Upper Class Pillaging

Even today as the U.S. Treasury is being pillaged by corporate America, there has been an absence of any significant economic middle class(*) backlash here in America. As the wealth gap between the middle class and upper class has increased more than any time in our history, Americans seem to be mostly helpless in stemming this trend toward inequality.

Will the tide finally turn during an Obama Presidency? After analyzing Obama's economic positions (including health care, tax policies and budgeting), most economists say "yes!"

After eight years of the Bush Presidency, McCain style deregulation and tax policy that favors the rich, the American middle class has been taken hostage and told they will lose everything (trickle down financial ruin) if they do not bailout the big banks, investment firms and insurance companies. Bush & Cheney have perfected the panic mode wealth transfer that Naomi Klein describes so well in "The Shock Doctrine." This multi-trillion-dollar parting gift is their payback to the upper class that helped orchestrate their election.

The U.S. Treasury gained support for the bailouts by promising stricter rules on grossly excessive executive compensation. But now we find out that financial workers at Wall Street's top banks -- the greedy ones that got us into this mess in the first place -- are going to receive payouts worth more than $70 billion and, according to the Guardian, "... a substantial proportion of which is expected to be paid in discretionary bonuses, for their work so far this year - despite plunging the financial system into its worst crisis since the 1929 stock market crash."

Last year, for instance, Merrill Lynch's chairman Stan O'Neal took a golden parachute deal worth over $160 million, after announcing losses of nearly $8 billion at his firm. Did Mr. O'neal's labor bankrupting Merrill Lynch really justify $159,935,000 more dollars from society than a teacher or fireman?

The politics of capitalism attempts to fool us into believing in extreme individualism --e.g., that every man is an island. But, the truth (starkly exposed by Mainstreet needing to bailout Wallstreet) is that we are closely interconnected even if worlds apart in wealth and influence. Mr. O'Neal taking $160 million out of the money system to spend on extravagances, does effect the teacher and fireman via the national debt they will incur to bailout Mr. O'Neal / Merrill Lynch.

Where did the billions of dollars lost by the banks go? Did the money just evaporate? No. Most of it went to these huge CEO and executive payouts to expand the obscene wealth of the upper class. Someone has to pay for the mega-yachts, extravagant parties, multiple mansions and other extravagances of the rich. If you want to see where your money is going, just tune into "Lifestyles of the Super Rich."

Once again, responsible hard-working citizens are paying for the lavish lifestyles and reckless financial abandon of the upper class. How ironic that the same institutions that have been feeding off the middle class like leeches for decades (via unreasonable fees, large interest rate spreads, insurance rate hikes, hyped-up investment schemes, etc.), are now begging for more blood money.

The middle class and poor get crumbs from measly "bailouts" such as the lackluster sub-prime mortgage assistance program and a tax rebate check for $600; while the rich get more tangible bailouts to the tune of billions. Capitalism for the middle class, socialism for the rich, indeed! This is what you get when corrupt Republicans and the Corporate sociopathic personality rule the economy. One of the ways to change this dynamic is to remove corporation's status as a separate entity unbound by individual consequences and place more responsibility on the executives that direct corporate actions.

We need to end the the welfare era for the rich via tax cuts, Halliburton / war "no bid" handouts, oil company gouging and corporate bailouts. Instead, the American government needs to lift the middle class with investments in education, job training, energy independence (from domestic oil companies too!), health care and economic programs such as small business development and tangible mortgage assistance.

The only choice for fiscal conservatives in this election is Obama. By electing Obama POTUS and other fiscally sympathetic representatives, the middle class can then exercise its newfound power over insurance companies, corporations and bankers. You want us to bail you out? Here are some of our demands:

1) Corporations and the rich need to pay higher taxes, period. We are tired of hearing that higher corporate and upper class taxes will increase the jobless rate and slow the economy.

Even Warren Buffet (an Obama supporter) says that our current tax system unfairly puts more of the tax burden on the working class than the rich. The rich pay more taxes as a total collected, but much less of a percentage as the middle class.

Mr. Buffet goes on to say, "There's class warfare, all right," Mr. Buffett said, "but it's my class, the rich class, that's making war, and we're winning."

2) We want tougher consumer regulations on the insurance, credit card and banking industries along with fair mortgage lending practices. It's time for Wallstreet, insurance company's and banks to forgo some of the excessive profits we have seen in the past and pass savings along to their clients.

3) Middle class and small business tax cuts. It's time for some "trickle up" economics.

When Obama becomes President of the United States with a Democratic Congress, the middle class will once again have a strong voice in national politics. If you were advising Obama as he begins his Presidency in 2009, what policies would you suggest he initiate to stimulate and strengthen the economy and middle class (instead of corporate bailouts)?

