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No matter how many times it's said, lowering tax rates for the highest income Americans does not create jobs or stimulate the economy. In fact, a detailed look reveals that the overall economy does slightly better when taxes at the top are significantly higher. This also holds true on the state level, as states with higher top personal tax rates have growth rates and median incomes that average greater than those with low (or even no) taxes. No matter how many times the experiment is repeated, or how long you extend the results, cutting taxes for the wealthy does not stimulate growth.

The idea that cutting taxes for the wealthy will generate jobs is as much a myth as bigfoot, and I don't mean the truck. It's demand that stimulates economic growth and drives down unemployment. Demand isn't generated by giving even more money to those who already have more than enough. It doesn't come from a handful of people ordering up yachts. It's certainly not created by rewarding those who engage in speculative investment. Demand grows when the much broader base of middle and working class have money available to meet needs ranging from feeding their families, to buying cars, to putting their kids through school.

Cutting the top tax rate will not stimulate demand. However, cutting the top tax rate can still wreck the economy. Here's how it happens.

This chart reflects Census data on income over the last sixty years. Folks at the 2oth percentile serve as a view of the working poor. Those at the 60th percentile represent the middle class. The 95th percentile serves as a marker for the wealthy.  All the numbers have been adjusted to account for inflation so that doesn't cloud the issue.

From this you can see that folks at the 95th percentile were bringing home the equivalent of around $65,000 in 1947 and are nearer to $200,000 today. With a gain over over 300% after inflation, they've done pretty well over this period.

The middle class has also improved their lot, though not by as much. In 1947, the 60th percentile was pulling in the equivalent of just over $28,000. Compare that to $75,000 today and it's still a gain of over 260%. Yes, the gap in income spreads out a lot more than you would think from those numbers, but then the income of the 95th percentile was a lot more than that of the 60th percentile to begin with.

Finally, the poor.  Those at the 20th percentile were earning less than $13,000 in 1947. Remember that these are adjusted values, so this is no "yeah, but in my day you could buy a loaf of bread for a nickel" number. Today the poor have doubled their relative income, coming in around $28,000.

That's the overall picture. Everyone gains over time, but the wealthy not only grow faster than the others, they have more money to start with, so the income gap constantly expands. It's pretty much what you'd expect.

Only there's a little more hiding in the data.

This is the year-over-year income growth for those at the 95th percentile. I've split the data into two regimes: a higher top tax rate from 1947 to 1981 (top rate ranging between 69% and 94%) and a lower top tax rate between 1982 and 2008 (where taxes ran from 28% to 50%).  Broken down like this, you can see that there were good years and bad years in both time periods. The income growth of the wealthy isn't immune to a bad overall economy, and in recession years their income came down. Strangely enough, the income of the wealthy actually grew better under the high tax regime, but then as we'll see, so did other incomes.

Let's jump next to the poor. Split out in the same way, you can see that while tax rates were higher on the wealthy, the income of the poor actually grew at an annual rate that was roughly equal to that of the rich. Yes, the rich were still edging them out, and because of the big difference in starting point, the gap between rich and poor was still expanding each year, but it sure beats out conditions under the low top taxes. Since taxes on the wealthy fell, income for those at the bottom has stagnated.

Finally, the middle class.  Like both the 95th percentile and the 20th percentile, growth for the middle class cruised along at around 2% for the period when the taxes on the wealthiest Americans was higher. However, when those rates were cut, middle class income growth was abruptly cut in half. For the last twenty five years, the middle class has not even averaged 1% growth a year.

Here are those numbers again.

Higher top tax rate
Lower top tax rate
95th 2.11% 1.62%
60th 2.22% 0.97%
20th 1.96% 0.58%

When top tax rates were higher, the middle class was actually holding its own against the folks at the top, and the poor were moving up at roughly the same rate as the rest of the nation. When tax rates were cut at the top, there was a radical change. Under the low taxes on the wealthy regime, middle class growth was cut in half. Growth of income for the poor was cut to less than a third of the previous pace.

Why? Because cutting taxes at the top does exactly what the conservatives have always advertised—it encourages the wealthy to make more money. However, personal taxes aren't paid on the revenues of a company. They're paid on how much you take home. Cutting taxes at the top encouraged the wealthy to put more cash into their own pockets and hold back pay that otherwise would have gone to middle class employees and the working poor.

Cutting top tax rates doesn't benefit the wealthy by growing the economy, or even by growing their own income in terms of actual dollars. It benefits them by suppressing the income of the middle class and the poor. After all, what makes someone rich isn't just making more dollars, it's making more dollars than everyone else.

Here's one more way of looking at it. In 1947, the income of one wealthy person at the 95th percentile was enough to purchase the annual labor of just over five people living at the 20th percentile. For the next 34 years, that relationship stayed almost the same. However, in the 25 years that followed the relationship altered much more radically. Now the income of one person at the 95th percentile is enough to buy the work of more than seven people at the 20th percentile. Relative to the poor, the wealthy are far more wealthy. And relative to those at the top, both the poor and the middle class are far worse off than they were 25 years ago.

For the wealthy, when taxes were relatively high they could see that their interests were best served by making more investments in their business and providing the kind of benefits and training that gave them a long term edge. The only way to do well was by participating successfully in the market, and often doing well also required doing good. There's no doubt about it, capitalism is driven by enlightened self interest, but the form of enlightenment varies wildly with the limits that society imposes. In a well governed economy, regulations and taxes exist that place responsibilities to community, employees, and the environment on par with those of shareholders and executives. In this kind of system, corporate officers and owners will see that they can build more value for themselves by building for the long term, by placing value in their employees, by sharing benefits and knowledge. An educated, competent workforce is the only way to create the broadly based, durable company needed for those at the top to enjoy the benefits.

However, enlightened self interest can also come in the form of realizing that no one is minding the shop. In such circumstances, it pays to ignore the community, ignore the workers, ignore the rules. When short term gain offers a better return than virtuous participation in the marketplace, enlightenment says "screw it, I'll take mine now, thank you."  That's what happened when deregulation of the savings and loans generated a crisis in the 1980s. It's what built the unsustainable bubble that popped in 2008. And it's what we've been doing to the broader economy since 1982. We've deregulated wealth; removed the incentives that made it reasonable for those who had much to invest in those who had little. We screwed up. When taxes drop so far that they cease to be a consideration, the best move is to simply grab all the money while it's available. Why tempt fate in the marketplace, why risk unforeseen circumstances, why do all that boring old work if you can simply pocket the profits and run?

The current system provides no incentive to build companies and systems that can stand the test of time, companies built around valuable and educated workers who have a stake in the success of the company, community, and society. We've built a system that's tottering on the edge of terminal instability, and those calling for still lower taxes are likely to knock out the last supports holding up the floor.

As it turns out, Ronald Reagan really did stage a second American revolution; a revolution that reversed the original. Because removing any pressure on income at the very top removed the only obstacle to what we have today—a system that inches ever closer to feudalism.

note: all the data this week came from census data available here, but calculations of annual growth and relative growth are my own. Any error is sure to be on my end.

Originally posted to Daily Kos on Sun Sep 04, 2011 at 06:00 AM PDT.

Also republished by ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement, Progressive Hippie, and DKOMA.


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Comment Preferences

    •  Excellent, as usual (11+ / 0-)

      I was particularly interested in one of your initial statements here.

      This also holds true on the state level, as states with higher top personal tax rates have growth rates and median incomes that average greater than those with low (or even no) taxes.

      I think most folks now know that most repub legislators have signed a "pledge" not to raise any kind of taxes...federally.  But, there is no such pledge in each of our 50 states.  As we've seen, democrats are butting their collective head up against a brick wall trying to get any kind of agreement on increased revenue through a more progressive tax scale at the federal level, but that shouldn't stop the states from doing this.  

      In my opinion, the states should take the lead here.  So many states are under water fiscally and have had to cut many state/local workers and, as a result, many services to their citizens.  Everything can't be solved at the federal government level.  States need to be proactive and look at being more self-sufficient in this respect.

      - If you don't like gay marriage, blame straight people. They're the ones who keep having gay babies.

      by r2did2 on Sun Sep 04, 2011 at 06:18:56 AM PDT

      [ Parent ]

    •  Really? I hope you graph Illinois. (1+ / 0-)
      Recommended by:

      Illinois Employment Plunges After Tax Hikes

      After tumultuous debate, in mid January Governor Quinn signed a tax bill that increased the personal income tax rate by 67 percent and the corporate rates by 46 percent, retroactive to Jan. 1. A provision that would have granted property tax relief was dropped as state senators sought enough votes to pass the bill.

      Well, in addition to the worst bond rating in the country, the state lost the most jobs of any state last month. The Illinois Policy Institute reported the grim news that "Illinois lost more jobs during the month of July than any other state in the nation, according to the most recent Bureau of Labor Statistics report. After losing 7,200 jobs in June, Illinois lost an additional 24,900 non-farm payroll jobs in July. The report also said Illinois’s unemployment rate climbed to 9.5 percent. This marks the third consecutive month of increases in the unemployment rate."

      What is significant is the correlation between the January tax increase and the downward employment spiral as seen in the chart above. The graph could have been pulled from an Arthur Laffer textbook to illustrate the futility of trying to cover the sins of profligate spending by raising taxes.

      The graph in that article speaks volumes about the relation of taxes and jobs - and with jobs loss goes economic growth.

        •  One month in one state... (7+ / 0-)

          Is kind of a small data set.  I can only tell you that mapping 50 states (plus DC) over 25 years shows no such relationship.

          •  7 months of decline since tax hikes (1+ / 0-)
            Recommended by:

            look at the graph - those are bureau of labor statistics' numbers.

