Leaning Left 11/23/2010

Leaning Left

Jim Fitzgerald

Even while fighting to ensure that the wealthiest among us keep their Bush tax cut, House Republicans just voted to deny any extension of unemployment benefits. I suppose it does not matter unless you are on unemployment but if so, what a Christmas present from conservatives. More important is what such a move signals about economic and social priorities.

The reasoning behind tax cuts for top tier earners (top 1%) suggests that these are the people creating jobs and that they will do so with their reduced taxes. For the unemployed, the reasoning is that the unemployment benefit encourages them to be lazy and not look for work. That there is one job available for every four people looking for work is ignored by conservatives.

So, who are these people in the top one percent? As of March, 2010, this country had 7.8 million households with a net worth of one million dollars, not including the value of their primary residence. There were 5.55 million with investable assets of one million dollars. There were 980,000 people, considered ultra high net worth, with assets of five million dollars or more. And, finally, we have 403 billionaires, with an average worth of $3.5 billion.

Did you know that between 1980 and 2005, 80% of the increase in income went to the top 1% of taxpayers? To express this slightly different, of every $5 in increased income, four of those dollars went to the top 1%. Since the unemployment rate varied under each President during that same period (average unemployment rate by President – Reagan = 7.5%; Bush I = 6.3%; Clinton = 5.2%; Bush II = 5.7%), the top 1% clearly did not create an abundance of jobs with their extra income. Clinton had the highest income taxes and yet unemployment was the lowest under his administration, suggesting the relationship between tax rates on the top earners and employment is tenuous at best. What’s more, such a trend is a robust demonstration that trickle-down and supply-side economics are little more than fantasy.

This radical shift in income redistribution toward the wealthiest is even more stark when you look at  CEO pay. In 1980, the average CEO’s pay was 42 times more than the average worker. By 2001, the average jumped to 531 times while workers pay has stagnated. Does it seem appropriate for a CEO to increasingly siphon the profits of a corporation while sending jobs overseas, slashing the workforce at home, failing to fully fund a workers retirement, and cutting other benefits? Is this the kind of economic system we think makes this country strong when it channels the majority of its wealth to the top 1%?

The baby boomers, the ones who have created this mess we find ourselves in, want to roll back every social program of merit and reduce taxes even more. Not surprisingly, rolling back the social safety net will not impact them at all because they are all “safely” tucked into the very programs they want to eliminate for their children and grandchildren. How convenient. They rape the country’s treasury, refuse to raise the necessary funds to replenish it, and, in their typically selfish manner, vote to eliminate every program from which they benefited! Forgive me if I think their concern for their grandchildren is hollow.

To the letter writer that asked me to explain (justify) the costs of Obama’s trip to Asia, just let me say that she should consider getting her news from more than one source. FOX was remiss in repeatedly reporting the costs at $200 million a day and utilizing 10% of our naval forces. This “news” was quickly disproved but unless you listened to other news sources, you would not know it.