I pay at fair market value. Interestingly, I lead a normal life and do not sit in some ivory tower with servants. People would likely be very surprised to learn that I make that kind of money because I drive a 2003 car and live in a house less than $300k. I put money away for retirement (in case this does not last) and money for my children's education. We give money to charity. I volunteer in my community. I agree that there is a problem and that something needs to be done. I guess my point is that not all of us are bad or greedy people - we are just successful. For years I worked over 100 hours a week. I worked hard to get here through sacrifice. And my tax rate is in the highest bracket. I am not "one of those" who pays less than my secretary. What is it that the "Occupy" movement really expects from me (a sincere question)?
+7 # MrGoodrant 2012-06-02 19:16
WilmingtonNCBiz , I wish I could click the "thumbs up" on your comment more than once. The problem is that there used to be a time when there were more 1%ers like you. Now they tend to be of the sort that jlohman had in mind when he said we should bribe them to leave the country. But you're right, we should not lump all the 1% together. All that said, given your success--and the fix the country is in--do you not agree that it's fair to ask you to contribute a little more in taxes? Like about what you were paying 12 years ago? I'm not in your tax bracket, but I'm doing pretty well and I think I could chip in a bit more. What say you?
+10 # WilmingtonNCBiz 2012-06-02 19:53
I have said many times to colleagues who complain about taxes: if it helps the country and those less fortunate, raise my taxes ( within reason). With that said, I will pay upwards of ( but not quite) 1 M in taxes this year!
+5 # bluepilgrim 2012-06-02 19:24
Help in crating a sane economic system which functions as a sustainable system. That's not capitalism. You are fortunate if you haven't become crazy and attached to money (and you can read that 'attached in the Zen sense').

The problem is not so much a few rich people, but an economic system which is horribly inefficient. In a well functioning society you wouldn't need to put money aside for your family's education because it would be treated as a public good and necessary function of society for everyone to be as educated as they can be -- it's like having a factory and keeping your equipment in good repair and up to date, or a farm with healthy crops and livestock.

In a well function socialistic system some people will be richer than others and can live quite well, but everyone can live at least decently, with basic needs met -- and the total real wealth is increased because it's much more efficient, so everyone ends up living better than now, including the rich.

Try accessing and learning about the inherent problems of capitalism which is what Marx analyzed and wrote about 150 years ago (and the studies have progressed since then).

This has to be looked at with systems thinking to get it right.
-5 # MrGoodrant 2012-06-03 08:44
Isn't "well function[ing] socialistic system" an oxymoron? In what such system can you say total real wealth was ever greater than it would have been under capitalism?

On education, I agree that the government should chip in--education benefits both the educated individual and society, so society should help cover the cost. BUT when education (I mean here postsecondary education) is treated PURELY as a public good, with all the education you can eat paid for 100% by the state, it soon looks like one of those cruise ship buffets. Because it costs the student nothing, much is wasted, many make poor choices for themselves AND society (too many trained anthropologists and music critics, too few engineers, because they think, hey, I can always go back for that engineering degree if I have to), and the students don't value what they're getting as much--and therefore might not study as hard--as they do when they've paid for a good chunk of it themselves. In other words, free postsecondary education is a far LESS efficient system, not more efficient.
0 # bluepilgrim 2012-06-04 06:22
I would have responded sooner and more complately but my efficient, capitalist, ISP's server was down all of yesterday.
Depressions and recession are always occuring in capitalism every few years.

A well functioning socialist is not an oxymoron at all. It would work eevn better if it wasn't destroyed by fascists whenever it started to really do well, including places which are attacked and destroyed (post ww2 Greece is one example, among many). There are many instances where socialist groups or societies did better than capitalist groups in the same time period.

So now we have only about 75% production utilization while millions who could be using those are unemployed. The infrastructure is collapsing. The health care system is disasterous. We have the highest incarceration rate of any industrialized nation. We have been at war almost constantly over US history, murdering millions and destroying whole nations at a go. We don't produce wealth as much as steal it from people we kill.

And with all of this, the 'efficient' capitalist system is destroying the environment and biosphere and we are killing ourselves with toxins and radiation; it's like the idiots who killed the goose which laid golden eggs.
0 # MrGoodrant 2012-06-06 22:01
"There are many instances where socialist groups or societies did better than capitalist groups in the same time period."

Name a few, and their capitalist comparators, and let's have a look at the numbers.

While you're at it, name the people we killed and stole their ISP server technology from.