            •  Except that graph is incorrect (5+ / 0-)
              Recommended by:
              neroden, docmidwest, oldcrow, Dragon5616, yaque


              You will also notice you are taking into account only a specific minimal time frame and the article uses numbers that are purposely vague. It fails to mention that in Jan 2010, Illinois unemployment was a staggering 11.2%, or that a tax hike of 67% personal and 46% corporate actually raised taxes from 4.8% to 7% on businesses and from 3% to 5% on personal income. In other words... Instead of 5 cents on the dollar you owed 7 cents as a business. This is not deterring anyone from starting or hiring. What is, is the uncertainty of an Economy as a whole. Greedy companies who ship jobs overseas. Also not included in those "unemployment figures" are public vs. private sector jobs lost.

              You can choose a ready guide in some celestial voice. If you choose not to decide, you still have made a choice. You can choose from phantom fears and kindness that can kill; I will choose a path that's clear - I will choose Free Will.

              by phitch on Sun Sep 04, 2011 at 07:09:27 AM PDT

              [ Parent ]

              •  Victor Laslo doesn't care about reality. (1+ / 0-)
                Recommended by:
              •  it's good I guess to have differing views (4+ / 0-)
                Recommended by:
                neroden, Dragon5616, La Gitane, yaque

                I'd like to hear Victor's explanation of the U.S. data that Mark put up there.  It's a little difficult to refute (or is that "refudiate"?).  In addition, the source is perhaps (and I don't know this for sure) a little bit biased.  "Business Insider"?  I'd be more sure about its bias if it were the "Wall Street Journal".

                "... a disciplined minority of totalitarians can use the instruments of democratic government to undermine democracy itself." -- Hannah Aredt, regarding the behavior of the National Socialist (NAZI) Party in the Reichstag in the Weimar Republic.

                by billlaurelMD on Sun Sep 04, 2011 at 07:35:45 AM PDT

                [ Parent ]

        •  That's why it's imperative the tax hikes (7+ / 0-)

          ON THE WEALTHY and CORPORATE PROFITS start on the federal level, so states aren't caught up in a race to the bottom.

          "Come on down. Lowest tax rates in the country. Lowest wages too, workers are plentiful, desperate and cheap!"

          Victor Laslo's third-world vision for America.

          And if corporations and the wealthy want to take their money and run, let them, then expatriate them and levy heavy tariffs on their products. You want to participate in the American economy pay your fair share or get lost. We don't need these greedy, self-serving unpatriotic MF'ers driving down the living standards of the rest of us to pad their accounts and perpetuate the new American aristocracy.

          I say fuck that and Fuck off Victor Laslo with your corporatist talking points. And fuck you for trying to use fear tactics to further the interests of the ruling class. Who are you to play that game here were so many are already frightened of an uncertain future and looking for good, working-class guidance?

          •  the 'race to the bottom' point is very important (2+ / 0-)
            Recommended by:
            Calamity Jean, yaque

            because there is every incentive now for states to do that.

            I think a state-by-state analysis would be interesting but what methodology to follow is the question - for instance, many higher tax states happen to have the best paying jobs and highest educated workforces - but that is based on trends over many years, not a recent change in taxes. I think anyone would be hard pressed to argue that an increase in businesses taxes in a state is suddenly going to lead to improved job growth in the state.

        •  Why do people fall for that propaganda? (3+ / 0-)
          Recommended by:
          neroden, yaque, Pescadero Bill

          At minimum find the data and make your own case. Instead, these right wingers, find some o9bsure article with the most obvious agenda and prejudice imaginable. Most free thinking people will dismantle that propaganda like Mexico compared to a state or "children of illegals" or all the rest after I stopped reading. Comparing a nation like Mexico to a state should stop most people right away.

      •  that's pretty funny (10+ / 0-)

        Since the Repugs have been happily slashing taxes at the state, local and Federal level since the early 80's to the lowest tax levels in the industrialized world, perhaps you could explain to us why, if lower taxes mean more jobs and better income, we are not the wealthiest most prosperous economy in the world right now.

        There would, um, appear to be some sort of flaw somewhere in your simple-minded analysis.

      •  Simply Put (4+ / 0-)
        Recommended by:
        neroden, freesia, La Gitane, yaque

        Correlation doesn't imply causation.  You have to show that tax hikes caused unemployment holding all other factors constant.

        Go ahead and run your regressions and see what you get.

        If I was a communist, rich men would fear me...And the opposite applies. The history of all hitherto existing society is the history of class struggles.

        by stewarjt on Sun Sep 04, 2011 at 07:40:52 AM PDT

        [ Parent ]

      •  Uh, Victor, on top of your OTHER inaccuracies (4+ / 0-)
        Recommended by:
        Calamity Jean, La Gitane, stewarjt, yaque

        Illinois has a flat tax. Meaning it hurts the poor when the rate is raised.

        If it had progressive taxation it would be possible to raise taxes on the rich without raising taxes on the poor.  Y'know? But it isn't.  So your data point says nothing about raising taxes on the rich.

        Read pp. 1-7 of Krugman's _The Great Unraveling_ (available from Google Books). NOW.

        by neroden on Sun Sep 04, 2011 at 09:25:59 AM PDT

        [ Parent ]

    •  if I may suggest . . . . (7+ / 0-)

      One diary, complete with graphics, that may be illustrative to many people is a topic we don't like to talk about in the US---the lopsided distribution of wealth. Although most of us feel it in our bones, few of us really know how actually lopsided our distribution of wealth really is (particularly compared to nations like Guatemala or India). Also, some graphs showing the distribution of things like stock ownership, "unearned income" and such, would remove a lot of myths people seem to have about how "democratic" our "free market" economy really is.

      It would open up some eyes to see just how dominant the super-wealthy really are, in everything.

      Just a suggestion.  :)

      •  Yeah, I want to see unearned income numbers (2+ / 0-)
        Recommended by:
        Calamity Jean, yaque

        I suspect those never get presented because of how shocking people would find them.

        Read pp. 1-7 of Krugman's _The Great Unraveling_ (available from Google Books). NOW.

        by neroden on Sun Sep 04, 2011 at 09:27:20 AM PDT

        [ Parent ]

        •  I find it surprising that IRS even has the guts to (2+ / 0-)
          Recommended by:
          La Gitane, yaque

          call it "unearned income" in the first place.  That is, of course, precisely what it IS, but I think such brutal honesty can only exist if somebody somewhere simply hasn't noticed it yet and hasn't demanded it be relabelled as "job-creating income" or some such horseshit.

          And in passing I note hmi's post below about the share of stock shares held by 401k's or pension funds as a very good example of why such a FP post, complete with graphs, is so necessary.  It is truly incredible what sort of nonsensical things Americans actually believe about the distribution of wealth in our country.

    •  Please do, Mark (4+ / 0-)
      Recommended by:
      jm214, mainely49, neroden, yaque

      this is the kind of stuff scientists like me just LOVE.  Hard data, and the facts that just jump out at you from the data are hard to refute ... unless of course they go against everything you believe ;-).  Hence our crisis today.

      "... a disciplined minority of totalitarians can use the instruments of democratic government to undermine democracy itself." -- Hannah Aredt, regarding the behavior of the National Socialist (NAZI) Party in the Reichstag in the Weimar Republic.

      by billlaurelMD on Sun Sep 04, 2011 at 07:31:00 AM PDT

      [ Parent ]

    •  Craft and effort shows (3+ / 0-)
      Recommended by:
      Plox, La Gitane, yaque

      This may not turn out to be the magnum opus of what you produce as a blogger, but it is a magnum opus.  How many essays on such topics from more traditional publications does this put to shame?  A must-read.

      In my avatar, the blue bars show how many want Reps who COMPROMISE; the aqua bars show who wants Reps who STAND FAST no matter what. (Left=Overall; Center=Democrats; Right=Republicans.) And there's the problem!

      by Seneca Doane on Sun Sep 04, 2011 at 07:40:25 AM PDT

      [ Parent ]

  •  I (6+ / 0-)

    don't need graphs to tell me it's time to: EAT THE RICH!!!!!!!!!

  •  a system that inches ever closer to feudalism. (8+ / 0-)

    I dunno about "inching". I get the sense that it's more like flushing a toilet; things are accelerating rapidly. External factors grown from wealth inequality; the outsized political influence of the rich in selecting policy, a global market in which to send that inequality into hyperdrive and spread its effect, and military adventurism have taken this whole thing up a few gears.
    We hear any of this from anyone on a campaign trail over the next 14 months, and I will be flabbergasted.

    Class war has consequences, and we are living them.

    by kamarvt on Sun Sep 04, 2011 at 06:19:40 AM PDT

    •  Wealthy people are insulated, mostly (7+ / 0-)

      The problem we have in America (very possibly globally) is that the wealthy people are pretty much insulated against the economic indicators of today.  These folks aren't going to lose their job and aren't going to find themselves unable to pay a house payment or find food for their family.  They're not going to be affected by the doubling of gasoline prices in the last two years.  So, as the economy spirals downward, the wealth gap continues to grow.  

      The "cure" for this is two-fold.  First, and I'm sure this will be echoed by most here, is for there to be a far more "progressive" income tax system that adequately reflects the ability of our citizens to contribute to our combined society.  The second, and by far the most important, is for our government to be completely focused on policies and programs that are dedicated to improving our economy and jobs creation.  There is no way this can happen without government spending...and I'm not talking about spending on just more "government jobs" but spending on WORK projects that, in themselves, generate free market economic activity and even more jobs.  

