Working as Intended

Via Crooks and Liars, yet another one of these studies:

The gap between the wealthiest Americans and middle- and working-class Americans has more than tripled in the past three decades, according to a June 25 report by the Center on Budget and Policy Priorities.

New data show that the gaps in after-tax income between the richest 1 percent of Americans and the middle and poorest parts of the population in 2007 was the highest it’s been in 80 years, while the share of income going to the middle one-fifth of Americans shrank to its lowest level ever.

The CBPP report attributes the widening of this gap partly to Bush Administration tax cuts, which primarily benefited the wealthy. Of the $1.7 trillion in tax cuts taxpayers received through 2008, high-income households received by far the largest — not only in amount but also as a percentage of income — which shifted the concentration of after-tax income toward the top of the spectrum.

I think a capital gains tax cut and permanently getting rid of the inheritance tax should fix this problem.

In all seriousness, what I do not understand is why don’t people realize this is unsustainable? How do people expect the economy to grow when 3/4 ofthe nation is too broke to buy anything?






75 replies
  1. 1
    Gebghis says:

    “Rich people are doing great…”

    http://kenrockwell.com/busines.....ooming.htm

    Best…H

  2. 2
    peej says:

    For the same reason that corporations expect that consumers will continue to be able to buy everything they produce…even when they’re laying off workers and keeping wages stagnant.

  3. 3
    Bootlegger says:

    David Harvey , the last real Marxist explains it in language even Palin could understand (but won’t).

  4. 4
    Bill E Pilgrim says:

    Because keeping the top tiny percentile well-fed is all that matters, the rest are fed by the invisible ham of the free market.

  5. 5
    atheist says:

    I always figured, few people do actually believe that such a wide gap is a good thing. Basically the ones who do believe it are the stupid, and pundits/think tank employees, who are stupid as a career. What do you think, am I being too optimistic?

  6. 6

    while the share of income going to the middle one-fifth of Americans shrank to its lowest level ever.

    When pondering what he wingnut is all about, forget about the racism, xenophobia, and military adventurism. They need to render obsolete the middle class in this country, that stands between them and the imagined safe harbor of Oligarchy.

    With dreams of dreams, to sip mint julips on the roof of “We Own It All” inc., surrounded by a small army of tea bag patriots with automatic weapons dressed in “Don’t Tread On Me Tee Shirts”, all the while wistfully watching, and sipping, as the peasants below sweating for crumbs, churn out the labor to sustain the mighty free market.

  7. 7
    Jennifer says:

    This is what I’ve been saying all along: You can’t have a functioning consumer-based economy when half of the people in it can’t participate in it.

    The dirty little secret of the financial meltdown (secret as in, you’ll never get either a politician or member of the media to whisper it in the deepest darkest forest) is that there can’t be a recovery without addressing the income/wealth gap. The irony is, without addressing this issue, even the wealthy end up with less in the end – once you’ve drained the suckers of blood, you’re left with no one who can buy anything and in doing so, generate income from the investments you’ve made. But I suppose that’s ok, as long as you still have a million times more than they do.

  8. 8
    Bootlegger says:

    @Jennifer:

    You can’t have a functioning consumer-based economy when half of the people in it can’t participate in it.

    That’s what the credit cards and easy mortgages were for. Now they’ll just target the “new” markets in India and China.

  9. 9
    Allison W. says:

    I know, its stupid. It’s like these people forget who made them rich. There are not enough Donald Trumps in the world to keep these rich folks rich.

  10. 10
    Redshirt says:

    It’s sadly ironic, of course, to point out that some of the people most affected by this trend are the Teabaggers, who will defend the rights of rich people to screw them over until they die.

    Why? JESUS! ABORTION! IMMIGRANTS! GHEYS! GUNS! Fill in whatever hot button issue is hot enough to get you to forget your real interests.

    The only hope I can take from this is the groundwork is all in place, with a big change in perspective, to turn this anger against the very people causing these problems. But with our media environment, that seems unlikely.

  11. 11
    Comrade Dread says:

    In all seriousness, what I do not understand is why don’t people realize this is unsustainable? How do people expect the economy to grow when 3/4 ofthe nation is too broke to buy anything?

    Credit, John. Credit.

    And if they can’t get credit, then they can get payday loans. And if they can’t get payday loans, then they can get loans against their cars.

    And if they’re too broke to pay it all back, then they can go to debtor’s prison and the companies that lent them money can get tax credits in addition to the interest they collected before the default and the money they made selling the debt to a collector.

  12. 12
    New Yorker says:

    @Jennifer:

    This is what I’ve been saying all along: You can’t have a functioning consumer-based economy when half of the people in it can’t participate in it.

