Showing posts with label Income inequality. Show all posts
Showing posts with label Income inequality. Show all posts

Wednesday, November 9, 2011

Robert Reich On The Real Stakes of the 2012 National Elections, The Wall Street Debacle, And the Collapse of the U.S. Economy

(Photo: Andrew Bossi / Flickr)

http://www.truth-out.org/washington-pre-occupied/1320501362

"The disconnect between Washington and the rest of the nation hasn’t been this wide since the late 1960s.

The two worlds are on a collision course: Americans who are losing their jobs or their pay and can’t pay their bills are growing increasingly desperate. Washington insiders, deficit hawks, regressive Republicans, diffident Democrats, well-coiffed lobbyists, and the lobbyists’ wealthy patrons on Wall Street and in corporate suites haven’t a clue or couldn’t care less.

I can’t tell you when the collision will occur but I’d guess 2012.

Look elsewhere around the world and you see a similar collision unfolding. The details differ but the larger forces are similar. You see it in Spain, Greece, and Italy, whose citizens are being squeezed by bankers insisting on austerity. You see it in Chile and Israel, whose young people are in revolt. In the Middle East, whose “Arab spring” is becoming a complex Arab fall and winter. Even in China, whose young and hourly workers are demanding more – and whose surge toward inequality in recent years has been as breathtaking as is its surge toward modern capitalism.

Will 2012 go down in history like other years that shook the foundations of the world’s political economy – 1968 and 1989?

I spent part of yesterday in Oakland, California. The Occupier movement is still in its infancy in the United States, but it cannot be stopped. Here, as elsewhere, people are outraged at what feels like a rigged game – an economy that won’t respond, a democracy that won’t listen, and a financial sector that holds all the cards.

Here, as elsewhere, the people are rising."

--Robert Reich

All,

Robert Reich says it all here and then some. This is just the beginning of a massive social movement that will-- if intelligently sustained and expanded --serve as the very foundation in the short and longterm for any real concrete social, economic, and political change in this society. So while it's just a (brilliant) beginning the important thing to remember is that it is a very POWERFUL beginning and for the first time in a very long time we, the People are in the forefront of actually making or at least demanding these changes. That is an inspiring reality in itself that will continue to serve as a major incentive for mass participation and elevating the very principle of grassroots struggle and mobilization that animates all genuine radical change in society and culture. This is our major opportunity to ACT on our own collective behalf for once without crippling ourselves with the eternal copouts and lazy equivocations of cynicism, solipsism, fatalism, nihilism, and despair. We dare not blow, take for granted, or smugly dismiss this great opportunity for creating real change. If we do so it will only be at our own peril as citizens and human beings...

Kofi


3 November 2011
by Robert Reich
Robert Reich's Blog | Op-Ed

The biggest question in America these days is how to revive the economy.

The biggest question among activists now occupying Wall Street and dozens of other cities is how to strike back against the nation’s almost unprecedented concentration of income, wealth, and political power in the top 1 percent.

The two questions are related. With so much income and wealth concentrated at the top, the vast middle class no longer has the purchasing power to buy what the economy is capable of producing. (People could pretend otherwise as long as they could treat their homes as ATMs, but those days are now gone.) The result is prolonged stagnation and high unemployment as far as the eye can see.

Until we reverse the trend toward inequality, the economy can’t be revived.

But the biggest question in our nation’s capital right now has nothing to do with any of this. It’s whether Congress’s so-called “Supercommittee” – six Democrats and six Republicans charged with coming up with $1.2 trillion in budget savings — will reach agreement in time for the Congressional Budget Office to score its proposal, which must then be approved by Congress before Christmas recess in order to avoid an automatic $1.5 trillion in budget savings requiring major across-the-board cuts starting in 2013.

Have your eyes already glazed over?

Diffident Democrats on the Supercommittee have already signaled a willingness to cut Medicare, Social Security, and much else that Americans depend on. The deal is being held up by Regressive Republicans who won’t raise taxes on the rich – not even a tiny bit.