      The republicans are just as adamant about no new spending as they are about no new taxes, so the only way this can change is through us...we citizens...putting pressure on the republicans.  We shouldn't bother with democrats anymore...they're already on board with us (with exceptions, of course).  It's up to us.  We have to join up at every republican speech..every teaparty event..go to D.C. offices and name it.  

      So, we shouldn't just bash the rich just because they're rich.  It's going to be up to We The People to get this changed around.  It won't happen otherwise.

      - If you don't like gay marriage, blame straight people. They're the ones who keep having gay babies.

      by r2did2 on Sun Sep 04, 2011 at 06:34:10 AM PDT

      [ Parent ]

      •  the return of the welfare state (4+ / 0-)
        Recommended by:
        r2did2, Karl Rover, Calamity Jean, yaque

        is utterly inevitable, and the corporados themselves will soon be calling for it.  They have no choice.

        It is not only that income is shrinking; jobs themselves are disappearing---not just moving to China or Mexico, but disappearing altogether. Just as mechanization reduced the percentage of population that was involved in the agricultural sector to a mere 10 or 15%, so too has automation and mechanization reduced the percentage of population involved in manufacturing to a mere 10 or 15%, driving everyone to the service sector instead.

        Now, however, the same dynamic is in play, and automation is already steadily eliminating jobs in the service sector. Take a look at Home Depot, which is replacing all its cashiers with automated self-checkout machines. Even McDonald's is beginning to replace its cashiers with self-checkout kiosks, while drive-through workers are being reduced and concentrated in regional call centers. It's just a matter of time until WalMart, the single largest employer in the US, replaces all its millions of cashiers with computerized self-checkout machines.

        The effects of this automation will be devestating. Not only will the number of unemployed grow exponentially to disastrously high levels, but there will simply be no more jobs anywhere for anyone to go to--they will have been eliminated completely.

        There will be only two options available--either we ignore the large mass of unemployed and underemployed and let them fend for themselves (a situation which will eventually explode), or we form a new massive welfare state to provide for those who no longer have jobs.

        Interesting times ahead . . . .

        •  It's a grim view into the future (3+ / 0-)
          Recommended by:
          mainely49, oldcrow, yaque

          I think about exactly what you've posted here sometimes when I, myself, am using the "self check-out" at Walmart or Lowe's.  I also think about that when I'm ordering stuff off the internet where it's all stored in some giant warehouse with automated "pickers" that get the item(s) I've ordered and then puts it in a box and addresses it and shoots it down a conveyor to the Fedex bin to be picked up by some driver coming by.  

          I usually just blank out those thoughts when I get them, though, because it's too scarey to think about them....not for me but for my grands.  

          - If you don't like gay marriage, blame straight people. They're the ones who keep having gay babies.

          by r2did2 on Sun Sep 04, 2011 at 07:20:43 AM PDT

          [ Parent ]

          •  My long delayed "How the World Ends" book (5+ / 0-)
            Recommended by:
            r2did2, kamarvt, Karl Rover, oldcrow, yaque

            That starts with looks at Mayan predictions and biblical prophecies, ends with a look at the idea of the "information age," and how silly we were to think we could make such a major transition without enormous disruption and loss.

            Unfortunately, the publisher went out of business before the book hit the shelves. Now I have to think about my options.

            •  You've sparked my interest (1+ / 0-)
              Recommended by:

              You must have read me posting that I'm a, looking forward to reading that.  I can see my head nodding in agreement all the way through it right now.

              - If you don't like gay marriage, blame straight people. They're the ones who keep having gay babies.

              by r2did2 on Sun Sep 04, 2011 at 07:52:29 AM PDT

              [ Parent ]

          •   self-check out (2+ / 0-)
            Recommended by:
            Calamity Jean, yaque

            I know, this sounds luddite-ish, but I can't ever bring myself to use one of those lanes, no matter how long the other lines are.

            Of course, this is one tiny part of the economic picture. I too, order items on the internet frequently. We all benefit from the mechanized process of distributing cheaper products that are handled by fewer people. There is no going back.

            What needs to happen, is that other jobs need to be produced for the workers who are displaced by machines. Incentives for job-creators--more funds for R & D, maybe; more funding of educational programs for transitioning workers, maybe. Whatever it takes to get the creative engine going--the answer really is simply that more jobs will generate more demand and more economic growth for everyone.

            What we really need, I guess, is a group of legislators who will plan for the society as a whole, not just the top tier.

            "Do your best, and keep your sense of humor."--My Mom

            by mainely49 on Sun Sep 04, 2011 at 08:46:25 AM PDT

            [ Parent ]

            •  alas, legislators can't create jobs (2+ / 0-)
              Recommended by:
              r2did2, mainely49

              They don't own the businesses.

              The "job-creators" are creating plenty of jobs---in China.  At least until all those jobs get mechanized and automated out of existence too.

              I see no alternative to creating a massive welfare state that allows people to live whether they have jobs or not. And the corporados will not see any alternative to that either--which is when the whole "conservative" paradigm will die a quick sudden death.

              The corporados may be greedy selfish bastards, but they're not idiots---they know what they need to do to prevent themselves swinging from lampposts.

        •  this is not a new scenario (2+ / 0-)
          Recommended by:
          neroden, yaque

          ....  I believe the Luddites were of a similar mind, and wound up being at least somewhat incorrect, though we also had the rise of the welfare state.  But I think this time we may be up against the real deal of the loss of jobs through technology, with no (or at least insufficient) new job opportunities for those who've lost employment.

          Interesting times indeed ... and not in a good way :-/.

          "... a disciplined minority of totalitarians can use the instruments of democratic government to undermine democracy itself." -- Hannah Aredt, regarding the behavior of the National Socialist (NAZI) Party in the Reichstag in the Weimar Republic.

          by billlaurelMD on Sun Sep 04, 2011 at 08:59:04 AM PDT

          [ Parent ]

          •  there is a story told about Walter Reuther which (4+ / 0-)

            illustrates the idea:

            One day Reuther (the head of the UAW, for those who don't know) and Henry Ford were walking through a prototype Ford factory that was completely automated--all the workers had been replaced by robots.  As they walked amongst the whirring and whizzing robots, Ford turned to Reuther and announced triumphantly, "Well, Walter, how do you plan on taking these robots out on strike?" And Reuther shot back, "Well, Henry, how do YOU plan on getting these robots to buy cars?"

            It is the simple basic fatal flaw in the entire "free market" system, a problem they can never solve.

            •  that is an incredible story and quote .. (0+ / 0-)

              amazing way to look at it.  Too bad Mr. Reuther isn't around today.

              "... a disciplined minority of totalitarians can use the instruments of democratic government to undermine democracy itself." -- Hannah Aredt, regarding the behavior of the National Socialist (NAZI) Party in the Reichstag in the Weimar Republic.

              by billlaurelMD on Sun Sep 04, 2011 at 12:11:19 PM PDT

              [ Parent ]

              •  "hardware" becomes more like "software" (0+ / 0-)

                "Well, Henry, how do YOU plan on getting these robots to buy cars?"

                But the cost of production, like software, would be basically free.

                Marginal cost, or how much does the 1001st item cost.

                So, like free software (Linux, Firefox, Internet Explorer)
                free physical objects would quickly come to dominate,
                especially if (almost) nobody had any money.

                There are any number of SF stories that postulate the invention of
                a duplication machine.

                One possibility, like you suggest, is that everybody is immediately thrown out of work and 95% of humanity starves.
                The duplication machine is itself duplicated widely, everybody gets one free, and paradise ensues. Money becomes obsolete.
                It's easy to see that the second option is more likely, it only takes one purchaser of the duplicator to betray his class.

                This is of course an oversimplification (skilled professions? doctors? barbers? masseuses?)

                Now our problem is that this is more or less what's happening, but in slow motion.

                (It actually is happening,
                look at productivity figures, Reprap, 3d printing)

                How do you avoid having the ultra-rich capturing all the profits and power?
                Which is what's been happening in the US for the last 30 years.

                (A Comment I posted in March)

                "If a people say they're a chair, they're a chair."

                by yaque on Mon Sep 05, 2011 at 04:13:20 AM PDT

                [ Parent ]

      •  "Insulated?" more like "stacked the deck, re-wrote (2+ / 0-)
        Recommended by:
        oldcrow, yaque

        the laws to make their behaviors 'not illegal,' removed all consequences to themselves, externalized all the horrid costs of simple and complex greed..."

        Have you seen Roger Moore's little visual diatribe, "Roger and Me"? Remember the segments devoted to the staging of that memorable party thrown by the wealthy, where for $100 a couple, Flint's and Grosse Point's corporate rich folks could get a thoroughly cleansed, brand-new, urine-and-puke-stain-free, catered night in the brand-new county jail, 5 stories high and covering a city block, built as an early icon to the prisonization of America, where the jailers are "re-trained' GM assembly line workers, now lording it over their former fellow workers for a fraction of what their "union wages" used to be?

        Is feudalism the natural state of humankind? Is it the best we can hope for?

        "Is that all there is?" Peggy Lee.

        by jm214 on Sun Sep 04, 2011 at 08:12:04 AM PDT

        [ Parent ]

    •  a system that hurdles toward an abyss (3+ / 0-)
      Recommended by:
      Egalitare, kamarvt, yaque

      Natural systems are all based on sharing and interdependence.  Mighty trees shadows creates the micro climate for the ferns and other plants underneath.  Certain bugs latch on to animals and clean them.  The sun, the orb with the most light in our system (making it the most powerful), freely shines its light on the lesser planets.  Yet human society is ordered around a few among us taking as much as possible from the lesser.  Ignore the way the cosmos is set up and sooner than later the impact of humans will shut down the working systems of the planet.

