We have Republican candidates calling Obama the food stamp president, as if the use of food stamps derives from his policies, when it does not.
The increased reliance on food stamps is a direct result of policies over an extended period of time, that has increased the wealth and income gap between the rich and everyone else, leaving everyone else poorer, significantly and pushing more people into poverty. Those policies redistribute wealth to the wealthy, and create an unfair playing field skewed to benefit the wealthy at the expense of most of us. Workers aren't getting paid for what they do; C-class executives - CEOs, CFO's etc. are getting overpaid for NOT producing on a similarly increased level when compared to worker productivity, but often even rewarded in compensation for making economic crashing and business destroying mistakes in crucial areas like risk assessment and other management level decisions.
The bars in the graph in orange show where most of us fall by income; for example, 27.3% of the population are in the $20,000 or below range for income. The graph bars in yellow are how much of each Bush tax cut dollar benefits each income group; so for the same $20,000 or below income family, they received $0.02 cents for every tax dollar in the Bush tax cuts, while the upper 1% received just under $0.25 cents of every tax dollar in the Bush tax cuts. That is a very harshly skewed unbalancing of the economic playing field; THAT is what is meant when those who advocate strongly for the Bush tax cuts to lapse mean by the wealthy, who can most afford it, are NOT paying their fair share under the Bush tax cuts. The wealthy disproportionately benefited in a way which shifted the tax burden to the least able to pay, while shifting a tax cut benefit to those who were already wealthy. The result was that those who were already wealthy became dramatically wealthier faster, and those who were not became poorer, dramatically faster by paying unfairly disproportionate taxes.
That deficit that conservatives like to moan and wail and gnash their teeth over? That was exploded by the Bush tax cuts combined with failing to raise taxes to pay for two wars. It continues to do so, and the efforts by the right are to shift even more of the burden for that debt to less affluent people than the 1%, and who are below the 'middle class' definition of Romney of $250,000 income per year. That is in fact a definition of middle class that is far too high properly to redefine the middle class.
If you doubt that the benefits are horrifically skewed, this shows more:
But if you look at just one measure of how disproportionately the rich are benefited and the majority are disadvantaged, here is just one more example of many, under Republican tax plans and under Democratic tax plans during recent years (sorry this reproduced so very fuzzily):
We have an explosion in the deficit linked to the policies of Bush, which are the SAME policies of Romney/Ryan, despite their protests about concern for the size of the deficit - through policy measures Ryan supported and for which he voted. The blue shows what Democrats have done with the deficit/national debt, and the red shows what the Republicans have done with the deficit/national debt:
While the right likes to CLAIM they are fiscally conservative, they aren't and never have been. While they like to CLAIM that Democrats are big tax and big spenders, the reality of the numbers and analysis clearly show otherwise.
Then we have the claims that the right will grow the economy through their cuts in spending and their failure to increase revenue where it is clearly necessary to do so:
The right is selling their candidates in this election on the premise that tax cuts will spur growth; it hasn't, not under Bush, not under ANYBODY. The right likes to claim that they are putting money in the hands of 'job creators', and that this will reduce unemployment. That too is trash talk fit only for the garbage can; the wealthy have more money now than at any previous time other than the 'Gilded Age' of the last decade of the 19th century into the early decades of the 20th century; corporations are sitting on huge amounts of capital, but not expanding jobs either. As Paul Krugman noted, our modern middle class was largely created by the very liberal policies of FDR. Prior to that time, as we have increasingly now, wealth was concentrated in the hands of the very wealthy. We had growth at that tie in spite of it because we had a young economy that was still expanding, geographically, by population - including through immigration, and industrially, to an extent we do not have now in our more mature economy. In other words, there was growth IN SPITE of that concentration of wealth in the Gilded Age where now our economy is driven by consumption and demand, which is being curtailed by the concentration of our national wealth in the hands of the 1% wealthiest individuals.
The growth of the Middle Class, with the increased demand was also part of our then expansion of manufacturing - which we have largely lost through the short-sighted and largely right wing outsourcing of jobs, especially good PAYING jobs.
