2007/10/12

The Economics of Instability

George Bush can try to explain it away by calling it a "skills gap". He can point to spectacular gains in the financial markets as a sign of economic health. But the gap between rich and poor continues to expand. It's wider now than at any time in the last century, and the sharpest increases have occurred since Bush took office in 2000. Recent IRS stats reprinted in the Wall Street Journal tell the tale:
  • The wealthiest 1% of Americans enjoyed a 2.1% increase in their share of all income between 2004 and 2005
  • The bottom 50% of all wage earners saw a .6% drop in their share of all income during that same period
  • By 2005, the median US income had fallen to $30,881 in inflation adjusted dollars
  • For the same period, the income level of the 99th percentile of wage earners increased 3% to $364,657
And if you think that this situation is going to change anytime in the near future, think again! Your representatives at the Federal level disproportionately fall into that top 1%, with half of all Senators and a sizable chunk of representatives boasting net worth in the millions. So...who do you think they represent?

Sadly, this is the formula for political and economic instability. As Americans scale back consumption and productivity drops--the foundations of spectacular corporate gains--the only alternative for continued migration of income from the "have-nots" to the "haves" will be 1) Increasingly regressive taxation and 2) Increased indebtedness for all but the super-rich.

Unfortunately for our nation, policies like these pave the way for bloody revolutions.

16 Comments:

Kvatch-

Good contrasting article that takes an "interior" look. We need this because the right is going to be having cyber parades on that "deficit drop".
there's a concept: bush has "skills"

i wonder if such a revolution is even possible in the good ol' us of a?
Bush is right. We don't have the skills to transform our middle- and lower-class incomes into giant corporations with offshore tax shelters while benefiting from loopholes here at home. It's tough being so unedumacated.

i wonder if such a revolution is even possible in the good ol' us of a?

No. Dammit. Sigh.
Well I guess when they have literally EVERYTHING we'll all starve and die, then the "middle class" will be doing well. It'll be a sharp adjustment.
So, is this where they're passing out the torches and pitchforks...cause I'm in.
This is so disturbing at every level. I had heard that wealthiest 1% piece of info on the radio earlier today.

In the end there will be a handful of very rich mostly white male gazillionaires and we will all be exiled.

Thank God!
George Will has his own interesting take on the insanity of the current "ownership society" version of feudalism which Bu$hCo represents.

I'm thinkin' it may not just be the view through rose colored glasses. The sad fact is, though, that the rise and fall of Empires does indeed take time. Will's "vision" of our current circs may well be accurate enough, but only as a brief (Historically speaking) portion of our journey downwards.

We'll be to see...
Without raining on the parade, the same sort of numbers are showing up among other economies. I think it's called globalisation, with or without a Z.
It must be hard being isolationist then having to share the bad news too.
And if we continue down the road of BushConomics we'll end up in bloody revolution with the have-nots plundering the have-mores.

Ofcourse the super rich like Bush, Cheney, etc will flee to their compounds in Dubai on man-made Islands or their Ranches in South America.

They see themselves as global citizens anyway. No loyalty to the U.S.

Their goal has always been to loot the U.S. Treasury.

We have $9.1 Trillion in debt. You know how much the yearly interst on that is? $406 Billion in 2006

Think about that...A third of your tax dollars go to service the debt... and it's only getting worse.

The goal is to get to a point where the interest on the debt is so huge that there is no money left over for anything but the military which already totals $700 Billion a year.

At that point all domestic government functions will stop and the conservative dream of destroying government will manifest.

If America will carry on in a massive depression and tolerate our reckelss govenment remains to be seen.

But I don't think so. I think people will get pretty pissed off.

And all those have mores getting richer every day will be fucked unless they have so much they can flee.

Conservatives and Republicans are so short sighted.

We want and need a large middle class to have a stable society.

A stable society means those in charge and wealthy stay in charge and wealthy.

When societies destabilize the first to go down are the wealthy elite ruling class.
I think it's called globalisation, with or without a Z.

With every dose of free trade, the misery is also free!

And Poli, come on, you know debts don't matter. Once the cookie crumbles, the oligarchs will take all the chocolate chips, but we'll still have the doughy, stale crumbs. Yum!
A bloody revolution in America? I don't think so. Democracy gives us the tools to make a peaceful, political revolution that would close the gap between rich and poor, but we're too timid even for that.
Unstated in those statistics is the obvious fact that if the 1% wealthiest americans enjoyed a 2.1% increased share in america's wealth, and the bottom 50% felt a .6% drop, then the people who fall into the 51-99% catagory got pinched for 1.5%. These are mostly middle to upper middle-class earners, married couples often falling into this catagory because of their combined household income when both spouses are working. This is, in fact, the biggest catagory of taxpayers & yet no news I've seen has mentioned that their income is also being shifted to the top 1%.

I was taught the wealthy had a vested interest in keeping the middle class strong as it is the middle classes that are standing between the wealthy & anarchy (think french revolution). But this maxim, like so many others, has been turned on its head in the last 6-yrs.

ps, how do you like the schmancy new blue name Enigma set me up with? Don't worry, it's still the same old ~~ D.K.
Unfortunately for our nation, policies like these pave the way for bloody revolutions.

You say that like it's a bad thing.
Yeah, no offense, but as long as there is still satellite TV, there will be no revolution. JMO.

Funny thing about the current boom. While the tech boom transfered massive amounts of wealth to the young (think of all your friends who sold their .com startups before the crash), the current boom is a wall street affair. So the brokers are having their revenge.
huffington post bernie sanders gets you a great report on income disparity.
A two earner family now makes less buying power income than a single earner family thirty years ago.
Them at the top simply embezzle king's fortunes from their constituents and shareholders and actually it is a conspiracy by boards and un-trustees just like the mob (Ricco) might pull off.
So sad to hear Kvatch is pulling back. Brilliant guy...not enough of you Brother.
All peace and prosperity Kvatch!!
This article is a nice start...

Now then, what do you propose we DO about it? Perhaps if we all started trying to use our collective brain power to come up with solutions more viable than something like a "revolution" (hello... how many times has a revolution simply ended with the current 1% of have-mores being replaced with a new 1% of have-mores?), we might actually be able to make some changes that will prevent history from repeating itself for once.

Instead of simply talking about everything that is wrong all the time, we should be talking about ways to solve these problems so they don't continue to happen.

Speaking of pointing out problems, I'd like to do that right now (accompanied by a suggested solution... hint hint...) The problem is this: we are human and we thrive on imperfections; people complain about anything and everything you could think of. If everything were to become "perfect" then humans wouldn't know what to do with themselves. We need to change our mindset. If we focus on goals for our country then we can start finding out ways to achieve those goals. Right now all I keep hearing from various channels is either complaining or complacency. Where are the SOLUTIONS?

Society doesn't seem to want things to really change, because they are content in their discontent. Let's change this!

Any "real" suggestions - that don't simply involve pointing fingers at the obvious culprits - are welcome.

-Josh

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