Agree on the low capacity utilization, infrastructure, health care, and jail rate. Is that capitalism's fault? Or mostly W's?

Was it capitalists that destroyed the Aral Sea, much of Belarus and Ukraine, etc?
0 # bluepilgrim 2012-06-04 06:35
I suspect there similar arguments agains free public schooling at the grammar and high schools levels in the past -- and now even that is being attacked. Things are more complex now and basic education levels must be higher.

What is wasted is not education, but millions of people who could not afford to go to school. Engineers are OK as far as that filed goes, but we need all the other subjects too so we don't just build better bombs and technology which don't helps us at all, but often contribute to our self destruction.

I'll tell you something -- I'me finally getting a decent education on the web, in my 60s, because I could never afford to do it before, and I sure as hell won't be working and using it for production. I happened to be born with very high intelligence -- in the 99.9999somethin g percentile -- but it's been 99% wasted because of a lousy education. I know many very bright people -- genius level even -- who couldn't afford to go to school. One of them is driving a truck, when he get the work.

Other countries that provide free education have done quite well with it, amd it's very efficient.

Also, education is NOT just another commodity, to be done purely for profit. It's what yields a working society, and ignorance is the death knell of a nation, and it's economy. This is one reason we are moving into third-world status and can't compete.

You don't understand education at all.
0 # MrGoodrant 2012-06-06 22:16
I don't think you read my comment at all.

I didn't say grammar and high school shouldn't be free. What part of "postsecondary" don't you understand?

I didn't say we don't need the "other subjects." We absolutely do. I said we would get people educated in them in something closer to the proportions in which they are needed if students had to take into consideration at least part of the cost of their education to society when they made their choices.

And I certainly did not say education should be run as a for-profit business.

Frankly, if I had your claimed IQ, blue, I'd be embarrassed at such a demonstration of lack of basic reading comprehension. Hell, I'd be embarrassed if I had your smarts and didn't have a Nobel prize. And blaming it on your poor education--that 's real class, blue. Jeez, even Einstein overcame a bad education, and you're saying you're orders of magnitude smarter!
+3 # kyzipster 2012-06-02 21:56
If I'm reading your post correctly, you're not in the 0.1%.

In case I'm wrong then I'll say that what many of us expect is some gratitude for those tax breaks that allowed you to put that money away. Now that it's clear that we have no way of paying down the $14 trillion in debt that those cuts contributed greatly to, we're asking for mutual sacrifice. We need to cut spending that benefits the poorest members of society and raise revenue, we're asking you to go back to the tax rates of the 1990s. Is that persecution?
0 # WilmingtonNCBiz 2012-06-03 07:09
Quoting kyzipster:
If I'm reading your post correctly, you're not in the 0.1%.

In case I'm wrong then I'll say that what many of us expect is some gratitude for those tax breaks that allowed you to put that money away. Now that it's clear that we have no way of paying down the $14 trillion in debt that those cuts contributed greatly to, we're asking for mutual sacrifice. We need to cut spending that benefits the poorest members of society and raise revenue, we're asking you to go back to the tax rates of the 1990s. Is that persecution?

My understanding is that the 0.1% is 1.6M in some places to 2.1M in other places. Regardless, I am in that category (but not by much). I do not qualify for many tax breaks at all. Almost any tax break available to others is not available for me. My point is that I pay a huge amount of tax already and am not opposed to chipping in more. But at some point there is a limit. We are not a communist country and no do I want us to be a communist country. Don't get me wrong - see my prior post in regard to my feelings on taxes and raising them more. But, if you try to eliminate anyone making a lot of money, when earned fairly, there are some issues with that system also. I've heard that an alcoholic is defined as "anyone who drinks more than you" and we need not apply this to money as well!
+6 # kyzipster 2012-06-03 10:44
OK. I responded by saying the debate is about going back to the tax rates of the 1990s for the top 1%. (I would personally support eliminating all of them to put the country back on track but the White House has promised to keep middle class tax cuts). Massive tax cuts were given to your income bracket and to corporations and to this day they have not been paid for. Republicans suggest we can cut spending to pay for them and they're even campaigning on more tax cuts. Reputable experts, conservative and liberal, disagree. They say we have to cut spending AND raise revenue, or taxes.

I fail to see what any of this has to do with communism, another way of suggesting that an entrepreneur such as yourself is getting persecuted. That's bull in my opinion.

