The Wealth Gap: Chickens, Pots, and the American Dream

Regardless of how the economy is doing it seems the super-rich come out ahead. The rest of the nation, not so much.

If you’re on the lowest economic rung you might as well just step off now, because your life is getting steadily worse – even if you’re only there “temporarily” while you’re laid off from a job that’s not coming back, waiting for the foreclosure notice, or for the repo-man to come for your car or first-born child – whichever fetches the most money. You folks living in homeless encampments have no worries at all, malnutrition and illness will kill you off soon enough. And hey – no death panels to worry about thanks to the reforms of the healthcare reforms!

You folks in the middle? Sure, you have to work two or three jobs but the foreclosure notice hasn’t arrived yet. You’ll squeeze another 50,000 miles out of your AMC Gremlin, while choosing which meal to forego to pay BP for $3.00 per gallon (and rising) gas. Yes, you’re worried about a leak in the roof, but you’ll cover it with a cheap tarp. Besides, if it causes damage it won’t be your problem when your friendly CitiBank “wealth manager” breaks drops in to get the key.

His house. His leak.

The Express Elevator to Fabulous Wealth
But those folks on the top? They’re not even on the ladder anymore. They’ve  jumped in a plush, express elevator that goes so high it doesn’t even have up buttons. However, they keep the elevator operator because, well, why not? He tells good jokes and they can afford him.

Many people think this outsized upper-end income growth is just fantastic. It’s the American way they say. It’s what the free market dictates they explain. Besides, they can’t be expected to “compete” with Chinese prison labor without the “efficiencies” (layoffs and declining wages) for which they’ve so handsomely rewarded themselves. Oddly enough, this view happens to be most prevalent among those who are making the big bucks.

Who could’ve guessed?

But as the folks in the newly remodelled corner offices take off for their Aspen homes via private dirigible, the US wealth gap grows and their inflated sense of self-worth shines like a new Maserati.

The World According to Greenspan
You hear about the wealth gap sometimes, mostly from those “liberal” media outlets like the Wall St. Journal. But now even Ayn Rand‘s evil spawn, Alan Greenspan, is sensing a little irrational exuberance in the wage disparity.

He understands that when the proletariat complains about The Suits’® penchant for uber-high living and not having a clue about what the average American puts up with, it’s more than just a case of sour grapes. He can see that if we expect to put a chicken in every pot, we need someone to grow the grain to feed the chickens and make the pot in which to cook them. Today, many don’t even have the pot left to piss in and they get their chicken on KFC’s liver and gizzards night.

The thing is that Ayn Rand and hundreds of executives notwithstanding, we’re close to killing the chicken and that’s bad for 100% of workers. The market for chickens and pots is pretty small when it’s restricted to the Top 1 Percenters®. But, the other 99%? Now that’s a big market, but nobody’s going after it except the Top 1 Percenters® who are the only ones left with enough cash to make the weekly chicken and pot-buying trip to the Super Wal-Mart.

Dear rich and powerful persons, feast well because you’re steadily choking your own chicken.

Cross posted at The Omnipotent Poobah Speaks!

 

 

 

The Wealth Gap: Chickens, Pots, and the American Dream

Regardless of how the economy is doing it seems the super-rich come out ahead. The rest of the nation, not so much.

If you’re on the lowest economic rung you might as well just step off now, because your life is getting steadily worse – even if you’re only there “temporarily” while you’re laid off from a job that’s not coming back, waiting for the foreclosure notice, or for the repo-man to come for your car or first-born child – whichever fetches the most money. You folks living in homeless encampments have no worries at all, malnutrition and illness will kill you off soon enough. And hey – no death panels to worry about thanks to the reforms of the healthcare reforms!

You folks in the middle? Sure, you have to work two or three jobs but the foreclosure notice hasn’t arrived yet. You’ll squeeze another 50,000 miles out of your AMC Gremlin, while choosing which meal to forego to pay BP for $3.00 per gallon (and rising) gas. Yes, you’re worried about a leak in the roof, but you’ll cover it with a cheap tarp. Besides, if it causes damage it won’t be your problem when your friendly CitiBank “wealth manager” breaks drops in to get the key.

His house. His leak.

The Express Elevator to Fabulous Wealth
But those folks on the top? They’re not even on the ladder anymore. They’ve  jumped in a plush, express elevator that goes so high it doesn’t even have up buttons. However, they keep the elevator operator because, well, why not? He tells good jokes and they can afford him.

Many people think this outsized upper-end income growth is just fantastic. It’s the American way they say. It’s what the free market dictates they explain. Besides, they can’t be expected to “compete” with Chinese prison labor without the “efficiencies” (layoffs and declining wages) for which they’ve so handsomely rewarded themselves. Oddly enough, this view happens to be most prevalent among those who are making the big bucks.

Who could’ve guessed?

But as the folks in the newly remodelled corner offices take off for their Aspen homes via private dirigible, the US wealth gap grows and their inflated sense of self-worth shines like a new Maserati.

The World According to Greenspan
You hear about the wealth gap sometimes, mostly from those “liberal” media outlets like the Wall St. Journal. But now even Ayn Rand‘s evil spawn, Alan Greenspan, is sensing a little irrational exuberance in the wage disparity.

