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Poisonous Plutocracy Pushes Economic Inequality

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The biggest political issue receiving no attention from the Democratic and Republican presidential candidates is the powerful plutocracy that has captured the government to produce rising economic inequality.

Both major parties have enabled, promoted and supported this Upper Class plutocracy. Myriad federal policies make the rich super-rich and the powerful dominant in both good and bad economic times. Meanwhile, despite elections, the middle class sinks into one big Lower Class as the plutocracy ensures that national prosperity is unshared.

Why no attention? Why no explicit reference to a plutocracy that makes a mockery of American democracy? Simple answer: because both major parties and their candidates are subservient to numerous corporate and other special interests that use their money and influence to ensure that their elitist priorities prevail. Make no mistake. Barack Obama with all his slick rhetoric is just as much a supporter and benefactor of this Upper Class plutocracy as Hillary Clinton and John McCain.

Everyone that is not in the Upper Class who votes for any of these presidential candidates is voting against their own interests. They have been hoodwinked, conned, brainwashed and manipulated by campaign propaganda. They elect people for the visible government while they remain oblivious to the secret government – the powerful pulling the strings behind the stage. Money makes more money, financing more political influence.

One of the biggest delusions of Americans is that if they retain their constitutional rights that they still live in a country with a working democracy. Wrong. American democracy is delusional because the two-party plutocracy makes citizens economic slaves. This represses political dissent. It is 21st century tyranny. Two-party presidential candidates, unlike our nation’s Founders, lack courage to fight and revolt against domestic tyranny. Placebo voting distracts citizens from the political necessity of fighting the plutocracy.

Economic data show the plutocracy’s assault on American society. Consider these examples.

The top 20 percent of households earned more, after taxes, than the remaining 80 percent in 2005, while the topmost 1 percent took home more than the bottom 40 percent.

No American state has seen the gap between rich and poor widen faster than Connecticut. From 1987 through 2006, the top fifth of the state’s households saw their incomes increase by 44.8 percent, after inflation. Incomes for the bottom fifth fell 17.4 percent. On the other coast, just three of every 1,000 Californians in 2005 reported at least $1 million in income. But they got $213 of every $1,000 Californians earned in 2005 income. The state’s top 1 percent – average income $1.6 million – pay 7.1 percent of their incomes in income, sales, property, and gas taxes. The poorest fifth of California households pay 11.7 percent.

Real hourly wages for most workers have risen only 1 percent since 1979, even as those workers’ productivity has increased by 60 percent. Higher efficiency has rewarded business executives, owners and investors, but not workers. What’s more, American workers now work more hours per year than their counterparts in virtually every other advanced economy, even Japan, and without universal health care.

A typical hedge fund manager makes 31 times more in one hour than the typical American family makes in a year. In 2007, the top 50 hedge fund income-earners collected $29 billion – an average of $581 million each. John Paulson took home $3.7 billion from his hedge fund labors. These figures do not count profits from selling shares in their companies. Importantly, hedge fund players contributed nine times more to the Senate Democratic fundraising arm than they gave to Senate Republicans in 2007.

In 2009, Americans who make over $1 million a year will save an average $32,000 from the Bush tax cuts on capital gains and dividends. The average American household will save $20.

Between 1986 and 2005, the income of America’s top 1 percent of taxpayer jumped from 11.3 to 21.2 percent of the national total. Their federal income taxes dropped from 33.13 percent of total personal income in 1986 to 23.13 percent in 2005. From 2001 to 2008, the net worth of the wealthiest 1 percent grew from $186 billion to $816 billion.

Economic inequality and injustice reflect a political disaster, even with regular elections. It has resulted from government decisions on tax cuts, spending, trade agreements, deregulatory measures, labor unions, corporate handouts, and regulatory enforcement. All crafted to benefit the rich and powerful and leave the rest of us behind. It has happened under Democratic and Republican presidencies and congresses. Bipartisan domestic tyranny propels greed driven plutocracy.

What do we desperately need? A national discussion and referendum on inequality-pumping plutocracy, that none of the major presidential candidates shows any interest in having. Certainly not Barack Obama with his vacuous talk of change (but not about the political system) and John McCain’s incredulous talk of reform.

And it is delusional to think that populist global Internet connectivity producing what is called personal sovereignty threatens plutocracy. Networking among the rich and powerful places the global plutocracy above national sovereignty. More than produce an army of revolutionaries to overturn the system, the Internet has fragmented every imaginable movement. Individuals indulge themselves with their own or social websites or fall victim to conventional politicians. Technology and media owned and controlled by plutocrats serves them while it shackles and deceives the multitudes.