The working poor is paying dearly because of this debt that Republicans refuse to address in any realistic way. Food and fuel costs have risen dramatically, the bare essentials for survival, because the debt devalues the dollar and contributes to inflation. This is only one cost of your tax breaks that have given you even more wealth. Were you really persecuted in the 1990s? Did you feel we were living in a communist state because the budget was under control?
+4 # WilmingtonNCBiz 2012-06-03 12:39
I would refer back to my original question. I have made my point that I am in the 1% by a good margin, pay an effective tax rate of 30+% and do not oppose raising taxes. Rather than just demonizing and lumping all of us together, it should be noted that there is heterogeneity among people doing very well. As a strong democrat I ask, what is it that I am expected to do to help? As a little more background, I am one of the few in my family to even attend college and came from a solid middle class (middle-middle class). I worked hard and pursued higher education. Moving through a state school system., I finally achieved a ridiculous amount of financial success through hard work. I did nothing shady and have nothing to hide. I could be your next door neighbor. So I don't mind higher taxes, but also feel exasperated at times hearing talk of us all being evil. That is not true. Just recognize that there is some balance. And in spite of being in the upper 1%, I am a democrat, I have maxed out donation to Obama, on behalf of both my wife and I, support affirmative action, support gay marriage, etc. etc. What is realistically expected from average people such as myself who have found financial success besides what I am already doing?
+2 # jlohman 2012-06-03 13:31
Your problem, of course, is who you hang out with. I use the 80-20 rule frequently... 80% of CEOs are pretty decent people, and it goes downhill from there. The reverse is true for politicians, 20% are pretty decent people, but watch out for the other 80%. The best thing for people like you is to (a) quit funding the political parties and (b) push for public funding of campaigns. Yea, that may piss off Obama, but you are looking beyond his term. Nothing good can come of political bribes, so don't help it along.
+2 # kyzipster 2012-06-03 14:03
If you're willing to see your taxes raised, I'm not sure why you're feeling like such a victim. The 1% pay an average effective rate of 15%, this is what we're bothered by. You probably do not pay 30% on investment income.

Obama has proposed lowering the corporate tax rate and getting rid of loopholes that help to make this possible, sounds like something that could help you. Does this make you feel persecuted also? It's a revenue neutral solution. Do you think the obstructionist Republicans want to debate ANY solution?

I'm confused as to why you feel like a victim. We're only trying to address the injustices in the tax code.
+5 # dovelane1 2012-06-03 15:48
A local editorialist, Ed Raymond, in a local alternative paper of Duluth, Mn., titled "Reader Weekly" quoted U. of Cal. professor Ernest Callenbach as writing "Capitalists who grew rich and powerful by making things gave way to a new breed: financiers who grasped that you could make even more money by manipulating money. They had no concern for the productivity of the nation or the welfare of its people; they believed in maximizing profitas the absolute economic goal."

Is your success based on productivity or financial manipulation? It would seem to me, that if your success and the success of others is based on productivity, you should be supported. If based on financial manipulation, it should not be supported, and should be regulated, and taxed accdordingly, and very stringently.

At present, there are few, if any real consequences meted out to what Callenbach calles the "looter elit," so why should their priorities and decisions change.

I like to use the example of the people who build and sell land mines. If they had to bury some land-mines in their back yards, where they and their families have to live, would they still be building land-mines? If they had to pay for the hospitalization and burial costs for all the people they have injured and killed, would they be buildimg land-mines? If there are no immediate consequences, why should the robber barons change?
+9 # kyzipster 2012-06-02 17:22
Great article. Unfortunately we need a 1% who are worried about the future of this country. In a global economy it has become meaningless, they've already invested in countries with a growing middle class. I remember reading about Bill Gates investing 100s of millions to train computer engineers in India. It won't be long before their wealth is largely independent of conditions in the US. They're determined to drain as much as they can and invest it for maximum profit. I think even the 1% understand that eventually there will be a voter reaction to their obscenities and they're prepared.

Patriots my asp.
0 # jimattrell 2012-06-02 18:39
If we keep our members of congress at home, voting by Internet sessions, that will reduce costs, keep them with their constituents, and make paid lobbyists travel extensively to peddle influence; which will eliminate most of them from the action.
+1 # MrGoodrant 2012-06-02 20:44
Even if you eliminated Congress entirely, you'd save only $5 billion. Travel expenditures must be a teeny fraction of that. Congrats, jimattrell, you just saved some teeny fraction of 1/7th of 1 percent of total federal spending, and reduced the debt by some teeny fraction of 1/30th of 1 percent. And what makes you so sure the lobbyists wouldn't follow the members back to their districts?
+5 # John Steinsvold 2012-06-02 19:29
An Alternative to Capitalism (if the people knew about it, they would demand it)

Several decades ago, Margaret Thatcher claimed: "There is no alternative". She was referring to capitalism. Today, this negative attitude still persists.