The Great Compression: The middle-class society I grew up in didn’t evolve gradually or automatically. It was created, in a remarkably short period of time, by FDR and the New Deal. As the chart shows, income inequality declined drastically from the late 1930s to the mid 1940s, with the rich losing ground while working Americans saw unprecedented gains. Economic historians call what happened the Great Compression, and it’s a seminal episode in American history.
It is a fallacy to believe that by either disproportionately enriching corporations or wealthy individuals, we will have either economic growth or a reduction in unemployment. Business expand, creating jobs, for one reason and one reason ONLY. They do not do so because of tax incentives for the most part, they do so because there is a demand for the goods or services they provide. That happens ONLY when a large number of people - the 99%, not the 1% - are able to buy and willing to buy those goods and services. That is not possible when affluence is concentrated in the possession of either the 1% or the capital on which corporations are sitting.
Quoting again from Krugeman:
The great divergence: Since the late 1970s the America I knew has unraveled. We’re no longer a middle-class society, in which the benefits of economic growth are widely shared: between 1979 and 2005 the real income of the median household rose only 13 percent, but the income of the richest 0.1% of Americans rose 296 percent.
Income Share of Top 1% Excluding Capital Gains
The false and flawed premise of the right is that if you give the rich, either as corporate 'people' or individuals, they will generate growth. It is a which came first, the chicken or the egg notion where which you put first has drastically divergent results, otherwise defined as supply side economic theory or demand side or demand driven economic theory. Under supply side, aka trickle-down, it posits that the wealthy will create businesses, either new or expansion of existing, without demand, but that as they hire a few people here and there, those new people will belatedly create demand with their new incomes. The reality is that without demand, there is no such expansion or growth of any kind; instead we have at best stagnation, at worst economic contraction.
With demand driven policies, which put money in the hands of the 99% of people rather than redistributing it to the already wealthy, be it through payroll tax holidays, or tax cuts that disproportionately benefit the middle class, or other policies which economically benefit the middle class and below, there IS increased demand -- and that includes food stamps, which additionally prevent our nation from having large numbers of people literally starving like a 3rd world country from Republican policies.
The conservatives would like to create the impression that Obama has created the wealth and income gap; he has not, he has not created a situation where we have increasing numbers of people who are less economically mobile, and who are increasingly becoming poor. That would be the fault of conservative policies.
As my co-blogger Laci has pointed out, from the perspective of holding a degree in economics from a top world-ranked university, the policies being promoted from the Austrian school are largely unproven theory; whereas the policies developed from the economic theories of John Maynard Keyes have been tested and proven effective.
It has been my experience that the overwhelming majority of right wingers who profess to support the Austrian school of Hayek don't actually know diddly squat about economics generally or the actual writing of anyone in the Austrian school specifically. If you challenge them on it, they cave, the stutter, they fall away in confusion and incoherency.
So it should be no surprise that there are very few people already on the right challenging Romney and Ryan (who frankly appears in no way that I can see to deserve his attribution of intellect and expertise), because they don't REALLY know what they are talking about as political partisans.
This has been featured here before, but it deserves a repeat. Heck, it probably deserves a repeat every week, because it is a fundamental message that should be more widely viewed.
And lastly, I will refer readers to my recent post which also emphasizes the inequalities of our shift in wealth from the most recent Labor Day weekend.
The increased reliance on food stamps is a direct result of policies over an extended period of time, that has increased the wealth and income gap between the rich and everyone else, leaving everyone else poorer, significantly and pushing more people into poverty. Those policies redistribute wealth to the wealthy, and create an unfair playing field skewed to benefit the wealthy at the expense of most of us. Workers aren't getting paid for what they do; C-class executives - CEOs, CFO's etc. are getting overpaid for NOT producing on a similarly increased level when compared to worker productivity, but often even rewarded in compensation for making economic crashing and business destroying mistakes in crucial areas like risk assessment and other management level decisions.
