Thursday, March 28, 2013

The Only Story That Counts

The press sure is full of stories about gun registration, gay marriage and immigration these days.  Of course, that doesn't leave much room for a story that got a little attention recently but is already on its way to being forgotten forever.  And here it is:

"Income Growth For Bottom 90 Percent Of Americans Averaged Just $59 Over 4 Decades:  Incomes for the bottom 90 percent of Americans only grew by $59 on average between 1966 and 2011 (when you adjust those incomes for inflation)"

Fifty nine dollars.  That's what upward mobility has to offer American workers in return for a life of labor- fifty nine dollars.

I've never taken to putting things in bold text before, but I am making an exception here, because there is not one single fact which indicated the miserable degradation which has overtaken our country over the last forty years or so.  In the same forty years, the GDP (inflation adjusted) of the United States has gone from $1.49 trillion to 14.99 trillion- an almost exact tenfold increase, absolutely none of which has gone into the pockets of the bottom 90% of Americans (well, except that $59.00, which I am sure is much appreciated.) In the meantime, the inflation adjusted income for the top 1/100 of 1% of the population has increased by an average of $18,362,740.00, or just over 311,000 times the income increase of the lower 90%.  

In roughly the same time (1973 to 2010), productivity per worker went from  $64,000 to $148,000, an increase of 2.31 times, not a shred of which went to American workers; the entire amount went to corporations and their owners:

Here is some more about this situation, from David Cay Johnson*, on whose research this post is largely based:

"Incomes and tax revenues have grown from 2009 to 2011 as the economy recovered, but an astonishing 149 percent of the increased income went to the top 10 percent of earners.

If you wonder how that can happen, the answer is simple: Incomes fell for the bottom 90 percent."

"the top 1 percent of the top 1 percent, those making at least $7.97 million in 2011, enjoyed 39 percent of all the income gains in America. In a nation of 158.4 million households, just 15,837 of them received 39 cents out of every dollar of increased income."

This is the story of the United States today- the story of the thieving of the entire wealth of the country by one ten thousandth of the population, aided and abetted at every step by a Republican party and far too many Democrats too (sad to say, Obama is one of them) who refuse to hold the thieves responsible in any way for the damage they have done and intend to keep doing in the future.

In the meantime, of course, corporate profits have surged to record heights, but anyone who dares to suggest that some share of those profits belongs to the workers is screamed down as a Socialist or Communist.

This situation is exactly analogous to something that happened in the 1920's and which was a significant factor in the 1929 economic collapse and the Great Depression which followed.  I want to quote here from The Crisis of the Old Order, by prominent historian Arthur Schlesinger: 

"The output per man-hour rose about 40 percent during the decade.  The central economic challenge was to distribute the gains of productivity in a manner that would maintain employment and prosperity.

By the rules of orthodox economics, the reduction in production costs should have brought about either a reduction in prices or a rise in wages, or both...Denied outlet in lower prices because of accumulating rigidities, the gains of technological efficiency were equally denied outlet in higher wages...because of the bargaining feebleness of the labor movement...As a result these gains were captured by the businessmen themselves in the form of profits.  Through the decade, profits rose 80 percent as a whole, or twice as much as productivity; the profits of financial institutions rose a fantastic 150 percent.

The increase in profits naturally pushed up the prices of corporate securities...As the twenties proceeded, the stock market sucked off an increasing share of the undistributed gains of industrial efficiency...the diversion of the gains of efficiency into profits was bound to result in a falling off of the capacity of the people as a whole to buy."

I hardly need to state that we have experienced the same thing in recent decades.  A consequence of this is the collapse that occurred in 2008.  We were lucky this time: after the 1929 collapse, the country had to wait three and a half years before a Democrat could enter the White House and begin to repair the damage done by Republicans; this time we only had to wait three months.  As a result, we avoided the worst of what happened in the thirties, but our economy is still polluted with the disease of Republican economic cant, so we are not yet out of the woods.  If Obama, Harry Reid, et. al. continue to allow this malignant imbalance to continue, we are doomed to repeat the story of the Great Depression; only today our country lacks the industrial base that enabled the United States of the thirties to return to economic stability.  This time, the result is liable to be our final descent into third world status, and the wiping from the earth forever of the promise that the United States represented for over two centuries.

Yes, I am all for equality for gays and lesbians, all for rational gun rules, reformed immigration policies.  But none of these issues involves the deliberate destruction of the lives of nine tenths of the American people, and the crushing of the hopes of their children.  And I, for one, am not willing to take gay marriage as a sort of consolation prize for having the hopes and dreams of American workers, the promise that our country has always represented, shattered. 

*"David Cay Johnston received the Pulitzer Prize for his coverage of tax policy while at The New York Times. He now teaches at Syracuse University College of Law and is the author of three books about taxes -- Free Lunch, Perfectly Legal, and The Fine Print."

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