President Obama, meanwhile, is out on the stump trying to sell his “jobs bill” – which would, by the White House’s own estimate, create fewer than 2 million jobs. Yet 14 million people are out of work, and another 10 million are working part-time who’d rather have full-time jobs.

Republicans have already voted down his jobs bill anyway.

The disconnect between Washington and the rest of the nation hasn’t been this wide since the late 1960s.

The two worlds are on a collision course: Americans who are losing their jobs or their pay and can’t pay their bills are growing increasingly desperate. Washington insiders, deficit hawks, regressive Republicans, diffident Democrats, well-coiffed lobbyists, and the lobbyists’ wealthy patrons on Wall Street and in corporate suites haven’t a clue or couldn’t care less.

I can’t tell you when the collision will occur but I’d guess 2012.

Look elsewhere around the world and you see a similar collision unfolding. The details differ but the larger forces are similar. You see it in Spain, Greece, and Italy, whose citizens are being squeezed by bankers insisting on austerity. You see it in Chile and Israel, whose young people are in revolt. In the Middle East, whose “Arab spring” is becoming a complex Arab fall and winter. Even in China, whose young and hourly workers are demanding more – and whose surge toward inequality in recent years has been as breathtaking as is its surge toward modern capitalism.

Will 2012 go down in history like other years that shook the foundations of the world’s political economy – 1968 and 1989?

I spent part of yesterday in Oakland, California. The Occupier movement is still in its infancy in the United States, but it cannot be stopped. Here, as elsewhere, people are outraged at what feels like a rigged game – an economy that won’t respond, a democracy that won’t listen, and a financial sector that holds all the cards.

Here, as elsewhere, the people are rising.


Links:

[1] http://www.truth-out.org/print/8617
[2] http://www.truth-out.org/printmail/8617
[3] http://robertreich.org/post/12303771388
[4] http://www.flickr.com/photos/thisisbossi/4393355562/in/photostream/
[5] http://www.truth-out.org/printmail
[6] http://www.truth-out.org/content/robert-reich
[7] http://org2.democracyinaction.org/o/6694/p/salsa/web/common/public/signup?signup_page_KEY=2160
[8] https://members.truth-out.org/donate
[9] http://www.truth-out.org/?q=occupied-what-now/1318825916
[10] http://www.truth-out.org/?q=food-system-pays-dearly-wall-street-occupies-washington/1319462814

Sunday, October 30, 2011

The Massive Increase in Economic Inequality in the United States Since 1979




Protestors participate in an Occupy Oakland rally Monday, Oct. 10, 2011, in Oakland, Calif. (AP Photo)

http://www.cbsnews.com/8301-250_162-20125589/cbo-top-1-getting-exponentially-richer/

October 25, 2011

(CBS News) The Occupy Wall Street movement has, for the most part, been formed around the idea that wealth distribution in America is unfair, and that the economic system is skewed to reward the already wealthy with the highest gains. A new report from the Congressional Budget Office appears to have confirmed that.

Specifically, it has confirmed that the rich really are getting richer.

Between 1979 and 2007, the top 1 percent of Americans with the highest incomes have seen their incomes grow by an average of 275 percent, according to the CBO study (PDF).

In comparison, the 60 percent of Americans in the middle of the income scale saw their incomes increase by just 40 percent during the same time period, according to the study, which was based on a combination of IRS and Census data.

To put the growing disparity of income distribution in a slightly different perspective: Between 2005 and 2007, the top one-fifth of earners in America earned more money than the bottom fourth-fifths.

The report declines to offer exact reasons for the growing income disparity, but acknowledges they are likely to include: Growing "superstar" salaries for actors, athletes and musicians; Changes in executive compensation; and the growth of firms in general.

Reports from the non-partisan CBO tend to get trumpeted by politicians who are supported by their conclusions, and dismissed by those who aren't, in a trend that crosses party lines.