    Someone wiser than me once noted that 90 years ago, Henry Ford paid his workers well enough so they could afford to buy a Ford. Today, Wal-Mart pays its employees “well” enough so they can’t afford to shop anywhere but Wal-Mart.

  13. 13
    mclaren says:

    @John Cole:

    In all seriousness, what I do not understand is why don’t people realize this is unsustainable?

    That is the question of the decade, isn’t it?

    Beats the hell out of me.

    Why don’t Americans realize that out-of-control Pentagon spending is unsustainable?

    Why don’t Americans realize that our chronic oil-and-SUV addiction is unsustainable?

    Why don’t Americans realize that offshoring every high-skill high-wage job in the U.S. is unsustainable?

    Why don’t Americans realize that endlessly skyrocketing college tuitions are unsustainable?

    Why don’t Americans realize that infinitely rising medical costs due to corrupt collusive monopoly cartels of medical devicemakers and doctors and hospitals and insurance cartels is unustainable?

    Why don’t Americans realize that continuing the War On Drugs is unsustainable?

    Why don’t Americans realize that the so-called War On Terror is unsustainable?

    Why don’t Americans realize that the current culture wars with their demonization of half of America by the other half is unsustainable?

    Why don’t Americans realize that losing two simultaneous foreign wars which no one can now justify continuing is unsustainable?

    Dunno. Mass insanity? Infectious brain-destroying parasites?

  14. 14
    Arguingwithsignposts - ipod touchs says:

    Bread and circuses, that’s why.

  15. 15
    Ash Can says:

    Prescott Bush would be proud, and likely envious, to see the extent of the damage Ronald Reagan and his policies inflicted, and continue to inflict, upon this nation. Reaganomics still has a ways to go, though; there’s still some middle class left in the US.

  16. 16
    mclaren says:

    @Arguingwithsignposts – ipod touchs: But that doesn’t make any sense. As Jennifer pointed out in #7:

    The irony is, without addressing this issue, even the wealthy end up with less in the end – once you’ve drained the suckers of blood, you’re left with no one who can buy anything and in doing so, generate income from the investments you’ve made.

    Take a really simple example — suppose you’re a billionaire who lives in America and you own a Bugatti Veyron. What’s the point of owning that super-high-end car if America’s roads are so crappy and potholed and eroded that your elite utlra-high-end sportscar winds up with a busted axle whenever you try to drive it down the road?

    Suppose you’re an American billionaire and you own a 200-million-dollar superyacht… What’s the point if you can’t take it out of the harbor because there’s an oil volcano that’s trashed the entire shoreline and covered the sea with petroleum slime as far as the eye can see?

    Suppose you’re an American billionaire…how does it help you to be rich if America can’t perform the cutting-edge stem cell therapy you need to cure your illness, and America doesn’t manufacture the high-end techno-gadgets you can afford to buy (there are whole websites now that specialize in importing super-high-end consumer electronics from Japan and South Korea and Taiwan that aren’t sold in America), and America doesn’t have the broadband capacity to really make use of that glitzy new computer you just bought?

    I can understand the average person being duped and suckered by reality TV and American Idol and all that crap. But wouldn’t you think that the elites would realize that it hurts them when America turns into a third world shithole?

  17. 17
    Bootlegger says:

    @mclaren: False consciousness, plain and simple. But “marx” is a 4-letter naughty word now so anything he wrote is automatically un-Murkan. He also pointed out the inherent contradiction of capitalism was that the system had to continue expanding or implode, which it does from time to time anyway providing proof that it does happen. But don’t worry, capital has shiny new markets in India and (ironically) China to exploit so we have a few more decades of the whirlygig to enjoy.

  18. 18
    Wilson Heath says:

    Considering the reminders you will find in K-thug’s work about professional economists who still believe this recession/depression was started by workers voluntarily stopping work because of Obama’s election having gotten a really good psychic reading of that result back in 2007, it’s not the stupidest thing out there. But it’s pretty close.

    Blame it in part on the poor quality of history education in this country. The history of American taxation gives a pretty clear picture that the GOP and Blue Dogs have all the wrong moves. Of course, this is part of why education is also on the right-wing enemies list.

  19. 19
    Bootlegger says:

    @mclaren: The bourgeoisie would have to admit that the system which gives them their excess is unsustainable, and I’d bet no one in history has intentionally adopted this level of dissonance.

  20. 20
    dadanarchist says:

    @Bootlegger: David Harvey

    Everyone should listen to Bootlegger and run out and by Harvey’s book, A Brief History of Neoliberalism, to get an overview of the last 35 years of economic and political policy. AND you’ll be stimulating the economy!

