Hey, no fair fighting back!!
That's what I hear when conservatives go on about "class warfare" in response the President's call for balance in deficit reduction. It's particularly grating to hear Rep Paul Ryan use the CW talking point, when the loins' share of his deficit savings come from cuts to low-income programs and Medicare, with no offsetting revenue.
Lots of posts in recent days have explored the tax side of this equation, essentially emphasizing the Buffett point that many of those who have done the best are paying a smaller share of the income in federal taxes than the middle class. That's an important point that links directly to President Obama's call for shared sacrifice and balanced deficit reduction. Sorry, Rep. Ryan -- it can't all come out of the spending side.
But, as the figure below reveals, the increase in income inequality -- one reliable metric of how different income classes have fared -- is very much a pretax phenomenon. The figure shows the changes in income shares from a comprehensive income data set of the Congressional Budget Office, 1979-2007, pretax and aftertax (federal taxes only -- I've added a table below with the levels for the most recent data year so you can see the underlying shares).
The fact that the growth in inequality is largely a function of the pretax income distribution doesn't mean we should make it worse with regressive, supply-side tax cuts -- (economist Alan Blinder calls this move "unnecessary roughness" -- amplifying pretax inequality with regressive tax cuts). To the contrary, we need balanced tax measures to generate the revenues to support programs that can help push back on this trend -- initiatives like Head Start, child nutrition, educational support.
But it also doesn't mean we can meaningfully correct the problem with tax policy alone. We have be mindful of all the policies that effect the pretax distribution--the distribution of labor and capital earnings before any taxes and transfers kick in...that's where the real inequality action is.
Now, most economists argue that much of the increase in inequality is due to factors like globalization and technological change -- factors that are less a matter of policy than of economic evolution. But of course their impact can be amplified or dampened by policy. For example, unfair trade practices like China currency management make give low-wage competitors an even stronger price advantage. (Trade agreements are less of a big deal as I see it--the advocates overdo how much they'll help and visa-versa re the opponents -- though the advocates are worse...).
Lack of a strong, long-term public-private strategy in terms of boosting our manufacturing sector, as is standard practice in advanced (Germany) and emerging (China) countries also hurts our manufacturers compete internationally. So policy does matter -- considerably -- in this space.
Technological change is also thought to be a significant factor behind the changes in the graph, though the evidence here is more ambiguous. (One strain of work, for example, argues that technology has increased labor demand for both high skill and low skill work, while leaving out the middle.) But to the extent that technology increases employers' skill demands such that a college education is increasingly necessary to compete, programs that help disadvantaged kids get that opportunity play a role here too. And cuts to those programs hurt.
And then there's a bunch of stuff that directly raises or lowers the bargaining clout of middle and working class families--policy changes or missed policy opportunities that have hurt or failed to help them.
- The long-term erosion of the minimum wage
- The absence of legislative protection to balance the organizing playing field for those who want to collectively bargain
- The inattention to labor standards such as wage and hour rules, overtime regulations, workplace safety, worker classification (this is where regular employees get misclassified as independent contractors and lose basic labor protections -- and guess what? Progressive reform of this problem is in the President's new budget plan -- very cool...)
- The attack on public sector employment
- The lack of universal health care
- The absence of comprehensive immigration reform
One more biggie: full employment. It's very much a policy variable and one, in fact, that used to be the law for the Federal Reserve -- so-called Humphrey Hawkins Act mandated full employment as a policy goal of the Fed. As I stress here, the fact that our job market has run with so much slack over the very period when inequality grew is no coincidence (and visa-versa: when inequality was flat or falling, we were more likely to be at full employment).
And of course, in recession, like now, by dithering on stimulus, we're disproportionately hurting the wage, incomes, and living standards of the folks who've been losing income share over the years shown in the figure above.
In other words, there are a lot of policy measures that have considerable impact on how the benefits of growth are distributed -- before taxes even show up on the scene. When representatives of the wealthy squeal about "class warfare," they're not just talking about shielding their treasure from the tax system. They're also protecting and endorsing a policy agenda that's helped tilt growth their way for a long time.
This post originally appeared at Jared Bernstein's On The Economy blog.
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Rabbi Samuel April: Class Warfare?: No Class, No War, No Fair
That's a funny typo.
The two Water Takers can't use all the water that they lay claim to and so they load it up into tankers and ship it off to friendly places, like St. Kits or Panama to park it. Some they lend to other villages for a price. Problems arise when those who borrowed cannot pay back. The Water Takers do not see it as their problem but as the GDP Well's problem. They cry that if they don't get more water from the well, they won't be able to monitor the withdrawals or provide the rope and all sorts of other fearful things. Not only do they need more water but others will have to take less.
Well, the other villagers not knowledgeable in the ways of wells and water scurry around muttering 'More water, more water for the Takers.' and search for water worthy vessels so that the top Water Takers would not weep and wail so mightily.
You promised the trade arrangements were going to be great for American workers.
70% of workers do not have college degrees , what job do you have beside their name with decent pay to train them for since you destroyed manufacturing.
Many college degree people are also being laid off teachers, police, fireman.
Where is American's jobs bill and their disaster funds without cutting more manufacturing jobs like the poison pill you put in your all house repub. bill.
Pass the clean disaster bill to fund FEMA that the Senate sent you at least a week before you tried to push the offset their way.
