TODAY'S TOPICS: Weiner, Debt Ceiling, Extortion, Colbert, Revenue v. Spending, Goodman/Moyers
More Thoughts on Anthony Weiner Story
Unfortunately, it appears this story just isn’t going away, so I want to briefly add to what I wrote last post. Let me first say, I don’t want to be misconstrued as a defender of Weiner (this all sounds so comical), nor an ardent advocate for him either staying in office, or deserving to stay.
In fact, I think, certainly from a political standpoint, one can make a strong case that he should resign. One, it’s fair to say it will be incredibly difficult for him to effectively represent his district any longer. Legislation he authors in the future simply won’t have the support it would have otherwise (sadly) and his prolific ability to get on television and be a “go to” spokesperson for progressive causes will also be greatly diminished.
You can also make the case, if there wasn’t such gross hypocrisy and so many worse crimes being committed by right wing politicians everyday (and corporations), that it isn’t healthy for our politicians to be held in such low regard, and trusted so little. This undermines democracy itself. And, I can see why one could argue that both his actions (more photos keep coming out….what the hell?) and his lying, do in fact, undermine this trust.
Of course, that trust was long ago broken…by actions and crimes FAR SURPASSING anything he has done.
So, let me be clear: my issue is not whether he should, or must, or will resign, or shouldn’t…that is for him to decide, and hopefully, his constituents (who as of now still want him to stay). Because, outside of the political reasoning for him to leave, it is an incredibly easy case to make that if people like Vitter and Ensign (finally resigned when threatened with jail…but his sick crimes got almost no coverage for years) stayed in office (and Bush and Cheney walk free), then Anthony Weiner and his tweets deserve to as well.
My issues are with A. the double standards applied to Republicans vs. Democrats, B. the media’s insatiable appetite for such a largely meaningless ‘sex’ story, C. the gross hypocrisy of the GOP…and media, and many Democrats, and D. the way that not only Republicans don’t ask for GOP criminals to resign as they do Weiner, but DEMOCRATS barely say a word when Republicans commit crimes, but boy are they on it when one of their own sends a few tweets…that’s when its “tough talk time” among the Dems.
What I also want to do here today is hone in on one of the issues Weiner was diligently working on, as well as give some REASONS WHY this double standard exists and this story is getting even more attention than one would expect from our soap opera, pop culture infatuated media.
Weiner v. Clarence Thomas
Leave aside the fact that Supreme Court justice (and fascist) – Clarence Thomas, had his own inappropriate sexual entanglements with a number of women and lied about it repeatedly to the American people afterwards. And, forget too that nobody - save for one Colorado law school prof – ever even implied that perhaps Justice Clarence Thomas should resign. And forget, that even though Thomas, unlike Rep. Anthony Weiner, appears to have actually, and flagrantly, and repeatedly, broken the law.
What am I talking about (aside from the obvious Anita Hill stuff)? Well, one of Weiner’s big projects was exposing Clarence Thomas’s conflict of interest and the longtime and continuous covering up of this conflict.
As Brad Blog reported in January, “Thomas appears to have "knowingly and willfully" filed falsified Financial Disclosure Forms which withheld disclosure of nearly $700,000 his wife received from the rightwing Heritage Foundation for the better part of the last 20 years. Only once it was pointed out publicly this year did Thomas bother to file "self-initiated amendments" to the forms he had signed just above the legal warning in bold and all caps which reads: "NOTE: ANY INDIVIDUAL WHO KNOWINGLY AND WILLFULLY FALSIFIES OR FAILS TO FILE THIS REPORT MAY BE SUBJECT TO CIVIL AND CRIMINAL SANCTIONS (5 U.S.C. app. § 104)
As Brad Blog reported in January, “Thomas appears to have "knowingly and willfully" filed falsified Financial Disclosure Forms which withheld disclosure of nearly $700,000 his wife received from the rightwing Heritage Foundation for the better part of the last 20 years. Only once it was pointed out publicly this year did Thomas bother to file "self-initiated amendments" to the forms he had signed just above the legal warning in bold and all caps which reads: "NOTE: ANY INDIVIDUAL WHO KNOWINGLY AND WILLFULLY FALSIFIES OR FAILS TO FILE THIS REPORT MAY BE SUBJECT TO CIVIL AND CRIMINAL SANCTIONS (5 U.S.C. app. § 104)
Connecting the dots, it would seem the couple made huge profits from Thomas' participation and insider knowledge of last year's Citizens United ruling at the U.S. Supreme Court, as we'll show you below.
