James Carroll writes: "That the rich get richer while the poor get poorer can seem a timeless cliche, yet something is steadily corroding America. The mythic land of equality has the largest income disparity of any Western nation. How can that be?"
The chief executives of banks that received federal government aid testified before the House Financial Services Committee, 02/12/09. (photo: Reuters)
Now the Rich Get Richer Quicker
03 January 11
he new year requires an inventory of the old. Mostly, this is an individual impulse, leading to resolutions and renewal. Such reckoning can seem an intensely private exercise. But what of a whole society? Can we assess the year just past with an eye on the entire land? Morally, how fares the United States of America?
If a just society is defined by the relationship between the well off and the very poor, we have big trouble. US Census data for 2010 show the widest rich-poor income gap on record. In 1968, the top 20 percent of Americans had about 7 times the income of those living below the poverty line. By 2008, that disparity had grown to about 13. By 2010, it had grown even further, to more than 14. The poverty level in 2010 was put at $21,954 for a family of four. In 2010, the percentage of Americans living below half of the poverty line (or about $11,000) had grown from 5.7 percent in 2008 to 6.3 percent. That the rich get richer while the poor get poorer can seem a timeless cliché, yet something is steadily corroding America. The mythic land of equality has the largest income disparity of any Western nation. How can that be?
These figures show that the shocking economic collapse of the last two years has been no collapse whatsoever for the most affluent, even while it remains traumatic for most, and catastrophic for many. Yet instead of generating a sense of moral urgency, this condition has produced a spirit of entitlement among the privileged, complacency among the struggling middle, and resignation among the impoverished. How else account for the most decisive judicial act of 2010 - the Supreme Court ruling in January that elite-protecting political spending by corporations must be unrestrained - and the most decisive legislative act - the December extension by Congress of massive tax cuts for that wealthiest sub-minority? And who can deny that the court decision led directly to the congressional act?
What's worse, instead of prompting a reconsideration of the untrustworthy twin pillars on which America's financial culture stands, the 2010 responses artificially reinforced them. The war economy is the first of these, with current annual military expenditures now exceeding $1 trillion - the most ever. Ironically, nothing undermines American security like the cuts in public spending (infrastructure, schools, libraries, etc.) made necessary by exploding budgets for outmoded weapons. Not guns over mere butter now, but over bread - and books and bridges. This monetary calculus leaves aside the most corrupting dynamic of the war economy, how the nation is driven into unnecessary wars simply by the unleashed momentum of hyper-war-readiness. Over-investment in arms leads to their use, period.
The second pillar of America's economic culture is the reduction of the pursuit of happiness to shopping. A tragedy, classically speaking, is when something good leads to something bad. Early numbers suggest that retail sales over the last few weeks of 2010 are up significantly, as the economic stimulus pays off. This means job growth, mortgages paid, careers rescued - the Obama recovery taking hold. And who can bemoan that? Yet looking deeper, we see that consumer confidence remains a confidence game. Emerging from the economic meltdown, we are still chained to the hamster's wheel of earning-in-order-to-spend. Manufacturing in America has faltered in all but the manufacturing of imagined needs which, once met, only manufacture more, leaving people consumed by consumption. Our idea of the good life, even as it sets up a next economic collapse, is destroying us.
This bleak inventory can extend to other facets of culture - how the once-proud institution of journalism increasingly confuses entertainment and politics, celebrity and news, with the result that, even as information explodes, the citizenry is less critically informed than ever. Hence the public gullibility to the Know-Nothing Tea Party movement, which so dangerously swamped the 2010 elections. What's that odor in the air - harmless swamp gas, or the whiff of fascism?
The point of a dark reckoning like this is not to wallow in defeat, but to confront the actuality of the national condition. At New Year's, the individual takes a good look in the mirror and resolves to change. So with our common life. America is better than this.
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Comments
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Without loosing tears here, the did take a hit, as well.
Of the historic wealth growth amongst the top; that was the result of the Enron era-the Clinton years.
In 1993 the top 1% of income earners earned 13.79% of all income (AGI) earned. By 2000 the number had balooned to 20.87%.
It then fell following the March 2000 crash of the Enron bubble-falling to 16/7% by 2002; then recovering and further making a smaller gain, to 22.83% in 2007. In 2008, surely a result of the housing crash fallout, it was back to 20.00%; or slightly lower than when Clinton left office.
Needless to say, the ratio of CEO pay to average worker pay made an even more disturbing launch during the Clinton years, only to fall during all years of the Bush era.
See ALFCIO chart here:
http://www.aflcio.org/corporatewatch/paywatch/images/2010_trend_chart_2.gif
But as you are ignorant and not willing to engage intellectually..