      "My plan is this: to place before mankind the alternatives of sharing and death. No-one in truth could for mankind choose the latter, for that death would be shameful and bitter indeed, unlike your blackest fears. My friends, there is a way of Hope. There is a way into the Light. That simple way lies through Brotherhood and Love."
      - World Teacher Maitreya

    •  I'm not sure (2+ / 0-)
      Recommended by:
      kamarvt, yaque

      I've been reading more and more lately from billionaires, Wall Street traders and traditional conservatives that are coming out in favor of higher taxes, stimulus and regulation.

      I think the ideological train wreck that is the Tea Party Express really got away from these folks - they didn't see it coming.  The 'baggers are so blinded by their stupidity idiotology ideology that they don't see the real damage that their philosophy does to the real economy.  But the rich do, and I think the smart ones are starting to freak out.

      They're in a pickle; because they know that they need 'baggers to win elections, but the 'bagger economy is going to start affecting their wealth too, pretty soon....  what to do, what to do....

      "Mediocrity cannot know excellence." -- Sherlock Holmes

      by La Gitane on Sun Sep 04, 2011 at 03:04:27 PM PDT

      [ Parent ]

      •  the conundrum for the rich; (2+ / 0-)
        Recommended by:
        yaque, La Gitane

        Their greed pushed them to create an environment (through propaganda, the amassing of obscene wealth, and the long term planning and positioning of everyone from politicians to pundits to judges) that would allow them their ultimate prize; a true license to steal. They got it.
        The problem?
        Only the insane would let that happen, if they're not in on the payoff, and the teabaggers are not in on the payoff.

        The oligarchy has created a base so stupid, hotheaded, dogmatic, nihilistic, misinformed, and angry that they cannot control the thing that was their key to the treasure house.
        They've got their fucking treasure, but the cost (as any progressive could have told the arrogant sons of bitches) is the very system that they so wanted to own.
        It sucks for the rest of us now, but it will suck for them, too, soon enough.
        Frankly, i hope it hurts like hell.

        Class war has consequences, and we are living them.

        by kamarvt on Sun Sep 04, 2011 at 06:53:48 PM PDT

        [ Parent ]

  •  Also, a great deal of the flattening (9+ / 0-)

    of income inequality in the period from 1962-82 (from the Kennedy Tax Cuts to the Reagan Tax cuts) was due to the inflation of the 70s, which reduced the value of debt, which, due to mortgages and credit card interest, improved the situation of the middle class vis a vis the upper brackets.  Thus, the negative effects of the Kennedy Tax Cuts on income inequality were somewhat tempered by the subsequent inflation.

    Equality - I spoke the word as if a wedding vow, But I was so much older then, I'm younger than that now. Bob Dylan

    by Its the Supreme Court Stupid on Sun Sep 04, 2011 at 06:24:41 AM PDT

  •  I really liked the last graph. Maybe it was the (7+ / 0-)

    little people piled one on top of each other. I think it also illustrates the point that, in today's economy, the mega-rich more and more amass their wealth by stepping on the people below them.

  •  Brilliant Work. Thank You. [n/t] (3+ / 0-)
    Recommended by:
    Navy Vet Terp, mainely49, 714day
  •  how can we illustrate that (1+ / 0-)
    Recommended by:

    there isn't enough money in circulation to run the economy.

    so much wealth is in the plutocracies accounts, there simply isn't enough to 'run' the system.

    i want to see a graph of that!!!!!!!!!

    great job that i have saved to use in class collection of sources relating to the economic collapse.

    "Until we know how to safely dispose of the radioactive materials generated by nuclear plants, we should postpone these activities so as not to cause further harm to future generations" Dr Shoji Sawada

    by BlueDragon on Sun Sep 04, 2011 at 06:35:12 AM PDT

  •  Excellent analysis (1+ / 0-)
    Recommended by:

    with great graphs. I am working on an appropriate soundtrack now. I would be willing to stipulate to Republicans that there is truth to their favorite JFK quote about rising tides lifting all boats if they would accept the fact that higher taxes on the richest among us make the tide go up for everyone.

    Let's go back to E Pluribus Unum

    by hazzcon on Sun Sep 04, 2011 at 06:35:43 AM PDT

  •  this is it, right here: (2+ / 0-)
    Recommended by:
    mainely49, yaque
    In a well governed economy, regulations and taxes exist that place responsibilities to community, employees, and the environment on par with those of shareholders and executives.

    can we make this case? that gov't exists to provide the very important moderation and mediation among all of the stakeholders you mention: community/ employees/ environment (and i'd add global trade and global workers as well) in a country of mature, reasoned governance...

    but this, it seems to me, is more important than all of the "issues" at hand. making a case to converge on how we govern and the role of government in our lives is the only way to start mitigating the mess made of this first decade in this new century.

    and i mean making the case to all Americans... if we listen to each, we can forge a credo that will work. imo.

  •  The Politics of The Last Days of Rome, or (0+ / 0-)

    of recent days in Greece? Either way, it is an elite trance not soon to be broken.

  •  Increased demand drives job creation (10+ / 0-)

    Anytime you hear a tea bagger/conservative spout the line about taxes on the rich you MUST
    1) contradict them,
    2) question their grasp of economics,
    3) state "increased demand drives job creation" and
    4) question "what is your plan to increase demand?"

    Austerity programs reduce demand and deepen our problems.

    Hoover.  Those who do not learn from history...  are surrounding us!

    We kidnap. We torture. It's our policy. Embrace it or end it!

    by Mosquito Pilot on Sun Sep 04, 2011 at 06:36:42 AM PDT

    •  And you'll get the talking points back at you (5+ / 0-)

      The "job creators' fear Obama will impose high taxes.  We must lower taxes on the "job creators"

      The "job creators" are hampered by federal regulation.  We must get rid of environmental and safety and worker protection regulation

      Big government controls too much of the economy and prevents the "job creators" and squeeze out the "Job creators" from creating jobs.

      When you argue with a tea bagger, you need to know what they will spout back, so you can respond.


      "We have always known that heedless self-interest was bad morals, now we know that it is bad economics." Franklin Delano Roosevelt, Jan. 20, 1937

      by Navy Vet Terp on Sun Sep 04, 2011 at 07:06:41 AM PDT

      [ Parent ]

      •  and the replies are... (7+ / 0-)

        Lowering taxes on the wealthy hasn't created jobs.  In the 90's we had higher taxes and more jobs.  In the 2000s and so far in the 2010's we have lower taxes and fewer jobs.  Isn't that clear enough evidence?  If it hasn't worked yet, how many more decades do we have to redistribute our wages to the rich for it to work?

        Environmental and worker protection programs protect you, your children and your planet.  They were also in place during the last big economic expansion in the 90s.  If they were such a problem, why did the economy expand?

        Big business controls too much of the government.  That's why we have a wealth redistribution program that sends lower and middle class wealth to those who are already wealthy.

        Use factual examples to counter empty claims

        We kidnap. We torture. It's our policy. Embrace it or end it!

        by Mosquito Pilot on Sun Sep 04, 2011 at 07:22:21 AM PDT

        [ Parent ]

        •  Great talkin points (2+ / 0-)
          Recommended by:
          neroden, yaque

          and responses.

          Hitting them with factual examples from the "real world" may work with some of the delusional ones.

          I especially like your reference to the worker and environmental regulations in place during the last expansion. Hard to deny that one.

          "Do your best, and keep your sense of humor."--My Mom

          by mainely49 on Sun Sep 04, 2011 at 08:55:58 AM PDT

          [ Parent ]

    •  Demand... (0+ / 0-) only possible when you produce something of private sector exportable value. If you don't produce, you can't consume.

      (-5.50,-6.67): Left Libertarian
      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

      by Sparhawk on Sun Sep 04, 2011 at 07:12:29 AM PDT

      [ Parent ]

      •  that's not the whole picture by a long shot (5+ / 0-)

        Demand becomes possible when individuals have money in their pockets and believe that their future is secure enough that they should spend it rather than save it.

        Government can put money both directly and indirectly into people's pockets via extension of unemployment benefits, reduction in middle class taxes and infrastructure investment projects.  Been to any first world countries lately and compared infrastructure?  We face a competitive crisis--given the choice, where will the companies of the future locate?

        Intellectual Property isn't "exportable" in the way manufactured goods are, but it brings a lot of wealth back into this country.  Investing in our education system (another infrastructure program) makes this type of export possible in the future and creates jobs immediately that put money into the economy.

        We kidnap. We torture. It's our policy. Embrace it or end it!

        by Mosquito Pilot on Sun Sep 04, 2011 at 07:33:23 AM PDT

        [ Parent ]

      •  Demand is also derived from necessity (6+ / 0-)

        The NeoCon's favorite "necessity" is War.

        War produces nothing in and of itself, but it creates massive demand that has to be filled somehow, someway.

        Of course non-military necessity is much more difficult to gain political consensus around. Those thousands of crumbling bridges and roads? Chances are that 99% will survive another year without any additional maintenance, Just re-route the traffic to other routes and problem "solved."

        I live near a school district that has had to re-route buses for now going on 7 years because one bridge is so deficient that it can no longer safely hold vehicles over 2 tons. It costs that community an extra 8,000 miles each year to accomodate that lack of Public Investment. Many extra hundreds of extra hours each year of students having to wait at school bus stops in inclement weather, parents having less "wiggle room" in the schedules, etc. No one is keeping track of the entire economic impact (which includes similar re-routing of delivery trucks, service repair calls, even some emergency vehicle responses) of not spending $600,000 one time to keep life more liveable and more profitable for thousands of people for decades.