While Barack Obama's DoJ seems to be looking the other way, there was one person in Congress trying to bring attention to this issue last week with his ConflictedClarence.com website: Rep. Anthony Weiner...”
And why is that important? Namely because the Supreme Court will be soon be ruling on Obama’s health care plan and its constitutionality (clearly it is….even though I don’t personally like the individual mandate). His wife happens to have made a FORTUNE off lobbying against it, and now, it could all come down to the usual 5-4 split between the fascist majority and the sane.
I bring this up, again, to highlight not just some of the great work Weiner has been engaged in, but also the incredibly distorted "reality" we live in, in which judges who break the law and rule in favor of corporate interests over those of human beings (in every case, no matter the cost to our rights and lives) are given a free pass for decades, but a sexting addict gets non-stop coverage and demands to resign – from his own party.
And this brings me back to the crux of this all: Imagine for a moment if the media were as focused on the allegations that led us into the Iraq war by the Bush administration as that of the latest photo of Weiner? Answer: there wouldn’t have been an illegal war that resulted in a million dead at a cost of trillions of dollars.
Why the Double Standards?
Just to add a couple more to the long list of Republicans that seem to live on like the cockroaches they are, let us remember South Carolina Gov. Mark Sanford, whose extramarital affair made headlines in mid-2009 when he disappeared from public life to visit his girlfriend. (Remember his cover story about hiking the Appalachian Trail?)
Then there's Fox favorite Rudy Giuliani, who literally paraded his then-girlfriend Judith Nathan around town in 2000, announcing his intention to file for divorce in a televised press conference.
There's also former Rep. Don Sherwood, R-Pennsylvania, allegedly beat his mistress of five years just a couple of months before getting re-elected in 2004. The incident didn't even make the news until the following year. While members of the Democratic Congressional Campaign Committee are calling for Weiner's resignation, the Republicans spent well over a million dollars defending Sherwood's seat.
Even disgraced Rep. Chris Lee, R-New York, also busted for posting a tame shirtless photo to the Internet, may well have resigned to hide the fact that he was trolling Craigslist for transexuals.
So how could this be? Why the double standard? I think it’s due to a lot of reasons. Clearly it’s the GOP’s lack of shame or morals, and their singular ability to focus in on these kinds of scandals when a Democrat does it (including sending henchmen out to find these stories), and ignore and defend it when a Republican does. This creates an impression on the media, and puts pressure on them to cover stories that involve Democrats and less on Republicans (because Democrats don’t focus in and try to capitalize in the same way…they actually care about policy!!). I’m glad Democrats are different…but that doesn’t mean it doesn’t have an effect on how these stories are portrayed.
It also has to do with the imagery itself in this case. I mean, Jesus…we live in the age of Twitter and Facebook…and this story has penis photos!!! How could the media resist??
It also goes without saying, there’s simply a built in media bias…perhaps again, less to do with corporate ownership, and more perhaps due to the right wing media machine that knows how to push stories and manipulate the press.
And that leads me Joshua Holland, and his breakdown of this "machine" and how it works...terming it the "Breitbart effect" – meaning the ability of conservative activists to push a news story to the forefront of the national discussion, and hold it there for an extended run.