(*For this blog's purpose I'm referring to the "middle class" as everyone who is not in the "upper class." Even though the "upper middle class," "lower middle class," "working class," and "lower class," combine to make up 99% of the United States population, the remaining 1% owns about one third of private wealth.)

Comments

[PT6]

The McCain "FEAR OF THE DAY" since Joe the Plumber is Wealth Shifting!
-------------------------------------------------------------------------------------------------------------------

Both McCain's and Obama's Tax Plans Shift the Wealth?

McCain"s Tax Plan - Redistribute Wealth to the Richest 1 to 2%!

1. Biggest TAX CUTS to the Richest 1 to 2%
2. Trickle Down Minuscule Tax Cut to the Rest!

Obama"s Tax Plan - Tax Cuts for Middle Class and all making less than $250,000 Net!

1. Biggest TAX CUTS to 95% of Americans making less than $250,000 Net
2. Remove "BUSH TAX CUTS FOR 5% RICHEST AMERICANS" back to first year under Bush!

Clearly, Both Plans shift the wealth:

Obama's favors the Middle Class!
McCains favors the Richest Class! McCain is Bush's Tax Cuts for Rich SQUARED!

[SparkyJP]

Does history repeat itself?

Marriner S. Eccles, was the Chairman of the Federal Reserve from 1934 1948

In his 1951 memoir Beckoning Frontiers, Eccles detailed what he believed caused the Great Depression.
Our current situation is eerily similar.

Eccles wrote:

"As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth " not of existing wealth, but of wealth as it is currently produced " to provide men with buying power equal to the amount of goods and services offered by the nations economic machinery.

Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. This served them as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants. In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.

[MajorKong]

Somehow we made it through the 1950s with a top marginal tax rate around 92%.

[DuganS1]

I don't know how anyone could say that current tax policy favors the rich? The "rich" pay a larger share of the federal income taxes before the lower middle class and lower class folks pay less than ever before, essentially zero. Close to 50% of workers don't pay any federal income taxes anymore. With dependants, the earned income tax credit, mortgage interest write-offs, etc, these folks get all the taxes they paid back at the beginning of the following year. Many folks, in fact, get more money back from the govt then they pay in. My sister is actually one. She gets $7k back every year than she pays in. When I found this out years ago I didn't even realize this was possible, but it is with the earned income tax credit. For the "rich", earners in the top tax bracket pay an astounding 65% of all federal income taxes. The tax structure has simply never been more progressive.

[WASanford]

Gee, those poor rich guys! Tell you what, I'll gladly trade places with any one of them. I must be missing something though, I get a grand total of $36,000 a year with my pension and Social Security and I end up paying income taxes. Can I talk to your sister? Oh wait, how many kids did you say she was raising? But that's not hard work is it? Maybe it's not work at all. It certainly doesn't compare to the difficulty of counting money all day. One could get carpotunnel you know.

[research]

Because the disparity between the population and the super rich 1% has grown so extreme, just like before the last great depression.

The rich do it every time , if we let them, the suck all the money out the system and crash the whole economy.

Industrialization and capitalism have built in exponential imbalances that, without progressive, redistributive , taxes makes the rich richer and poor poorer, faster and faster. It happen before the depression the same way. Taxes on top income got lower to 25% in 1925 leading to market bubbles and crashes. think of it this way: 10 times the average income has WAY MORE THAN TEN TIMES THE POWER TO MAKE MORE MONEY.

Please read up on the Great Depression with this time line:
http://www.hyperhistory.com/online_n2/connections_n2/great_depression.html

Low taxes CAUSED the bubbles then the crash.

We thrived with 74-92% top income tax rate from 1934 to 1962.

Government Public Works deficit spending is what ended the Depression.

I would not raise Capitol Gains or corporate tax very much. Nor should we impose large tariffs.

[DuganS1]

The income tax didn't even exist until just before the 1920s, so the "taxes on the top income got lower to 25%" doesn't mean much. The tax rate in the 1920s had absolutely nothing to do with the causing the Great depression. And government public works programs had absolutely nothing to do with ending it. the increase in production for export to Europe and for domestic use related to WW2 is what ended the depression. FDRs policies certainly did not, and in fact made the economy see a huge economic downturn again in 1937.

[DuganS1]

In addition, the idea that the "poor got poorer" in the 1920s is only true in the agricultural sector because of the massive collapse in agricultural prices following the war starting around 1920. In that period over 30% of folks lived on farms, which is the reason the "real median income" statistics finished the decade in the negative and so many banks failed. In that era, if you weren't on a farm you probably felt signficiant prosperity. This was especially true for factory workers who saw incomes rise substantially throughout the decade - and which is why they shunned unions.