    I also recommend the pieces that Benjamin Kunkel has been writing for the hoity-toity Brooklyn literary review, n+1, on economics. His piece, Full Employment, is very good.

  21. 21
    Mike E says:

    Also, the physical nature of our sprawling existence here in The Land o’ the Free makes mass protest unlikely, just some quaint European/Third World event that we can watch safely from our teevee, and tsk-tsk about. Too.

  22. 22
    Bootlegger says:

    @dadanarchist: The Enigma of Capital and the Crisis of Capitalism should be even better.

    Did you check out that link to the RSA animation of his explanation for the Great Recession? I just discovered those RSA animated lectures and am totally hooked.

  23. 23
    Todd Dugdale says:

    what I do not understand is why don’t people realize this is unsustainable?

    You dangle the unrealistic hope to 3/4 of the people that they could someday become one of that 1/4.
    Most people will take that bait, because they believe that they are special, deserving, and destined for greatness. When those hopes fail, the obvious course of action is to suck up to that 1/4 like a lapdog begging for table scraps.

    As for that 1/4, they are not thinking about the long-term. They don’t have to, because their long-term is secure. Even if the whole shithouse comes crashing down, they’ll get by. Hey, it might even be exciting for them.

    In the 1920’s, the plutocrats used religion to justify the situation. The Big Dude made them wealthy because they were better than you grubby people living in squalor. You don’t want to argue with the Big Dude, do you?

    Today’s Republican Party uses both religion and dangling unrealistic hopes to persuade a substantial portion of that 3/4 to defend them.

  24. 24
    Corner Stone says:

    I believe El Cid linked to this Robert Reich shrillness the other day:
    We’re in a Recession Because the Rich Are Raking in an Absurd Portion of the Wealth

    “Consider: in 1928 the richest 1 percent of Americans received 23.9 percent of the nation’s total income. After that, the share going to the richest 1 percent steadily declined. New Deal reforms, followed by World War II, the GI Bill and the Great Society expanded the circle of prosperity. By the late 1970s the top 1 percent raked in only 8 to 9 percent of America’s total annual income. But after that, inequality began to widen again, and income reconcentrated at the top. By 2007 the richest 1 percent were back to where they were in 1928—with 23.5 percent of the total.”

  25. 25
    grandpajohn says:

    @Redshirt: 0.0

    Why? JESUS! ABORTION! IMMIGRANTS! GHEYS! GUNS! Fill in whatever hot button issue is hot enough to get you to forget your real interests.

    surprising the number of people who seem to forget that their “real” best interest is survival.

  26. 26
    Indie Tarheel says:

    @mclaren: You assume that the elites have more intellect than the masses. I’m going to have to say at this point, not so much.

  27. 27
    Bootlegger says:

    @Todd Dugdale: aka, false consciousness.

    Somebody punch this commie DFH in the gut.

  28. 28
    grandpajohn says:

    @mclaren: In their minds the only real question is who will win on “American Idol” all them other serious problems are too hard and involved to worry about

  29. 29
    Redshirt says:

    The myth of “The American Dream” has certainly become quite pernicious. I do believe, long ago, it held some currency. But now, it’s just a noose by which people are ensnared into a system (credit – debt) actively designed to use them and toss them aside.

  30. 30
    Seanly says:

    What John & comments 1 through 29 sez.

    The lack of growth in wages is destroying us.

    Our last economic expansion was driven not by the dotcom bubble but by demand. I remember news stories in the mid-90’s about McDonald’s in the NE having to pay way more than minimum wage to attract workers. Clinton proved that a rising tide lifts all boats.

    Instead we got hoodwinked into cashing out our home equity to make up for our lack of wage growth and to afford our consumer crap.

  31. 31
    El Cid says:

    We lack the rational super-rich that we did in the late 1920s — the Rockefellers, etc. — who were concerned not only for being rich right now but who assisted in supporting the New Deal (contra right wing nationalist organizations such as NAM) so that they could be super-rich for many, many generations.

    Now the super-rich are simply focused on grabbing every bit, every tiny, blood-soaked bit they can out of our national wealth and labor and productivity and consumption, future be damned.

    It’s why so many are pushing these bullshit ‘deficit’ or ‘austerity’ labeled programs to roll back any likelihood of improving social equality programs or in Europe even rolling them back.

    It’s like the extractive policies of punishing the poor and indebting nations for investors imposed by the IMF and World Bank on South America and Africa in the 1980s and 1990s — i.e., in exchange for continued loans you must pay us in interest vastly more than you ever borrowed, and by the way defund elementary schools and industry assistance and farming material programs, etc. — until Argentina stepped out and said, “Fuck you,” and Venezuela backed them up with cash reserves to break the back of the IMF’s stranglehold on Latin American economies.