He writes, “Breitbart, like the Drudge Report and a host of other dedicated right-wing provocateurs, has learned the value of gaming the refs – of hounding the mainstream media with angry and unsubstantiated accusations of “liberal bias” for so long the latter tend to overcompensate and give prominence to whatever story the activists are interested in amplifying.
That's not to suggest that the story doesn't have inherent prurient appeal – it does. But Breitbart's antics – as well as Weiner's own bungled efforts to contain the damage – have made this lusterless, rather bovine “scandal” a huge sensation across the political spectrum for an entire week, and as of this writing it doesn't appear to be losing momentum. The Huffington Post live-blogged the unfolding non-drama and Amanda Marcotte and Dana Goldstein have been debating the ramifications of Weinergate here at AlterNet and on the Nation's blog for several days.
There's a feedback loop in play: Conservatives get hold of a story and hector the media into giving it outsized coverage. That coverage makes the story appear to be a big deal, which in turn attracts lots of viewers and readers. Then, seeing all those eyeballs on the story tells the media it is of great import to their readers and viewers, so they focus yet more energy on it.
Remember that until a fuzzy cell-phone pic alleged to be the Congressman's penis was released early this week, this whole brouhaha was about the kind of PG-rated photos that can be found in any men's clothing catalogue being sent to people Weiner had never met, much less touched. Contrast that tepid example of stupidity with the tale of Senator David Vitter, R-Louisiana, donning an oversized diaper in order to play mommy-games with random prostitutes. The Vitter story made the rounds for a few days, died down and he was easily re-elected in 2010.
And, unlike Anthony Weiner, all of those pols were “family values” types – self-appointed moral scolds telling others how they should or shouldn't express their own sexuality. Weinergate lacks their hypocrisy entirely – this is a man who never blamed any substantial issue on the imagined loss of some kind of idealized past in which innocence and chastity were supposedly the norm.
Ultimately, Weiner's just a horny dork with a Twitter account – a guy with some penchants that nobody outside his family should even begin to care about. But Breitbart appears to rule our world, so we'll have to suffer through days of additional analysis of this perfect distraction of a “story.”
That's not to suggest that the story doesn't have inherent prurient appeal – it does. But Breitbart's antics – as well as Weiner's own bungled efforts to contain the damage – have made this lusterless, rather bovine “scandal” a huge sensation across the political spectrum for an entire week, and as of this writing it doesn't appear to be losing momentum. The Huffington Post live-blogged the unfolding non-drama and Amanda Marcotte and Dana Goldstein have been debating the ramifications of Weinergate here at AlterNet and on the Nation's blog for several days.
There's a feedback loop in play: Conservatives get hold of a story and hector the media into giving it outsized coverage. That coverage makes the story appear to be a big deal, which in turn attracts lots of viewers and readers. Then, seeing all those eyeballs on the story tells the media it is of great import to their readers and viewers, so they focus yet more energy on it.
Remember that until a fuzzy cell-phone pic alleged to be the Congressman's penis was released early this week, this whole brouhaha was about the kind of PG-rated photos that can be found in any men's clothing catalogue being sent to people Weiner had never met, much less touched. Contrast that tepid example of stupidity with the tale of Senator David Vitter, R-Louisiana, donning an oversized diaper in order to play mommy-games with random prostitutes. The Vitter story made the rounds for a few days, died down and he was easily re-elected in 2010.
And, unlike Anthony Weiner, all of those pols were “family values” types – self-appointed moral scolds telling others how they should or shouldn't express their own sexuality. Weinergate lacks their hypocrisy entirely – this is a man who never blamed any substantial issue on the imagined loss of some kind of idealized past in which innocence and chastity were supposedly the norm.
Ultimately, Weiner's just a horny dork with a Twitter account – a guy with some penchants that nobody outside his family should even begin to care about. But Breitbart appears to rule our world, so we'll have to suffer through days of additional analysis of this perfect distraction of a “story.”
