Friday, July 22, 2011
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The wealthy have been on a roll since Reagan. The rest of the country has been on a slide, while China and BRIC have become the new economic leaders, thanks to America's wealthy shipping U.S. jobs overseas: outsourcing the work as they insource the profits. But of course, you all know this. So why don't the lower and mid-income Right not seem to know? Haven't they followed the bouncing line...?
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Anyone notice the top marginal tax rate in 1929?
ReplyDeleteI've been yelling about tax cuts and deregulation and "business friendly" policies as a factor in the roaring 20's and the 1929 bust for a long time and somehow not one of them has ever acknowledged that it happened or that I've mentioned it. They just mumble about that Commie Roosevelt and lazy workers. . .
ReplyDeleteCaptain and Edge,
ReplyDeleteYour point about the top marginal tax rate, 1929 versus today, is duly noted. I touched upon this subject in this post, A Ghost of Depression Past, which included a quote from Marriner S. Eccles who served as Franklin Roosevelt's Chairman of the Federal Reserve from November 1934 to February 1948. In his memoir, Beckoning Frontiers (New York, Alfred A. Knopf, 1951), he offered his opinion of what caused the Great Depression:
“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 nation's 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.”
If you define income inequality as the ratio between the highest wages earners versus the lowest, and if you superimpose this graph over your top marginal tax rate graph, you will find a nearly perfect inverse relationship click here and have a look.
Of course, whenever our side argues these points, the Republiscum counter with epithets of "socialism" and “income leveling” as if these are bad, bad, bad. Their wealthy benefactors, it seems, do not want to share the rewards of economic growth with the middle class and … worst of all … their wealthy benefactors do not want to share the cost burdens of civilization. Thus, they rake in the chips while we get stuck with the bill.
Of course, none of their bullshit about "socialism" makes any sense because the historical evidence clearly shows that economic fairness and justice is the best way to avoid Great Big Depressions and Recessions.
Well said, Octo. The plutocracy link is great.
ReplyDelete"Socialism" is, of course, the straw man here. What the dumbed-down American re-public refuses to understand is that socialism is not communism. Socialism is simply the product of well-governed and humane societies.
But the right has become very good at bastardizing and distorting meaning to its own ends...which, as you point out, is the ongoing migration of profits to the top—until the whole top-heavy, unbalanced structure collapses. Oops.
Octo and Edge,
ReplyDeleteFine post and comments. Well, I've always liked that old commie joke about how to define socialism:
"What is capitalism, Ivan?"
"Capitalism, we say, is the exploitation of man by man."
"And what is socialism, Ivan?"
"Socialism, we say, is the very reverse."
Konyeshna! (Of course!)
Anyhow, I've long thought the simplest-dino justification for setting tax rates somewhat higher for very rich folk and corporations isn't to punish them but rather that they, unlike wage-earners, have a great deal of control over what gets counted as their "income." I suppose it's all perfectly legal -- one gets fancy accountants to define and shift everything so that it's not income and therefore not immediately taxed. Average people can't do that with a W2 form. And the poor pay a great deal of their small income percentage-wise on things like the sales tax -- gotta buy food, gas, and whatnot, can't escape it.