Yes - the sucking sound of money moving upward has been going on for decades.
The bubble collapsing ( I suspect you mean the housing bubble - not the dot.com bubble) is simply the final straw.
Yes, wages have been more or less stagnant (I'd argue that the middle class is seriously going backwards) for decades.
You're dead wrong about Freddie/Fannie - but please note - it was HUD handing out the marching orders.
Oh right.. sometime around 1997, lenders just started waltzing into community orgizing orgs like ACORN pushing poor minority folks by the tens of millions to move out of their rental unit and go purchase a friggin house.
Realtors didn't play a role either, did they?
Oct. 2000 - HUD ANNOUNCES NEW REGULATIONS TO PROVIDE $2.4 TRILLION IN MORTGAGES FOR AFFORDABLE HOUSING FOR 28.1 MILLION FAMILIES
http://archives.hud.gov/news/2000/pr00-317.html
And if you want a good education read this one:
http://www.aei.org/docLib/Pinto-Government-Housing-Policies-Crisis.pdf
or read this one from the NY rag tag Village Voice:
Andrew Cuomo and Fannie and Freddie - How the youngest Housing and Urban Development secretary in history gave birth to the mortgage crisis
http://www.villagevoice.com/2008-08-05/news/how-andrew-cuomo-gave-birth-to-the-crisis-at-fannie-mae-and-freddie-mac/
This is not rocket science. The housing bubble as well as the credit crisis was created by HUD's actions. Yes, after it got rolling, most everyone jumped on the bandwagon. Bush - like Clinton before him, with the DotCom bubble - should have crushed the housing bubble by 2001 - in order to save the country from the crisis.
There were 27 million sub-prime (Alt-A)
loans "two-thirds [19.2 million] of the subprime and other high-risk loans were held or guaranteed by government entities or entities required by the government to acquire, guarantee, or insure the loans.
This makes it very clear that the great bubble of 1997–2007 did not develop naturally as an ordinary bubble; it was driven by a government social policy intended to increase homeownership in the United States.
The banksters had a need for mortgages to populate their CDOs and unless they started handing out subprime mortgages then their cash cows would run dry. Blaming the victims, the borrowers who were convinced by banksters that they could afford the mortgages, rather than the criminals running the banks ignores the basic principle of motive. The banksters were greedy and in need of financial instruments to make money from nothing. This is why there was an explosion of subprime lending. The greed of the banksters. The borrowers are not responsible for our current economic crisis. It is the banksters who sold the subprime mortgages who are responsible for this disaster. They are also responsible for convincing otherwise intelligent people that the victims are the criminals. Follow the money, it will always lead you to the real crooks.
But the bubble was born via HUD policies; lowering of lending standards (early to mid late 1990's) - setting targets to put tens of millions of poorer minorities into home ownership (yes plenty of folks on both sides of the isle jumped on this bandwagon - but the major regulations by HUD were in the late 90's and in late 2000 - Cuomo). The marketing coordination with ACORN and Countrywide not only educated these tens of millions of "innocents" to come to the table to play in the R/E markets - they facilited it by changing all the rules.
con't..
Obama: "Well, I uh, think there are a lot of folks who have to take some responsibility. The original idea was a good one, which was that let's see if we can distribute this more broadly and make it easier to provide loans to people who otherwise might be-- not be able to get a mortgage loan."
.. he was talking about all that I have said here... you know all the nonsensensical obvious stuff - that folks here are calling me names over.
How many residences are there in the US? 170 or so million?
Imagine for a minute how supply is cut, when the government lays out the marching orders (linked above - HUD 2000) to put 28 million new homeowners into that market. Limited supply - prices are driven up. Prices go up - interst rates lowered - lending standards lowered - more buying - more shortage - more price appreciation. A bubble.
Many on the left and the right, were warning of the housing bubble as early as 2000.
In 2003 - the NYT's wrote in New Agency Proposed to Oversee Freddie Mac and Fannie Mae "The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago." NY Times Sept. 10, 2003.
Too bad that he didn't overcome the objections and prevail.
Start with the United States Supreme Court ruling in 2010 that allows corporations to give unlimited $$ to campaigns and SWING elections. No matter how you spin the rhetoric of the Republicans about "the will of the people" --- those NEGATIVE ADS allowed Americans to be deceived and us Americans (under the top 2-10% will PAY and PAY and PAY.
That ruling STOLE my LIBERTY and gave away the hope of getting big $$ out of government forever.
When the TOP court makes such a DECISION the corruption will trickle down to the district courts---- I've already felt and seen it in my lawsuit. Lawyers connected to the judge = lawlessness.