[dctackett]

I think your missing the "what you actually end up with" and the "earning vs getting" concepts.

Say you are a hedge fund manager, your income is $2.8 billion and you actually pay taxes (no offshore tax haven or such) and you miraculously take no deductions... you pay about $980 million in taxes... WOW $980 million in TAXES... WOW! how horrible! that's just not fair. oh wait, you still took home $1.8 billion. Forget a mortgage, you can buy several homes every month and still not be broke. As a hedge fund manager, how do you contribute to society to "earn" $2.8 billions dollars worth of other people serving you? You invest other people's money to get rich. What a contribution!

Now you're a CEO of XYZ corporation, your salary is $50 million, you again pay taxes and have no deductions, you pay about $17.5 million and take home about $32.5 million dollars. Again, you're not struggling with $32.5 million.

OK, now your salary is $50,000, pay $13,500 in tax and take home $36,500... $36 thousand take home, not bad, until you pay $2,000/month mortgage, utilities, food and transportation.

Now your making $32,000, paying $7,287 tax and taking home $24,713. In a year $24,713 doesn't go far, especially with housing and utilities, food costs and transportation.

Now imagine less.

Quite a difference, huh? especially when you consider the "earning vs getting" factor

[DuganS1]

The "hedge fund manager" earns most his money in capital gains and just reinvests it. Most their earnings are not money they take home and spend, but rather money that gets moved from one investment to another. So because of that it makes perfect sense to tax it at a lower rate.

[MajorKong]

Except they still pay payroll taxes, excise taxes and sales taxes. Since your sister has it so great perhaps you'd trade salaries with her?

- sound of crickets chirping -

[RoloTomassi]

What we fail to nurture is the furtile ground of bottom-up populism; right now our political mood is one that could be focused for major change, change far beyond what Obama or any other politican will promise or deliver: democratic accountability and reform of the electorial college election system.

We must pass laws in regards to being ignored by our representatives, the bailout bill being a prime example. But we are so polarized with BS ideology [center-right fashioned, anti-democratic in nature], that we are always arguing someone else's case, and never getting down to the popular interests of the general public.

Polls have consistently shown for DECADES that the majority of Americans favor a UHC system, higher minimum wages, better labor rights, and a strong social safety net. Yet time and again our representatives reject our opinions and instead act on corporate interests and self-preservation; this is NOT the way it must be--but we are constantly told that such is the case.

WE ARE NOT A CENTER-RIGHT NATION, and such is the biggest LIE the MS/corporate media has fed us hook, line and sinker.

I do believe in letting Obama's vision have a go at it, but if such fails to take root and the our situation in this country continues to deteriorate, we will not be without options. We are entering a period of history when much good work can be done and much political upheaval can take place.

[WorkingClass]

"WE ARE NOT A CENTER-RIGHT NATION"

You are correct Rollo. Congratulations on having successfully resisted the most pervasive lie of the corporate media and our corrupt politicians.

[frenchie25]

republicans + deregulation = recipe to feed the greed

http://www.youtube.com/watch?v=JPRfVD5Q0dI

Obama Biden '08

[cylindar]

I want Buffet to give me all his money. I got things to do, places to go and people to meet.

[Mykel]

Halve military spending, close all US military bases abroad, end aid to Israel, put a moratorium on freeway construction, end subsidies for urban sprawl and use the savings to provide free health care, 24 hour mass transit, quality public education.

Nationalizing the financial, energy and money-printing industries wouldn't hurt, either.

[JBS]

If you ARE going to end freeway construction & urban sprawl, you have to give some consideration to where people are going to live, work & how they're going to get from one to the other. Oh, and how they're going to get groceries to the table.

I'm not saying you're wrong, or that it's a bad idea. Only it's going to take a whole lot more good ideas to make it work.

[ElectricEye]

Maybe winning for now. Ask the French how that whole class warfare works out in the long run.

[Nikola Tesla]

"In general, higher rates of belief in and worship of a creator correlate with higher rates of homicide, juvenile and early adult mortality, STD infection rates, teen pregnancy and abortion in the prosperous democracies. A striking example of this is the US, which has the highest degrees of religious faith and the highest rates of homicide, abortion, STD infection and teenage pregnancy. The least religious countries - Japan, France and Scandinavia - have the lowest rates of violent crime, juvenile mortality and abortion. "

From :"The Journal of Religion and Society promotes the study of all religious groups and beliefs among the various peoples of the world, past and present. They studied religiosity in 18 countries. They performed multiple surveys, the last of which involved 23,000 people."

http://www.datehookup.com/Thread-172900.htm

[ElectricEye]

Interesting. But I am not sure what that has to do with Louis XVI.