        The so-called "rising tide" is lifting only yachts.

        by Egalitare on Sun Sep 04, 2011 at 07:44:49 AM PDT

        [ Parent ]

      •  nonsense (6+ / 0-)

        A dollar is a dollar. The business where you spend your dollar doesn't care if you got it by manufacturing heart/lung machines or by digging holes in the ground then filling them in.

        Since less than 20% of the workforce is involved in any sort of manufacturing, and less than 10% is involved in any sort of agricultural production, most people with jobs produce absolutely nothing.

        •  All of the non-"produce" jobs are... (0+ / 0-)

          ...enabled only by the "produce" jobs. A good economy can only exist based on growing, mining, or manufacturing stuff of value. The ancillary activity you mention can only exist in this context.

          (-5.50,-6.67): Left Libertarian
          Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

          by Sparhawk on Sun Sep 04, 2011 at 09:46:49 AM PDT

          [ Parent ]

          •  simply untrue (1+ / 0-)
            Recommended by:

            What is India growing, mining or manufacturing that we are buying?

            They have invested in education and taken advantage of cheap communications networks to deliver value via intellectual property.  

            We kidnap. We torture. It's our policy. Embrace it or end it!

            by Mosquito Pilot on Sun Sep 04, 2011 at 10:58:51 AM PDT

            [ Parent ]

          •  so what (2+ / 0-)
            Recommended by:
            Calamity Jean, yaque

            How does that alter the fact that a dollar from a non-producing job spends just as well as a dollar from a mine or factory.

            Ten dollars into the economy increases demand by ten dollars, whether it comes from a mineworker or a government bureaucrat. Sorry if you libertarians don't like that.

            Libertarians seem to be utterly ignorant of the most basic premise of economics----everyone's "expense" is also someone else's "income".  By "cutting expenses", we as a society also are "cutting incomes". And that is fatal in an economic downturn.

            •  Ugh (0+ / 0-)

              Expenses are only worthwhile if paying them produces something of value or helps you somehow. If this isn't the case, the incomes you describe don't help society. Cutting out non-value-add activity is always a good idea (net).

              (-5.50,-6.67): Left Libertarian
              Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

              by Sparhawk on Mon Sep 05, 2011 at 06:17:41 AM PDT

              [ Parent ]

  •  Excellent post, (3+ / 0-)
    Recommended by:
    TallForAHobbit, Calamity Jean, yaque

      I've been throwing out comments about low upper tax rates encouraging profit taking vs. reinvestment for some time, but your post lays it out very well.

  •  I think that there is a second process at (7+ / 0-)

    work here. when you look at the period 1945-75, you are looking at a period when American businesses were producing things for the US market with US workers. Globalization has driven a race to the bottom. Not only is it cheaper to produce things outside the US, but US companies are no longer interested in selling to the US market. Companies no longer need us. As long as companies can off-shore their work forces and off-shore their profits, they have no need for American workers. Any jobs that are being created are low wage service jobs that are more difficult to off-shore.

    •  that is not a new process (6+ / 0-)

      American companies did exactly the same thing in the 50's and 60's--they shifted jobs from the unionized North to the non-union "right-to-work" South, to increase their profits by using lower-wage workers.

      Off-shoring is simply the logical and inevitable extension of that same process.

    •  Right on (5+ / 0-)

      And we are supposed to support even more free trade agreements, this time with Korea and Panama, on the theory that free trade agreements create jobs.  How many jobs, net, have NAFTA, CAFTA (Central American Dominican Republic), Chile, Bahrain, Peru, Oman, Israel created?  They were supposed to generate exports, out biggest exports are scrap metal and scrap paper.

      "We have always known that heedless self-interest was bad morals, now we know that it is bad economics." Franklin Delano Roosevelt, Jan. 20, 1937

      by Navy Vet Terp on Sun Sep 04, 2011 at 07:09:19 AM PDT

      [ Parent ]

      •  They created jobs (2+ / 0-)
        Recommended by:
        Navy Vet Terp, yaque

        Only...not in America.

        This is one of those "fool me once....." things.  I'd LOVE to hear the "sell" on how more trade agreements will help create jobs in the U.S.  

        My guess most that "sell" would be exactly the same as we heard on NAFTA etc.  

        - If you don't like gay marriage, blame straight people. They're the ones who keep having gay babies.

        by r2did2 on Sun Sep 04, 2011 at 08:00:28 AM PDT

        [ Parent ]

    •  And a second point (9+ / 0-)

      From 1945 to 1975 the work force was dominated by World War II vets.  The managers were often the officers, the workers were often the enlisted men.  I think the CEO's of this era may have felt a responsibility to the workers who had served with them in the battlefields of the Pacific and North Africa and Europe.  That comraderie is long gone, and has been replaced by pure greed and pure selfishness.

      "We have always known that heedless self-interest was bad morals, now we know that it is bad economics." Franklin Delano Roosevelt, Jan. 20, 1937

      by Navy Vet Terp on Sun Sep 04, 2011 at 07:12:04 AM PDT

      [ Parent ]

  •  From graphics to poetry, an ode to trickling down: (2+ / 0-)
    Recommended by:
    Egalitare, Dragon5616

    From Philip Appleman, venerable American poet and professor emeritus at Indiana University:

    The Trickle-Down Theory of Happiness

    Out of heaven, to bless the high places,
    it falls on the penthouses, drizzling
    at first, then a pelting allegro,
    and Dick and Jane skip to the terrace
    and go boogieing through the azaleas,
    while mommy and daddy come running
    with pots and pans, glasses, and basins
    and try to hold all of it up there,
    but no use, it’s too much, it keeps coming,
    and pours off the edges, down limestone
    to the pitchers and pails on the ground, where
    delirious residents catch it,
    and bucket brigades get it moving
    inside, until bathtubs are brimful,
    but still it keeps coming, that shower
    of silver in alleys and gutters,
    all pouring downhill to the sleazy
    red brick, and the barefoot people
    who romp in it, laughing, but never
    take thought for tomorrow, all spinning
    in a pleasure they catch for a moment;
    so when Providence turns off the spigot
    and the sky goes as dry as a prairie,
    then daddy looks down from the penthouse,
    down to the streets, to the gutters,
    and his heart goes out to his neighbors,
    to the little folk thirsty for laughter,
    and he prays in his boundless compassion:
    on behalf of the world and its people
    he demands of his God, give me more.

    He's just sayin' ...

    Obama and strong Democratic majorities in 2012!

    by TRPChicago on Sun Sep 04, 2011 at 06:39:17 AM PDT

  •  So how do you turn it around? (4+ / 0-)
    Recommended by:
    divineorder, mainely49, neroden, yaque

    The banks run the place, so how do you ever turn it around, short of torches and pitchforks?

    I ask in sincere puzzlement: The maldistribution of wealth has been obvious to me for at least 15 years, has been obvious to more insightful people for far longer, and is increasingly obvious to damn near everybody now. Yet nothing is done to correct it, even simple, obvious steps like letting the Bush tax cuts on the wealthy expire.

    Is it possible to turn it around using conventional methods, or will it take mass Arab-spring-like, London-riot-like, street protests sometime in the indefinite future?

    The invasion of Iraq was a war crime, a crime against humanity, and a crime against civilization. Prosecute the crime.

    by Positronicus on Sun Sep 04, 2011 at 06:39:47 AM PDT

    •  history shows that the elites never (6+ / 0-)

      give up their position of privilege voluntarily.  It always takes torches and pitchforks.

      Just ask Marie Antionette.

      •  Poor Maria Antoinetta von Hapsburg (3+ / 0-)
        Recommended by:
        Mark Sumner, Calamity Jean, yaque

        When she was married off to King Louis, her mother (Maria Teresa) wrote her letters.  Her mother was very concerned to make sure she knew her duties as a Queen, to listen to the people's problems, perform charity, and keep them happy enough -- to avert revolution.  

        Maria Antoinetta wrote back with exasperation, because she kept trying, but the royal court at Versailles wouldn't let her.  She was a prisoner in a gilded cage.  Eventually she gave up and created a little fantasy world for herself in the gardens.

        I feel sorry for her.  Women just weren't listened to in France at the time, even Queens.

        Louis and, most of all, the court officials at Versailles are the key villains in this piece.  Once you have established an entire bureaucracy with a Versailles mentality -- such as we have in the Beltway of DC -- it is very very hard to get rid of it without bloodshed, because they won't allow anyone to break ranks, and even the mildest proposals for change will be met with threats of violence (as happened when the National Assembly tried to fix the tax system).

        For a contrasting example, noble houses which paid even a minimal level of attention to the demands of the people, not giving up their position of privilege, but reducing their privileges, survived for very long times.  The Hapsburgs weren't brought down until WWI, and even now they still have some of their private estates.  Thanks to concessions by monarchs from William and Mary onward and by noblemen from Earl Grey onward, the British nobility and royalty still have much wealth and many privileges.

        Read pp. 1-7 of Krugman's _The Great Unraveling_ (available from Google Books). NOW.

        by neroden on Sun Sep 04, 2011 at 09:38:23 AM PDT

        [ Parent ]

      •  Power ... (0+ / 0-)

        Since, as you suggest, those in positions of power now will not voluntarily relinquish it, so  it needs to be seized by any "OTHER" means, - then, where and how does one start?