I would like to offer an alternative to capitalism for the American people to consider. Please click on the following link. It will take you to an essay titled: "Home of the Brave?" which was published by the Athenaeum Library of Philosophy:

John Steinsvold

“Insanity is doing the same thing over and over and expecting a different result."~ Albert Einstein
+3 # MrGoodrant 2012-06-02 21:13
I took a look. Basically you call for the elimination of money and markets and the creation of "economic coordinate, monitor and carryout our economic needs." You say these bodies would be sort of like local school boards, except that instead of picking textbooks etc., they would get to decide which of us can have houses, cars, boats, etc.

You obviously don't have much experience with local school boards.

No, thanks, John, I've actually done pretty well under capitalism. I think I'll stick with it, even though it throws us some nasty curves every 75 years or so.
0 # John Steinsvold 2012-06-02 22:24

In some respects, our economy will be the same. Our free enterprise system will remain in place as it is today; but no money will be exchanged. Profit will no longer be a factor and cooperation will replace competition. Government, industry and the people will work together as a team toward common goals.

Yes, the administration of a way of life without money is a huge problem. As proposed in my essay, a web of "economic bodies" would be created; one for the federal, one for each state and one for each local level. These economic bodies will coordinate the economic traffic in our nation. They will interact with each other as much as modern technology will allow. A balance of supply and demand will be achieved taking every conceivable factor into consideration including conservation and our environment as well as the needs of the people and their craving for luxuries.

In short, these economic bodies will be coordinating what is now our free enterprise system to fulfill the economic needs of our nation.

Note: The local school boards would be involved only to establish priorities in the neighborhood. For example, if housing is available, who would have the most need? The homeless would have a higher priority than those living in crowded quarters.

John Steinsvold

Perhaps in time the so-called dark ages will be thought of as including our own.
--Georg C. Lichtenberg
+1 # MrGoodrant 2012-06-02 22:42
John, it is said that the human brain is the most complex thing in the universe. An economy is basically the interaction of millions of human brains. If you think a local or national or any finite "board" is capable of coordinating all that activity, my only question for you is "How's the weather on your planet?" Please read Hayek. ASAP.
0 # bluepilgrim 2012-06-04 08:11
I started reading Hayek once -- but I puked all over the keyboard and had to stop.

It doesn't matter how complex the brain is (and it's is certainly not the most complex thing -- it is way too small to even get close; most things in the universe are so complex that most people can't begin to understand even what they do. Look at some information theory.) -- it doesn't matter because the econmic system is so highly abstract that such level of detail is ignored anyway -- likely justifiably so in most cases. One does not need to even know who all is eating to feed a clowder of cats. Stocastics will do just fine.

The real problem is not doing without money (people have lived without it before, in various places and times); the problem is people are too dumb, ignorant, underdeveloped, and insane (mostly this last) to pull it off any time soon. Most people still have no understanding of abstraction, and don't even see a need to read Korzibsky's general semantics or Zen literature.

Pay to order of Mr. Goodrant
One Zillion Dollars

Don't you feel richer now?
Get enough people to believe that stuff and you really will be richer. It's all a silly social construct, and you would never get cats to go along with it: they don't do financial ontology.

The true universal commodity is compassion and empathy.
0 # MrGoodrant 2012-06-06 19:11
Thanks, blue, for your concise and mature (eew, Hayek, gaaag me!) critique of Hayek’s work. Actually I read The Road to Serfdom expecting to have much the same gut reaction. I’m a Keynesian, after all. Indeed, there was much I disagreed with, but I ended up mostly agreeing. If you can suppress your gag reflex, you can learn from anybody. From you, for example, I learned a new word: clowder.

Yes, money is a social construct. Dollars have no necessary connection to anything of real value. They have value only by convention: we accept dollars because others accept them from us. Cats have no use for them. But is money therefore “silly”?

Language is a social construct, too, isn’t it? Words have no necessary connection to what they signify. They mean things only by convention: we use English words because other English speakers understand them. Cats have no use for them. So is language also “silly”?

I think if we did away with language, our society–this conversation, for starters--would come to an abrupt halt. And I think if we did away with money, so would our economy.

