The Big Obscenity: A Trillion Dollars a Year to the Richest 1%
(That's seven times more than the budget deficits of all 50 states combined)
by Paul Buchheit
CommonDreams.org: January 20, 2011
If you make less than $114,000 a year (90% of us), you've been financially
damaged by the flow of income to the richest 1% of Americans over the past
30 years. Based on Internal Revenue Service figures, if middle- and
upper-middle class families had maintained the same share of American
productivity that they held in 1980, they would be making an average of
$12,500 more per year.
If you make less than $160,000 a year (95% of us), your household value has
decreased, percentage-wise, over the last 25 years. According to noted
researcher Edward Wolff, only the top 5% of American families increased
their percentage of the country's total household net worth from 1983 to
2007.
U.S. GDP has quintupled since 1980, and we all contributed to that success.
It's not unreasonable to say that upper-middle class families should have
maintained the same size of their slice of pie.
But if earnings since 1980 were based on this measure of productiveness, the
richest 1% of Americans would be making $1 trillion less per year.
A trillion dollars a year. That's more than we spend on the entire military.
A trillion dollars a year. That's seven times more than the budget deficits
of all 50 states combined. Many states have been forced to cut police forces
and teachers to balance their budgets.
A trillion dollars a year. Yet Congress just voted to continue the Bush tax
cuts.
The richest 1% ($400,000 or more) didn't work harder than the rest of us.
They profited from stock market gains, shrewdly designed financial
instruments, and tax cuts.
The very wealthy insist that all their income will stimulate the economy.
But low-income earners spend a greater percentage of their overall income on
consumption, while high-income earners save more. Middle-class America has
been led to believe that the growth at the top will eventually produce more
jobs. But many of us have college-educated sons and daughters who can't find
suitable employment. Fortune Magazine reported that the 500 largest U.S.
companies cut a record 821,000 jobs in 2009 while their collective profits
increased to a record $391 billion.
Even the upper class should be concerned about this. As inequality
increases, the majority of Americans will consume less, leading to
conditions not unlike the years before the Great Depression, when the
working class was unable to buy the goods they produced. The rich, with
extra money, speculate in risky investments. The majority of middle-class
Americans, with little money, go deeper into debt. The result is an unstable
economy for all of us.
Who are the people making up the richest 1%? Bankers, CEOs, upper
management, university presidents, Congressmen. They live in their own
world, supporting each other's needs. They can no longer relate to the needs
of average Americans.
Taxing them is not "soaking the rich." The greatest redistribution of income
in history has taken place over the last 30 years, and the victims are
beginning to make a fuss about it.
Paul Buchheit is a faculty member in the School for New Learning at DePaul
University.
***
And lo, it came to pass.
ed
http://www.commondreams.org/headline/2011/01/25-6
Obama to Push Bogus 'Competitiveness' Theme in State of the Union Address
"On January 19, AFL-CIO President Richard Trumka blasted the deal as a
"Bush-style" agreement that fails to protect U.S. jobs from being
offshored."
by Roger Bybee
In These Times: Tuesday, January 25, 2011
Boosting "American competitiveness" and creating jobs through increased
exports will reportedly be the key theme of President Obama's plan for
economic recovery detailed in tonight's State of the Union speech.
This familiar theme, a slickly-disguised appeal to support corporate
globalization, plays upon our reflexive pride in American workmanship. It is
built upon President Obama's empty claim that "we can compete with anybody
in the world," as he put it in a speech in my unemployment-wracked hometown
of Racine, Wis., last July.
What does that really mean? Most of the "foreign competition" that U.S.
workers face actually comes from foreign subsidiaries of US-based
corporations like GE, Ford, GM, Boeing, Microsoft, which operate in places
like China and Mexico to exploit low-wage labor. You've got that right: A
majority of U.S. "trade" consists of intra-firm transfers within the same
corporation. For example, GE sends machinery and parts to Mexico as
"exports" and then "imports" finished products.
Thus the entire competitiveness framework is bogus.
