Money Matters

[ysabetwordsmith]

I first saw this on Doug's computer screen, from the commentary essay "Money Matters."  This is the quote that caught my eye:

The truth is that while the proximate cause of America’s economic plunge was Wall Street’s excesses leading up to the crash of 2008, its underlying cause — and the reason the economy continues to be lousy for most Americans — is so much income and wealth have been going to the very top that the vast majority no longer has the purchasing power to lift the economy out of its doldrums.

Well, yes. I have been saying that for quite some time. But the person who said this version has served as the 22nd Secretary of Labor. You might ignore me, but he has all the fancy paper and experience to show for it. Of course the obvious is still the obvious: no matter what you try, 20% of the wealth can't run 80% of the economy. Further thoughtful details appear in "The Republican Shakedown," which explains how Republicans are digging in taxpayer pockets. The problem with a shakedown, though, is that eventually you get down to pocket lint. Working Americans are running out of pennies to fund the government, or anything else for that matter.

Comments

It's the top 0.5 to 5%, not 20%

[mejeep.livejournal.com]

Back around 1988 I started feeling the effect of "salary erosion": my take-home pay was reduced by increased costs such as higher medical insurance premiums and higher co-pay. And then my work hours increased from the traditional 9-5 to 8 hours a day NOT counting lunch or breaks, and the occasional mandatory unpaid overtime.

I felt the war on the middle class intensify as the banks started squeezing me with 20-30% credit card interest rates (when they borrow money at under 1% and pay maybe 1-2% to accounts). I don't own a home so I have no other way to borrow money. Rich people don't care, they have other ways to borrow money if necessary, the the poor folks just don't have the money at all.

Where do you get 20%? The Robert Reich article says 5% and it's really more like 0.5%

Only the richest 5 percent of Americans are back in the stores because their stock portfolios have soared. The Dow Jones Industrial Average has doubled from its crisis low. Wall Street pay is up to record levels. Total compensation and benefits at the 25 major Wall St firms had been $130 billion in 2007, before the crash; now it’s close to $140 billion.

But a strong recovery can’t be built on the purchases of the richest 5 percent.

And that leads to one of my "standard rants". As a stockholder, I read the stockholder reports. They ALWAYS claim that the president/CEO and board members don't just deserve high pay and outrageous bonuses but they've deluded themselves into believing that such compensation is essential for retaining talent. The article kinda agrees with me: they're not worth retaining since THEY CAUSED THE ECONOMIC PROBLEMS and they'll continue the problems as long as they're overpaid and unaccountable for their actions. What about retaining the talent of all the teachers, firemen and other essential services who are being fired and having their unions busted? School vouchers and "pay to spray" is really a step backwards from what our gov't and society was providing equally and fairly to everyone. Even teachers' and professors' tenure is being busted: the online comic Piled Higher & Deeper noted how universities used Katrina as a way to "downsize" by eliminating entire departments and nullifying contractual obligations such as tenure.

more to follow ...

[msstacy13.livejournal.com]

So, yeah, that's what led up to October, 1929.

How does it not occur to wealthy people that whatever a person with one billion dollars
can do with a second billion dollars
could be done better by a million people with a thousand dollars each?

[siliconshaman.livejournal.com]

Or as I put, if a small number of people are bleeding the economy dry, eventually it's going to die.

Money, unfortunately, is a zero sum game. More for them, means less for everyone else.