Only one presidential candidate sees our core national problem and the need for revolutionary thinking and action to correct the system: Ralph Nader who said recently, “We need a Jeffersonian revolution.” Plutocrats should heed these wise words of John F. Kennedy: “Those who make peaceful revolution impossible will make violent revolution inevitable.” With all the guns and pain Americans have, the ruling class should worry and start reforms. To start, let third party and independent candidates into televised presidential debates. If the stage can be filled with a bunch of primary season candidates, why not more than two in the general election?

For electoral dissent, stop being a presidential romantic; use your vote to fight the plutocracy. Reject the Democratic and Republican presidential candidates. Put an end to serial disappointments. Time is running out. Talk is cheap. Action is crucial. Violent revolution is an option.

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About Joel S. Hirschhorn

Formerly full professor Univ. of Wisconsin, Madison, and senior official Congressional Office of Technology Assessment and National Governors Association. Author of four nonfiction books and hundreds of articles.
  • http://www.republicofdave.com Dave Nalle

    Real hourly wages for most workers have risen only 1 percent since 1979,

    This is not true. Just looking at the most recent stats from the BLS and focusing on the lowest wage earning groups, we can see that real wages adjusted for inflation grew 5% from 1997 2005 for cleaning and maintenance workers and 7.9% for health service workers, two of the lowest paid hourly wage job sectors and two groups which definitely include no hedge fund managers.

    A typical hedge fund manager makes 31 times more in one hour than the typical American family makes in a year.

    You show a fundamnetal lack of understanding of how money is earned and how the economy works here. There is no relationship – except the false one you try to set up – between the wages earned by any worker and the income earned by people working on commission or profiting from investments. You cannot compare these types of income or relate them to each other. They are like apples and oranges. You could eliminate every hedge fund manager in the world and it wouldn’t improve wages for one laborer by one cent.

    In 2009, Americans who make over $1 million a year will save an average $32,000 from the Bush tax cuts on capital gains and dividends. The average American household will save $20.

    Again, factually completely incorrect. You got your information from the CBPP which is a leftist propaganda machine and just straight out lies about this stuff. I refer you to the real data from the CBO. Because of increases in exemptions and deductions, low an middle income families have seen their tax rates decline far more than the wealthy since 1979. Here are the percentages of reduction by quintile:

    First Quintile -3.7%
    Second Quintile -8.1%
    Middle Quintile -3.9%
    Fourth Quintile -3.7%
    Highest Quintile -2.8%

    So as far as real rates go, taxes have been reduced the most for the lowest income earners, and that family earning the average $45K a year income likely saw their taxes decrease not the claimed $20, but a hefty $1750.

    Between 1986 and 2005, the income of America’s top 1 percent of taxpayer jumped from 11.3 to 21.2 percent of the national total. Their federal income taxes dropped from 33.13 percent of total personal income in 1986 to 23.13 percent in 2005. From 2001 to 2008, the net worth of the wealthiest 1 percent grew from $186 billion to $816 billion.

    Again, all the result of a booming stock market, which has nothing to do with what people are actually getting paid. You don’t see the same kind of disparity in actual wages. And with more and more Americans investing their retirement money the middle class is actually benefitting from the strong growth in equity, although to a lesser extent proportional to their savings.

    Talk is cheap. Action is crucial. Violent revolution is an option.

    Joel, do you even own a gun?

    Dave

  • http://www.delusionaldemocracy.com Joel S. Hirschhorn

    Dear Dave:
    I won’t waste my time dealing with all your inapplicable data, none of which actually addresses the data I used. But the other right-wing nuts that seem to love this website will gladly buy into your moronic analysis. And if I did have a gun I certainly would be tempted to use it on all the Bush-Cheney right-wing idiots that have done so much to wreck our nation. The vast majority of Americans are hurting, experiencing terrible economic conditions and I BLAME you all the others who clearly love the massive economic inequality; which means national prosperity is preferentially steered to the Upper Class because of their influence on the political system. Data on hedge fund managers and other corporate types are powerful illustrations of a totally corrupt political and economic system that is fundamentally different than what we once had in this country when prosperity was widely shared.

  • http://www.republicofdave.com Dave Nalle

    Joel, you can deny and ignore me all you want, but I don’t think you are actually stupid. How can you not understand that income from investments and the high earnings of people like hedge fund managers have nothing to do with the situation which the average citizen faces.

    Putting aside the fact that your data is incorrect, and assuming that you are even right about the massive suffering people are experiencing nationwide – which I agree with on some levels. Could you please explain how the earnings of a hedge fund manager in any way harm or reduce the earnings of a machinist or a nurse or any other average wage earner?

