October 19, 2008
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Redistribution of Wealth
Is anyone else tired of the phrase “redistribution of wealth?”
We are on the tail end (I hope) of an era of massive redistribution of wealth. It occurred over the past 6-10 years primarily as people were convinced to take the accumulated equity in their homes (the single largest source of “wealth” for Americans is the value of their home) and pledge that wealth over to large corporations as they refinanced again and again, driving up the cost of their homes while undermining the value of the properties in question.
Wealth redistribution happens every day, every where. When the gap between rich and poor grows wider, it’s not because those at the top managed to expand the pie that everyone’s trying to get a slice of, it’s because they managed to get their slice and a bit of yours too.
How many people think that’s a good policy for the economic health of the country? Come on, you’re attending all those rallies shouting the charge of “Socialist!” against the candidate who has said it needs to change so I know you’re out there ….
Idiots.
Princeton Professor of Political Science, Larry M. Bartels has published Unequal Democracy: The Political Economy of the New Gilded Age which compares the economic outcomes for people in different income groups under the various economic policies of the 57 years from 1948-2005. His work is summarized by the former vice chairman of the Federal Reserve in the following New York Times story on August 30. Is History Siding with Obama’s Economic Plan?
Comments (19)
I think history is aligning itself with Obama’s economic plan. Judi
Forget 1948, I thought we had learned under Hoover after the crash of ’29 that “trickle down” economics doesn’t work. Didn’t work then, doesn’t work now, and the repugnantcons just, apparently, CAN’T learn.
You know…neither candidates can truly fix the situation the US is in….both parties are to blame if one truly takes the time to study history and be openminded about it. Both parties will always make promises, say they will do this and that, they will sling mud at each other and one will be voted into office. Then…then there is the time where it looks like they are doing great things, everyone is cooperating, then wham, the bickering, finger pointing, the truth of things, the politics of dealing with other countries or even the senate and congress, the inability to really work through things surfaces. Then you start to hear the ‘why did we vote for him’ scenarios. We can only hope that some things can start to be rectified. But it won’t happen in a year, two or four or even eight. To much has happen…by both parties, not just one, to make it all happen by one election. Well, them is my thoughts from an old lady who has heard the same thing said over the years…and you know down the road will hear it all again…with a new twist. Chuckles. But, it’s not all bad, we live in a truly wonderful country when you start looking at the others.
Have a great day!! *hugs*
It is all shocking but we all watched this unfold.
@GrannieDee - the sub-plot to my blog is that if we demonize certain policies up front by slinging around words like “Socialist” and scare phrases like “redistribution of wealth” without stopping to think about what those words mean or whether they apply, we have shot ourselves in the foot.
I agree with your assessment about what happens in Washington and I wish I didn’t share that cynicism. But I’m hoping that the depth of this year’s crisis will create a groundswell that will scare the politicians into putting the squabbling aside if for no other reason than that they want to be re-elected in two years.
@quiltnmomi - Yep, I’ve gotten a bit cynical over the years. And, you are right…the words they sling round are well planted and used…just for what you say scare tactics…words to catch the publics attention without the meanings being explained. Sigh, anyway…you have a great rest of the day.
I just posted this comment on another blog because I’m tired of all the focus on people who earn $250,000 or thereabouts…
According to Money magazine (Nov. 2008 issue, p. 113), under the Obama
tax plan, someone making between $226,919 and $603,402 per year would
see their taxes increase…. (are you ready for this??)… $121 per
year.
Now, TRUE, that under McCain, that income group (which
encompasses only 4% of the population, by the way) would see a
significant REDUCTION in their current taxes. That is true. But the
idea that an *extra* $121 tax burden is going to put people out of
business and discourage innovation and subsidize a bunch of welfare
queens, is just ignorant.
Who Obama really wants to hit hard
is people who make OVER $603,403 per year – and they would be hit HARD,
no mistake about it. So if those people (who make up 1% of the
population) want to whine their way over to McCain, fine, because they
are the exact people he’s “fighting for” – not Joe the Plumber.
i just watched part of mccain’s stump speech in whatever state it is he’s desperately trying to hold onto, and it’s just sickening! the outright lies! the hate-bating and fear mongering. i can’t believe people suck this shit down like breastmilk.
and his little self-satisfied grinch grin when he’s particularly proud of himself……..and joe the plumber ad nauseum……frankly, at $40,000 a year, joe could use some of that wealth redistribution!
oh, this election needs to be over. my heart and sanity can’t take it!