The bars in the graph in orange show where most of us fall by income; for example, 27.3% of the population are in the $20,000 or below range for income. The graph bars in yellow are how much of each Bush tax cut dollar benefits each income group; so for the same $20,000 or below income family, they received $0.02 cents for every tax dollar in the Bush tax cuts, while the upper 1% received just under $0.25 cents of every tax dollar in the Bush tax cuts. That is a very harshly skewed unbalancing of the economic playing field; THAT is what is meant when those who advocate strongly for the Bush tax cuts to lapse mean by the wealthy, who can most afford it, are NOT paying their fair share under the Bush tax cuts. The wealthy disproportionately benefited in a way which shifted the tax burden to the least able to pay, while shifting a tax cut benefit to those who were already wealthy. The result was that those who were already wealthy became dramatically wealthier faster, and those who were not became poorer, dramatically faster by paying unfairly disproportionate taxes.
That deficit that conservatives like to moan and wail and gnash their teeth over? That was exploded by the Bush tax cuts combined with failing to raise taxes to pay for two wars. It continues to do so, and the efforts by the right are to shift even more of the burden for that debt to less affluent people than the 1%, and who are below the 'middle class' definition of Romney of $250,000 income per year. That is in fact a definition of middle class that is far too high properly to redefine the middle class.
If you doubt that the benefits are horrifically skewed, this shows more:
But if you look at just one measure of how disproportionately the rich are benefited and the majority are disadvantaged, here is just one more example of many, under Republican tax plans and under Democratic tax plans during recent years (sorry this reproduced so very fuzzily):
We have an explosion in the deficit linked to the policies of Bush, which are the SAME policies of Romney/Ryan, despite their protests about concern for the size of the deficit - through policy measures Ryan supported and for which he voted. The blue shows what Democrats have done with the deficit/national debt, and the red shows what the Republicans have done with the deficit/national debt:
Then we have the claims that the right will grow the economy through their cuts in spending and their failure to increase revenue where it is clearly necessary to do so:
The right is selling their candidates in this election on the premise that tax cuts will spur growth; it hasn't, not under Bush, not under ANYBODY. The right likes to claim that they are putting money in the hands of 'job creators', and that this will reduce unemployment. That too is trash talk fit only for the garbage can; the wealthy have more money now than at any previous time other than the 'Gilded Age' of the last decade of the 19th century into the early decades of the 20th century; corporations are sitting on huge amounts of capital, but not expanding jobs either. As Paul Krugman noted, our modern middle class was largely created by the very liberal policies of FDR. Prior to that time, as we have increasingly now, wealth was concentrated in the hands of the very wealthy. We had growth at that tie in spite of it because we had a young economy that was still expanding, geographically, by population - including through immigration, and industrially, to an extent we do not have now in our more mature economy. In other words, there was growth IN SPITE of that concentration of wealth in the Gilded Age where now our economy is driven by consumption and demand, which is being curtailed by the concentration of our national wealth in the hands of the 1% wealthiest individuals.
The growth of the Middle Class, with the increased demand was also part of our then expansion of manufacturing - which we have largely lost through the short-sighted and largely right wing outsourcing of jobs, especially good PAYING jobs.
The Great Compression: The middle-class society I grew up in didn’t evolve gradually or automatically. It was created, in a remarkably short period of time, by FDR and the New Deal. As the chart shows, income inequality declined drastically from the late 1930s to the mid 1940s, with the rich losing ground while working Americans saw unprecedented gains. Economic historians call what happened the Great Compression, and it’s a seminal episode in American history.
Update: This is the actual graph...
It is a fallacy to believe that by either disproportionately enriching corporations or wealthy individuals, we will have either economic growth or a reduction in unemployment. Business expand, creating jobs, for one reason and one reason ONLY. They do not do so because of tax incentives for the most part, they do so because there is a demand for the goods or services they provide. That happens ONLY when a large number of people - the 99%, not the 1% - are able to buy and willing to buy those goods and services. That is not possible when affluence is concentrated in the possession of either the 1% or the capital on which corporations are sitting.
