Greed and Incompetence – 4

The Demonstrators

Here in the Washington area, an interesting phenomena is taking place.  The Democrats (spineless wimps that they are) are keeping pretty quite about the demonstrations in New York.  The ones that DO have anything to say seem to be generally supporting the demonstrators.

The Republicans, and their TV station, Fox News — are against the demonstrators.  The demonstrators are un-American, we are told.  The demonstrators are told that if they don’t like it here they should go elsewhere, etc.

Let’s look at that pesky old first amendment to the United States Constitution:

“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

Hmm, RIGHT OF THE PEOPLE PEACEABLY TO ASSEMBLE, AND TO PETITION THE  GOVERNMENT FOR A REDRESS OF GRIEVANCES.  What do you suppose that means.  Well, the 1st amendment was put in our constitution in 1787.  It is old.  It has probably got dust and cobwebs on it.  Maybe the Republicans think it is time to get rid of it.

According to the law, the demonstrators are OK doing what they are doing, but the they must comply with reasonable rules.  The ones that have been arrested were making unreasonable noise, or obstructing vehicular or pedestrian traffic, or refusing to comply with lawful orders of the police.  A city has to tolerate a certain amount of inconvenience to make room for First Amendment activities but not so much as to disrupt normal city activities.  New York and Mayor Bloomberg are doing a good job.

What lead up to these demonstrations?  Don’t they have anything better to do?   Well, I can’t judge that, but I do think that what they are doing is pretty significant.  Those demonstrators are doing this country a favor.


In 1947, two years after the end of World War II, the top 1% of US households were taking home 12% of the nations pre-tax income.  The other 99% shared around 88% of the take.  It was an era when a large middle class was emerging.  In 1967 — 20 years later — the top 1% grabbed 10.7% of the nations pre-tax income.  The rest of us grabbed around 89%.

We must have been doing something right.  Our economy was booming our scientific and industrial productivity was the envy of the world.  Most Americans would define themselves as a part of the “middle class”.  We had become a classless society.  We were doing GREAT.  Families consisted of one wage earner and one staying home and raising the kids.

Up through 1979 those at the top never took in more than 12.8% of the total.  The year that Ronald Reagan was elected (1980 ) the top 1% grabbed 10% of our economic output and the rest of us shared 90%.  In his presidency the shift began. In Reagan’s final year of office the top 1% were taking in15.5%.


By 2007 the year before the crash, the top 1% were pulling in 23.5% of our pre-tax incomeWithin 8 years we, as a country, changed significantly.  Almost 1/4 of our country’s income was going to 1% of the people.

According to Paul Bucheit, a professor with the City Colleges of Chicago, the size of our economy, “has quintupled since 1980, and we all contributed to that success., but our contributions have earned us nothing. While total income has also quintupled, percentage-wise almost all the gains went to the richest 1 percent.” This upward redistribution of wealth “translates into a trillion extra dollars of income every year for this group.”

This didn’t happen by accident and it didn’t happen because those in the top 1% are better or smarter than they were in the 1940s and 50s.  It happened because there were specific policy changes that the American Right Wing fought hard for.

There were changes in labor laws, international trade that facilitated moving much of our manufacturing overseas and the cutting the unionized share of the American workforce in half.  There was a change in the Federal Reserve that led it to concentrate far more on keeping inflation in check than keeping working America employed.

Last year  the share of the nation’s income going to wages hit an all-time low while the New York Times tells us that corporate profits accounted for 14 percent of the total national income in 2010, the highest proportion ever recorded.  In the 3rd quarter of this year, Bank of America reported a $6.2 billion profit.  Citigroup did $3.8 billion, and JP Morgan Chase did $4.4. That is not bad for a recession year.

The previous peak, of 13.6 percent, was set in 1942 when the need for war materials filled the order books of companies at the same time as the government imposed wage and price controls, holding down the costs companies had to pay.

A lot of conservatives simply refer to the unemployed as just “sore losers.”   Pretty callous, but there’s a practical issue here: the economy simply doesn’t function well when working America is taking home less than half of our national income in wages.

About two-thirds of our economy is driven by consumer spending, and studies have shown that unlike ordinary people, when the very wealthy get a tax break, they don’t spend more money as a result. They bank it. The other 99 percent are consumers, but having seen their incomes stagnate for three decades, they’re tapped out, up to their ears in debt and unable to maintain the demand that the economy requires to keep people working.

All in all, there is something seriously dysfunctional about the economics of our country.  We are becoming a nation of haves and have-nots with almost nothing in-between.  If the government cannot or will not address the situation I think that we will all suffer the consequences.

So, what’s up with the demonstrators?  Well, after having spent most of my life in the DC area I know better than to believe that the demonstrators are all united.  I remember that when the Tea Party people were demonstrating there were some good interviews done by the local Fox News (of all people).  In many cases (certainly not all) the people were breathtakingly ignorant of what the demonstration was supposed to be all about.  A fair amount of the Tea Party people seemed to think that it was all about gun control either in total or at least partially.  Others thought it was about “taking back America”.  From whom?

Let’s hope that the 99% have a better grasp on reality than the Tea Party does.


2 comments on “Greed and Incompetence – 4

  1. The only way to come out of this mess is to abolish the interest system. All the US debt can never ever be paid out. Its only going to pass on the next generation. And the will end up as the slaves.

  2. May be the answer lies on who is taking the time to defend America. Today only a fraction of one percent of the American people are actually in the military. This involvement or lack of involvement is unsustainable to protect U.S. wealth abroad. It may be poetic justice that the wealth of the top one percent may come to an end as 99 percent of Americans refuse to join up to protect American wealth abroad., a wealth only enjoyed by the top one percent.

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