Emmanuel Saez from UC Berkeley has released his latest report on inequality and it reminds me that I need to finish off my last three installments of Joseph Stiglitz. I'll have Part Eight up sometime next week, perfectly timed as well as the title of that chapter is "The Battle of the Budget."
Saez's latest report has quite a bit of useful information, including...
Top 1% incomes grew by
31.4% while bottom 99% incomes grew only by 0.4% from 2009 to 2012.
Hence, the top 1% captured 95% of the income gains in the first three years
of the recovery. From 2009 to 2010, top 1% grew fast and then stagnated
from 2010 to 2011. Bottom 99% stagnated both from 2009 to 2010 and from
2010 to 2011. In 2012, top 1% incomes increased sharply by 19.6% while
bottom 99% incomes grew only by 1.0%.
So, what does all this mean?
Top 1% incomes are close to
full recovery while bottom 99% incomes have hardly started to recover.
Shocking, I know:)
Saez notes that after the Great Depression, there were policy changes that reduced this income concentration. Today, however, there have been none. Again, I'm shocked.
On page seven, the data shows that during the Clinton administration, the wealthy did quite well, increasing their income by 98 percent! Yet, so did the 99 percent, who saw their income increase by 20 percent. Now, take a look at the Bush Years. It's apparent that the policy changes under his administration favored the wealthy and even then, underperfomed compared to Bill Clinton. The collapse of 2008 seems to have permanently stagnated the income of 99 percent of Americans.
We simply can't have an economy like this. Two thirds of our economy is consumer spending and there just aren't enough people spending. They don't have any extra money.
So, what do we do now? Well, any policy changes are going to be nearly impossible to pass with the Republicans hell bent on the president failing. They certainly don't want any successes on his watch as that would really drive home the contrast between the utter failure of George W. Bush and any potential gains under Barack Obama. In fact, our economy is doing mildly better and that's just about all they can tolerate as they still have to have something negative to caterwaul about.
In some ways, I hope that we elect a moderate Republican so he or she can do all the things that Barack Obama was not allowed to do because of adolescent temper tantrums.
5 comments:
You should pay very close attention to California over the next 3 to 4 years. CA has the most progressive income tax in the country. If that doesn't help inequality here, what makes you think it will help nationally?
Because the tax structure under Eisenhower was much more like what Mark is suggesting, and the middle class did very well.
We've tried low taxes on the wealthy in the past, and it's always resulted in inequality, stagnation and ultimately economic collapse.
And as Mark is repeatedly told, but ignores: In an economy where every other competitor has been bombed to ruin or indebted to you taxing the hell out of yourself can work - because you are so 'profitable'. Comparing post WWII economic examples to now is apples to oranges.
Because the tax structure under Eisenhower was much more like what Mark is suggesting, and the middle class did very well.
Again failing to draw cause and effect, progressives are cargo-cultists - believing that if they can properly align the symbols of power, the results (that they never understood in the first place) can be replicated.
During the Eisenhower Administration, the U.S. was the only industrial economy in the world untouched by the war. The prosperity of the early post War was not caused by U.S. tax policy. Never mind the irony of the Kennedy tax cut.
You aren't getting the 50s back no matter how nostalgic you are for them. This is something that even M has figured out - as painful as it was for him to learn.
Not to mention the multitudes of tax shelters and loopholes that made the top tax rates almost entirely theoretical back then. But that's okay, it's the intentions that count for progtards, not the results.
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