    And the last sentence of your comment is particularly goofy. What does distribution of property have to do with wealth inequality in a modern society? The profits of those who make their money on equity are based on virtual value and have nothing to do with distribution of property. And when was property shared in the US? We’ve always had privatge property ownership not collective property ownership.

    And you blame all of this on Republicans? Yet even you are using data which goes back to 1979 and includes 10 years of government by Democrats during which some of the greatest inccreases in inequality took place.

    Dave

  • http://www.delusionaldemocracy.com Joel S. Hirschhorn

    Dave, apparently you read with your eyes but not your mind.
    The obscene levels of wealth being sucked out of our system by a privileged few are proof positive of a corrupt political system – corrupted by the very same people in this Upper Class.
    When national prosperity was shared, economic inequality was much lower. The economic plight of ordinary Americans results from wages that are too low and living costs that are too high, and these conditions are engineered by the Upper Class plutocracy.
    And, yes, people in that wealth Upper Class are NOT paying enough taxes, which means the rest of us face a higher burden.
    And, yes, there is an enormous amount of federal spending and corporate handouts that benefit the Upper Class but that the rest of us pay for.

  • http://www.republicofdave.com Dave Nalle

    Joel, wealth doesn’t get ‘sucked out of our system’ – that’s not the way it works. If a lot of wealth accrues to certain individuals they then spend that money or reinvest it, putting it back into the system. It goes to hire more people, pay salaries, build facilities, etc. It never gets just ‘sucked out’.

    Economic inequality is a myth, Joel. As I said before, you are comparing apples and oranges. The money generated by investments and speculation is inherently different and separate from wage earnings and the two cannot be measured against each other. No one is engineering low wages and high expenses. There’s no benefit to anyone from that.

    And as I have pointed out in the past, your claim that the rich arne’t paying their share of taxes is ridiculous. They pay taxes far out of proporition to their numbers and their wealth. Here are the statistics from the CBO for your reference – not that you’ll let any factual data challenge your delusions:

    The top 1% earn 18.8% of all income earned, yet pay 27.6% of all taxes.
    The top 5% earn 31.1% of all income, yet pay 43.8% of all taxes.
    The top 10% earn 40.9% of all income, but pay 54.7% of all taxes.
    The top 20% earn 55.1% of all income, yet pay 68.7% of all taxes.

    For the bottom 80% of the population this pattern is reversed, with the percentage of income earned exceeding the percentage of taxes paid.

    The poorest 20% earn 4% of the income and pay .8% of the taxes
    The next poorest 20% earn 8.5% of the income and pay 4.1% of the taxes.
    The middle 20% earn 13.3% of the income and pay 9.3% of the taxes.
    The 4th 20% earn 19.8% of the income and pay 16.9% of the taxes.

    Joel, you are just dead wrong on these things. Sorry.

    Dave

  • http://www.delusionaldemocracy.com Joel S. Hirschhorn

    Dave, the level of your ignorance and bias is astounding; I really don’t understand how you live with yourself.
    You say “Economic inequality is a myth.”
    Well, sir economic inequality is something that is a statistical measure for any economy; it has been measured by the US government for a very long time and in most other nations as well. For a long time, that statistical parameter has been climbing steadily; more than most other economic data that get so much attention, economic inequality shows how a nation’s political system can get hijacked so that the economy serves the Upper Class; that’s the whole point of my article, how a plutocracy has stolen both our government and our economy. Please, spare me from any more of your insipid, unintelligent views.

  • http://www.republicofdave.com Dave Nalle

    I sometimes forget how pointless it is to argue facts with fanatics. I do love the predictable way you descended into a semantics argument when the facts didn’t support you.

    Any capitalist society is going to have income inequality. But by counting all income as the same, you distort the disparity in income unfairly. There has been little change in the gap in wages between the top and bottom wage earners. That is the only area in which income can be fairly compared. To skew the figures by including non-wage income is blatantly deceptive.

    Dave

  • pleasexcusetheinterruption

    Im in the middle of writing something longer, but I can tell you those stats Dave cited on changes in effective tax rate from 1979-2005 for each quintile are wrong. He must have misread them. I know this for a fact without looking it up, prior to 1980 the income tax rate was 80% on the top bracket, today it stands at 35%. That is a decline of 45%, not 2.8%.

  • http://www.republicofdave.com Dave Nalle

    They’re not wrong, PETI. Use the link I provided. I am citing total real tax burden from all federal sources, not the income tax ‘rate’ which is something entirely different, and I’m not talking about 1979-2005 but 1997-2005. Bit dislexic are we?