  32. 32

    what I do not understand is why don’t people realize this is unsustainable?

    How dare you suggest the IHotFM can’t fix everything!

    Today’s Republican Party uses both religion and dangling unrealistic hopes to persuade a substantial portion of that 3/4 to defend them.

    Come on, who wouldn’t want to be a shrieking intolerant fuck who ignores and/or deliberately misunderstands the two documents and the one economic system he allegedly holds dear?

    As an added bonus he gets to be a brave patriot while alive and is certain to get front row seats for Armageddon post-Rapturization. Surely God will reward him with a shit-ton of money while he is alive. (Jesus did that all of the time. That healing lepers and not judging shit was put in later by hippies.) Just wait. Any minute now …

    And if the money doesn’t appear it simply means some ACORN thug stole it for a state-sponsored art project that promotes atheism and sodomy.

  33. 33
    Seanly says:

    @Todd Dugdale:

    Its not even 1//4 vs 3/4. My wife & I make enough to be in the top 15% and we’re living just a few paychecks ahead of disasters.

    Its really 1% vs 99%. Unfortunately, a big portion of the 99% is either collaborators or dupes for the 1%.

  34. 34
    ppcli says:

    @Todd Dugdale:
    Tru dat. If the ancienne régime had just thought of planting the idea in the sansculottes that if they did what other people told them, then some day they might be able to afford underwear. France might still be a monarchy.

  35. 35
    MTiffany says:

    …why don’t people realize this is unsustainable? How do people expect the economy to grow when 3/4 ofthe nation is too broke to buy anything?

    Oh, they do understand that the situation is unsustainable. They just don’t care because they expect that if they faithfully adhere to Repbulican dogma for just one more day, they will wake up the day after that to find themselves as rich and powerful as the people that keep conning them.

  36. 36
    New Yorker says:

    @Seanly:

    Yeah, back before I quit my job to go to grad school, I was making enough money to pay my rent, live comfortably, and stuff some away from savings. I didn’t feel rich, but I sure didn’t feel poor.

    As it turns out, I was making almost 50% more than the median household income for Brooklyn, and my “household” consisted of just me, 27 years old and single. No kids, no mortgage, no credit card debt. No student loans either because my parents were well-off enough to cover that for me.

    It really hits you just how bad so many in this country have it when you think about it this way and just how fortunate I was and still am even if I’m severely underemployed at the moment.

  37. 37
    bago says:

    @Todd Dugdale: That’s why I voted republican when I was young and dumb and fresh out of the trailer park. I was 18, fresh in the software industry, and had been marinating in a limbaugh stew during high school. However, life in Seattle changed me. I learned corporate politics, almost had my brother killed in the war, had some violent creep kill a few of my friends. Watched VP’s fire their best technical staff because they were well paid, and then wonder why their projects subsequently failed. Saw a different VP of a fortune 500 company totally blow it with product naming, spending 5 million dollars for a media firm to come up with the name, while not realizing it had already been trademarked. But they still took us to a un-style amphitheater to breathlessly announce the decision, excited as they were.

    I was young and dumb once. I learned. The hard way.

  38. 38
    AhabTRuler says:

    @Bootlegger: Well, to be fair, doctrinaire Marxists turned many people off and provided solutions that were just as ludicrous as doctrinaire Capitalism.

    That being said, discarding Marxism as an analytical tool is just as foolish as arguing that the only struggle is class warfare. As someone pointed out in the BARTcop verdict thread, such ideas fall on stony ground when addressed to, say, Oakland’s AA community when they are dealing with a established pattern of racial discrimination. Sure, urban AA communities are often exploited economically, but I would argue that that is a secondary condition as compared to overt and structural racism.

    For example, there exists a population of middle- and working-class Caucasians who continually vote against their class interests because of racial animus and the perception that the Democrats are the party of welfare queens. I wouldn’t wish to speculate as to the precise number and what their overall effect is (and how that has changed over time), but I think we can agree that in this case, racial animosity overwhelms class-based interests.

  39. 39
    grumpy realist says:

    Hence my explanation to rich people of why progressive taxation is A Good Thing:”insurance against revolution and getting hanged from lampposts.”

    Most Americans unfortunately have a 1950’s TV image back in their brains as How Things Should Be At Equilibrium, forgetting that the main reason the US’s economy roared was everyone else had been bombed flat in WWII. We also had a fantastic science & technology base, due to the brains of all the refugees from Europe.