The Debt Ceiling and GOP Extortion
If you thought my birthday post on June 2nd was hyperbolic in anyway (i.e. dying paradigm), just wait and see if the GOP is successful in either preventing the raising of the "debt ceiling" or forcing MASSIVE budget cuts that will torpedo our so called “recovery”. But its not just Congressional Republicans terrorizing our nation, its state legislators across the country. In California, we once again, are being held hostage by GOP demands if we are to approve modest tax extensions (meaning you will be paying the same as now) to avoid even larger, draconian cuts to life and economy sustaining programs. I just published an article detailing what the GOP is doing in states across the country on the California Progress Report if interested in getting angry and nauseous.
But let's get back to the grandaddy of them all: the debt ceiling. Remember, without raising the debt ceiling the government's authority to borrow money has reached its limit. The Treasury Department is engaging in gimmicks and schemes to keep the country going but time is running out. Without extending this limit, we default on our bonds. If our government defaults on its bonds it would initiate a worldwide financial crisis that dwarfs the Wall Street meltdown of a few years ago.
WHY We Have This Debt
As is so often the case when explaining any crisis and its origins, we must go back to 1981 and that dimwitted b-movie actor, Ronald Reagan. It was his administration that began the defunding of government by passing huge tax cuts for the rich and massively increasing military spending, while cutting back on the things that we collectively do for each other.
As Dave Johnson recently noted regarding the Reagan legacy, “The country cut back on maintaining -- never mind modernizing -- our infrastructure, our schools, colleges and universities, scientific research and other things that make us competitive in world markets. We began cashing in our factories and moving the jobs out of the country. As a result of Reagan-era changes our trade deficits soared, wages stagnated, pensions disappeared, and a few extremely wealthy started getting much, much richer.
One major result of these changes, of course, was the huge budget deficits that accumulated into today's massive debt. This was the plan from the start, to "starve the beast" by defunding government and forcing the debt to reach a level where there was no choice but to cut back on democratic government's protections for the people, unleashing plutocracy.”
One major result of these changes, of course, was the huge budget deficits that accumulated into today's massive debt. This was the plan from the start, to "starve the beast" by defunding government and forcing the debt to reach a level where there was no choice but to cut back on democratic government's protections for the people, unleashing plutocracy.”
It’s a Revenue Problem, Not a Spending One!!
To review: federal taxes are at their lowest level in more than 60 years" as a share of gross domestic product, and they consume a lower share of gross domestic product in the U.S. than they do in every Organization for Economic Cooperation and Development-member country: 10.1 percent in 2008, compared to the 20.4 percent OECD average. Only Japan is lower.
U.S. corporations have the lowest tax burden in the OECD relative to the size of the economy. Their tax burden is only 1.8 percent of GDP, again about half the OECD average of 3.5 percent.
The many adjustments to income permitted by the tax code, plus alternative tax rates on the largest sources of income of the wealthy, explain why the average federal income tax rate on the 400 richest people in America was 18.11 percent in 2008, according to the Internal Revenue Service, down from 26.38 percent when these data were first calculated in 1992. Among the top 400, 7.5 percent had an average tax rate of less than 10 percent, 25 percent paid between 10 and 15 percent, and 28 percent paid between 15 and 20 percent.
It then becomes incredibly obvious why we have reached, again, this debt ceiling. And don’t forget, even Republicans know raising the debt ceiling is not really negotiable. As David Dayen notes, and this is why Democrats MUST STAND STRONG, “This issue is at core about whether or not we do what we say, whether or not America can be trusted. And raising the debt ceiling without precondition is about whether we make good on our promises not just to our creditors, but to each other.
For all Republicans talk about not being able to afford things, it seems to apply only to food, health care, housing and electricity for their constituents. We’re flush when it comes to not collecting taxes from corporations, giving more to millionaires, subsidizing polluters and bombing other countries.