    Dave

  • pleasexcusetheinterruption

    Any capitalist society is going to have income inequality. But by counting all income as the same, you distort the disparity in income unfairly. There has been little change in the gap in wages between the top and bottom wage earners. That is the only area in which income can be fairly compared. To skew the figures by including non-wage income is blatantly deceptive.

    But the design of that system, the regulation of the actors within it, the way in which prices are negotiated between them and the structure of the system in which these negotiations take place are all inherent variables within a capitalist system. Most other capitalist systems do not have the same inequality that the U.S. has, even when comparing your so called “apples and oranges.”

  • pleasexcusetheinterruption

    They’re not wrong, PETI. Use the link I provided. I am citing total real tax burden from all federal sources, not the income tax ‘rate’ which is something entirely different, and I’m not talking about 1979-2005 but 1997-2005. Bit dislexic are we?

    No, your comment says 1979:

    “Because of increases in exemptions and deductions, low an middle income families have seen their tax rates decline far more than the wealthy since 1979. Here are the percentages of reduction by quintile:”

    1997 might make more sense though.

  • http://www.republicofdave.com Dave Nalle

    Ah, well, I freely admit to being somewhat dislexic. If you check the link, the data is from 1997-2005.

    Dave

  • pleasexcusetheinterruption

    OK Dave, here are the numbers I found from 1979-2005:

    Total Effective Tax Rate:

    Lowest Quintile: 1979: 8% 2005: 4.3% (-3.7%)
    Second Quintile: 1979: 14.3% 2005: 9.9% (-4.4%)
    Third Quintile: 18.6%; 14.2% (-4.6%)
    Fourth Quintile: 21.2; 17.4; (-3.8%)
    Richest Quintile: 27.5; 25.5 (-2.0%)

    Top 1%: 1979: 37.0% 2005: 31.2% (-5.8%)

    So the biggest drop was for the highest 1%.

  • pleasexcusetheinterruption

    Also, all of these statistics are misleading, because even if the tax code was exactly the same today as in 1979, one would expect the effective tax rate of the top quintile and the top 1% to increase because their incomes have grown much faster than the incomes of the other 80-90%. Therefore, even inflation adjusted they should have moved into higher tax brackets, and their effective rate should have increased. In short, as these people make more and more money, their effective tax rate should have increased as they climbed the tax ladder. The fact that it did not, is evidence of the fact that the tax system became more regressive during this time. If we had the same tax code today as we did in 1979 (inflation adjusted), the top 1% would effective rates around 50% instead of 31.2%. The tax code has become more regressive. This is an indisputable fact as far as I am concerned.

  • http://www.republicofdave.com Dave Nalle

    Total Effective Tax Rate

    Thanks for finding that table. I’ve been looking for it.

    Top 1%: 1979: 37.0% 2005: 31.2% (-5.8%)

    So the biggest drop was for the highest 1%.

    That rate reduction exists solely because of the elimination of an extra tax bracket at the top during the Reagan administration. The top 1% was put under the same rate as the group below it.

    Putting that anomaly aside, your figures support the argument that over that 26 year period it is the middle-income groups which have seen the greatest reduction in taxes.

    Also, all of these statistics are misleading, because even if the tax code was exactly the same today as in 1979,

    I think the changes in tax structure in the 1980s are why comparisons going back that far are not made often, because it is indeed misleading.

    one would expect the effective tax rate of the top quintile and the top 1% to increase because their incomes have grown much faster than the incomes of the other 80-90%.

    Increases in income don’t actually change the effective tax rate, they just cause people to move into a different group.

    Therefore, even inflation adjusted they should have moved into higher tax brackets, and their effective rate should have increased.

    This has indeed been happening. The wealth of those in the upper quintile has generally increased, including a lot of people who would be considered middle class moving up into the ‘rich’. We’ve got more millionaires than ever before. The fact taht 54% of the population is now actively investing means that more middle class people than ever are building substantial wealth. This is good for them, but it is not inherently bad for the poor and less affluant workers.

    In short, as these people make more and more money, their effective tax rate should have increased as they climbed the tax ladder.

    This point is debatable. They are already paying a very high percentage tax. As their income increases the net amount they pay will increase faster than it would if they wer eearning less.

    The fact that it did not, is evidence of the fact that the tax system became more regressive during this time.

    I’d argue that the level of regressivity was destructive before and that now it is more equitable.

    If we had the same tax code today as we did in 1979 (inflation adjusted), the top 1% would effective rates around 50% instead of 31.2%. The tax code has become more regressive. This is an indisputable fact as far as I am concerned.

    What I’d argue with is the assumption that progressive taxation is desirable. Plus if we still had the 1979 system the poor and middle lcass would be much more heavily taxed.