    •  The wealthy are most complicit here (4+ / 0-)

      The more the wealthy element in our country is able to control the direction of our country, the less chance there will be that anything will "turn around".  Our biggest problem, in my opinion, is that this is a problem within BOTH political parties.  Anyone that thinks the democratic party isn't controlled in a very big way by the "money-folks" is wearing blinders.  The biggest sign of that came when Obama agreed to continue the Bush tax cuts on people making over $250,000.  This was his chance to stand OUR ground.  It didn't take him long to "blink" on that one....and by reading DKos since then, I think he's lost a lot of support from those that stood firmly on his side.  It has gotten to the point that for anything to change now, it's going to take a grassroots effort.  Saving that, I think we're looking at our future in America right  

      - If you don't like gay marriage, blame straight people. They're the ones who keep having gay babies.

      by r2did2 on Sun Sep 04, 2011 at 07:33:24 AM PDT

      [ Parent ]

      •  The stupid super-greedy wealthy... (1+ / 0-)
        Recommended by:

        ...we have folks like Warren Buffett (no saint) saying "Raise my taxes.  Please."  And discussing how utility companies are a deal with the government -- the private investor gets a profit but guarantees good service for the public.

        Then we have the stupid super-greedy wealthy who don't even understand PR.  And they are controlling Obama and the Blue Dogs as well as the Republicans.

        Read pp. 1-7 of Krugman's _The Great Unraveling_ (available from Google Books). NOW.

        by neroden on Sun Sep 04, 2011 at 09:40:16 AM PDT

        [ Parent ]

    •  If enough people are aware of the problem (1+ / 0-)
      Recommended by:
      Calamity Jean

      it is possible to run a concerted set of campaigns to oust the banksters from political power one Congressional seat at a time.  Even without money.

      We'll probably STILL have to have an Arab-Spring-like movement, because the right-wingers are trying to eliminate our right to vote and our right to run for office.

      Read pp. 1-7 of Krugman's _The Great Unraveling_ (available from Google Books). NOW.

      by neroden on Sun Sep 04, 2011 at 10:03:17 AM PDT

      [ Parent ]

  •  What a great analysis! Thanks. (0+ / 0-)

    I'd rather not know, than have answers that are wrong - R.Feynman

    by jim in IA on Sun Sep 04, 2011 at 06:43:47 AM PDT

  •  If only ... (0+ / 0-)

    If only tax policy was driven by facts and reason. I appreciate all the work you put into compiling these charts and graphs but we're past that now. Civil disobedience is increasingly becoming an attractive option on a number of issues. The time for thoughtful deliberation is over. We are entering a new era I think.

  •  Correlation does not equal causation (3+ / 0-)
    Recommended by:
    hmi, Sparhawk, squarewheel

    The idea that lower taxes for the rich is better for the economy is clearly a republican myth, and your data proves it. But there is a lot more to the pre-Reagan vs post-Reagan economy than top tax brackets. Lower energy prices and seemingly unlimited raw resources are a thing of the past. Total lack of environmental protection is also a thing of the past. We don't rape our environment for profit as much as we used to. The higher level of tax revenue allowed us to invest more in infrastructure, but that was only part of the picture.

    Since the days of Reagan, we had the introduction if personal computers in the workplace in the 80s, networking in the 90s, the Internet in the 00s, all of them improving efficiency. The grown in GDP from those events did not really benefit the true "job creators", which are the consumers that create demand.

    •  I don't disagree at all... (6+ / 0-)

      Let me say it this way: my theory is that lack of downward pressure on high incomes results in a perverse incentive to reward those who ignore their workers and communities for short-term gain. So far, I think the data that I've looked at supports this theory, but it certainly doesn't prove it, and I'd be very interested in looking at other data that could help me refine (or disprove) the idea.

      I'm not an economist. I'm a guy with a cheap spreadsheet and some basic knowledge. I'm surely just treading ground that's well-worn by people with far, far more knowledge.

      •  There are plenty of people (3+ / 0-)
        Recommended by:
        vzfk3s, neroden, monkeybrainpolitics

        who have degrees in Economics and call themselves economists who do not have the scope of understanding that you do.

        Your essays are complex, but written so that other people like us--people who are genuinely engaged in the economic life of our country, but who don't hold advanced degrees in Economics/Finance, etc.--can have an intelligent discussion about these issues.

        Thank you very much for all your work.

        "Do your best, and keep your sense of humor."--My Mom

        by mainely49 on Sun Sep 04, 2011 at 09:06:15 AM PDT

        [ Parent ]

        •  There are SO many phony economists (1+ / 0-)
          Recommended by:

          filling academia and thinktanks that Krugman refers to it as a "new dark age of Economics".

          But the good economists do, indeed, understand what Mark Sumner is talking about.  

          Read pp. 1-7 of Krugman's _The Great Unraveling_ (available from Google Books). NOW.

          by neroden on Sun Sep 04, 2011 at 09:43:14 AM PDT

          [ Parent ]

      •  the problem is that people with far more (0+ / 0-)

        knowledge tend to be lousy at disseminating that knowledge to other people in a way that is relatively easy to follow.

        sometimes that's just the nature of the subject matter, e.g. quantum mechanics, but a lot of times it's because they're not good at it.

        big badda boom : GRB 080913

        by squarewheel on Sun Sep 04, 2011 at 09:56:41 AM PDT

        [ Parent ]

  •  The Financial Elites refuse to contemplate... (5+ / 0-)

    ...the possibility of getting richer at a slower rate.

    Because that is what any and all the plans that we advocate amount to: taking such a large portion of their income stream that they get richer at 1/3 the rate they are currently.

    (Sound of thousands of pearls being clutched simultaneously)

    The so-called "rising tide" is lifting only yachts.

    by Egalitare on Sun Sep 04, 2011 at 06:52:33 AM PDT

  •  Excellent Diary (2+ / 0-)
    Recommended by:
    Karl Rover, mainely49

    Your diary is very well done. It should be repeated over and over again by the President and Democrats. THE MIDDLE CLASS ARE THE JOB CREATORS. If people are making enough money to purchase goods and services, they drive up demand and businesses then need to hire more help to meet the demand. The American corporations do not need the American middle class as much now as in the past because they can hire from and sell to China, India and the entire world. When speaking of taxing the wealthy, the President and Democrats need to use the phrase "America, love it or leave it."  We have had 10+ years of tax cuts for the rich. Where are all of the jobs that tax cutters have promised?

    WAR stops a beating heart.

    by Ltddy on Sun Sep 04, 2011 at 07:00:26 AM PDT

  •  Please explain to me (1+ / 0-)
    Recommended by:

    just what the rich, said here to be "sitting" on the wealth, were doing with their money prior to the 2008 economic collapse? They don't stuff it into a mattress, and I doubt they let it accumulate as uncashed checks in those offshore mailboxes. So where is it? What is it doing? Factual answers, please. TIA.

    •  they were gambling it in the stock market (2+ / 0-)
      Recommended by:
      mainely49, neroden

      It used to be that the stock market was a way for companies to raise capital by selling shares.  Now, of course, that is no longer true---the Fortune 500's all self-finance out of profits. So now the stock market serves only two purposes--it lets the small minority of the population who own most of the shares to trade ownership with each other, and it allows everyone to gamble away their money in what has become essentially a large legalized casino.

      It should of course go without saying that most of the American investment in production has gone overseas, since the mid-1980's. American investors have indeed created millions of new jobs---in China.

      •  Still not clear (0+ / 0-)

        For every stock trade, someone buys and someone sells. What, then, does the seller do with the money? Just reinvest in the market, ad infinitum? Doesn't his profit first get taxed?

        Also, you say a small minority has most of the shares. But aren't all our pension funds, 401Ks and money market accounts also share owners? Do we know how that divides up with the small minority?

        •  read it again (1+ / 0-)
          Recommended by:

          The stocks get traded back and forth.  The real investments go overseas.

          As for pension funds, 401ks, IRA's etc, it is indeed a popular myth, held by uninformed people, that these things make up the vast majority of stock shares in the US.  It is utterly not true. The vast majority of stock shares in the US are, like wealth, income, bond dividends and interest payments, held by a very small number of private owners.  All the pension funds etc make up only a small share.

          I suggest you do some Google research---it will open your eyes (unless of course you don't want your eyes to be opened).

          here's a good place to start:

          •  Lenny, you're leaving out the MBS & derivatives (1+ / 0-)
            Recommended by:
            Calamity Jean

            A lot of the "spare money" got "invested" in mortgages, and then into mortgage-backed securities, and then into financial derivatives.  

            Basically, starting with the CFMA and Gramm-Leach-Billey, a lot of it went into fraudulent securities.  The fraudster executives at the banks issuing these fraudulent securities took the money, and paid much of it to themselves in salaries and bonuses.

            Much of this got reinvested -- until people started panicking.  Then the rich parked their money in bank accounts and the banks parked their money at the Federal Reserve bank....

            Oh, and hmi -- yes, profit gets taxed, but since the Bush tax cuts, it gets taxed at 0% for the first $30000 or so, and 15% for the rest.  The low low capital gains rates encourage churning.

            Read pp. 1-7 of Krugman's _The Great Unraveling_ (available from Google Books). NOW.

            by neroden on Sun Sep 04, 2011 at 09:47:44 AM PDT

            [ Parent ]

          •  Not getting clearer (0+ / 0-)

            "Back and forth" means buying and selling. If the seller profits, a tax is assessed. If he loses, he gets to write it off against other earnings. Or is there some other meaning of "back and forth?"

            Thanks for the link; I was surprised to see that I pretty much knew most of what he had to say, which largely reduces to the unsurprising discovery that the rich get richer. What he did not say, that I could find, was that "the real investments go overseas." Did I miss something?

            BTW, some of that Gini coefficient stuff has been suggested to be badly misconceived by e.g. Peter Baldwin [] If he is correct, then Sweden only gets its top  ranking because it encourages wealth to leave the country. Apparently, if Ingvar Kamrad (Ikea) and his ilk returned to Sweden, their Gini numbers would make the US look like a paradise. But I somehow doubt that you would see this as eye-opening.