I did not even mention tax cuts; however, I would wonder how many millions of jobs that the Bush tax cuts "saved." Also interestting that federal income tax revenue soared 44% (2004-2007) following the full implementation Of the Bush tax cuts, in 2003. Likewise, the federal defict decreased rather significantly during each of those 4 years.
Following the crash of the 90's dot com bubble, as well as following the collapse of the housing bubble, in 2007, horrible things happened to "our" economy. In both, it was and now is, very difficult to get it going again.
Do we learn from this?
PLUS the jobs created by Bush TAX CUTS have and continue to be created overseas (a minor fact that FAUX omits as does your R's friends in Congress. We need jobs in the USA, dear.
Maybe you should post on a FAUX web site with other people who think their opinions substitute for facts.
In plain English "you are entitled to your own opinion but not to your own facts"
ALthough Nazi Germany turned this statement around -- as do our Congressional people who quote or contribute to FAUX
I could argue that the jobs that were created under Clinton were created because the congress was taken over by the Republicans (see bi-partisanship comes easy to me) for the first time in decades and the dot.com bubble soared. Even then - I'd still arugue that the dot.com bubble of greed and fraud (which the national media still adores Clinton for) was as corrupt and ultamently damaging as any other single event in our economic history .. well until Clinton's housing bubble burst and created this mess.
And of course, it would be quite easy to verify the numbers I presented.
BTW - the $$ supporting our military does not create pregress in the USA and the mantra of "homeland security" is an OPINION and not a fact.
GOP: you are entitled to your own opinions but not to your own facts.
United States Supreme Court: Your decision to let corporations (as individuals or whateer) to control our elections is the WORST CRIME of 2010 - yes bigger than the Haiti disaster.
Look at the fed deficit in the chart. It went down under Clinton and up under W.
http://www.usgovernmentspending.com/downchart_gs.php?year=1900_2010&view=1&expand=&units=p&fy=fy11&chart=G0-fed&bar=0&stack=1&size=l&title=US%20Federal%20Deficit%20As%20Percent%20Of%20GDP&state=US&color=c&local=s
I only said that in those 4 years following the full implementation of the Bush tax cuts in 2003 - that the federal deficits fell - in each year.. it went from -412.7B to -318.3B to -248.2B to -160.7B
The tax revenue numbers come from the IRS - where else? Several folks compile them. One of the most often sourced is here: http://www.taxfoundation.org/files/ff249.pdf
Yes - deficts were declining towards the end of the Clinton era. This was a result of a combination of super budget restraint (between the Rep Congress and Clinton) and the incredible increases in tax revenue because of the dot.com bubble. When the dot.com bubble collapsed in March of 2000 - $trillions in projected furture tax revenues would be toast - mattered not, whether or not Bush or Gore was president. It vaporized - almost overnight. Yes, Bush's immediate spending on entitlements, stimulus, 9/11, and war costs did over time add much to the budget woes. I'd bet that Gore wanted to spend even more.
I think I may share a prejudice or two in common with you, but I am nonetheless offended by your comment. This is not (the designated 'liberal') TV5 in France. If 'forparity' [or Phyllis Schlafly for that matter] wants to try to burst our bubble of presumably unrigorous GroupThink, then let him try.
If what he says is nonsense, then he has set his cause back a step (good for you). If what he says makes sense and leads to a little step of intellectual growth on your part then it is also good for you!
Capice?
I've never had an R by my name, and more of my friends are devote Communists then conservatives .. and considering that all of those Communists love JFK and RFK - I continue to find that interesting.. as Bobby and Jack were not exactly Commie lovers.
First rule in life - respect of other's views - otherwise, one is intolerant.. leaning to bigotry.
From the US Treasury dep't...
09/30/2010 13,561,623,030, 891.79
09/30/2009 11,909,829,003, 511.75
09/30/2008 10,024,724,896, 912.49
09/30/2007 9,007,653,372,2 62.48
09/30/2006 8,506,973,899,2 15.23
09/30/2005 7,932,709,661,7 23.50
09/30/2004 7,379,052,696,3 30.32
09/30/2003 6,783,231,062,7 43.62
09/30/2002 6,228,235,965,5 97.16
09/30/2001 5,807,463,412,2 00.06
09/30/2000 5,674,178,209,8 86.86
09/30/1999 5,656,270,901,6 15.43
09/30/1998 5,526,193,008,8 97.62
09/30/1997 5,413,146,011,3 97.34
09/30/1996 5,224,810,939,1 35.73
09/29/1995 4,973,982,900,7 09.39
09/30/1994 4,692,749,910,0 13.32
09/30/1993 4,411,488,883,1 39.38
09/30/1992 4,064,620,655,5 21.66
09/30/1991 3,665,303,351,6 97.03
09/28/1990 3,233,313,451,7 77.25
"stupidest" man ever to sit in the oval office. If Bush era economics, an endorsement of failed Reagan era debauchery, had worked, we wouldn't have gone into recession. It took a few years for the malfeasance of Bush economics to achieve their pernicious effects. I'm no fan of Clinton and Obama is only kicking the can down the road. I don't want to live in a "social Darwinist theocracy." I don't believe Jesus would have either. It sounds like you do. I pity you more than anything else. The rich don't NEED their rights and privileges championed. Income disparity is greater than any year since '28. We know what followed. Find your soul.