For all Republicans talk about not being able to afford things, it seems to apply only to food, health care, housing and electricity for their constituents. We’re flush when it comes to not collecting taxes from corporations, giving more to millionaires, subsidizing polluters and bombing other countries.
Without raising the debt ceiling free of conditions, we cannot honor our commitments to our grandparents who need to see their doctors and purchase their meds, to our children who need trained teachers and classrooms with heat and to our neighbors who need help when jobs are scarce and earnings don’t cover what life costs. Further gutting social spending will hurt those least equipped to sustain further injury. The jobless, the homeless, the young and the old will be the ones maimed.
In this context, there is a bill by Rep. Jan Schakowsky that would impose a surtax on millionaires and billionaires of between 45 and 49 percent is far from radical legislation. (Radical would be raising the top tax rate on these people to 91 percent — which is where it was for people earning more than $1.4 million in today's dollars when John F. Kennedy took office. The Tax Foundation offers this look at how tax rates have changed over the years.)
It would create new tax brackets for annual income above $1 million, starting at 45% for income between $1 million and $10 million, inching up to 49% for income over $1 billion.
I’ve been arguing for the need to increase the number of tax brackets upwards, like we had until Reagan, for a long time. That way, a family of six living in Manhattan making $300,000 isn’t treated the same way as Bill Gates. Those tax brackets should be different.
Its of course very telling that Obama not only won't lift a finger to advocate on behalf of this legislation, he won't even endorse or mention it. In fact, its worse than that (which I will address more next post), he's making the GOP case for austerity AND tax cuts better than they ever could. What a disgrace...like Clinton, he is one of the best Republican Presidents we've ever had...
Its of course very telling that Obama not only won't lift a finger to advocate on behalf of this legislation, he won't even endorse or mention it. In fact, its worse than that (which I will address more next post), he's making the GOP case for austerity AND tax cuts better than they ever could. What a disgrace...like Clinton, he is one of the best Republican Presidents we've ever had...
With that, check out the articles I've included today…they will go into GREAT detail into why our economy is lagging so badly, what has led to the corporatization of the Democratic Party, and how policies during the years of our great prosperity (1947-77) were so successful, and those embraced since such a disaster.
VIDEO SECTION
Stephen Colbert eviscerates the false meme that scum bag liar Mitt Romney's (that is repeated by the media!) a "job creator"! As Governor of Massachusetts the state ranked 47th in job creation. As CEO of Bain Capital he made his fortune off laying off workers and raiding pensions. And now he's call for lowering the corporate tax rate from 35 percent to 25 percent. Wow!!! What a jobs record and plan!!! If you want the whole scoop you can check out Is Mitt Romney A Job Creator-- Or A Job Destroyer?
Now enjoy Colbert: http://videocafe.crooksandliars.com/heather/colbert-rips-romney-his-business-experienc
Interestingly, here's an example of the media essentially showing its hand, and admitting in fact, that they (in this case Luke Russert) will continue to hound Anthony Weiner until he resigns (and make it the "distraction" that they keep saying it is to Democrats)...unlike, say, ALL Republicans that do far worse.
http://videocafe.crooksandliars.com/heather/luke-russert-explains-how-media-will-hound
Interestingly, here's an example of the media essentially showing its hand, and admitting in fact, that they (in this case Luke Russert) will continue to hound Anthony Weiner until he resigns (and make it the "distraction" that they keep saying it is to Democrats)...unlike, say, ALL Republicans that do far worse.
http://videocafe.crooksandliars.com/heather/luke-russert-explains-how-media-will-hound
Amy Goodman interviews Bill Moyers…doesn’t get much better than that…
Bill Maher’s New Rules…
Rachel Maddow on how the right wing media machine, from Limbaugh to Fox, instill in their audience "grievance, resentment and belonging" and how that made it inevitable that we would end up with someone like Palin using avoidance of the "mainstream" media as part of a political platform.
