Saturday, August 25, 2012

Inequality is our real problem, and class warfare is real

The Pew Center released a fascinating report on entitled "The Lost Decade of the Middle Class." And it illustrates how much damage has been done to regular working Americans, not just in the last 10 years, but in the last 30.

There's a lot of good things in here. I'll start by pointing out is the damage from the lost decade itself.

Median household income, overall (2011 $)
1997- $51,705
2000- $54,842
2010- $51,006 (DOWN 7.0%)

Median Household income for 3-person family (2011 $)
2000 $63,277
2010 $59,127 (DOWN 6.6%)

And even more than incomes, the housing and stock market crashes destroyed the net worth of millions of Americans, putting them in a bigger hole to climb out of.

Median net worth from poll of middle-class
2001 $129,582
2010 $93,150 (DOWN 28.1%)

And you see that effect in people's increasingly concerned and pessimistic attitudes when polled by Pew for this study.

Among middle class, how are you since recession started?
Worse off 42%
Better off 32%
No change 23%

Maintaing middle-class lifestyle vs. 10 years ago?
More difficult 85%
Less difficult 9%
About the same 4%

More financially secure vs. 10 years ago?
More secure 44%
Less secure 42%

Age 50-64- 35% More, 52% Less
Age 65+ 23% More, 49% Less

Can most people get ahead if they work hard?
1999 74%
2003 68%
2007 67%
2011 58%

And this worsening status is despite tax cuts for both incomes and capital gains over the last 10 years, and I'd argue that last question shows that people are starting to get what that really means for social mobility. You'll see why with these next graphs, because the deregulation and tax-cutting of the last 30 years has not paid off for the everyday American- only the rich and the corporate. For example, since 1983, the middle and lower classes are really no better off when you adjust for inflation, but the upper class has seen their net worth double, even after the Great Recession hit.

Net worth by class level 1983-2010

And the same trends show in incomes, as the upper incomes continue to grab a higher amount of money from the middle class, to the point that the upper classes had more total income than the middle class by 2010. This amount of overall income for the U.S. between the middle and upper classes has been steady at around 90% for decades, but who got the money favored the middle class by 2 to 1 in 1980, before Reagan took office and started the 30-year trend of tax cuts and deregulation that continues to this day.

And the last 30 years has caused a vanishing of the middle class itself, as more people have either moved up into the upper classes, or back down into the lower ones.

As opposed to the "rising tide that raises all boats", our last 30 years (and especially the last 10) have been more like a Vegas casino, where the high rollers are going to be OK regardless of what happens at the tables, a few of the average bettors may win and move up to the big tables, but the average folks are more likely to break even. Or worse, they try to play the big-table games and get cleaned out.

    I've seen a Teabagger bumper sticker that says "Redistribute my work ethic." Well, the last 30 years have shown that their work ethic has indeed been the rich and corporate that GOP panders to. This June, Business Insider released a report that put this all together, showing that corporate profits as a percentage of GDP are at an all-time high, and wages vs. GDP at an all-time low.

   The wages part is especially worth mentioning because it has steadily declined from 1970's high of nearly 54% to today's 44%. The only exception to this decline in the last 40 years? When it rose 46% in 1992 to  49% in 2000...right when we had the Clinton tax increases on the rich. And they ended with the Bush tax cuts to the rich.

   No, that's not a coincidence. And that's why the Bush tax cuts to the rich have to end, because the rich and corporate have been stealing U.S. worker's productivity and putting the proceeds into their pockets. They'll be a whole lot less likely to do that if they got taxed more, and might (juuust might) decide to pay their workers and expand their businesses instead of what they do today- funnel those profits into legalized Wall Street gambling and paying off politicians.

   Class warfare is real, and it's being waged on the vast majority of us. We need to be honest about it, and fire back.

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