    We’re never going to be able to go back to that era. Americans now are in competition with places like China and India, who are churning out more engineers a month than we do in a year. And the US was never going to be able to maintain a first-class economy with a population culturally better fitted to farming, selling used cars and proselytizing.

  40. 40
    BR says:

    @mclaren:

    Indeed.

    Some might even say we’ve hit the limits to growth.

  41. 41

    @mclaren:

    I can understand the average person being duped and suckered by reality TV and American Idol and all that crap. But wouldn’t you think that the elites would realize that it hurts them when America turns into a third world shithole?

    The Bugatti Veyrons and 200-foot yachts are just high-end circuses first of all. Secondly, you assume the American billionaire has any national loyalty at all (with the exception of Bill Gates and Warren Buffett, perhaps).

    The oligarchy in third world countries make off quite well with their private armies. And there’s always the random Caribbean island or European soc1alist country willing to cater to their whims.

  42. 42
    Nellcote says:

    @mclaren:

    I can understand the average person being duped and suckered by reality TV and American Idol and all that crap. But wouldn’t you think that the elites would realize that it hurts them when America turns into a third world shithole?

    I just doesn’t matter since they can always leave. Their taxfree money is in the Cayman’s anyway. The beauty of being a multi national is that you don’t have any allegiance to any country.

  43. 43
    Neo says:

    Coming just after the story about 1 in 7 home “owners” with a million dollar plus mortgage are walking away, you really have to wonder if their personal value went up as a result of their pruning of their personal debt.

  44. 44
    sparky says:

    @Bill E Pilgrim: i seed what you did there.

    @mclaren: part of the answer is in this comment–

    @Indie Tarheel:

    @grumpy realist: well-put. it occurs to me that the people running the Empire, who are now of a certain age, seem to have imbibed the idea that the world they grew up in–Disney, interstates, etc.,–is reality, and have not (ever?) grasped that what they think is reality is actually a fantasy constructed by those who just wanted to put the horrors of the twentieth century aside for a short time. it’s like thinking Club Med is the way people live.

    and another part of it, IMO, (and this, sadly, is where there is a nugget of truth, far down and far tortured out of all recognition by oligarchic toadies) is that the notion of the collective nature of the enterprise known as society, like the notion of shame, has simply evaporated. far be it from me to defend Mister Morgan or Mister Carnegie, but they (and the newly emergent Progressives) did understand there was a certain point beyond which it was possible to break the bounds of society. perhaps it was the collapse of the Marxist system as a device to keep selfishness in check (i mean as alternative analysis not a policy), perhaps it was something else, but in any event once we discarded the notion that this society could ever fail, there was no longer any reason to respect old limits. as i see no signs that our current policy makers are troubled by the notion that the entire enterprise might simply wither away, i find myself a tad skeptical about the Empire’s long-range prospects.

    edit: i love moderation! it’s like my own little Purgatory!

  45. 45
    Brian J says:

    I don’t know how, in the various economic models economists use, behavior would respond, but this is one reason why I think the very, very rich could pay a lot more in taxes. Like, a lot more. I’m not talking about the people who are relatively well off but not loaded, like those making $250,000-$300,000 before taxes. They could probably pay a little more, as could everyone else once the economy returns to full employment, whenever that is. It was Ryan Avent in The Economist a couple of weeks ago who used Eddie Lampert of Sears Holdings, who is worth about $3 biillion, as an example of being able to pay more. If he makes just one perecent off of his money a year, that’s $30 million, which is 600 times the median household income in America.

    Nobody, or at least not me, is saying he should have all of that money taken away, or should be embbarrased at being so successful. We just think he should pay a little more in taxes, at least in percentage terms, especially when you consider that incomes for most other people have either stagnated or gone down. I don’t understand why this is so controversial, but it sadly is.

  46. 46
    Bootlegger says:

    @AhabTRuler: No doubt, Marx’s economic analysis was spot-on but his policy prescriptions just handed power from one band of thugs to another.

    It’s also true that economics is just one dimension of social status, as minorities are constantly reminded.

    But its a sorry irony that the people who cry “marxist” at people who aren’t really marxists are themselves doing exactly as Marx predicted.

  47. 47
    Brian J says:

    @bago:

    No joke, I’d like to hear more about this.

  48. 48
    aimai says:

    There’s something odd about the story about the homeowners with million dollar houses walking away from their mortgages. These are not necessarily among the truly rich. If the house is/was their major asset, and it wasn’t fully paid for, and it is now underwater, they are simply people who successfully scammed the system into part purchasing houses they really couldn’t afford. They aren’t truely rich. Truly rich people don’t have to worry about losing their jobs, or making payments. They live off what used to be called “unearned increment.”