    Dave

  • pleasexcusetheinterruption

    That rate reduction exists solely because of the elimination of an extra tax bracket at the top during the Reagan administration. The top 1% was put under the same rate as the group below it.

    Putting that anomaly aside, your figures support the argument that over that 26 year period it is the middle-income groups which have seen the greatest reduction in taxes.

    Your “anamoly” is my crime. The elimination of that tax bracket has saved the top 1% literally 10s of trillions of dollars. That’s enough money to eliminate the national debt several times over.

    I think the changes in tax structure in the 1980s are why comparisons going back that far are not made often, because it is indeed misleading.

    It’s not misleading. You don’t think the Reagan administration realized the economic consequences of its decision to eliminate that bracket? It was an intentional reform to save the top 1% trillions of dollars. I agree some reform was necessary.. an 80-90% rate for the top bracket was almost socialist..but would have settled for 50% instead of the 35% we have today.

    Increases in income don’t actually change the effective tax rate, they just cause people to move into a different group.

    Increase in inflation adjusted income do change the effective tax rate of a quintile (or the top 5%..2%.. 1%.. etc..). If the average income of the top 5% doubled (inflation adjusted) from 1980-2005, then much of their income shifted into higher tax brackets because tax brackets are only indexed against inflation. Under conditions of rapidly increasing income for the wealthiest, one would expect effective tax rates for the top quintile/top 5/top 1% to increase w/o changes to the tax code.

    Therefore, considering the rapid income growth at the highest levels of the economy, one would expect their effective tax rates to increase. It has not. This is only explained by changes in the tax system to make the tax code more regressive.

    I’d argue that the level of regressivity was destructive before and that now it is more equitable

    I’d argue it was more equitable during the Clinton years. Perhaps slightly more progressive than under Clinton, and with a slightly lower total average effective tax rate (around the current 20.5% instead of Clinton’s 23%). The destructive effects of an 80% top bracket had been eliminated long before Bush came into office, and the increased regressivity of his plan was unnecessary and damaging to the middle class.

    What I’d argue with is the assumption that progressive taxation is desirable.

    Without a progressive tax code, people making 30k would be paying effective rates of 20% instead of 4-5%. This is completely unaffordable for most and completely unrealistic. The level of progressivity is always debatable.. but Bush never gave a reason for making it less progressive when they cut taxes in 2001.

  • Marlowe

    Dave… Once again every sane analyst would laugh you to scorn. I have a pretty good idea where Joel’s gotten HIS facts – 99% of them from the government itself.

    Once again, read David Cay Johnston. Hell, if a book is too much for ya – read Kevin Phillip’s piece in May’s HARPER’S…

    And BTW… Try to be honest about the stats… What most “cons” don’t tell you when they say, “well, real income has GROWN in the US…” is that, by using the “income” of all our multi-BILLIONAIRES, mega-multi-MILLIONAIRES of COURSE the god**** numbers LOOK good…

    The TRUTH isn’t nearly so pretty…

    Marlowe

  • Lumpy

    when called on their lies and confronted with facts it’s always fun to watch the lefties squirm. and start throwing out the ad hominems and strawmen.

    This hedge fund manager BS is their latest class warfare campaign, but as usual there’s nothing of substance behind it. Point at some rich guy and call him a villain and stir up the masses. same old lame shit.

    The bad news is that the people are waking up and they have been paying attention and they have had enough of socialism and the nanny state.

    There may be a revolution, but when there is Joel isn’t going to find many of his fellow travellers manning the barricsdes. He’ll find them in the rogues gallery or strung from the nearest lamp post.

  • pleasexcusetheinterruption

    when called on their lies and confronted with facts it’s always fun to watch the lefties squirm. and start throwing out the ad hominems and strawmen.

    This hedge fund manager BS is their latest class warfare campaign, but as usual there’s nothing of substance behind it. Point at some rich guy and call him a villain and stir up the masses. same old lame shit.

    The bad news is that the people are waking up and they have been paying attention and they have had enough of socialism and the nanny state.

    There may be a revolution, but when there is Joel isn’t going to find many of his fellow travellers manning the barricsdes. He’ll find them in the rogues gallery or strung from the nearest lamp post.

    Funny, two different groups predicting revolution and majority support for opposing ideologies. One of them is delusional. Question is, which one?

    Of course the honest answer is that the large majority (say 80%) of Americans fall between these two extremes and that’s not changing any time soon. And overall, in the general population there has probably been a slight shift in ideology away from the Republican market based solutions and policies.

  • pleasexcusetheinterruption

    This probably has something to do with the fact that the market oriented policies that have dominated the period 1980-2008 have failed to benefit a majority of Americans.