Quoting again from Krugeman:
The great divergence: Since the late 1970s the America I knew has unraveled. We’re no longer a middle-class society, in which the benefits of economic growth are widely shared: between 1979 and 2005 the real income of the median household rose only 13 percent, but the income of the richest 0.1% of Americans rose 296 percent.
Income Share of Top 1% Excluding Capital Gains
The false and flawed premise of the right is that if you give the rich, either as corporate 'people' or individuals, they will generate growth. It is a which came first, the chicken or the egg notion where which you put first has drastically divergent results, otherwise defined as supply side economic theory or demand side or demand driven economic theory. Under supply side, aka trickle-down, it posits that the wealthy will create businesses, either new or expansion of existing, without demand, but that as they hire a few people here and there, those new people will belatedly create demand with their new incomes. The reality is that without demand, there is no such expansion or growth of any kind; instead we have at best stagnation, at worst economic contraction.
With demand driven policies, which put money in the hands of the 99% of people rather than redistributing it to the already wealthy, be it through payroll tax holidays, or tax cuts that disproportionately benefit the middle class, or other policies which economically benefit the middle class and below, there IS increased demand -- and that includes food stamps, which additionally prevent our nation from having large numbers of people literally starving like a 3rd world country from Republican policies.
The conservatives would like to create the impression that Obama has created the wealth and income gap; he has not, he has not created a situation where we have increasing numbers of people who are less economically mobile, and who are increasingly becoming poor. That would be the fault of conservative policies.
As my co-blogger Laci has pointed out, from the perspective of holding a degree in economics from a top world-ranked university, the policies being promoted from the Austrian school are largely unproven theory; whereas the policies developed from the economic theories of John Maynard Keyes have been tested and proven effective.
It has been my experience that the overwhelming majority of right wingers who profess to support the Austrian school of Hayek don't actually know diddly squat about economics generally or the actual writing of anyone in the Austrian school specifically. If you challenge them on it, they cave, the stutter, they fall away in confusion and incoherency.
So it should be no surprise that there are very few people already on the right challenging Romney and Ryan (who frankly appears in no way that I can see to deserve his attribution of intellect and expertise), because they don't REALLY know what they are talking about as political partisans.
This has been featured here before, but it deserves a repeat. Heck, it probably deserves a repeat every week, because it is a fundamental message that should be more widely viewed.
And lastly, I will refer readers to my recent post which also emphasizes the inequalities of our shift in wealth from the most recent Labor Day weekend.
Labor Day Edition - Labor Compared to Management
The Laborer is worthy of his
hire. 1 Timothy 5:18
I would assert that executives are overpaid. I would contend that underpaying labor is contrary to the words of the Bible. I would argue that the wage and income gap represents a very real failure for labor to have genuine equality of pay for work. This is what the 99% is unhappy about in the Occupy movement.
They do NOT receive their compensation on merit; they do not receive their compensation packages at the discretion of the real owners of the business they work for - the stockholders. They used to receive far less during earlier periods where they were arguably as important if not more important for fulfilling their roles as executives. Now executives are handing each other excessive pay, bonuses and benefits, even when they make disastrous decisions that ruin companies.
That should be contrary to real, legitimate capitalism.
Any doubts - look at the bonuses paid to the executives at the companies receiving bail outs. It is true even when they do clearly dishonest and risky things - like altering the LIBOR rate or falsifying credit ratings.
From earlier this year at the LA Times:
I would assert that executives are overpaid. I would contend that underpaying labor is contrary to the words of the Bible. I would argue that the wage and income gap represents a very real failure for labor to have genuine equality of pay for work. This is what the 99% is unhappy about in the Occupy movement.
They do NOT receive their compensation on merit; they do not receive their compensation packages at the discretion of the real owners of the business they work for - the stockholders. They used to receive far less during earlier periods where they were arguably as important if not more important for fulfilling their roles as executives. Now executives are handing each other excessive pay, bonuses and benefits, even when they make disastrous decisions that ruin companies.