    Not that I mean I pity them. But I just wanted to point that out. The businessman who is described at the end of the article, specifically, essentially ran his businesses by converting the house into a series of loans. He cashed out imaginary credit, based on the banks assumption that there would always be a rising real estate market, and loaned himself money to run his businesses that banks wouldn’t have loaned him on the strength of his business plans. And rightly so, since each of his businesses failed. He may look like a member of the upper classes but he’s only there on sufferance.

    aimai

  49. 49
    El Cid says:

    @Bootlegger: Marx didn’t actually have much in the way of policy prescriptions. It was never much of his focus to suggest what to do. The vast, vast majority of what is assumed to have been Marx’s recommendations (other than vague exhortations in publications like the Manifesto) were from followers.

  50. 50
    kay says:

    @aimai:

    The businessman who is described at the end of the article, specifically, essentially ran his businesses by converting the house into a series of loans. He cashed out imaginary credit, based on the banks assumption that there would always be a rising real estate market, and loaned himself money to run his businesses that banks wouldn’t have loaned him on the strength of his business plans.

    I agree with you. I would go further. The people walking away from their houses have an accurate view of their relationship with lenders. They’re walking away from the asset that secured the loan. It’s the lenders problem if the asset value doesn’t cover the loan. There isn’t any moral element. That’s true, too. They’re simply basing decisions on what’s best for their bottom line, and we’re told over and over again that finance owes nothing to anyone, and will base decisions on what’s best for their bottom line, regardless of the common good, or any larger concern.
    Those individuals are simply applying that standard to their personal finances. In a sense, they’re serving their single “shareholder”, themselves.
    When I was little, and did something irresponsible or selfish, my father used to say “what if everyone did that?”
    I think that must scare the shit out of finance and lending. What if regular borrowers figure out that this is about protecting their family and bottom line? What if regular borrowers start acting like the people in million dollar houses, or, worse, what if regular borrowers start behaving like lenders?

  51. 51
    Bootlegger says:

    @El Cid: The ideas of how to fix the class system in the Manifesto were far from vague, though I would agree they were not necessarily specific in the sense of “we need to do x in nation y using tool z”. I’d also agree that people like Lenin and Mao were more interested in accumulating and using power than in creating a classless society.

    That was my point, actually, that Marx said “go create a classless society” without considering that political power *always* produces a class of elites. Folks like Jefferson, OTOH, recognized this and tried to design a system that limited the power of those elites. So much for that eh?

  52. 52
    GregB says:

    Can’t we just taze the masses into buying more?

  53. 53

    @kay:

    What if regular borrowers figure out that this is about protecting their family and bottom line? What if regular borrowers start acting like the people in million dollar houses, or, worse, what if regular borrowers start behaving like lenders?

    I see no way around this. It is a monster we have created with criminally unbound profit taking and the accomplices are us. A vicious circle that appeared to be taking us upward with manic consumerism based on manic credit, when it fact it was a race to the bottom. Capitalism based on credit that is far from having the real capital to back it up, will come crashing down every time. It is at a tertiary stage of malignancy and no matter how badly, or not, Obama or any president, or any few lawmakers may want to, they are not going to be able to tame this beast. It has the body politic and addiction to a affluent lifestyle by the shorthairs. It is going to eat us alive until about nothing is left, but to wake up and learn to live within our means and seeing the wisdom of slow sustained growth based on the quaint idea of reasonable profit and citizens living within their means. We have been down this road before, but never with plastic and digital money giving off huge mirages of prosperity, as is the case now. I have my Coleman cook stove, tin pot and fork. So bring it on.

  54. 54
    dissident says:

    not because the middle class is losing income, but because the wealthiest incomes are skyrocketing.

    Everyone’s getting richer. I don’t see a problem. Maybe getting rid of the Democrats, since they have ruled since 2006 would fix the problem?

  55. 55
    grumpy realist says:

    Actually, I think we are (long-term) totally and royally screwed simply due to the environmental train coming down the track at us called Global Warming. All those idiots who think that we can handle a 6 degree rise in temperature (“oh, we can use air conditioning!”)–what do they assume we’re going to be eating?!! Rocks?

    Maybe Soylent Green WILL be the way of the future…

  56. 56
    atheist says:

    @mclaren: That totally makes sense. But I think you are forgetting, as many others do, that the “rational self-interest” beloved of economists is only part of the picture for understanding human behavior. What if the ultra-rich are motivated as much by atavistic feelings of hatred, contempt and fear for the other 99%, as a rational desire for their own lives to be good? If what you want is to be better off than others, then destroying other’s lives could be a good strategy.