And for what? I gather you want to abandon money because people sometimes abuse it. Should we also abandon language because people sometimes lie? I think both money and language are valuable information systems, and on balance make us better off.
0 # MrGoodrant 2012-06-06 19:14
P.S. Yes, there have been places where people substituted compassion for money. Most were called monasteries. I know of no such clowder or cloister that extended beyond a few devoted souls AND provided a standard of living like yours and mine. I, for one, am not keen on living on cat food. So it frankly scares me that your economic model is an invisible hand feeding cats. And with cat food that materializes out of nowhere! I think you’ve left out a production side, blue. But don’t expect to herd the cats into making it themselves—they ’re too stochastic (note the “h,” by the way—or is it “stocatstic” in this case?).
+6 # angelfish 2012-06-02 19:50
Sadly, there are none so blind as those who WILL not see. The Primary reason why Newt was rattling the bars for the Colonization of the Moon is because that's where the 1% will probably wind up when "le deluge" arrives. Sadly again, I don't think they have a big enough space-shuttle to transport the "400", besides, there will be no-one there to wait on them hand and foot. Poor Dears.
+4 # Rick Levy 2012-06-02 20:01
The 1% will never get it. They don't have to. They can keep exploiting the 99% because people in the U.S. especially the workers will never take to the streets like their European counterparts. Most Americans consider such demonstrations as subversive and un-American. The Occupy movement is the exception that proves this rule.
-3 # jimattrell 2012-06-02 20:02
Canada had a serious financial crisis in the early1990's and will have solved their deficit problem in the next few years and earlier than expected. They did it by gradually reducing the business tax rate (about 18%) and increasing the personal tax rates. The result was business hiring with the extra cash and more people employed which grew the tax revenue significantly. They also cut social programs and started investigating abuse and corruption in social programs. It helped that there are only a handful of very regulated banks and that Government encouraged business. The difference is that the US has S Corporation taxation which makes it (falsely) appear that the owner is very wealthy when in fact they are not.
+4 # PGreen 2012-06-03 13:19
It is likely that the stringent banking regulation is responsible for the relatively healthy Canadian financial sector. Certainly the US has cut far more social programs s/o positive result.
Wikipedia tells us, "In Canada total tax and non-tax revenue for every level of government equals about 38.4% of GDP, compared to the U.S. rate of 28.2%." This is easy to check online elsewhere as well.. Wiki also tell us:
--Canada's total governmental spending was about 36% of GDP vs. 31% in the US
--Canada's income tax system is more heavily biased against the highest income earners
--Government spending at all levels (federal, state/provincia l and local) has traditionally been higher in Canada than the United States.
--For its higher taxes Canada has a larger system of social programs than the United States. This includes having a national broadcaster in the CBC, a largely government-fund ed health care system, and having all major universities receive partial government funding.
+9 # Counselor1 2012-06-02 20:07
Sadly, I'm afraid this right - thinking piece is unrealistic. I wish the wealthiest people thought this way, and some, the 40 billionaires who have agreed to give half their fortunes to charity, seem to agree. But the callous other half, whose political funding is toxic, and their Liars for Lucre publicists and Congress-creeps , know that the the rich can live anywhere in the world. They can live in gated communities in the safest and least uninhabitable parts of the world (after the world workforce is forced to ruin it on their behalf.) They could give up their citizenship and move to Singapore or a Caribbean island. They'll continue their mad reign unless and until Americans either de-register from both major parties, refuse to support them and elect a coalition of anti-big money people, or there is a violent revolution. That would be as terrible as the Civil War, because America has, like all countries, a large group of fascist loyalists.
+5 # mdhome 2012-06-02 21:00
"Today's widening inequality extends to almost everything - police protection, the condition of local roads and utilities, access to decent health care, access to good public schools. As higher education becomes more important - not just for individuals but for the future of the whole U.S. economy - those at the top push for university budget cuts and tuition hikes, on the one hand, and cutbacks in guaranteed student loans, on the other. To the extent that they advocate student loans at all, it's as another opportunity for rent seeking: loans to for-profit schools, without standards; loans that are non-dischargeab le even in bankruptcy; loans designed as another way for those at the top to exploit those aspiring to get out of the bottom."
Just one evidence you cannot buy IQ with money.
+4 # letsfixit 2012-06-03 08:07
Higher education is NOT the only solution. As long as this country continues to award bridge contracts to china because we don't have a large enough pool of welders- we wil continue to allow our backwards education system to lead us into excess personal debt and unneeded skill sets.
+9 # sgmp 2012-06-03 09:32
It all becomes hopelessly complicated. Find a starting point we can all agree on.. get influence of big money out of government. An amendment to overturn Citizen's United. Bring back Glass Steagal. And that is just a start. Tax the rich??? Of course.
0 # bluepilgrim 2012-06-04 09:38
The best use of higher education is for people to learn economics, history, linguistics and rhetoric, law, philosophy and ethics, criminology, and how to organize and conduct a revolution. That's what the oligarchy is afraid of and why they keep people ignorant. When enough people find out what is really going on they won't stand for it. Notice how often it is the students who start things up.
+5 # letsfixit 2012-06-03 07:11
Our nation does not understand what it is doing to itself. When you go to HomeDepot and pick through every tool on the rack looking for something American made- it is NOT THERE.