And NOTHING more clearly backs my "doubling down" on what doesn't work thesis than the GOP. My god, Pawlenty’s budget calls for lower taxes on corporations (down to 15 percent from the current 35 percent), and lower taxes on the rich (to 25 percent from the current 35). Newt Gingirch wants to lower corporate income taxes to 12.5 percent and eliminate the estate tax altogether….and in an interview published by the Wall Street Journal, Rep. Michele Bachmann one-upped them all, calling for a reduction in the corporate tax rate to 9 percent. Bachmann also wants to pair that huge tax cut with giant tax reductions for the rich, as well as a tax increase on the working poor. Here's Cenk Uygur on Pawlenty's plan:
http://videocafe.crooksandliars.com/heather/uygur-pawlentys-budget-proposal-just-more
http://videocafe.crooksandliars.com/heather/uygur-pawlentys-budget-proposal-just-more
ARTICLE SECTION
Why the Democratic Party Has Abandoned the Middle Class in Favor of the Rich, by Kevin Drum
A FEW CLIPS:
A FEW CLIPS:
But two years later, Wall Street is back to earning record profits, and conservatives are triumphant. To understand why this happened, it's not enough to examine polls and tea parties and the makeup of Barack Obama's economic team. You have to understand how we fell so short, and what we rightfully should have expected from Obama's election. And you have to understand two crucial things about American politics.
The first is this: Income inequality has grown dramatically since the mid-'70s—far more in the US than in most advanced countries—and the gap is only partly related to college grads outperforming high-school grads. Rather, the bulk of our growing inequality has been a product of skyrocketing incomes among the richest 1 percent and—even more dramatically—among the top 0.1 percent. It has, in other words, been CEOs and Wall Street traders at the very tippy-top who are hoovering up vast sums of money from everyone, even those who by ordinary standards are pretty well off.
Second, American politicians don't care much about voters with moderate incomes. Princeton political scientist Larry Bartels studied the voting behavior of US senators in the early '90s and discovered that they respond far more to the desires of high-income groups than to anyone else. By itself, that's not a surprise. He also found that Republicans don't respond at all to the desires of voters with modest incomes. Maybe that's not a surprise, either. But this should be: Bartels found that Democratic senators don't respond to the desires of these voters, either. At all.
The first is this: Income inequality has grown dramatically since the mid-'70s—far more in the US than in most advanced countries—and the gap is only partly related to college grads outperforming high-school grads. Rather, the bulk of our growing inequality has been a product of skyrocketing incomes among the richest 1 percent and—even more dramatically—among the top 0.1 percent. It has, in other words, been CEOs and Wall Street traders at the very tippy-top who are hoovering up vast sums of money from everyone, even those who by ordinary standards are pretty well off.
Second, American politicians don't care much about voters with moderate incomes. Princeton political scientist Larry Bartels studied the voting behavior of US senators in the early '90s and discovered that they respond far more to the desires of high-income groups than to anyone else. By itself, that's not a surprise. He also found that Republicans don't respond at all to the desires of voters with modest incomes. Maybe that's not a surprise, either. But this should be: Bartels found that Democratic senators don't respond to the desires of these voters, either. At all.
SNIP
Technically, American labor began its ebb in the early '50s. But as late as 1970, private-sector union density was still more than 25 percent, and the absolute number of union members was at its highest point in history. American unions had plenty of problems, ranging from unremitting hostility in the South to unimaginative leadership almost everywhere else, but it wasn't until the rise of the New Left in the '60s that these problems began to metastasize.
The problems were political, not economic. Organized labor requires government support to thrive—things like the right to organize workplaces, rules that prevent retaliation against union leaders, and requirements that management negotiate in good faith—and in America, that support traditionally came from the Democratic Party. The relationship was symbiotic: Unions provided money and ground game campaign organization, and in return Democrats supported economic policies like minimum-wage laws and expanded health care that helped not just union members per se—since they'd already won good wages and benefits at the bargaining table—but the interests of the working and middle classes writ large.