  57. 57
    El Cid says:

    @Bootlegger: I’d agree he sets out some guidelines about principles, but, no, there wasn’t much indication in the Manifesto about what to do. There were a lot of people who really would have preferred a lot more.

  58. 58
    kdaug says:

    @grumpy realist: That, and the 90% top marginal tax rate.

  59. 59
    Pangloss says:

    My dad is from Brazil, and it amazes me what they’ve done with their economy and social services over the past 25 years, the last 8 under a pragmatic left-leaning former union organizer. They’ve fought drug companies to make AIDS drugs affordable, cut poverty, raised millions into the middle class, dramatically improved health care, sustained growth rates in the high single digits and low teens, and cut the crushing disparity of wealth that kept them a third world country for a century despite bountiful natural resources.

    But we don’t want any of THAT now, do we?

  60. 60
    kdaug says:

    @Brian J: Eddie Lampert thinks it’s very controversial, and he has friends who own media companies, and they agree with him that it’s very controversial. Thus, it’s controversial.

  61. 61
    dissident says:

    @Pangloss: Yeah, Congress had the chance with the healthcare bill, but they stuck up for the drug companies instead.

  62. 62
    kdaug says:

    @grumpy realist: Ding! Global warming isn’t a bug, it’s a feature. Take “gated communities”, scale up to “private valley, private mountain, private island”, and throw in a little “private army”, and you’re starting to get the idea.

    Population growth was always an issue, anyway. Why should we fight what “Mother Nature” has in store?

  63. 63
    waynski says:

    Libruls know how to shoot you conservative fuck pants. How’d the civil war work out for you assholes.

    http://www.youtube.com/watch?v=1XYFJUP84lE

    I will drink your funking milkshakes, you cunts.

    Big brunch, waynski, out.

  64. 64
    Nick says:

    @mclaren: Because they consciously choose not to recognize any of that and demonize those who try to get them to.

  65. 65
    Nick says:

    @Pangloss: It helps to have been a third world country for half a century.

  66. 66
    D. Mason says:

    In all seriousness, what I do not understand is why don’t people realize this is unsustainable?

    Which “people” are you referring to? If you mean the average working class – on an individual basis many of them do realize it but honestly there’s fuck all anyone can do while struggling to eat, regardless of awareness level. If you mean the slobs at the top – they realize it and are completely covered whenever the economic collapse arrives, assets overseas and all that. If you mean the politicians who enable this broken system – they realize it and are desperately trying to claw their way into the previous group, everyone else be damned. Maybe you’re waiting for some collective ahhh-ha where everyone wakes up to the notion that concentrating 98% of a nations wealth in the hands of 500 families is like playing Russian roulette? Good luck with that, guess who owns the media.

  67. 67
    dadanarchist says:

    @Bootlegger:

    Yeah, that animation is great – I’ve been sending that link to everyone I know and am going to use it with my students to explain capitalist crises. Quality stuff. Maybe Marxism would be more attractive if it came in animated form – like the Smurfs!

  68. 68
    Brachiator says:

    @mclaren:

    Suppose you’re an American billionaire and you own a 200-million-dollar superyacht… What’s the point if you can’t take it out of the harbor because there’s an oil volcano that’s trashed the entire shoreline and covered the sea with petroleum slime as far as the eye can see?
    __
    I can understand the average person being duped and suckered by reality TV and American Idol and all that crap. But wouldn’t you think that the elites would realize that it hurts them when America turns into a third world shithole?

    Bad examples. The billionaires can always travel to places where they can use their toys.

    For example, what did BP executive Tony Hayward do after giving his testimony? From the Telegraph and other news reports.

    Embattled BP chief executive Tony Hayward took a break Saturday from manning his company’s massive Gulf Coast oil spill to attend a posh yacht race along a pristine British coast.

    I just love that part about the pristine British coast.

    There is obviously a point where the elite cannot immunize themselves against their bad judgments, but the worst of them don’t think that far ahead.

  69. 69
    racrecir says:

    This is where Aspen brings the festive to Ideas:

    Tom Wilson, the CEO of Allstate (another underwriter of the festival), made the essential — and brave — point that the fates of American business and American society may be starting to diverge. “I’ll get them [workers] anywhere in the world,” Wilson said. “It is a problem for America, but it is not necessarily a problem for business. I have workers in Belfast, I have workers all over the world. American business will adapt.”

    Recently, J.C. linked to a C-SPAN (?) video which is summarized: Why creeping consolidation is crushing American livelihoods. Two points:

    Fewer entrepreneurs at start-up companies even attempt any longer to build their firms into ventures able to produce not merely new products but new jobs and new competition into established companies. Instead, increasingly their goal, once they have proven that a viable business can be built around a particular technology, is simply to sell out to one of the behemoths.