Harbor Freight All Chinese tool stores abound. Asian cars have more america content than "American" cars in many cases.

Until this nation understands what their consumption is based on- nothing will change.
+7 # Innocent Victim 2012-06-03 12:52
Mr Stiglitz, an excellent teacher, fails (as do Paul Krugman and Robert Reich) to mention the rentier class that is as important and as destructive as the financial one: the military-imperi alists. They suckle on half of the federal discretionary budget. They produce nothing but the tools of the destruction of other peoples, societies and lands, as well as the blowback that eventually destroys some of us. Isn't it strange that he would fail to mention this huge drain on our productivity and national wealth? Isn't it curious that he would leave unsaid that our militarism makes us pay rent to China, Japan and S. Korea in the form of interest on the loans they make to our federal government and that binds us for decades ahead? Why doesn't he mention how we are being bound to the care of the maimed and broken of our returning armed forces?

We have such fine economic scholars to teach us, but they teach us nothing about the single biggest rent that we pay from our federal budget. Not only does that rent buy us no security, it increases our reason to be fearful.
+8 # Listner 2012-06-03 13:28
The man who wants to be President of the United States of America has an offshore account to AVOID PAYING TAXES IN THE UNITED STATES.

Don't even THINK about electing this guy !!!
-4 # letsfixit 2012-06-03 18:05
If the tax laws are on the books- and what he did is perfectly legal - is it wrong to not simply flush money down the toilet or light your Lucky strikes with a hundred dollar bill?

Change the tax code- don't blame the people who use legal loopholes.
+1 # PeaceOrDestructionItsYourChoiceToday 2012-06-05 14:52
Quoting letsfixit:

Change the tax code- don't blame the people who use legal loopholes.

The same people who write it are the same people who know how to abuse it. There is no easy way short of firing them all and starting with fresh uncorrupted people outside the two parties.
0 # PeaceOrDestructionItsYourChoiceToday 2012-06-05 14:59
Quoting Listner:

Don't even THINK about electing this guy !!!

I can't believe this is the best they can do. This is why I am no longer a Republican. I can't stomach the Demoncrats. I am a centrist or even a Libertarian but definitely not of the other two extremes. I can't believe they even think they have a shot with Romney. What moron is running that party. Seriously? If Obama will not protect the Constitution and the Bill of Rights who will? That person for President. We have little time the ELITE have a plan to destroy the country and take it over under Marshal Law. Do not Riot make changes by peace and accept none of their BS. The End is near and you can stop it by rejecting the current powers. Vote them all out ASAP.
+3 # feralblue 2012-06-03 14:02
Mr. Stiglitz - Thank you (and Vanity Fair) for finally clearly and precisely writing what we are all feeling. Now I know how to exactly state what I think about the way America is going.

