It’s the income inequality, stupid

Mother Jones has provided some charts that illustrate the income inequality in America. The article is here:

•How rich are the super rich?

•Out of balance

•Why Washington is closer to Main Street than Wall Street:

Author: jeffpelline

Jeff Pelline is a veteran editor and award-winning journalist - in print and online. He is publisher of Sierra FoodWineArt magazine and its website SierraCulture.com. Jeff covered business and technology for The San Francisco Chronicle for years, was a founding editor and Editor of CNET News, and was Editor of The Union, a 145-year-old newspaper in Grass Valley. Jeff has a bachelor's degree from UC Berkeley and a master's from Northwestern University. His hobbies include sailing and trout fishing.

7 thoughts on “It’s the income inequality, stupid”

  1. I hope that people will click through to the whole article in Mother Jones and in particular have a look at the comparison between what the wealthy pay in taxes now, and what they paid in earlier years.

    The data show that over the last decades, there has been a steady lowering of taxes on the wealthy (and especially the super-wealthy). This has happened under both Republican and Democrat administrations–but more quickly under the Republicans. It has also happened at a time when a great deal of new wealth was created by the American worker.

    As Barry writes on his blog, “Facts are Stubborn Things.” I would be interested in hearing what his take is on the facts highlighted in the graphs in the Mother Jones article.

  2. This is the number one issue in our country. The lowering of tax rates for the top margin has allowed the corruption to become out of control. Income equality equates to many social ills.
    Thomas Paine would be so disappointed in our current tax system. In “Rights of Man” man he writes about a progressive tax system and social programs to counter income inequality/ wealth disparity.

    1. Speaking of “corruption” trouble…it seems that Faux News is in truuuble…Judith Regan has a recording of Roger Ailes asking her to “lie” to federal investigators about her “relationship” to that Bernie Kerik guy that was up for the big ole “Homeland Security” job under Dubya…oh, and Petraeus thinks he might want to “investigate” the psy-ops/black-ops mind control of our American Senators by some whackjob wingnut commander in Afghanistan. Rolling Stone Article…oh my, I hear the “chickens roosting”…so Barry, whadya think cowboy? I think these people should all wear Star Trek outfits so we can spot em when we see em…

    2. I think Ben is absolutely right. This is the single most important issue in our country. If we do not stop the widening gap between the rich and the poor some day soon there will be violent class conflict and perhaps revolution. (The measure of this divide is called the GINI index)

      http://en.wikipedia.org/wiki/Gini_coefficient

      Some may find this counter-intuitive, but I believe that many of the solutions to the problem of increasing income inequality and the problem of increasing debt are one and the same.

  3. Most of us, on the rare occasions when we think about it at all, consider income inequality to be a regrettable but probably unavoidable feature of an economic system which is fundamentally just and sound.

    But there’s growing understanding among mainstream\ economists of the direct and terrible connection between inequality and economic meltdowns, the regular recurring boom and bust cycles like the one we are still trying to recover from now.

    The mechanism is easy to understand: money (what should be demand) accumulates instead in the coffers of the rich (the hoarding class) and does not “trickle down.” If it did trickle down to the non-rich/non-hoarding classes, who have no choice but to spend it (on rent, mortgage, gas, food, etc, etc), it would then become demand, the engine for a healthy economy.

    When inequality becomes extreme, the demand engine stalls. This is what happened on the eve of the Great Depression, and again on the eve of our current Great Recession.

    Since the late 1970s — and particularly since the early 1980s when Reagan accelerated the war on the middle class and the war on unions by firing the air traffic controllers — worker real wages (adjusted for inflation) have stayed flat, and have not maintained their historic parity with growing productivity.

    To make up for the decreasing demand from the now more impoverished middle class, some other demand mechanism had to be found. The other mechanism was easy credit, fueled by low interest rates engineered by Greenspan and his cronies at the Federal Reserve.

    Americans began to use the still considerable equity in their homes as sources of borrowing. It appeared to be a “virtuous cycle” of growing values and growing debt. Americans used their homes like ATMs.

    When the bubble burst — as all bubbles inevitably burst — in the late 1920s, the economy limped along for some years until jobs policies put in place by FDR (the “traitor to his class”) and his administration began to ameliorate the suffering somewhat. A setback occurred in 1939 when FDR, bowing to pressure from conservatives, attempted to balance the budget by reducing spending (sound familiar?).

    The real recovery finally took place as a result of the ultimate jobs program, World War II.

    The point, though, is that, thanks to FDR, the political will existed at the federal level to address the root problem in some fashion.

    I’m afraid that we face a much more dire situation today, with the potential for an Even Greater Depression.

    Consider: Obama is no FDR, and shows little inclination to emulate him. He continues to rely for economic advice on the same cast of characters from the financial sector who created the current meltdown.

    Instead of a Pecora Investigation and a massive shaming and rebuke of Wall Street, we have historic profits and bonuses in the financial sector, combined with a continuing war on unions and on the increasingly-impoverished and rapidly-disappearing middle class.

    At a time when the culprits should be facing jail terms, they continue to rule the roost.

    The only way out of the current crisis to “bail out” the working class with policies at the federal level, in order to restart the economy’s demand engine.

    We need to raise taxes on the rich, the primary method for preventing hoarding. This is not as simple-minded as it sounds. See http://www.huffingtonpost.com/larry-beinhart/weird-tax-myths-2-recessi_b_794592.html

    Unfortunately, though, the deficit hawk mentality prevails in Washington today.

    The only sign of hope anywhere in our country is in the massive public reaction, starting in Wisconsin, to the latest assault on unions.

    Either the union movement will recover some of its historic strength in the current conflict, or it may die once and for all.

    If it dies, God help us all.

    We’ll be living in a world of permanent income inequality.

  4. If the “powers that be” are not exceedingly careful–i.e., addressing this income inequality, the hoarding by the elite (a measly 2% of the american population), the corruption of politicians like Walker, protection from corporate predators, including wage enslavement by union busting, wage stagnation, ignoring worker and human rights, religious fundamentalism and bigotry–the fire that is engulfing the middle east, with players like Gaddafi sounding like Faux news announcers, with “drugs”, “al-queda”, “whiners”, “babies” “welfare queens”–dribbling out of both the wingnuts AND crazy Gaddafi’s mouth at the same moment in time from the same playbook it seems–this conflagration over there is going to look a picnic in May. The american middle and working classes are losing a helluva lot at a rapid rate…when they are left with next to nothing it will not be a pretty sight. Ask the Middle East… Just sayin…

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