The other night I was googling “global economic collapse” because I google these kind of things when I cannot sleep at 3AM. I found myself over at wikipedia, to get the very basic sort of education in this matter…this struck me:
“By contrast, the Indian philosopher P.R. Sarkar and his disciple Dr. Ravi Batra, hold that the “concentration of wealth in few hands” and “stoppages in the rolling of money” are root causes of such crisis of capitalism. The concentration of wealth engenders an euphoric phase accompanied by rising asset prices and further excesses which are eventually followed by a correction in asset prices, a liquidity crisis, insolvency and collapse.” (link: http://en.wikipedia.org/wiki/Economic_collapse)
And then I went to another wikipedia page…
“In the United States at the end of 2001, 10% of the population owned 71% of the wealth, and the top 1% controlled 38%. On the other hand, the bottom 40% owned less than 1% of the nation’s wealth.”
Trickle down economics does not work. But lets assume that it can. The only way for it to work would be for big companies to actually work towards the best interests of their employees. That would mean no outsourcing. No shipping high-paying jobs to other countries. Not doing things like firing 20+ year employees to replace them with (cheaper) recent college graduates. Maybe if we were still in the age of mom and pop businesses who actually cared if your kids had health insurance or not, I might say…yeah… trickle down could happen. But with the corporate environment as it exists right now, the only concern is the return to the shareholders.
Secondly, wealth, as accrued with no actual labor, has been hoarded. CEO’s salaries, severence packages. Back when the CEO of HomeDepot was fired and left with a 60 million dollar severence package, I was wondering why Home Depot shareholders weren’t rioting in the streets. Why aren’t we outraged over AIG’s corporate retreat? Where was the outrage?
No. Making those words “bad” is like you said…shooting ourselves in the foot. So I hear McCain rant and say, “So? Your point is???” Wealth needs to be redistributed (and not just greater access credit, which is just another form of indentured servitude) but real wages that keep up with what is happening in your health insurance premiums and gas bill and electric bill and food cost.
@lilms_sassy - Did you see the report this morning about Obama’s fund raising in September? 620,000 new donors giving an average of $80 something each for a total of $150,000,000. Sounds like every time McCain/Palin utter one of these hate statements, the convince another voter to GIVE MONEY to their opponent. I’d say that’s a pretty significant vote against their way of compaigning.
@Monique - Amen
VOTE FOR DONKEY_GUY_10 FOR PRESIDENT!
RYC: Thanks for your comment. To be honest, I received that info in an email and I didn’t check anything it was saying out on the web. I just found it interesting. I personally am still riding the fence on both of them. Right now, my opinion is no matter which one wins….the country is screwed.
Actually the notion Obama supports is a redistribution of income rather than wealth. Wealth is more about what you own realtive to what you borrowed to buy it. People with extreamly high incomes may have no real wealth because of spendthrift ways and I’ve know someone who made a fairly modest income throughout his life (probably never more than $30,000 a year in present day dollars) but, because of his thrifty ways, left his church close to $2 million when he passed away. I do believe the government can make things a bit more equal on the margins but I think in the long run simply transfering income will not change the structural inequities in society.
If you vote for Donkey guy for President i will keep giving you credits!!! i am at 705, almost enough for another 1000 eprop mini! i think it is worth it to ya!
@fugu62 - YES! As a Credit Analyst, I look at people’s cash flow picture to judge whether they are able to repay the loans they’ve applied for. And you’re absolutely right. Wealth has very little to do with cash flow. Wealth is assets you hold free and clear. Money, property etc. Obama hasn’t said anything about taking anyone’s assets. What he’s talking about is changing the flow of cash so that more people have access to the stream.
@spazmom40 - I can be bought, oh yes I can. That will do it!
It’s not what we make as much as what we spend. We must learn to live on less and go more with less. Perhaps those who already know how to do that, people like you should be running our economy. Oh, and Nada has a great idea. We used to have a small tax on each transaction on Wall Street. Our bail out could be paid for if we renewed the tax. Such a tax is common in Europe and other nations.
I’ll have to come back and read through all these comments. Barack’s answer to Joe the Plumber was pretty much the same thing he said to a ritzy gathering of rich people right here in Vero Beach, back on April 14, 2007, a meeting I was privileged to attend.
“You folks need to allow the rest of America to have the same kind of opportunities that you’ve been able to take advantage of.” I paraphrase wildly, but his message was one of honesty: the rich need to pay more in taxes.
Redistribution of wealth is essentially what taxation is.
I haven’t said this well at all, but as I suggested, I’m rushed for time, as usual