    “Real hourly wages for most workers have risen only 1 percent since 1979,”

    Dave’s original objection to this in his first post is false.
    This is not true. Just looking at the most recent stats from the BLS and focusing on the lowest wage earning groups, we can see that real wages adjusted for inflation grew 5% from 1997 2005 for cleaning and maintenance workers and 7.9% for health service workers, two of the lowest paid hourly wage job sectors and two groups which definitely include no hedge fund managers.

    Actually, believe it or not, it is true. Believe it or not, wage earners TODAY in the 21ST CENTURY are no better off than they were in 1979!! You’re response is like comparing apples and oranges. You try and use the fact that health service workers (who have done well becaues of the health service labor shortage) have increased real wages to disprove the fact that since 1979 real wages for all wage earners have increased only 1%.

    I have spent half an hour trying to find information showing real wages have increased in the United States, and I have found nothing. All I have found are articles including a good one from the NYT as well as tables and charts such as this one showing real wages have remained constant in the U.S. for a long time. Believe me I tried, and that’s what I found. Unless you can find something different, and more substantial than health care worker wages, then that’s what I’m going on.

    Real wages have been constant in the U.S. at least since 1980.

    Now doesn’t that just turn your world on your head Dave?

    If wage earners are no better off today than in 1980 despite huge productivity gains, what reason do they have for supporting the current system? What justification could one find for the Bush administration’s increasingly regressive tax system at a time like this?

  • Doug Hunter

    “This probably has something to do with the fact that the market oriented policies that have dominated the period 1980-2008 have failed to benefit a majority of Americans.”

    What the fuck kind of depressed liberal moron would suggest that people aren’t better off now than 1980? I’ll take the internet and cellphones coupled with increased access to electicity and water for rural communites plus now almost universal AC, throw in a 30% drop in violent and property crimes and increase in homeownership and a growth in average home size from 1500 to 2350. I like my increased lifespan and the improved high school and college graduation rates coupled with cleaner air and water with less second hand smoke. I prefer unemployment being halved and some would even say that the doubling a welfare spending is a good thing.

    Which of those FACTS don’t you and your ilk like? What bad, evil, greedy, envy inspiring capitalist creations can counterbalance all the good things I mentioned?

  • Doug Hunter

    Oh nevermind about the previous post, I thought we were in the fact and reality land populated by the right. I need to get into emotion and feeling land. You’re probably correct, people probably don’t ‘feel’ better now than they used to.

    We’ll call it a draw with both sides being ‘right’ in their own special little way.

  • http://www.elitebloggers.com Dave Nalle

    Actually, believe it or not, it is true. Believe it or not, wage earners TODAY in the 21ST CENTURY are no better off than they were in 1979!! You’re response is like comparing apples and oranges. You try and use the fact that health service workers (who have done well becaues of the health service labor shortage) have increased real wages to disprove the fact that since 1979 real wages for all wage earners have increased only 1%.

    PETI, I used the selected examples I did because I didn’t want to create an opening for an accusation that my figure for overall wage increase was unrepresentative because it included high wage earners who are part of class who are rapidly growing in wealth. I figured if I gave an overall figure I’d just have to deal with the argument that it wasn’t a fair number because it didn’t represent ‘real’ workers, so I picked several groups of low income workers to use as examples instead.

    But if you want more figures, here you go. I refer you to this BLS Article. I’m not going to go into all the details of the article, but it looks at real wage and compensation increases from 1979 to 2003 and using various methods of measurement it comes up with a variety of results, none of which show real wages as being stable.

    The worst figures it offers are for average hourly wage which had a real dollar increase of only 4.6%. But when salaried jobs and non-wage compensation is figured in the overall increase for total real compensatio is 26.8%.

    Lots of other interesting stuff in the report, but what it demonstrates definitively is that by any measure Joel’s original claim is incorrect.

    Dave

  • Wakefield Tolbert

    I was under the odd impression that marxian twaddle speak was about as poisonous and harder to peddle these days than yesterday’s old burritoes. And more extinct than T-Rex.

    Guess I was wrong.

    If you would like to make more money, you must find an occupation that cannot do without you nor make significant insights and inroads without your consultation, and not be interchangeable. Income inequality occurs because the higher level incomes generally are among the most productive in terms of a shrinking or small pool of needed talent that is NOT equally distributed across social lines. The politicians cannot do this for you, nor is that their job any more than finding a house for you or raising your kids (though on the latter issue, the NEA would certainly like to try).

    Sorry, egalitarians. Rules of the House.
    It is a relative phenomenon, and you might take note that 250 years ago almost all people were poor other than sultans and kings. Capitalism lifts all persons affected to the point where getting sumptious benefits from the Government as well as most “poor” households owning TVs and cars and having access to most forms of entertainment and leisure other than elite golf courses means you are “threadbare” poor and “poor as a churchmouse” in the West. True poverty and penury do not occur in this nation. The tables commonly seen also do not show “in kind” payments from the government in the form of food and housing assistance nor in cash payouts.