SNIP
The results were catastrophic. Business groups, simultaneously alarmed at the expansion of federal regulations during the '60s and newly emboldened by the obvious fault lines on the left, started hiring lobbyists and launching political action committees at a torrid pace. At the same time, corporations began to realize that lobbying individually for their own parochial interests (steel, sugar, finance, etc.) wasn't enough: They needed to band together to push aggressively for a broadly pro-business legislative environment. In 1971, future Supreme Court justice Lewis Powell wrote his now-famous memo urging the business community to fight back: "Strength lies in organization," he wrote, and would rise and fall "through joint effort, and in the political power available only through united action and national organizations." Over the next few years, the Chamber of Commerce morphed into an aggressive and highly politicized advocate of business interests, conservative think tanks began to flourish, and more than 100 corporate CEOs banded together to found a pro-market supergroup, the Business Roundtable.
They didn't have to wait long for their first big success. By 1978, a chastened union movement had already given up on big-ticket legislation to make it easier to organize workplaces. But they still had every reason to think they could at least win passage of a modest package to bolster existing labor law and increase penalties for flouting rulings of the National Labor Relations Board. After all, a Democrat was president, and Democrats held 61 seats in the Senate. So they threw their support behind a compromise bill they thought the business community would accept with only a pro forma fight.
Instead, the Business Roundtable, the US Chamber of Commerce, and other business groups declared war. Organized labor fought back with all it had—but that was no longer enough: The bill failed in the Senate by two votes. It was, said right-wing Sen. Orrin Hatch (R-Utah), "a starting point for a new era of assertiveness by big business in Washington." Business historian Kim McQuaid put it more bluntly: 1978, he said, was "Waterloo" for unions.
Instead, the Business Roundtable, the US Chamber of Commerce, and other business groups declared war. Organized labor fought back with all it had—but that was no longer enough: The bill failed in the Senate by two votes. It was, said right-wing Sen. Orrin Hatch (R-Utah), "a starting point for a new era of assertiveness by big business in Washington." Business historian Kim McQuaid put it more bluntly: 1978, he said, was "Waterloo" for unions.
Organized labor, already in trouble thanks to stagflation, globalization, and the decay of manufacturing, now went into a death spiral. That decline led to a decline in the power of the Democratic Party, which in turn led to fewer protections for unions. Rinse and repeat. By the time both sides realized what had happened, it was too late—union density had slumped below the point of no return.
SNIP
If unions had remained strong and Democrats had continued to vigorously press for more equitable economic policies, middle-class wages over the past three decades likely would have grown at about the same rate as the overall economy—just as they had in the postwar era. But they didn't, and that meant that every year, the money that would have gone to middle-class wage increases instead went somewhere else. This created a vast and steadily growing pool of money, and the chart below gives you an idea of its size. It shows how much money would have flowed to different groups if their incomes had grown at the same rate as the overall economy. The entire bottom 80 percent now loses a collective $743 billion each year, thanks to the cumulative effect of slow wage growth. Conversely, the top 1 percent gains $673 billion. That's a pretty close match. Basically, the money gained by the top 1 percent seems to have come almost entirely from the bottom 80 percent.
Why Americans Have to Work Longer Hours and Borrow to the Hilt Just to Keep Afloat, Robert Reich
A FEW CLIPS:
How did we go from the Great Depression to 30 years of Great Prosperity? And from there, to 30 years of stagnant incomes and widening inequality, culminating in the Great Recession? And from the Great Recession into such an anemic recovery?
The Great Prosperity
During three decades from 1947 to 1977, the nation implemented what might be called a basic bargain with American workers. Employers paid them enough to buy what they produced. Mass production and mass consumption proved perfect complements. Almost everyone who wanted a job could find one with good wages, or at least wages that were trending upward.
During these three decades everyone’s wages grew — not just those at or near the top.