The most relevant part of the report to the ongoing debt battle in Washington will surely by the argument, pointed out by The New York Times, that the government has done less and less to involve itself in redistributing the nation's wealth since 1979. That said, the report was careful not to draw a direct line between the growing income disparity and the lower rate of government wealth distribution.

"The equalizing effect of federal taxes was smaller" in 2007 than in 1979, as "the composition of federal revenues shifted away from progressive income taxes to less-progressive payroll taxes," according to an excerpt from the CBO report in the Times.


http://www.cbo.gov/doc.cfm?index=12485

SUMMARY

AFTER-TAX INCOME GREW MORE FOR HIGHEST-INCOME HOUSEHOLDS

After-tax income for the highest-income households grew more than it did for any other group. (After-tax income is income after federal taxes have been deducted and government transfers—which are payments to people through such programs as Social Security and Unemployment Insurance—have been added.)

CBO finds that, between 1979 and 2007, income grew by:

275 percent for the top 1 percent of households,
65 percent for the next 19 percent,
Just under 40 percent for the next 60 percent, and
18 percent for the bottom 20 percent.

The share of income going to higher-income households rose, while the share going to lower-income households fell.

The top fifth of the population saw a 10-percentage-point increase in their share of after-tax income.

Most of that growth went to the top 1 percent of the population.

All other groups saw their shares decline by 2 to 3 percentage points.

MARKET INCOME SHIFTED TOWARD HIGHER-INCOME HOUSEHOLDS

Shifts in the distribution of market income underlie most of the changes in the distribution of after-tax income. (Market income—or income before taxes and transfers—includes labor income, business income, capital income, capital gains, and income from other sources such as pensions.)

Each source of market income was less evenly distributed in 2007 than in 1979.
More concentrated sources of income (such as business income and capital gains) grew faster than less concentrated sources (such as labor income).

GOVERNMENT TRANSFERS AND FEDERAL TAXES BECAME LESS REDISTRIBUTIVE

Government transfers and federal taxes both help to even out the income distribution. Transfers boost income the most for lower-income households, while taxes claim a larger share of income as people's income rises.

In 2007, federal taxes and transfers reduced the dispersion of income by 20 percent, but that equalizing effect was larger in 1979.

The share of transfer payments to the lowest-income households declined.
The overall average federal tax rate fell.


http://bloggingblue.com/2011/10/25/new-cbo-report-reaffirms-the-growth-of-income-inequality-in-america/

New CBO Report Reaffirms the Growth of Income Inequality in America by PHIL SCARR
OCTOBER 25, 2011

We have become a class-based society

The Congressional Budget Office just released a report which shows yet again the growth of inequality in America. We have become a class-based society.

For the 1 percent of the population with the highest income, average real after-tax household income grew by 275 percent between 1979 and 2007 (see Summary Figure 1).

For others in the 20 percent of the population with the highest income (those in the 81st through 99th percentiles), average real after-tax household income grew by 65 percent over that period, much faster than it did for the remaining 80 percent of the population, but not nearly as fast as for the top 1 percent.

For the 60 percent of the population in the middle of the income scale (the 21st through 80th percentiles), the growth in average real after-tax household income was just under 40 percent.

For the 20 percent of the population with the lowest income, average real after-tax household income was about 18 percent higher in 2007 than it had been in 1979.

As a result of that uneven income growth, the distribution of after-tax household income in the United States was substantially more unequal in 2007 than in 1979: The share of income accruing to higher-income households increased, whereas the share accruing to other households declined. In fact, between 2005 and 2007, the after-tax income received by the 20 percent of the population with the highest income exceeded the aftertax income of the remaining 80 percent.

What’s really depressing about this is that American’s don’t understand how unequal America has become. A study by Michael Norton surveyed Americans on the question of what they think inequality is and what they think it should be. His results were startling.



Notice the variation between Ideal and Actual. And the startling line that shows how deluded Americans are as to the real distribution of wealth in the nation.

I challenge anyone to argue that this level of inequality is a good thing for America.