    As William Henry III once said (himself a dyed in the wool lefty) “the People” need a hefty dose of understanding about how money is made, not airheaded commentary from politicians regarding “change” and other meaningless yick yack that makes absurdist envy-oriented promises that can never be delivered.

  • pleasexcuetheinterruption

    PETI, I used the selected examples I did because I didn’t want to create an opening for an accusation that my figure for overall wage increase was unrepresentative because it included high wage earners who are part of class who are rapidly growing in wealth. I figured if I gave an overall figure I’d just have to deal with the argument that it wasn’t a fair number because it didn’t represent ‘real’ workers, so I picked several groups of low income workers to use as examples instead.

    But if you want more figures, here you go. I refer you to this BLS Article. I’m not going to go into all the details of the article, but it looks at real wage and compensation increases from 1979 to 2003 and using various methods of measurement it comes up with a variety of results, none of which show real wages as being stable.

    The worst figures it offers are for average hourly wage which had a real dollar increase of only 4.6%. But when salaried jobs and non-wage compensation is figured in the overall increase for total real compensatio is 26.8%.

    Lots of other interesting stuff in the report, but what it demonstrates definitively is that by any measure Joel’s original claim is incorrect.

    Dave

    I read through most of the article and looked at all the tables. The 4.6% increase seems to be the same statistic used by Hirschhorn, but his figure is 1.0%. I wonder what the disrepency is.

    The worst figure is not the 4.6% increase in hourly pay, but the -1.0% change in weekly pay.

    Again, including salaried compensation is comparing apples to oranges, because the original statistic was real hourly wages. You got +4.6, he has +1.0, not that large of a discrepncy for 23 years. The disrepency is probably timeframe, as your stat only goes to 2003, his probably goes to 05 or 07, and it is quite likely they decreased in those 2-4 years, considering they decreased 1980-1992. Most of the increase is accounted for in the period 1992-2000.

    He or I could just have easily used the +4.6% in real wages as the +1.0, it’s only marginally better. Insert 4.6% into his artile or my comments if you want. Case still stands.

    Even better, insert the -1.0% change (from your own source) in weekly wages.

    Also, including salaried workers misses the point entirely. Including salaried workers includes some people making 100s of thousands a year, where increases in wealth have been high. This skews the data upwards, when almost all the growth occurred at the top.

    So the article most certainly does not demonstrate Joel’s claim to be correct. In fact it confirms it, because if Joel was citing 1979-1999, his figure would be right, and if he was citing 1979-2007/8 he may very well be right, as the discrepency is small.

    Face it. There has been almost no economic growth at the bottom third or half of the income spectrum. Still waiting for the trickle down..28 years later.

  • pleasexcuetheinterruption


    I was under the odd impression that marxian twaddle speak was about as poisonous and harder to peddle these days than yesterday’s old burritoes. And more extinct than T-Rex.

    Guess I was wrong.

    If you would like to make more money, you must find an occupation that cannot do without you nor make significant insights and inroads without your consultation, and not be interchangeable. Income inequality occurs because the higher level incomes generally are among the most productive in terms of a shrinking or small pool of needed talent that is NOT equally distributed across social lines. The politicians cannot do this for you, nor is that their job any more than finding a house for you or raising your kids (though on the latter issue, the NEA would certainly like to try).

    Sorry, egalitarians. Rules of the House.
    It is a relative phenomenon, and you might take note that 250 years ago almost all people were poor other than sultans and kings. Capitalism lifts all persons affected to the point where getting sumptious benefits from the Government as well as most “poor” households owning TVs and cars and having access to most forms of entertainment and leisure other than elite golf courses means you are “threadbare” poor and “poor as a churchmouse” in the West. True poverty and penury do not occur in this nation. The tables commonly seen also do not show “in kind” payments from the government in the form of food and housing assistance nor in cash payouts.

    As William Henry III once said (himself a dyed in the wool lefty) “the People” need a hefty dose of understanding about how money is made, not airheaded commentary from politicians regarding “change” and other meaningless yick yack that makes absurdist envy-oriented promises that can never be delivered.

    No one’s talking about socialism. Talking about regulated capitalism vs. completely free market capitalism where international capital has a virtual monopoly in negotiating power with labor.

    While capitalism has lifted a nation of peasant into what it is today, whatever we are doing currently has done nothing to benefit a large part of America since 1980. Remember it was some of the socialist policies like the GI bill that helped create the economic boom we have been surfing for a half century.