Great nick btw. Tesla was a truly unappreciated genius.

[MajorKong]

Sound of pitchforks being sharpened and torches being lit....

[JBS]

It's a very curious thing.

Two weeks ago, gas stations around here were selling gas for $4.07 (or more) a gallon when they had gas at all. Last Monday it was still $3.86 a gallon and today it's $2.95 a gallon.

Wonder how much gas will cost on November 4? And how much on November 5?

[wolfgangmo]

The same thing happened in 2004 and 2006.

[JBS]

Not quite so obviously.

[robinhood2]

Much of the American public continues to be distracted by bogus issues such as abortion, gay marriage and skin color. Obama ought to be doing much better in the polls than he is. I guess we get the president we deserve.
It's too bad the American public cannot accept the fact that taxes ought to go up for everybody and that everyone ought to be contributing something to the war effort., even if it is only through a higher Federal excise tax on cigarettes, booze or even a broad based Federal sales and services tax. If you expect the country's financial burdens to be borne by only the top 5% of the population, you are sadly mistaken. It is not going to happen. The tax code is already riddled with all sorts of deductions and credits and higher nominal raters will only encourage tax accountants to be more creative for their rich clients. It seems that every time Congress wants to solve a particular problem, it creates more tax deductions and credits to influence individual and corporate behavior. The planned takeover of Wachovia by Wells Fargo will give Wells billions of dollars of tax deductions related to the losses Wachovia has accumulated. I wonder who instructed the IRS to interpret the tax code in such a generous manner for Wells.

[Veri]

Just to through in a truly frightening scenario to see if everyone is thinking. No, I do not believe the following post is accurate or reflective of current events. However? Ever get the feeling that McCain is running a bad campaign because:

A. He is supposed to lose, or
B. McCain already knows he has this election in the bag.

In the case of scenario A., Obama is being pushed as the new Reichsfuhrer, but in a much nicer way. Expanding on Naomi Klein's "Shock Doctrine", give people a worse case scenario in the form of a financial disaster. Then, during the next Presidential election, give the voters (you) the choice* between the worst and a Messiah. Either way, their man wins.

In scenario B., just add gasoline and a match and watch The United States burn, baby, burn.

Which is the worst case scenario. Dictators arose during times of crises, promising a return to better days. And all hell broke lose afterwards.

We have two cans of Spam. Selected by their presumptive parties out of a narrow range of the best and brightest. However, given the recent failures, since 2007, of the Democrats upon taking power to successfully challenge President Bush and their colleaguesthe Republicans, , the magic question becomes: What are the differences between both parties?

Social policies only.

[wolfgangmo]

The choice is easy.

The pro corporate party or the other pro corporate party.

The only difference is in the number of seconds it takes them to get on their knees when big business walks into the room. It takes the Dem's only a few second while the repubs are already on their knees.

[Veri]

As another poster, who's name I wish I could remember, said: "My kind of heresy."

[PatrickforO]

Last...
7. Make sure we have alignment between the various laws. Pell, WIA, Welfare, Perkins, IDEA, No Child Left Behind, SBA - all need to be rewritten so they're aligned to compel the separate parts of our system to recreate the scientific, technical, engineering and mathematical powerhouse America once was.

[PatrickforO]

Continued...
4. Get proactive about retraining for ex-offenders so they can get the skills they need to get good jobs - this will help everyone
5. Work hard on planning for transition into the workforce for other special populations, like single parents, non-custodial parents, parents behind on child support, persons with sensory, physical, cognitive and emotional disabilities. We can't afford to waste a single person with 76 million Boomers retiring and only 46 million GenX to replace them.
6. Put strong government subsidies into place on energe independence and conservation - these are the hot jobs of the next decade, and if we're to be independent by 2019, then we must begin now. Help retool factories for renewable energy technology, revitalize the American auto industry for fuel efficiency

[PatrickforO]

This was beautifully written. The situation we're in now is the logical end of the social Darwinist neoconservative policies. Yes, we are interconnected.

If I were advising Obama, I would stress the need for a coherent policy on workforce development for this nation. If our businesses aren't competitive in a global economy because they can't get the skilled workers they need, then we all lose out. A strong economy and educated, skilled workforce are national security issues.
1. Rewrite the Personal Responsibility in Welfare Act. It is punitive now, and needs to stress job training.
2. Beef up the already existing labor exchange and workforce development system. Rewrite the Workforce Investment Act to require ongoing partnerships with high-growth industries that give them the people they need (we're already around 500K registered nurses short, did you know?)
3. Improve education at all levels and make sure college or tech education is affordable to all