That should be contrary to real, legitimate capitalism.
Any doubts - look at the bonuses paid to the executives at the companies receiving bail outs. It is true even when they do clearly dishonest and risky things - like altering the LIBOR rate or falsifying credit ratings.
From earlier this year at the LA Times:
Actually, the best way to describe the Austrian School is that it supports the Libertarian view point of economics in specific, and reality in general. This school hopes to solve complex economic issues by conducting "thought experiments" rather than examine actual market behaviour.
ReplyDeleteI wouldn't say that these theories are untested, but they have been tried and found to be vastly wanting. For example, the assertion that returning to the Gold Standard would prevent economic swings, which is pure crap since there were many economic crashes due to the money being tied to commodities. The Gold Standard was denounced by William Jennings Bryan in his famous Cross of Gold Speech.
Another thing which appeals to the right is the fact that the Austrian group sees economic fluctuations (i.e., recessions and depressions) as being part of the business cycle.
Even more importantly to the current conservative, reality doesn't matter mindset, the Austrian School doesn't really look to the real world for how its economic theories work.
These are people who call Keynes a socialist, when he was a defender of capitalism, while failing to notice that their Austrian School heroes were socialists.
On the whole, Keynes is far friendlier to the market economy than the Austrian School.
But, if you want to see wealth accumulate in the hands of the few without any real benefit to the masses, then the Austrian School is just the perfect mindset.
Actually, a better way to describe the "Conservative" (maybe Republican is a better term) fixation with the fantasy world is that they find books which fit their world view: e.g., Ayn Rand's Atlas Shrugged, Robert Heinlein’s Beyond This Horizon, and the works of the Austrian School.
ReplyDeleteYou point out that these are works of fiction and don't really reflect how the real world functions, or should functions, yet they will hold on to their fantasies since it is so much more comforting than reality.
In the words of Rick Santorum "We will never have the media on our side, ever, in this country. We will never have the elite, smart people on our side."
Of course you won't, Ricky, as long as you lot keep espousing crackpot theories.
The Austrian school theories interpreted into policies have been tested far less than the Keynesian theories. That appears to be because they don't work when they are tried, and because there appears to be no significant reason to believe they SHOULD work.
ReplyDeleteSo while not absolute, it was a substantially correct statement in terms of comparative demonstrated effectiveness. The failure in the comparatively few instances where it has been tried is an even greater indictment than if the proponents could claim the Austrian school ideas deserved trial - they've had that, they didn't perform as advertised or promoted.
That is ALSO true of supply side economics, and no one is more critical of supply side economics than the Reagan supply side economics architect David Stockman.
For those not familiar with the Cross of Gold quote, here it is:
"There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it."
The link in the Santorum quote should be:
ReplyDeletewww.guardian.co.uk/world/2012/sep/15/rick-santorum-smart-people-conservative
QUERY #1 : Is it the Economy or the Tax Code ?
ReplyDeleteQUERY #2 : Why won’t Mitt Romney release his tax returns beyond two years … and why has he not filed his return that was due on April 15th ? (Most likely, voters will hear the information on September 17th - the last day that the official filing is due.)
OK - let’s look at how complex and stupid our tax code is.
What’s deductible … what is the incentive … and who benefits … for example, let’s look at how Congress treats books and insurance.
Why did Congress create a tax deduction of for teachers who purchase classroom supplies, books, etc instead of providing the textbooks, computers, etc. Yep, its deductible (up to $250 per teacher) but many teachers expend more. The incentive is to be a better teacher and give the kids a chance to learn. Who benefits is the taxpayer because we don’t provide funding. Republicans know that to have an advanced country, we need educated workers … but they don’t want to pay for education.