It merely means more NAFTA-style "free trade" agreements that already have
cost millions of jobs and driven down wages. And it sets up a collision
course between the White House and US labor-both the AFL-CIO and Change to
Win federations- over the upcoming vote on the US-South Korea Free Trade
Agreement (KORUS).
On January 19, AFL-CIO President Richard Trumka blasted the deal as a
"Bush-style" agreement that fails to protect U.S. jobs from being offshored.
He pledged that opposition "will be a major priority" of the AFL-CIO. In a
strongly-worded statement, Change to Win denounced the motives of the
pro-KORUS corporate chorus:
It's crystal clear why the US Chamber is supporting a deal effectively
shipping over 150,000 American jobs overseas: As the nation's chief
cheerleader for outsourcing, the Chamber gets to go to bat for its top
corporate members (the CEOs of JP Morgan Chase, Citigroup, Boeing and GE,
Chamber members and outsourcers all...) and gets a jump-start on one of its
key goals for 2011: tax breaks for outsourcers.
The "competiveness" framework is essentially a call to pretend that U.S.
workers and U.S. corporations share the same interest in globalization. As
Nobel-Prize winning economist Paul Krugman points out,
the interests of nominally "American" corporations and the interests of
the nation, which were never the same, are now less aligned than ever
before.
Take the case of General Electric, whose chief executive, Jeffrey Immelt,
has just been appointed to head [Obama's] advisory board [on
competitiveness]. ...
But with fewer than half its workers based in the United States and less
than half its revenues coming from U.S. operations, G.E.'s fortunes have
very little to do with U.S. prosperity.
In particular, the South Korea deal will be a cruel new blow to American
workers, despite the "increased exports" hype. The Economic Policy Institute
has calculated that the South Korea FTA will cost 159,000 US jobs. Public
Citizen's Global Trade Watch has pointed out numerous U.S. state and local
laws that will be over-ridden by the FTA, and has documented numerous ways
in which the proposed deal falls far short of the United Auto Workers'
standards for the agreement (which the UAW nonetheless mysteriously endorsed
anyway, as noted here, here, and here.)
A 'CORPORATE PLEDGE OF ALLEGIANCE'?
The juggernaut of corporate campaign donations and their lobbyists lined up
behind the Korea free trade deal cannot be stopped by labor acting inside
the Washington Beltway.
"The labor movement has learned something from the last two years about jobs
and investment: We can't count on the political process here in Washington
to get the job done," declared Trumka.
In Washington, it is as though the estimated 4.9 million job
losses, 43,000 factory closings, and falling U.S. wages flowing from
free trade deals like NAFTA and China's entry into the World Trade
Organization never happened.
Equally unimportant are the opinions of the 86% of Americans who
emphatically agree "that outsourcing of manufacturing to foreign countries
with lower wages was a reason the U.S. economy was struggling and more
people weren't being hired."
So who really matters on the trade issue?
As the New York Times reports, the South Korea deal "is playing well" with
the audience that truly counts, the U.S. Chamber of Commerce. It's
apparently no problem to the White House that the Chamber hauled in millions
from firms engaged in offshoring US jobs and then turned around and spent
tens of millions in the 2010 mid-terms to defeat Democrats and elect
pro-offshoring Republicans.
However, the drive for the job-destroying KORUS could well be met with a new
grassroots approach, as suggested by Trunka's comment about the limits of
Washington lobbying.
At the same time, Teamsters President James Hoffa, Jr., is promoting a
"Corporate Pledge of Allegiance" that US corporate CEOs will be called upon
to sign. "They've got their $2 trillion in profits, and now we're calling
upon them to create jobs here in the US," he stated on "The Ed Show."
Ideally, the Corporate Pledge strategy could be used at the local level to
visit CEOs across the United States, mobilizing labor's untapped power and
reaching out to the 86% of the public worried about what corporations are
doing to our economy and our futures.
Stay tuned for a major battle over KORUS.
© 2011 In These Times
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