        •  Actually, yeah, reinvested ad infinitum (0+ / 0-)

          How do you think the stock market goes "way up" without companies making any actual real money -- as happened in the dot-com bubble?  People just keep reinvesting in the market ad infinitum.... until they pull it out and dump it in bank accounts or T-bills, and the market crashes.

          Read pp. 1-7 of Krugman's _The Great Unraveling_ (available from Google Books). NOW.

          by neroden on Sun Sep 04, 2011 at 10:05:26 AM PDT

          [ Parent ]

    •  They were investing in real estate (2+ / 0-)
      Recommended by:
      Karl Rover, neroden

      If you increase the wealth of the investor class, they do not necessarily invest the money in job-creating enterprises. They invest it in whatever is going to produce the greatest return on investment in the shortest possible time. In the late 1990s, it was the tech bubble. In the years leading up to the 2008 crash, it was the real estate bubble (or derivatives or CDS's, etc). If any of these activities create jobs, it's a side-effect, and the jobs vanish as soon as the bubble bursts.

      These are not socially useful, sustainable investments, they are simply ways to maximize profit over the short term.

      The invasion of Iraq was a war crime, a crime against humanity, and a crime against civilization. Prosecute the crime.

      by Positronicus on Sun Sep 04, 2011 at 07:19:05 AM PDT

      [ Parent ]

      •  Same question as above (0+ / 0-)

        If they invest in real estate, somebody sells the real estate and makes money with it. What happens to that money.

        BTW—how is this different from the millions of middle class people who, during the 20 years or so prior to 2008, kept buying and selling homes, profiting from what we now call the real estate bubble?

        •  it is different because (1+ / 0-)
          Recommended by:

          Joe Blow's $200,000 investment in one home isn't the same as Milton J Moneybag's $12 billion investment in an entire housing project.

        •  You seem to have another theory of things (0+ / 0-)

          Care to share?

          - If you don't like gay marriage, blame straight people. They're the ones who keep having gay babies.

          by r2did2 on Sun Sep 04, 2011 at 08:07:03 AM PDT

          [ Parent ]

          •  wait wait, let me guess . . . . . . . (2+ / 0-)
            Recommended by:
            r2did2, Karl Rover

            His theory is that the people at the top took all that money that was flooding to them and invested it in new jobs-creating businesses in Peoria, which is why we have record low unemployment rates in the US right now so thank you thank you, rich people.


            •  You insist (0+ / 0-)

              that the money held by the wealthy simply isn't productively invested. I've yet to see that demonstrated, and your sarcasm isn't much of a counter.

              Personally, I think the Bush/Obama tax cuts go beyond what is reasonable, but clearly wealth goes somewhere besides mattresses. e.g., into bonds to finance municipal and state infrastructure, into property development, and even into banks which, if things were normal, would be lending to help businesses expand—which is why I asked about 2008 and earlier.

              •  I insist no such thing. (0+ / 0-)

                It created millions of new jobs.  In China.

                That is why, as I noted before, over half of the productive capacity of American companies is located outside the US, and over half their profits now come from outside the US.

              •  now that I've answered your questions . . . . (0+ / 0-)

                perhaps you could answer mine.. .

                If lower taxes means more jobs and economic growth, why is it that the US (with some of the lowest tax rates in the world) doesn't have a booming economy with the lowest unemployment rate in the world?

                Wait, wait--let me guess . . . . .  the tax rates have to be EVEN LOWER before it'll work.  Right?

                At which point I'll ask: (1) how much lower, exactly, and (2) can you point to any economy anywhere on planet earth where this has happened?

                Thanks in advance for not answering my questions.

                •  One "not answer" deserves another (0+ / 0-)

                  More to the point, as you asked earlier, try actually reading before frothing.  All I did was post some queries about what the rich did with their money. You have leapt to the assumption that I am touting low taxes as some cure-all. I didn't say that; I don't say that. Find somebody else's mouth to stuff words into.

                  1) The U.S. does not have startlingly low taxes when the total tax burden is entirely factored—state and federal.
                  2) The U.S. did have a booming economy and many jobs and nothing but growth. It boomed, and then it busted. Why that happened is a long story with villains up and down the food chain.

                  Up to some hard-to-specify point, lower taxes help and at some equally difficult to pin down point, they hinder. In any case, what helps to boom doesn't necessarily restore what is busted, and I would be surprised if low tax rates by themselves could put an economy back on track.

                  But what I actually said (you would have noticed if you had bothered to read) was, "I think the Bush/Obama tax cuts go beyond what is reasonable..." Doesn't sound like someone asking for lower taxes to me, but you're obviously responding to some figment stuck in your misfiring neurons.

                  •  how is "zero taxes" too high . . . .? (0+ / 0-)

                    Study says most corporations pay no U.S. income taxes

                    WASHINGTON | Tue Aug 12, 2008 12:54pm EDT
                    (Reuters) - Most U.S. and foreign corporations doing business in the United States avoid paying any federal income taxes, despite trillions of dollars worth of sales, a government study released on Tuesday said.
                    The Government Accountability Office said 72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005.

                    More than half of foreign companies and about 42 percent of U.S. companies paid no U.S. income taxes for two or more years in that period, the report said.

                    Given that an effective corporate tax rate of . . . well . .  zero, doesn't seem to be enough to spur all those wealthy do-gooders to give us all well-paying jobs, perhaps you'd care to explain how you think lowering taxes on the rich will accomplish that.

                    And I'm still waiting for you to cite an example where "lower taxes and less government" has led to economic growth.  Every economy that has grown at high rates that I can think of in the past 50 years (Taiwan, Japan, China, Singapore) did it by doing precisely the opposite---raising taxes and massive government intervention in the economy. And every country that tried your free-market IMF ideas (Argentina, Brazil, Chile) collapsed into abject squalor before abandoning your cherished ideology and pulling themselves out of it by ignoring the IMF and using the same policies that have worked for everyone else (more taxes and more government).

                    Thanks once again for not responding. I don't blame you.

                    •  Once again (0+ / 0-)

                      Read what I write, not what you imagine I said, not what some remembered enemy of yours once said, not what some imaginary entity once might have said.

                      Here, just try one thing: quote me. Find the place where I used the words "lower taxes and less government." I mean, you put quotation marks around that phrase, so you must be quoting, right? The alternative is that you just make stuff up. Or you really can't tell the difference. Which is it?

                      As for foreign tax treatment, once again you betray your utter ignorance. These companies establish foreign subsidiaries that pay local taxes in the countries where they are domiciled, so they are not paying "zero taxes."

                      They may, however, pay little or no U.S. federal tax. But the U.S. has established a dumb set-up, unlike most other countries, in which they try to tax foreign subsidiary profits, treating the corporation and all its foreign subsidiaries as one thing. Not unreasonably, if you treat them as one big thing, they then get to offset expenses paid out anywhere as offsets against total income. Score another one for the U.S. tax code.

                      Then to compound the stupidity, the tax code makes it wildly unprofitable to repatriate foreign earnings. Even better, every X number of years the Treasury realizes that and offers penalty-free, low rate repatriation. Score two more for the U.S. tax code.

                      The corporations are acting completely rationally. It's that government of which you are apparently so fond that has set the rules.

                      BTW, one of the reasons they set up in countries like Taiwan in the first place is because of favorable tax treatment. You might want to revisit what you imagine you know about their corporate tax on foreign entities (hint: they recently lowered it to attract foreign investment).

        •  and the money goes overseas (1+ / 0-)
          Recommended by:

          That is where most of the American investment has gone for the past 20 years or so.  That is why American corporations now have over half their productive capacity located outside the US, and earn over half their profits outside of the US.

          The super-rich have indeed been investing all their extra money and creating jobs with it.  Alas for us, all that investment and jobs are in China.

          •  Some of the money also vanishes completely (0+ / 0-)

            I think hmi is having trouble with the concept of "money creation".

            Basically, if money is stiing in bank accounts, not being spent on ANYTHING, it doesn't exist, not for economic purposes.  It doesn't cause any actual activity.

            During the bubble rich people and companies speculated in all kinds of garbage.  Mortgage-backed securities, collateralized debt obligations, credit default swaps.  It funded the housing bubble, the tech bubble and the stock market bubble and the commodities bubble.

            When that turned out to be trash at the 2008 crash they sold it to bargain hunters.... and dumped the money they got for it in their bank accounts.  Which means it doesn't get spent on anything.

            Do the banks spend it?  No.  The banks are all insolvent (from making bad loans) and trying to cover it up, so the LAST thing they want to do is spend more money.

            And there you have it, the financial collapse of 2008.

            Read pp. 1-7 of Krugman's _The Great Unraveling_ (available from Google Books). NOW.

            by neroden on Sun Sep 04, 2011 at 09:57:02 AM PDT

            [ Parent ]

            •  our libertarian friend seems not to understand (0+ / 0-)

              that "job-creators" invest money to make more money for themselves, not to give good-paying jobs to the little people.

              In times of economic collapse, when there's no profit to be made, they STOP INVESTING when there's no longer enough return for them. They do NOT rush out to invest in "creating new jobs" when there's no vigorish in it for them.

              Why on earth anyone is actually stupid enough to believe that wealthy people just want to give us all good jobs, is beyond my understanding. History shows abundantly that they don't give a flying fuck about us or our jobs.  (shrug)

          •  Corporate money (0+ / 0-)

            may well be partly invested overseas (stats?) and a good deal may well stay there—although at least part of that is because of perverse US business tax incentives that make it attractive to do this. And I can't help but notice that the U.S. is still the world's largest manufacturer.

