For those of you who missed it, the last time I wrote a politically oriented post I was verbally spanked by a wave of angry comments. Basically, the overriding message was: “Stick to The Six Million Dollar Man and Hong Kong Phooey posts, asshole!”
Given our horrific economic situation, I can’t help but trace the chain of events leading up to our current state of affairs. This sort of thing isn't created out of nothing – it comes from increments of change over a period of decades.
During WWII, the United States was able to climb out of depression, due in no small part to the fact that global competition was still piles of burning cinders. The GIs came home, bought a house in the ever growing suburbs and went to work. From the doctor to the TV repairman, all were paid a decent living wage.
Throughout the 1940s and 1950s, the wealthy were taxed big time – their tax rate was over 90 percent! In the 60s and 70s, this was dropped to 70 or 80 percent. In other words, someone earning 50 million dollars may be forced to live on a paltry 5-10 million that year. There were rich people, but the gap between the CEO and the workers was not abysmally wide as it is today. Notice in Mad Men that top ad execs like Don Draper aren’t living in sprawling mansions… that would come in the 80s.
In the Reagan-Bush era, that tax rate for the wealthy dropped down to 28 percent! The new “trickle down economics” scheme was a complete reversal of the way things were done in the 1950s. The unsubstantiated hypothesis was that if you let the rich get exceedingly wealthy, that money would “trickle” down to the peasant class. Unfortunately, as we are seeing, all it amounted to was CEOs making billions more, giving themselves outlandish golden parachutes, and shipping their factories overseas.
The top 300,000 Americans collectively enjoy almost as much income as the bottom 150 million Americans
There were 3 times more money given in CEO bonuses last year than the entire debt in Greece.
Two-thirds of the nation’s total income gains from 2002 to 2007 flowed to the top 1 percent of U.S. households, and that top 1 percent held a larger share of income in 2007 than at any time since 1928,
Yes, the income gap widened significantly since Reagan took office; however, the trend actually had its genesis in 1976, and Bill Clinton and his cronies were every bit as complicit in this mess as the Republicans. Today, there is very little difference between White House staffers and the board of directors on Wall Street.
So what does this mean for you? It means that, unless you are among the top one percent, you have not been able to enjoy the benefits of the economic expansion of the past three decades. In fact, you are being screwed royally.
Chances are, if you are married, both you and your spouse work. Yet, with a dual income, you still live paycheck to paycheck and have significant debt. Why? Is it because you are irresponsible and should be pinching pennies more? Or is something really, really wrong here?
Answer: Something is really, really wrong, and here's what went wrong: (1) that wonderful three decade long economic expansion only helped the top one percent - it never “trickled down”, and (2) corporations can’t afford to pay higher wages when they are competing against countries like Vietnam which pays their workers with wood chips and bits of string. The only way to compete is to put your company overseas or hire illegal immigrants (which is a whole other can of worms).
Most countries have tariffs or non-tariff barriers to protect the industries of their own countries – not the US of A. No sir. It may seem wonderful that you can buy a coffee maker at Wal-Mart for five bucks, but it’s not so wonderful when you realize that the company making it shut down a plant in Missouri to set up shop in Laos. Little do you realize, you probably could’ve afforded the nice, more expensive coffee pot had the wealth stayed in the States and been distributed in a more even manner.
Guys like Limbaugh and Beck are quick to call you a communist for even using the words “distributing wealth”; but take a step back and ask yourself a few questions. Were they communist in the 1950s when the rich were taxed upwards of 90 percent? Is it possible that the companies that partner up with China and take billions out of the government coffers in bailouts are actually the “Commies”? Are you comfortable with the fact that most fortune 500 companies pay ZERO dollars in taxes? Yeah, you heard that right.
For instance, GE made 10.8 BILLION DOLLARS IN PROFITS, BUT PAYED ZERO IN TAXES. You see, the profits were “international”, so they didn’t have to pay up. So, not only is the money not trickling down to you, they’re not even contributing their fair share in taxes.
If you’re okay with this, give yourself a pat on the back for not being a Commie. Rush Limbaugh and the guys at Goldman-Sachs would be really proud of you.