My son has no future to look forward to like we did, and I'm beginning to think that our idealistic 60's was the beginning of the end. Just look at all the "hippies" who went back to Daddy's money after 'dropping out', and left the rest of us wondering what happened! I'm hoping this article goes 'viral'. The 99% must stand up for itself which we started to last October. More articles like this please - maybe talk to us regular people and write an article about that. . .
+8 # Innocent Victim 2012-06-03 15:54
Tell us, Mssrs Stiglitz, Krugman and Reich, how much of our work-force is now dependent on US military imperialism! How many of our cities, small towns, communities are dependent on military and naval bases, factories that produce arms and munitions, airplanes, submarines, naval ships, nuclear weapons, US spying and surveillance agencies, VA facilities! Show us a graph of the dollars that go into this sort of expenditure and a graph of the dollar value of US production (not just assembly) of consumer goods and services since 1976! Your astute observations on the need for Keynesian stimulus is fine, but you leave out the structural disabilities of the US economy that come from militarism and globalism. Keynes, brilliant as he was, had no remedy for that!
+4 # letsfixit 2012-06-03 18:07
Do not forget about the Dept of Homeland Security.
+1 # Innocent Victim 2012-06-03 21:57
Yes, thanks!
+5 # Selwick 2012-06-03 18:30
What is the problem with the 99%?
Too many people believe they belong to the 1%.
Here is an unscientific guess just for the sake of the argument:
30% think they belong to the 1% and another 30% believe that one day they might join the 1%.
In my eyes that is the reason why so many people are against tax increase for the rich. They think they are rich and they are not. As a matter of fact, they could be as poor tomorrow as the next guy. "Sorry we had to streamline. Your job has been eliminated."
+4 # mjc 2012-06-04 09:00
Much of what basically describes the 1% in this blog can be agreed with easily, but my only problem with some of the arguments is that when this very well-to-do group actually becomes extremely wealthy, they no longer are really a part of society as most of us know it. Their means of transportation consist of every form available, fleets of cars, boats, airplanes, and perhaps even private trains. Their homes exist in many countries and regions. The bank accounts such as they exist are also in many places as well, mostly to ease any tax burden that might be present. There are very few Warren Buffets in the world and the 1% has no affinity with anything like the middle classes, much less the poor, except as objects of their charity. They are able to buy and sell super-packs but probably are a lot less interested in which party is elected or which person is elected. Their society is not at risk for the most part; ours is.
+1 # C. Winslow 2012-06-04 10:36
I am sensitive to the view that much needs to be done in reducing military costs in the global economy. However, I believe that Stieglitz and the editors were right in not moving into that subject since, for a satisfactory remedy, it requires reciprocal as well as unilateral action. A mention of the defense budget as one of the drains on economic progress might have been order. It is part of the capitalistic competition that must be reformed along with our domestic competition.

The Stieglitz is an excellent piece, and I truly wish that every American could both read and understand it. If they could, it would increase the probabilities that remedies can be managed through the ballot box rather
than through violence.
+3 # wilma 2012-06-04 10:49
This was a very good article; it explained the issue of our widening inequality and the necessity of the top earners to create wealth in a positive way and not simply collect rent.
It disturbed me when the bank 'bailouts' did nothing to aid those households possessing mortgages on their primary and only homes were allowed to lose those homes - there was no bailout for them. What gives? Where is the justice?
People need something to work for and ones own home has been a primary driver of the American Dream or why bother. That is certainly why voters are more disillusioned than ever.

It is simple, in order to keep building America, start listening to the beleaguered Middle Class or there not only will be no Middle Class, there will be no AMerica worthy of saving.

+3 # letsfixit 2012-06-04 11:22
When Kelly Rippa thinks it's cool to talk about someone expanding a 2000 sq ft house to 11,000 sq ft you know our values are completely backwards. The one percent is all about ego and cocktail party babble. The rest of the world cannot relate.

We each have to find a way to relate to each others values.
That is not happening in real life, in politics, and in congress
0 # Stephen 2012-06-05 10:24
when the banks were in the hole, they could have been bailed out by allocating the same funds to debtors on the condition they pay down their debts. The banks would have received the same money, and the debt load of the middle class would have been reduced significantly. Instead, the banks get free money - from the taxpayers- while the taxpayers' debts remain on the books. Doubly screwed.
+1 # 2012-06-04 11:41
What most folks forget or fail to realize is that sociopaths are the norm or default version of a human; we are the best killers or we would still fear tigers, bears and the like. Thus those with a little empathy are the EXCEPTION! The sad corollary is that most of the 1% are 'legacy kids' having no need to read history. A few more big bank failures and a missed military payroll make EDUCATE THEM as was Louis 14!
+1 # 2012-06-04 13:16
If too much of the GDP goes to the 1% then how
does the 1% spend it? On stocks? Bonds? Land?
When there is a surplus supply of capital, we
should get a bubble---i.e. financial instability. While instability is not good for the 1% it may be OK for the .001%
+3 # cybervigilante 2012-06-04 18:40
"Richard Nixon, known to this day as a manipulative cynic, concluded that social peace and economic stability could best be secured by investment - and invest he did, heavily, in Medicare, Head Start, Social Security, and efforts to clean up the environment. Nixon even floated the idea of a guaranteed annual income."

It's sad, but Nixon was far to the left of today's Democrats. In fact, Obama, Clinton, and Carter are far to the right of Nixon, despite all this teanut hooraw about socialistic. People who use the world socialistic don't even know what socialism is. It's social security, one of the few government programs that works - if they'd stop robbing it. Would you want your social security to be invested in Enron?