Government enforced the basic bargain in several ways. It used Keynesian policy to achieve nearly full employment. It gave ordinary workers more bargaining power. It provided social insurance. And it expanded public investment. Consequently, the portion of total income that went to the middle class grew while the portion going to the top declined. But this was no zero-sum game. As the economy grew almost everyone came out ahead, including those at the top. The pay of workers in the bottom fifth grew 116 percent over these years — faster than the pay of those in the top fifth (which rose 99 percent), and in the top 5 percent (86 percent).
Productivity also grew quickly. Labor productivity — average output per hour worked — doubled. So did median incomes. Expressed in 2007 dollars, the typical family’s income rose from about $25,000 to $55,000. The basic bargain was cinched.
During these three decades everyone’s wages grew — not just those at or near the top.
Government enforced the basic bargain in several ways. It used Keynesian policy to achieve nearly full employment. It gave ordinary workers more bargaining power. It provided social insurance. And it expanded public investment. Consequently, the portion of total income that went to the middle class grew while the portion going to the top declined. But this was no zero-sum game. As the economy grew almost everyone came out ahead, including those at the top. The pay of workers in the bottom fifth grew 116 percent over these years — faster than the pay of those in the top fifth (which rose 99 percent), and in the top 5 percent (86 percent).
Productivity also grew quickly. Labor productivity — average output per hour worked — doubled. So did median incomes. Expressed in 2007 dollars, the typical family’s income rose from about $25,000 to $55,000. The basic bargain was cinched.
SNIP
The Middle-Class Squeeze, 1977-2007
During the Great Prosperity of 1947-1977, the basic bargain had ensured that the pay of American workers coincided with their output. In effect, the vast middle class received an increasing share of the benefits of economic growth. But after that point, the two lines began to diverge: Output per hour — a measure of productivity — continued to rise. But real hourly compensation was left in the dust.
It’s easy to blame “globalization” for the stagnation of middle incomes, but technological advances have played as much if not a greater role. Factories remaining in the United States have shed workers as they automated. So has the service sector.
It’s easy to blame “globalization” for the stagnation of middle incomes, but technological advances have played as much if not a greater role. Factories remaining in the United States have shed workers as they automated. So has the service sector.
But contrary to popular mythology, trade and technology have not reduced the overall number of American jobs. Their more profound effect has been on pay. Rather than be out of work, most Americans have quietly settled for lower real wages, or wages that have risen more slowly than the overall growth of the economy per person. Although unemployment following the Great Recession remains high, jobs are slowly returning. But in order to get them, many workers have to accept lower pay than before.
Starting more than three decades ago, trade and technology began driving a wedge between the earnings of people at the top and everyone else. The pay of well-connected graduates of prestigious colleges and MBA programs has soared. But the pay and benefits of most other workers has either flattened or dropped. And the ensuing division has also made most middle-class American families less economically secure.
Government could have enforced the basic bargain. But it did the opposite. It slashed public goods and investments — whacking school budgets, increasing the cost of public higher education, reducing job training, cutting public transportation and allowing bridges, ports and highways to corrode.
Government could have enforced the basic bargain. But it did the opposite. It slashed public goods and investments — whacking school budgets, increasing the cost of public higher education, reducing job training, cutting public transportation and allowing bridges, ports and highways to corrode.
It shredded safety nets — reducing aid to jobless families with children, tightening eligibility for food stamps, and cutting unemployment insurance so much that by 2007 only 40 percent of the unemployed were covered. It halved the top income tax rate from the range of 70 to 90 percent that prevailed during the Great Prosperity to 28 to 35 percent; allowed many of the nation’s rich to treat their income as capital gains subject to no more than 15 percent tax; and shrunk inheritance taxes that affected only the top-most 1.5 percent of earners. Yet at the same time, America boosted sales and payroll taxes, both of which took a bigger chunk out of the pay the middle class and the poor than of the well off.
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