I don't know about others reading this post, but as far as I'm concerned, I'm sick and tired of the litany of self-styled "faux centrists," economic cheerleaders and corporatist wingers that continue to
trivialize the brutal reality that we're currently witnessing record-breaking income inequality in the U.S. I'm reminded of this tonight, once again (and Kossack Pluto has a great post tonight on this, from a broader perspective, which you may read by clicking right
HERE), as I read a post over at Naked Capitalism (see farther down, below) which points out that economic inequality in New York City is now greater than Chile, and Friday's Wall Street Journal column by Alan Blinder, entitled: "
Our Dickensian Economy."
Our Dickensian Economy
Wall Street Journal Blog
Alan S. Blinder
DECEMBER 17, 2010
Since 1978, productivity in the nonfarm business sector is up 86% but real compensation per hour is up just 37%. Is that fair?
Season's greetings. And while I'm on the subject, this is a good time for us "haves" to start thinking more about America's "have nots."
The national unemployment rate stands at a horrifying 9.8%. But unemployment is 15.7% among high-school dropouts, and an astonishing 42% of all unemployed workers have been jobless for more than six months. At press time, Congress appeared poised to pass a package of tax cuts that offers 19% of its benefits to the richest 1% of taxpayers. Earlier this month, the president's deficit commission proposed a comprehensive deficit-reduction plan with many virtues. But it included, among...
If you recall, Blinder is the same guy who, along with Moody's economist Mark Zandi, published a widely-publicized paper on July 27th, during our "Recovery Summer," entitled: "How the Great Recession Was Brought to an End."
Yes, that's right. I'm talking about all of those politically-mindless asshats (I won't be providing links, but you know of whom I speak) that continually use the word "recovery" to describe the current state of our economy. These are the folks that conveniently overlook Congressional Budget Office and Bureau of Economic Analysis forecasts that tell us--at least as far as unemployment's concerned--we won't be out of this Depression-like trough for another five or six years (at best). These are also the folks that give short shrift at the end of their commentaries (99% of the time), with little more than a closing paragraph or two, concerning the deliberately understated, inconvenient realities of the day, such as the ignored truths of Simon Johnson [SEE: "The Quiet Coup" and the "Two-Track Economy," from April and August of 2009, respectively], and pieces such as this posted by Yves Smith, very early this morning over at Naked Capitalism: "Banana Republic Watch: New York City More Unequal Than Chile."
# # #
(Note: Diarist has received written authorization from Naked Capitalism Publisher Yves Smith to reprint her blog's posts in their entirety for the benefit of the DKos community.)
Banana Republic Watch: New York City More Unequal Than Chile
Yves Smith
Naked Capitalism
Friday, December 17th, 2010 12:34AM
A newly released report, "Grow Together or Pull Further Apart? Income Concentration Trends in New York," by the Fiscal Policy Institute (hat tip reader Thomas R) gives a picture of how New York City is now at Latin American levels of income disparity.
CHART: The top 1% share in NYC and NYS has risen rapidly since the mid-1990s
New York's top one percent has an income share that one and a half times as high as the 23.5 percent historically-high national level....The city used to have a broad middle class, rooted in a vast manufacturing sector and mid-level positions in corporate headquarters as well as in education, government, construction and other good-paying blue-collar jobs. But manufacturing is about one tenth the size it used to be, and the city's labor market has seen the disappearance of thousands of middle-paying jobs and the growth in their place of moderate- to low-paying jobs, mainly in services.
Given its degree of inequality, if New York City were a nation, it would rank 15th worst among 134 countries with respect to income concentration, in between Chile and Honduras. Wall Street, with its stratospheric profits and bonuses, sits within 15 miles of the Bronx--the nation's poorest county.
And if you think that the rising tide of burgeoning financial services profits has improved the living standards of those at the bottom, think again:
The concentration of income growth at the top does not necessarily mean that those below the top are not experiencing real income gains and generally rising living standards... However, over the period from 1980 to 2007 in New York, when total inflation-adjusted income in the state grew an average of 2.1 percent a year after adjusting for population increase, incomes for those in the bottom half of the income spectrum generally declined while those in the middle income range rose but at only a fraction of the pace of total income growth.
In addition, taxes do little to redistribute income:
Because the city has a mildly progressive personal income tax, high-income residents pay a lot in New York City taxes. However, when local sales and property taxes are factored in, it does not appear that high income residents pay more than their proportionate share in local taxes. In fact, as discussed later, they pay a smaller share of income in local taxes than residents in the middle of the income structure.
The reason rising income disparity matters, as we have discussed before, is that highly unequal societies produce poor outcomes on virtually all social indicators - mental health, crime, teen pregnancy, lifespan - to such a degree that it has a negative impact even on those at the top of the foodchain. But no one in the kleptocracy wants to hear that message.
# # #
Krugman has been on a rant over at his blog all week (SEE: HERE, and HERE) about this Orwellian strategy, where vague acknowledgement (at best) is given to greater truths by those whose primary efforts are, in fact, geared towards focusing upon contorted terms and revising history to further the goals of an unbridled status quo.
From his column in today's NY Times, Krugman talks of GOP obfuscation on Capitol Hill and of the ongoing: "Wall Street Whitewash."
Wall Street Whitewash
By PAUL KRUGMAN
New York Times
December 17, 2010
...Last week, Spencer Bachus, the incoming G.O.P. chairman of the House Financial Services Committee, told The Birmingham News that "in Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks."
He later tried to walk the remark back, but there's no question that he and his colleagues will do everything they can to block effective regulation of the people and institutions responsible for the economic nightmare of recent years. So they need a cover story saying that it was all the government's fault.
In the end, those of us who expected the crisis to provide a teachable moment were right, but not in the way we expected. Never mind relearning the case for bank regulation; what we learned, instead, is what happens when an ideology backed by vast wealth and immense power confronts inconvenient facts. And the answer is, the facts lose.
# # #
Then again, all you have to do is look in any nearby dictionary for a definition of the word, "RECOVERY." Stating the obvious, you'll be informed that one of the definitions of the word is derived from the verb, "RECOVER," which means to "cover again."
I live in Westchester County, New York, which is bordered on the south by the Bronx. I'm reminded of our country's economic "recovery" every time I drive or take a train into Santiago...er...um...Manhattan.