All we export any more are war and pornos, but the Netherlands and Germany are producing, exporting, have vibrant economies, jobs, education, healthcare and strong socialism, but Also strong capitalism. The two are not antithetical.Bu t our Rupert-and-Koch controlled media keeps us in the dark with slogans and hatememes.
0 # MrGoodrant 2012-06-07 20:05
Actually U.S. exports, at about $1.3 trillion, exceed the entire GDP of all but about 12 other countries. We're the world's #1 exporter. And arms exports are only about 3% of the total; porn doesn't even amount to rounding error. The problem isn't our export prowess; it's that we import even more.

Would have given you a thumbs up but for that--and for mislabeling Social Security as socialism. We really need to get past these careless, antiquated cliches that substitute for real observation and thought.
-1 # Martintfre 2012-06-05 11:24
Let's start by laying down the baseline premise:

Because trickle down works today's poor live better then the greatest of kings of just a few generations ago. Why even the most sacred progressive FDR was stricken by a disease that is largely unknown in our world.
-2 # jimattrell 2012-06-05 12:21
If nothing else Obama has certainly divided our country. I remember when we could disagree and still make things happen. Kennedy, Reagan and Clinton were good examples. Our US expenditure budget is funded 60% with tax revenues and 40% with new debt.  The broad categories of spending are roughly as follows:  5% interest on the debt, 13% on all governmental operations, 22% on defense, and 60% on “entitlements” (social security, medicare and medicaid payments, federal and veterans pensions, etc.). So if we could just get past "who did it" and concentrate on "fixing it", I'm certain we can pull out of this mess. Making our country energy independent would solve many problems; mostly the unemployment and declining tax revenue problem. If we simply do that, considering the environmental issues, like they manage to do in Canada in a big way, then that would be a start. Natural Gas is clean and plentiful and if we converted trucks from Deisel vehicles to Natural Gas as a start, our carbon footprint would also be positively impacted.  Somehow we need to elect "get it done" leaders who do not fear for their elected lives. Most of our long-term members of congress are spending most of their time running for re-election, that's been the downfall of our system. I believe we should look not at what they say, look instead at who they are and what they did. And let's forget about what side of the aisle they reside.
+1 # PGreen 2012-06-05 14:12
Getting the special interest money out of politics would address many of these leadership issues. The best solution is to overturn the SC ruling that money is free speech, which is obviously fallacious. Then ban outside income for members of congress, and restrict all income for five years after an official leaves government service to eliminate the revolving door fiascoes. Government service should be Service and not selfish interest. The current system causes members of congress and high level officials to act as covert lobbyists for particular industries. Also, more strictly regulate or eliminate lobbying, (currently the financial sector alone employs five lobbyists for each member of congress). Then publicly finance elections (eliminate PAC contributions) and mandate network television time (as in the UK) for serious candidates.
But the problems in our system have more to do with distribution of returns than spending. Our current level of social spending is perfectly supportable after eliminating the Bush tax cuts for higher income people. We need to monitor expanding healthcare costs, but that could be solved with a single-payer system. The economy is unhealthy because half the public has no money in our current distribution system. This is due to muscle, not merit.
0 # PeaceOrDestructionItsYourChoiceToday 2012-06-05 14:47
Great article sounds much like the message I have been putting out.I am a reformed Republican and not a Democrat. Both parties blow and are full of liars,thieves,a nd self interests.Now we have to FIRE and replace every single person in politics today with anyone other than the two parties.This should get the point across.A slow change is fine.We need a central database with names and pictures of everyone running for any position.We want to know who changed their coats and still hides their spots.We want to keep out all the political lifers who have gamed us and the system.This upheaval will get both sides attention and let them know that this planned takeover and forced police state is not going to happen. By peace we will replace the old system and replace it with the people at the bottom.We will legislate 99% taxes on the rich as punishment for their dirty deeds.We will hunt them down worldwide and reclaim some of that wealth that they have been hoarding.We will impose new rules on wall street.We will not allow them first dibs on the likes of Facebook at $20/share for insiders and elitist only to sell to the public at $38 a share.The elite on Wall street "CASHED OUT" of it taking a huge chunk of the little guy and his 401K.Talk says FB will not exist after 2020 Talk of "pump and dump".I played the game and their is no belief in product,service s,or companies there. It's about sucking equity from anything that has it.Anyone with morals should know better.RISE UP PEACEFULLY!

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