You continue to fund rebuilding Iraq, Afgan, the wars, the tax cuts for the rich and servcing your repub. debt What have you done for Americans.
Please pass the word. Please start now on 1 & 2.
1. please call your representatives/senators and tell them we want a American jobs bill.
2. Teachers/Military/others, Please run in districts/states where the only choice is a republican rep./ or senator.
RUN as an independent - get republicans, independent and democrats votes.
Educate your church, neighbors on the Ryan Budget bill (destroy medicare/other programs for the people but cut taxes on rich) ,
all republican senators and house members voted yes on it.
You need to start now to register voters, be sure they have ID'S, up to date addresses on voter records.
The house radical republicans can increase taxes any day they want to pay off their Bush Era republican credit card bills/debt(2 wars, rich tax cuts etc).
They are still borrowing from China and adding to their credit card bills/debt to pay for current war spending, excessive defense spending, rebuilding Iraq and Afgan. etc, servicing Bush Era debt) none of this is emergency spending.
The house is responsible for making laws and funding the government
back in the Bush ERA and now.
The Republicans have destroyed manufacturing jobs and replaced them with low pay service jobs, un/under employment for 70% of workers who do not have college degrees. Do not talk about training them unless you have a decent paying job What $20.00 an hour so they do not have to depend on entitlement programs to survive.
Too bad that too many will find data, statistics and rationales to make a case for the status quo while ignoring what is in plain sight. Knee-jerk protectionist dogma sees truth, sustainability and compassion in society as just so much clay to be manipulated into something pleasing to an egocentric eye.
Again, another alarmist class-warfare justifying article that overstates an inequality problem. I would argue that:
a) The data you provide on growth of income is not compelling.
b) That inequality is the United States is mismeasured and overstated.
c) It’s causes are the result in a change in demographics and changes in the economy, not due to changes in tax or treatment of lower income groups. And any attempt to correct the problem through tax and distribute is addressing the symptom not the disease.
d) That even so, inequality is a feature of a functioning economy, not a bug. And those countries that tend to have increasing GINI’s also have increasing economies.
Finally, I would add that the reason why our economy is failing at the moment is because the administration is so focused on social justice that it has lost sight of the measures that wok to spur growth: tax cuts, lower regulations and barriers to starting new businesses, increased protection of property rights and wealth creation. All these things would help grow the economy. Everything you are advocating just pulls efficient resources into inefficient uses and lowers the standards of living for everyone. Get government out of the way and let people start creating their own jobs.
Kai
“…But another class of reasoners hold the opinion that there is no such relation between capital “and labor, as assumed; and that there is no such thing as a freeman being fatally fixed for life, in “the condition of a hired laborer, that both these assumptions are false, and all inferences from “them groundless. They hold that labor is prior to, and independent of, capital; that, in fact, “capital is the fruit of labor, and could never have existed if labor had not first existed---that labor “can exist without capital, but that capital could never have existed without labor. Hence they hold “that labor is the superior---greatly the superior---of capital.
“They do not deny that there is, and probably always will be, a relation between labor and capital. “The error, as they hold, is in assuming that the whole labor of the world exists within that relation. “A few men own capital; and that few avoid labor themselves, and with their capital, hire, or buy, “another few to labor for them. …”
This is not a new subject, just different set Americans--and I'm not talking about immigrants who refuse to adhere to BASIC American laws or customs, especially in public or some social settings.
Gates and Buffet have created a foundation to invest their money for their favorite causes. Would society be better off if the Feds taxed that money away and spent it on their priorities? Entrepreneurs invest their time and investors money to create new businesses. Perhaps 10% are very successful, 30-40% exist after 10 years and the rest die. The government taxes these risky investments at 15% since money is at risk. These people create jobs and when successful can make a lot of money. Do you think returns on these investments should be taxed as income?
maybe they could toss a few scraps off their table for us down below... or we could go back to trickle down economics.. we all know how good that worked. They turned the spigot down to a trickle and we got less and less... they got more and more... and now are passing it to their kids who need and want even more.
They can create jobs,
or destroy them
as Romney, the unregulated banksters, war, and concentration of wealth do.
That's why the Founder were against the 1000 richest families acquiring too much wealth:
"When economic power became concentrated in a few hands, then political power flowed to those possessors and away from the citizens, ultimately resulting in an oligarchy or tyranny." John Adams
"I hope we shall . . . crush in [its] birth the aristocracy of our monied corporations." Thomas Jefferson
"As riches increase and accumulate in few hands . . . the tendency of things will be to depart from the republican standard." Alexander Hamilton
The citizens safety net, green energy investments and infrastructure, did not bankrupt us.
The MIC wars, the Bankster's fraud and the ungrateful rich's robbed the citizens and the world.
The solution: end the wars, cut the MIC 90%, arrest the banksters for fraud, seize their assets and records for audits, tax the super rich like Ike did when the USA became the greatest economy in human history.
The Obama DLC enable the GOP agenda because they sold their souls to get elected. They are Reagan democrats, moderate republicans if you will. AKA New democrats, pragmatic Progressive, Blue dogs, New American Foundation, Progressive Policy Council, Third Way.
Vote for the CPC progressives, The Progressive Democrats of America, the Kucinich folks in the primaries. Vote the Dems in the general.
Click on the Link about the homeless artists. Homeless people are not uneducated, shiftless people.....
Look and LEARN...