  • http://www.republicofdave.com Dave Nalle

    PETI, what both you and Joel are leaving out is that workers are working harder and longer hours, which is why you have a discrepancy between total income and hourly wages. This increasing pattern is part of our labor shortage problem which I’ve written about before. A lot of people now get overtime and it’s kind of an assumed part of their job. Working 60 hours a week and getting paid as if you wored 70 or 80 is increasingly common. So incomes are up much more than wages are at the lower end of the wage scale.

    Dave

  • Cindy D

    Dave, Where do you come up with this stuff?

  • http://bloggingontheedgeofsuicide.blogspot.com/ Jet in Columbus

    Trust me Cindy, you don’t want to know…

  • http://www.elitebloggers.com Dave Nalle

    The Bureau of Labor Statistics, Cindy. Pay it a visit sometime.

    Dave

  • bliffle

    “Bureau of Labor Statistics”? Is that one of those federal agencies? Where Bush has appointed an incompetent party functionary to make sure it’s ‘politically correct’? You know, like FEMA, EPA, NIH, etc? To make sure that department reports express the Politically Correct viewpoint? Even if it means browbeating and threatening career employees, like at the FAA?

    I’m sure that BLS will support the Politically Correct neocon gospel.

  • http://www.republicofdave.com Dave Nalle

    Bliffle, like most government agencies, the BLS is run by career bureaucrats with no loyalty to any particular administration and who are, in fact, chronically hostile towards the appointees they serve under and tend to vote democrat as a group. It’s also at a couple of levels of remove from any political appointees as it is a sub-group within the Department of Labor. Plus like any of these agencies, it’s subject to congressional oversight, so if the Republican administration pushes it one way the Democrat congress pushes it the other. Another reason why it’s absolutely vital to elect a Republican this fall since it seems likely the Democrats will hold onto congress.

    Dave

  • Wakefield Tolbert

    No one’s talking about socialism

    Neither was WHIII and neither was I, per se.
    He was discussing egalitarianism. Socialism’s ugly little sister and motivator for politicians.

    But there are socialistically MODELED programs that in net effect have more of a drag effect on the economy than real benefit.

    Else we’d have government mandate national ownership of pizza parlors and computers and cars.

    As to the GI bill and any such program, that argument has been abused: Food stamps and other “in kind” payments help people too. But the problem is manyfold here. First, as I said these stats about “in kind” payments to the poor are not often (usually) seen even in sophisticated analyses of poverty levels. Second, you could use that kind of argument to say that government spending is superior by default to private investment. Which of course is utterly absurdist and counterintuitive. GIs served their nation on another fundamental level and as with SS one can assume it is “deserved” for a hand UP. Though to be sure some never saw action any more horrific than a large chow line.

    If we go that route and play that kind of game, then as Mickey Kaus has indicated it is a never ending sales pitch to have government involved in…well…just about everything. The argument for some kind of intervention is eternal if not halted at some point. What is that point? What is that level?

  • bliffle

    No. Policy is set by the department heads appointed by the President. In this administration they often do that purely for ideological reasons or on command from the whitehouse.

    We have many examples before us of Department heads being appointed from people who are ideologically opposed to the work of their departments and who have subverted the Department for political purposes. Even going directly against the conclusions and proposals of their own experts.

    We even have examples of heads reaching down into the submissions of their experts and changing factual data which is over the signature of those experts, so it looked as if the counterfeit statements and recommendations were their own. That’s fraud.

  • http://www.elitebloggers.com Dave Nalle

    Yes, that is fraud. It’s also extremely rare. Almost unheard of. Much more common is for political appointees to never really get a grip on their agency at all and to follow the lead of the experienced bureaucrats under them, even to be corrupted by those bureaucrats.

    Your experience in how Washington really works and the pervasive permanency of the bureaucratic culture is sadly lacking.

    Dave

  • pleasexcuetheinterruption

    PETI, what both you and Joel are leaving out is that workers are working harder and longer hours, which is why you have a discrepancy between total income and hourly wages. This increasing pattern is part of our labor shortage problem which I’ve written about before. A lot of people now get overtime and it’s kind of an assumed part of their job. Working 60 hours a week and getting paid as if you wored 70 or 80 is increasingly common. So incomes are up much more than wages are at the lower end of the wage scale.

    Dave

    Wrong Dave.

    The average wage earner works 36 hours a week today, while the 1979 average was 39 hours a week. Weekly wages have decreased 2.0% since 1979, hourly wages have increased 4.6% (period of 1979-2003).

    The facts simply contradict you. This information comes directly from the article you linked to. Underemployment is a bigger problem today than in 1979.