Photo Credit: Shutterstock.com/Vepar5
October 6, 2013
|
The middle class, once the backbone of a strong American society,
has been broken, beaten down, pushed further and further toward poverty
levels. Here are five well-documented ways that this has happened.
1. Income Redistribution is Worse than Usually Reported
We are
told that the richest 1% doubled its share of income in the past thirty years. But from 1980 to 2006, according to both
IRS and
CBO figures, they nearly TRIPLED their share of income -- and that's after-tax income.
After 2006, the recession set everyone back temporarily, but in the
first two years of the recovery, the richest 1% captured an
incomprehensible
121% of the income gains (others saw debt rise faster than income).
2. Wealth Redistribution is Even Worse than Income Redistribution
In 1983 the poorest
47% of America owned about
2.5 percent of the nation's wealth, an average of $15,000 per family.
In 2009 the poorest 47% of America owned
ZERO percent of the nation's wealth (their debt exceeded their assets).
Hard to believe it could get even worse. But because of the housing crisis and recession, the median family
net worthdropped 40% between 2007 and 2010, while the richest Americans were
regaining all their losses, and beginning an even steeper
climb to the top.
Perhaps the biggest reason for this wealth redistribution is that the richest 10% own
almost 90 percent of stocks excluding pensions. Since the recession, as the U.S. economy has
"recovered," almost
two-thirds of the gain was due to growth in the stock market.
3. The Redistribution of Productivity: Boosting Profits rather than Wages
From 2001 to 2011, total
corporate profits more than doubled, to almost $2 trillion, while the corporate federal
income tax rate was cut in half.
Incomes for 99% of Americans have declined since the recession, with the median household income
dropping by 7.3 percent.
Low-income jobs ($7.69
to $13.83 per hour) made up 1/5 of the jobs lost to the recession, but
accounted for 3/5 of the jobs regained during the recovery.
4. Finance is Outrunning Society, and Taking the Money with Them
Americans once trusted the financial industry to safeguard their
retirement money. But high tech has transformed high finance, at a much
faster rate than the average investor can understand the changes.
Rolling Stone reports
on the loss of $2.3 billion in pension money in Maine -- and the
simultaneous billing of $2.1 billion by the hedge funds, private-equity
funds and venture-capital funds. Another
report tells
of local funding crises caused by indecipherable "structured finance"
deals sold by bankers with promises of big returns. In 2007 a hedge fund
manager (
John Paulson)
made $3.7 billion by conspiring with Goldman Sachs to create packages
of risky subprime mortgages, so that in anticipation of a housing crash
he could use other people's money to bet against his personally designed
sure-to-fail financial instruments.
The high-speed high-tech chicanery continues in the
stock market,
where programs can intercept 'buy' orders and in a few nanoseconds
purchase the stock and then complete the 'buy' order for a few pennies
more.
The bankers and hedgers and hustlers have made up new rules for
making money, and our government representatives don't know what's going
on, or don't care, or don't want to stop the financial games that
ultimately generate campaign funds. Finance is quickly printing its own
new money. In less than ten years, the
world's wealth has
approximately doubled, from $113 trillion to $223 trillion. Much of
that is sheer speculation: the derivatives industry is worth over
$1 quadrillion. But those speculative transactions get cashed in as real money.
It's a dizzying high-speed fantasyland that redistributes the real
money of the middle class to the super-rich while inventing new forms of
fees and bonuses along the way.
5. Redistribution through Government Manipulation
There are numerous ways the very rich have cajoled and coerced and
connived their Congressional partners to redistribute money in their
direction. Like the lower capital gains rate. An astonishing
75 percent of
dividend and capital gain subsidies go to the richest 1%. That's still
not enough for hedge fund managers, who call their income "carried
interest" instead of "income" to keep their tax rate at the capital
gains rate. And even this small amount may not be paid. Hedge fund
managers with incomes in the billions can pay
ZERO income tax by deferring their profits through their companies indefinitely.
About
two-thirds of
nearly $1 trillion in individual
"tax expenditures" (tax
subsidies from special deductions, exemptions, exclusions, credits,
capital gains, and loopholes) goes to the top quintile of taxpayers.
Banks have arranged to get lower interest rates, saving them
$83 billion per year.
The U.S. federal government spends
$100 billion a year on corporate welfare, almost half for big agriculture and the fossil fuel industry.
Another $150 billion per year goes for excessive
pharmaceutical expenditures, as the drug companies have lobbied for laws to keep
cheaper medications out of the hands of Americans.
Better to Call it Pre-Distribution
The term 'pre-distribution' better represents, according to political scientist
Jacob Hacker,
"the way in which the market distributes its rewards in the first
place." Unregulated free-market capitalism simply makes the rich richer.
Even if they have to break the backs of productive middle-class
Americans to get their way.
Paul Buchheit is a college
teacher, a writer for progressive publications, and the founder and
developer of social justice and educational websites
(UsAgainstGreed.org, PayUpNow.org, RappingHistory.org).
No comments:
Post a Comment