Join us today Sept. 10, 2011 for POLITICS DONE RIGHT. Call (646) 929-2495 to listen or comment from 12 noon to 2 PM central (1 pm to 3 PM eastern). Let's discuss the President's Jobs Bill, the 10 year anniversary of the 9/11 attacks, my article below, or what's ever on your mind.
by Egberto Willies
Acceptance of a growing income disparity is a recipe for economic depression. Fixing our country’s economy will require a psychological deprogramming in America. The reality is that our politicians are a reflection of ourselves. The dysfunction we see in Congress is no different than the dysfunction among our citizenry. We have allowed our corporate class through their media empires & think tanks to corrupt our objectivity in such a manner that we no longer analyze situations or data. We have allowed them to redefine the causes of all our problems in a manner that pits the working and middle class against each other.
Our growing income and wealth disparity is a dangerous situation socially and for the well-being of our economy. When policies cause wealth and income to accumulate to the top 1%, economic activity naturally slows because the wealthy's marginal propensity to consume is much less than that of the working and middle class. In other words if 1 billion dollars is earned by 50,000 everyday people instead of a single, super-wealthy plutocrat, then those 50,000 everyday people will generate a LOT more economic activity because they will spend most of that billion dollars right away, while the plutocrat may invest the excess money in China or just save it. It should be noted that at the beginning of the Great Depression (1929) and the Great Recession (2008) the income share of the top 1% were both in excess of 20%.
Under President Obama we have had the lowest income tax rates ever, including under President Reagan. These low rates have been a windfall for those with the largest income and wealth. We chose to believe the claim that bigger and bigger tax giveaways for the wealthy will benefit the rest of us when their wealth spills over and trickles down to us. If we were thinking for ourselves, we might have concluded by now that, if Wall Street tycoons cause a global financial market collapse, if the U.S. economy craters, and if factories are closing in America while opening in countries where there is very cheap labor, "trickle-down" policies have failed and should be repealed.
In bailing out the banking system we chose to believe that if those that had caused the collapse in the first place did not get their bonuses, they would move on to greener pastures. If we were thinking for ourselves, we would have concluded that in the global meltdown they had caused, there were few places they could have gone. Moreover, their risky financial products are wealth extraction schemes, transferring capital from the working and middle class to a gambling and unproductive upper-class, without creating any jobs at all.