As the economic straits of a growing number of Americans and of local, regional, state and federal governmets become increasingly dire, I keep wondering, if nobody has any money, where has it all gone? I think this is the answer.
Cities are broke.
Counties are broke.
States are broke.
People are broke.
Corporations are ... oh.
Corporations are flush with money.
Corporations are enjoying record profits.
This, as the rest of the country tries to claw back from the worst recession we have suffered through since the Great Depression.
Maybe that's where all the money has gone.
Maybe that's is why everyone else is broke.
New York Times columnist David Brooks said the other day to, "Make Everybody Hurt."
I agree, should that become necessary. But it might not be.
First, let's exempt those who are already hurting.
Let's start inflicting pain at the top.
Let's start with the CEOs whose corporations are rolling in dough and whose bonuses suffered no recession. Here are bonuses gifted to the top three CEOs in 2010, a decidedly bad economic year for the rest of the U.S.
1. H.J. Heinz top exec William R. Johnson, $8.6 million. That's just his bonus, and it's 17.6% higher than the year before. His total income for last year? More than $882 million.
2. Oracle CEO Lawrence J. Ellison, $6.5 million, up nearly 80%.
3. Cisco CEO John T. Chambers, $4.6 million, up 126%.
Let's start with Messers Johnson, Ellison, Chambers and their fellow elites in the country's top 1% income bracket who got their Bush tax cuts extended.
Let's start with the hedge-fund billionaires -- the top 13 of whom earned an average of $1 BILLION each last year -- but get to claim their income as capital gains. I say "get to" because the capital-gains tax rate is 15% rate, instead of as regular income at the appropriate tax bracket, which is 35%.
Taxing their intake as regular income within the same income tax rate structure as the rest of us, would create enough revenue to pay for 300,000 teachers. Three-hundred thousand! Maybe forcing those in the top income tax to actually pay income taxes instead of a 20% lower capital gains tax would mean classroom-sizes in Detroit could be reduced from the 62 students necessary because the education budget there has been decimated. Maybe then Detroit teachers could get back to actually teaching and helping kids learn instead of just being adult supervisors in holding pens for adolescents.
American capitalism advocates say, hey, the rich have earned it. Maybe so. But that shouldn't give them special privileges and special ways that enable their money to be taxed at a lower rate than the income of the rest of us get.
It also shouldn't entitle them to government subsidies, such as the billions of dollars the oil industry, that is flush with record profits, gets in federal subsidies, while the government curtails and eliminates programs that assist so many who are already hurting. It just isn't right that taxes paid by people whose income is shrinking, who are losing their jobs and homes, who have no medical coverage or affordable access to healthcare should be lavished on the rich and powerful just because they are.
Here are some more stats:
* The income of the richest 5% in 1979 was 10 times of that of the poorest 20% (US News and World Report, Feb. 21, 2000)
* Twenty years later that gap had grown to 19 times.
* In 1992, income of top executives of the largest US companies was about 100 times more than that of their workers
* In 2000 -- just 8 years later -- that difference had grown to 475 times more.
* Income of the richest 20% in Silicon Valley grew 29% during the 1990s while income of the poorest 20% fell, with those at the lowest level earning 10% less than they had a decade earlier.
That begs the question: What happened between 1990 and now that accounts for such astounding financial gains for the very rich, while the fortunes of the not-so-filthy rich and middle- and lower-income groups stagnated or fell? Did the mega rich work harder? Work longer hours? Get second jobs? Or, perhaps, were laws changed to their economic advantage?
I know even mentioning such things evokes cries from the priviledged elite that the have-nots and have-not-so-muches are engaging in "class warfare" on the rich.
I posit that class warfare began long before this, and it was declared and is being waged by the rich on the rest of us. How else can such fast-tracked disparities be explained?
The simple fact is that with more and more of the nation's money being concentrated among a very small percentage of the population, that makes a few people richer and richer and everyone else broke. People who are broke don't have anything to spend on the goods and services that fuel a robust middle class.
The mega-rich just buy another exotic island resort or salt their gains in off-shore tax shelters and Swiss banks. Not one drip from Ronald Reaganesque trickle-down policies trickles down to anyone else.
So instead of "making everybody hurt" -- especially those who already are hurting -- let's start by equalizing the playing field in this country that prides itself on a Declaration of Independence that proclaims that we are all created equal. Maybe then it wouldn't be necessary to make anyone hurt.
Here are charts that shows very graphically where the money has gone:
Economist Robert Reich concurs!
Democrats, he says, have become irrelevant. If they want to be relevant again they have to connect these dots:
- The explosion of income and wealth among America's super-rich,
- The dramatic drop in their tax rates,
- The consequential devastating budget squeezes in Washington and in state capitals,
- The slashing of public services for the middle class and the poor,"
- The competing goals of the rich and corporate world to amass even more, and the middle- and lower-income segments of society to not just afford a middle-America lifestyle, but to avoid becoming poverty stricken.