See ALFCIO chart here:
http://www.aflcio.org/corporatewatch/paywatch/images/2010_trend_chart_2.gif
Indeed - how and why it happened should be common knowledge.
Only when you understand it, can you speak out against it.
Do you see on this page where I am quite clear about my view of the top end tax cuts?
Other than that, you know nothing about me - and apparently litte about economic history.
In 1999, other than clearly seeing that as soon as the dot.com bubble crashed, the federal (and states) budgets would quickly return to massive deficits (Dean Baker personally shared that view with me, as well), I thought that unemployment would reach 15% by 2005 or so. I predicted DOW at 8,600 -- All of this was in fear of what was happening to the middle class. I didn't yet understand how powerful (and dangerous) that the housing bubble would delay the day.
And, yes - I love Lou Dobbs out there (although he's not my style) - the working class has never had a more competent voice shrilling for it.
I support a 50% tax on any and all short term gains - and no tax on long term (over say 5 year investments) - like nothing about the game. I do like the concept of investing capital in something that one believes in - and wants to share in the profits of - good ole fashion super conservative investing.
Common sense, but this is moot. The point of this article is that the economy is not serving the people. When we have an economy in which big business, Wall street, or the wealthy are getting richer, this does not mean that the public prospers. Business should be here to benefit the public, not the other way around. Wealth comes from the labor of society; morally it belongs in much greater share to those who do the work and perform the services. When we move away from that principle, we move to totalitarianism .
Most of Bush's economy was the housing bubble - which was created by HUD- then engorged by other factors.
However.. as GDP grows, would you expect tax revenue to increase or decrease?
Conversly, as GDP shrinks (or slows) would you expect that tax revenue would decrease or increse?
You're familiar with Christiana Romer,considere d one of the premiere Great Depression academics. With her husband, David Romer, they form a powerful economic duo. The two CA-Berkeley profs have published a variety of papers together, which at times run counter on tax policy to Pres Obama's own opinions.
Most recently - last spring they wrote:
"Our results indicate that tax changes have very large effects on output. Our baseline specification implies that an exogenous tax increase of one percent of GDP lowers real GDP by almost three percent.
The most striking finding of this exercise is that tax increases have a large negative effect on investment."
Most economists would agree with that.
It had the oppposite effect when the dot.com bubble (the knee jerk joke that gave us a brief shot at surpluses).
In 2000 (the year the bubble crashed) corp tax revenue was $207.3B. By it fell to $131.8B. With personal income tax rev., it was just over $1 Trillion in 2000. By 2003, it fell to $793.7B. (note in 2003 the combined change there was $281B. (note the proj growth of revenue looking forward from 2000 - called for much much more.) Enter deficits. Right Bush did that. ha!
Enter Bush tax cuts (Look there's much more involved here) - both personal tax and corp tax revenue soared thru 2007.
Then the housing bubble crashed - and tax revenue collapsed once again.
This is not rocket science. A first grader should be able to explain this.
Whether Clinton's dot.com bubble and deregulation was more dangerous than Bush's war & entitlement spending, or Obama's stimulus was less or more effective than Bush's stimulus in 2001 & 2003, are really good questions. There are no absolute good talking points here.
I'm not sure of your position on government spending for social programs...? Spending for no purpose, or for poor reasons (e.g. deceitful wars) is counter productive, but spending to alleviate poverty or to create a more fair, creative, etc. society is money well spent. It is obvious that a poorly regulated "free market" does not address these issues, nor is it sustainable; indeed the excesses of this system caused it to crash, and it would burn if the proponents of this ideology did not conspire to grab further wealth.
WAKE UP! Based on results, it's not!
Would you want to live there and support that regime? Or is it time for regime change? Let's let the bombs drop and the missiles fly. Oh, ooops, that's us the United States of America.
Where did consent of the governed and the "all men are created equal" principle run off to.
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