Why did Congress create a tax deduction for Long Term Care Insurance. Yep, it’s deductible - if you're in a 28 percent tax bracket, at could mean $900 to $1,000 a year in reduced taxes. The incentive is to encourage people to buy insurance in the event that they need to have long-term care (like many insurance policies, there is no guarantee that you will ever get a benefit - you have insurance on your home, for example and if you have an electrical fire, you are covered, but if you have a wood "shake" shingled roof and your house is burned in a wildfire, you are not … and if you never have a fire, you do not get any return on your investment). Long-term care insurance has provisions … you have to be disabled for a period of time before it kicks in (for example, six months) and then there are limits on how much the insurance company has to provide … if you become disabled, this insurance could help, but if you die naturally, your estate does not get a dime. Who benefits … the insurance companies and high-income tax earners looking for tax deferral. Republicans can count on both of these groups for financial contributions … but for the AverageJoe, who is worried about the next paycheck, he doesn’t have that extra money to bet on a long-term care insurance policy, especially when his wife, TeacherTerry is buying all those school supplies.
IMO, for working families, “It’s The Economy, Stupid” … for Republicans, “It’s the Tax Breaks, Stupid” … why else does the Romney tax plan promote reducing the corporate income tax, eliminating the estate tax, and repealing the alternative minimum tax (AMT) … will that help working families ?
IF Romney would release more of his tax filings, working families would see how he has worked the system … let’s remember, he told a group of unemployed Floridians at a campaign stop on June 16, 2011 that 'I'm Also Unemployed' … yeah, no doubt it is tough when you rely on speaking fees for income (Romney actually earned $374,328 from speaking fees in 2010).
UNBELIEVABLE.
BTW ... some thoughts from the MN Political RoundTable
ReplyDeleteWould there have been the growth of the Middle Class if Eisenhower hadn't protected the New Deal ?
In 1952, the Republican Party platform had some goals …there would be an end to the New Deal programs (such as Social Security and agricultural price supports) … and there would be tax cuts.
Yet, when Ike became President, he disappointed his Republican supporters …There would be no end of the New Deal … And there would be no tax cuts.
To reduce the budget deficit, conventional forces would be drawn down while tax cuts would be deferred until the budget was balanced. The top tax rate on income over $400,000 was 92%.
Eisenhower steered a balanced course economically. Some Republicans called for rolling back the New Deal, but the president realized that many of Franklin D. Roosevelt’s liberal social programs were both popular and effective. Instead of getting rid of Social Security, for example, Ike actually expanded it to cover another ten million people who had been left out of the original program. Instead of turning away from big public works projects, he instead invested federal money in the Interstate Highway System, one of the largest public spending projects in the country’s history.
The main economic goal that Eisenhower pursued through both his terms in office was to achieve a balanced federal budget. The government ran a small deficit in 1954 and 1955, then registered a surplus for each of the next two years. As the nation went into a recession in 1958 and 1959, Eisenhower allowed the federal deficit to grow in order to stimulate the economy. By 1960, he managed to return to a surplus.
The problem with Republicans today is that there do not have the backbone of Eisenhower … much less his wisdom.
Regarding Food Stamps … it’s a political dog whistle reminding their supporters of the whom they believe uses these programs — “Cadillac Welfare Queens”. Now, I do not know the actual numbers but I recall that Tim Walz got a resounding ovation at FarmFest when reminded Allen Quist that most of those who receive food stamps are older than 65 and younger than 3 … if Walz is wrong, I sure that there will be a FactCheck soon.
We should remember two things when it comes to the Food Stamp programs …
1. It provides buyers for the farm-produced items
2. It provides jobs for India … oh, maybe you did not know that … JPMorgan Chase is the largest processor of food stamp benefits in the United States. The bank is contracted to provide food stamp debit cards in 26 U.S. states and the District of Columbia.
The firm is paid per customer. This means that when the number of food stamp recipients goes up, so do JPMorgan profits. Talk about perverse incentives when JPM is foreclosing on homeowners. JPMorgan is taking its responsibility to keep the U.S. unemployment rate high by offshoring the servicing of many of these contracts to India, according to ABC News.