    And:

    Finally, dominant firms can hurt job growth by using their power to hamper the ability of start-ups and smaller rivals to bring new products to market.

    These companies are profitable catering to a smaller consumer base in this country. And, clearly, they think that’s sustainable.

  70. 70
    Brachiator says:

    The CBPP report attributes the widening of this gap partly to Bush Administration tax cuts, which primarily benefited the wealthy.

    The CBPP report is mostly flawed. Many of its basic assumptions are wrong, its analysis faulty and its conclusions simplistic.

    An example of one BIG problem. The chart in the Crooks and Liars post shows the share of income going to the wealthy steadily increasing between 1989 and 2007. This period comprises the presidencies of Bush I and Bill Clinton? How does this “prove” anything about the impact of Bush tax cuts? Clearly, something else is going on.

    It’s easy to focus on stuff like tax cuts, capital gains and marginal tax rates, because this is easier for the lay person to grab conceptually. But tax policy is more complex than this. A few tidbits.

    The estate tax is scheduled to automatically come back in 2011 unless Congress votes to repeal it. This is unlikely, but they are tinkering with it to provide huge loopholes to the wealthy in how inherited assets are valued. Existing tax schemes like Roth IRAs give huge permanent tax breaks to the wealthy on the backs of middle class workers, but the politicians that corporate lobbyists buy off get away with this because the impact of these laws is difficult to explain in simple sound bites.

    Former NY Times reporter David Cay Johnston has written eloquently about the distortions in tax policy. I recommend much that he has written on the subject, especially Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense and Stick You With The Bill. Johnston gave an interesting interview related to this book on the January 3, 2008 broadcast of the NPR program Fresh Air, which may still be available online.

    Taxing the wealthy more and cutting taxes for everyone else can increase after tax income for many households, but doesn’t really solve the problem of the loss of jobs and wage stagnation.

  71. 71
    John Bird says:

    Yeah, but you see, rich people are the movers and shakers who generate wealth for everyone. They aren’t like the poor, irresponsible layabouts who walk away from mortgages.

  72. 72
    frankdawg says:

    Speaking of Social Security . . .
    For Social Security purposes, the correct question is not how many live to age 65, but rather how long those reaching age 65 live thereafter. Here the numbers are not as dramatic. In 1940, men who survived to age 65 had a remaining life expectancy of 12.7 years. Today, a 65 year old man can expect to live not quite three years longer than he might have in 1940, or 15.3 years beyond reaching age 65. For women, the comparable numbers are 14.7 years beyond age 65 in 1940; 19.6 years in 1990.

  73. 73
    Viva BrisVegas says:

    Didn’t someone here say that there is a class of people who would happily live in a burnt out car under an overpass roasting sparrows on a curtain rod, so long as they could make sure that the guy in the car next door didn’t have a curtain rod?

    Well there is another class of people who will happily live in a lean-to on top of the overpass, so long as they get to piss on the guys underneath.

    Civilisation is the art of ensuring that neither of those groups get their way.

  74. 74
    Kyle says:

    “It is a problem for America, but it is not necessarily a problem for business. I have workers in Belfast, I have workers all over the world. American business will adapt.”

    This is where the stranglehold that moneyed interests have over our corrupt political system becomes truly toxic.

    When the interests of businesses like Allstate aligned much more to the benefit of the American public, it wasn’t as harmful for them to own politicians lock stock and barrel and manipulate legislation. Now, they could give a crap if America goes down the toilet, with their worldwide markets and Indian back-office operations, and it shows.

    And they’ve kept the American public distracted and infighting with corporate media bullshit and heavily-hyped social/religious dog-whistlers like Palin (“She’s a redneck Christian jus’ like me!”) such that voters exert little counterpressure on politicians as they sell out the country for short-term greed.

    people who will happily live in a lean-to on top of the overpass, so long as they get to piss on the guys underneath.

    And people who think it’s “patriotic” to get ripped off by HMOs, so long as not a penny goes to the gov’mint to give them better health care for less money.

  75. 75
    ThresherK says:

    @Viva BrisVegas:

    Didn’t someone here say that there is a class of people who would happily live in a burnt out car under an overpass roasting sparrows on a curtain rod, so long as they could make sure that the guy in the car next door didn’t have a curtain rod?

    I don’t know who created that awesome description, but there’s usually a racist distinction to be made for the “guy in the car next door”. That curtain rod is the only thing keeping some (white) people thinking they’re better than others. Their common cause (sic) with white people who have power is not to be relinquished lightly.

    Maybe the short phrase should be “Lace Curtain-rod Irish”.

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