            •  you are only partly right (0+ / 0-)

              US corporations are indeed investing heavily overseas. Taxes have stuff-all to do with it (despite the libertarian/Repug fantasy that taxes determine absolutely everything in the world).  Most corporations, after all, don't pay any US taxes at all whatsoever, so they don't give a flying fuck what the tax rates are. Taxes are for little people.

              The reason why corporations move overseas to China is so crashingly obvious that even a libertarian should be able to see it----they move to China because they can pay workers there two cups of rice a day.

              BTW, did you notice who the second-largest manufacturer now is?  And how they got that way? And what year they are projected to surpass us?

              •  Ya know (0+ / 0-)

                I did notice China was growing—but thanks for continuing to point out the obvious.

                 So near as I can tell, their growth is due in large measure to a) a gigantic cheap labor force b) finally put to work by freeing up individuals to try their skill and fortune in the hope of economic advancement. Sadly, the 2 cups of rice is not any longer adequate, and businesses are already moving on in search of cheaper alternatives.

                You are incorrect on taxes and overseas investment. One of the primary reasons that multinational money stays overseas is the U.S. insistence on taxing foreign subsidiary profits as if they were earned at home.

                Also, see here, for instance, on how taxes affect foreign investment []
                "The US system of taxing foreign income encourages MNEs to locate high technology production abroad:

                •  sorry if IBM thinks their taxes are too high (0+ / 0-)

                  Perhaps they should learn from these people:


                  (Reuters) - Most U.S. and foreign corporations doing business in the United States avoid paying any federal income taxes, despite trillions of dollars worth of sales, a government study released on Tuesday said.
                  The Government Accountability Office said 72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005.

                  More than half of foreign companies and about 42 percent of U.S. companies paid no U.S. income taxes for two or more years in that period, the report said.

                  I think you'd have a pretty tough time convincing me that corporations who pay zero taxes are moving overseas because their, uh, taxes are too high.

                  But feel free to try. I'm all ears.

                  Perhaps they'd be happier in, say, Europe.

                •  I just want to repeat this statement of yours . . (0+ / 0-)
                  Sadly, the 2 cups of rice is not any longer adequate, and businesses are already moving on in search of cheaper alternatives

                  I want to make sure everyone sees it.

                  Of course we already know that the free market libertarian kooks are heartless bastards without an ounce of humanity anywhere in them, but it's always nice for them to confirm it periodically for us.

                  •  Predictable. (0+ / 0-)

                    The two cups of rice is a direct quote from you. I supposed the sarcasm would show. My error.

                    Let me point out the sarcasm: ever since the Chinese have made inroads in the direction of freer markets, the overall living standards have been soaring (ditto for India, btw). Two cups of rice will get you little these days in China, and their living standards have risen so sharply that they are already priced out of some labor markets. Many people see this a progress, but I feel certain that you are pining for the good old days of Mao and the Great Leap Forward.

                    I suppose that if I were a free market libertarian i might be insulted. What I absolutely am not is a Marxist ideologue, for which I am ever and always grateful. YMMV.

        •  They didn't invest directly in real estate (0+ / 0-)

          They invested in "mortgage backed securities".

          Many of which were fraudulent.

          Some of the money from that financed the housing boom (so, hooray, we have lots of empty McMansions now -- maybe if we let homeless people live in them that would be useful, but the government won't do that, so....)

          Some of it was stolen by middlemen at the banks.  Who are now sitting on their ill-gotten gains (which are stuffed in bank accounts, see below).  Such as Angelo Mozilo.

          Read pp. 1-7 of Krugman's _The Great Unraveling_ (available from Google Books). NOW.

          by neroden on Sun Sep 04, 2011 at 09:59:21 AM PDT

          [ Parent ]

  •  Very useful article. (0+ / 0-)

    two small suggestions:
    1. plotting those real incomes vs time might be easier to read with a log vertical axis. It capture the relative change directly, and come closer to capturing the perceived absolute changes. It also allows equal visibility of sections over time.

    2. Maybe a follow-up could get into the more subtle correlation-causation issues.

    It's hard to convey to someone who didn't grow up in a homogeneous 2% growth-rate environment with relatively modest inequality how much that gave us an (ahistorical) sense of confidence.

    Michael Weissman UID 197542

    by docmidwest on Sun Sep 04, 2011 at 07:15:16 AM PDT

  •  Capital Gains Taxes (2+ / 0-)
    Recommended by:
    Egalitare, neroden

    This is great stuff. And it doesn't even mention how differentiated capital gains tax rates have allowed the ultra rich to pay even less of their fair share.

    "[S]ince Obama keeps talking nonsense about economics, at what point do we stop giving him credit for actually knowing better? Maybe at some point we have to accept that he believes what he’s saying." --Paul Krugman

    by GreenSooner on Sun Sep 04, 2011 at 07:16:23 AM PDT

    •  Capital gains tax discounts are evil. (1+ / 0-)
      Recommended by:

      One of the few good pieces of tax policy under Reagan was the elimination of capital gains tax breaks...
      ... he brought them back two years later, of course.

      Read pp. 1-7 of Krugman's _The Great Unraveling_ (available from Google Books). NOW.

      by neroden on Sun Sep 04, 2011 at 10:01:38 AM PDT

      [ Parent ]

  •  I read an article last week (2+ / 0-)
    Recommended by:
    mainely49, neroden

    on this same subject with a few graphs which are similar to yours but it left me with too many questions on the relationship between taxes and the overall economy that inludes everyone. You've answered them here. Excellent work.

    This has to be a reference for us to try to reach those to whom facts and a rational analysis of them means something.

    Unapologetically pro-citizen. Not anti-corporation just very pro-citizen.

    by CanYouBeAngryAndStillDream on Sun Sep 04, 2011 at 07:46:44 AM PDT

  •  Politically, The Lying Thieving Thugs HAVE Done (1+ / 0-)
    Recommended by:

    their job - they've done what they're supposed to do -

    LIE so that the rich pig string pullers can steal.


    THE PROBLEM has been the pathetic sacks of shit sucking "leader" paychecks on our side - when they aren't politically pathetic sacks of shit,

    they're DLC Blue Dog Third Way New Dem traitors to us bottom 90 percenters - traitors who belong on the other side.

    Till we stop voting for fucking sell outs and get rid of the sell out branch, we're gonna keep getting sold out.


    Yond Cassius has a lean and hungry look; He thinks too much: such men are dangerous

    by seabos84 on Sun Sep 04, 2011 at 07:48:12 AM PDT

  •  Please keep writing! (0+ / 0-)

    Your essays and the discussions they provoke are highly intelligent and useful in understanding what is happening to us.

    Be well.

    "Do your best, and keep your sense of humor."--My Mom

    by mainely49 on Sun Sep 04, 2011 at 09:11:55 AM PDT

  •  For equality, tax property too (0+ / 0-)

    While a progressive tax structure may alleviate inequality somewhat, what is needed is a progressive federal tax on wealth.  While an estate tax that becomes steep after total estate of about 1 million, (say, 90% after 1 million) worked fine in the past, what is needed now is a tax on present wealth which generates, among other things, the trust funds that feed future generations of financial  overloards, and the ability to generate untaxable income.  Economic incentives to "innovate" will not be greatly diminished because this class of people will still be better off than the rest of us, just less so m- but we (the USA), will have some capital to get us out of this mess.  

  •  thanks for tackling this (0+ / 0-)

    It always bears repeating with cute graphs.

    No nation can be great if it allows its elites to loot with impunity and prosecutes its whistleblowers. Geithner is destroying the things that made America great. -- Bill Black, white-collar criminologist & a former senior financial regulator

    by jboxman on Sun Sep 04, 2011 at 09:40:36 AM PDT

  •  Incone for the wealthy CAN come down (1+ / 0-)
    Recommended by:
    Calamity Jean

    but there is a HUGE difference between someone making $2MM per year vs someone making $65K per year - where each loses 25% of their income.

    The wealthy cut back on obvious luxuries and can still invest when the economy starts to turn around.

    The person making $65K cuts back on food, rent, clothes and, if they are "lucky," gets a second job.

    The income growth of the wealthy isn't immune to a bad overall economy, and in recession years their income came down.

    "The right to be heard does not automatically include the right to be taken seriously." -- Hubert H. Humphrey

    by Candide08 on Sun Sep 04, 2011 at 09:48:25 AM PDT

  •  is it better to have a 1000 people who make (0+ / 0-)

    100,000 a year or 1000 people who make 10,000 a year and 1 person who makes 90,000,000 a year ?


    big badda boom : GRB 080913

    by squarewheel on Sun Sep 04, 2011 at 09:52:23 AM PDT

  •  a system that inches ever closer to feudalism. (0+ / 0-)

    is exactly what is planned and what will be.

    The entire world is on an austerity diet and is being turned into a giant plantation.

    The good news?

    Because the contraction has been global, the progressive revolution that follows this period of extreme madness and greed, will be the single greatest progressive revolution the world has seen.

  •  In other words (1+ / 0-)
    Recommended by:
    Calamity Jean

    Wealth capture is not wealth creation.

    •  why? he was a bastard (0+ / 0-)

      who "eliminated welfare as we know it", introduced NAFTA, formed the WTO, repealed the bank regs that were intended to prevent the very meltdown that happened, introduced all sorts of idiotic draconian "antiterrorism" laws, introduced "don't ask don't tell", and removed any trace of a liberal agenda from the Democratic Party for an entire generation by turning it into Repug-Lites.

      Gee, thanks.

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