He understands that when the proletariat complains about The Suits’® penchant for uber-high living and not having a clue about what the average American puts up with, it’s more than just a case of sour grapes. He can see that if we expect to put a chicken in every pot, we need someone to grow the grain to feed the chickens and make the pot in which to cook them. Today, many don’t even have the pot left to piss in and they get their chicken on KFC’s liver and gizzards night.

The thing is that Ayn Rand and hundreds of executives notwithstanding, we’re close to killing the chicken and that’s bad for 100% of workers. The market for chickens and pots is pretty small when it’s restricted to the Top 1 Percenters®. But, the other 99%? Now that’s a big market, but nobody’s going after it except the Top 1 Percenters® who are the only ones left with enough cash to make the weekly chicken and pot-buying trip to the Super Wal-Mart.

Dear rich and powerful persons, feast well because you’re steadily choking your own chicken.

Cross posted at The Omnipotent Poobah Speaks!

 

 

 

Weekly Audit: Attack of the Imaginary Budget Demons

By Zach Carter, Media Consortium Blogger

On Feb. 1, President Barack Obama unveiled his 2011 budget proposal. While conservative pundits reacted with predictable, yet preposterous, wailing about the federal budget deficit, the short-term U.S. budget outlook is just fine. If anything, Obama’s budget doesn’t dedicate nearly enough funding to create jobs.

As John Nichols notes for The Nation, Obama budgets just $100 billion for jobs in fiscal 2011. The amount is nowhere near enough to make a significant dent in the epic unemployment rate. The government’s fiscal 2011 calendar begins in October of this year, and by that time, the stimulus package Obama pushed through in February of 2009 will have been exhausted, leaving the labor market without serious support from the federal government.

The free market isn’t going to take care of the jobs shortage on its own. While the unemployment rate fell from 10.0% to 9.7% during January, the “improvement” is really just a statistical mirage—the economy actually lost 20,000 jobs during the month.

If we had pushed through a bigger, or as Nichols notes, a better stimulus package in the first place, we might not be facing the same situation today. Part of the problem is that Obama redirected about $326 billion of the $787 billion bill away from direct job-creation efforts toward a set of tax cuts intended to appease Republican senators.

Tax cuts do not equal job growth

But as Art Levine emphasizes for Working In These Times, the $100 billion that Obama sets aside for job creation in 2011 appears once again to take the form of relatively inefficient tax cuts. Giving money to businesses, even small businesses, isn’t really going to make them start hiring unless there’s a real demand for what those businesses produce. When everybody is broke and out of work, that demand doesn’t exist, since people don’t have money to spend.

If the government wants to create jobs, it has to do it directly by hiring people to help rebuild the nation’s infrastructure through institutions such as schools, transportation and green energy. Just as important, the federal government can provide funding to state and local governments to make sure that jobs that serve our communities—teachers, cops, etc.—don’t disappear.

Sure, these things cost money. But the short-term budget deficit is nowhere near the current deficits of many European nations, or the deficits the U.S. ran during World War II. The budget deficit only matters to economics insofar as it raises concerns that the government will not be able to pay back its debt. But despite caterwauling from the right, investors just aren’t worried about a U.S. debt default. If they were, they would demand very high interest rates on Treasury bonds, and Treasury rates are at their lowest levels in decades.

If policymakers want to keep the jobs bill from running the deficit higher, they could always raise taxes on somebody. Financial speculation on Wall Street seems like a good place to start, but just about any tax on the wealthy would work fine. Rich people don’t get hammered by recessions. After all, they’re rich.

Overzealous tax cuts hurt communities

In a piece for AlterNet, David Sirota details the budgetary disaster that has already befallen the city of Colorado Springs, CO., a conservative enclave where anti-tax extremists have managed to slash just about every basic government service imaginable. Rather than impose some modest taxes on the wealthy, Colorado Springs is going to lay off cops and firefighters, let its parks go to waste, shut-down rec centers and museums and even allow its streetlights to go out. This is the Republican plan for fiscal responsibility.

But several state governments recognize that shredding the social fabric just isn’t a good idea. In Oregon, Sirota notes, voters just approved two ballot initiatives to raise taxes on corporations and wealthy individuals rather than allow their state to slide into social decay.

How to deal with a deficit

There are two ways to increase a budget deficit: You can either increase spending, or cut taxes. If you want to decrease the budget deficit, you can either cut spending, or raise taxes. As Kevin Drum notes for Mother Jones, Republicans both increased spending and cut taxes during the George W. Bush presidency. Now those same so-called fiscal conservatives are feigning outrage over the prospect of the government actually spending some money to put people back to work. These are not serious economic arguments—conservative politicians are just hoping to gut progressive policy priorities.

But while the attacks don’t hold any water, conservative media outlets are latching on to them, and Obama isn’t pushing back.

What caused the current crisis

Writing for The American Prospect, Robert Kuttner notes Obama’s recent support for a proposal from right-wing deficit hawks to create a commission to evaluate the causes of our so-called fiscal crisis. But we already know what put us in the current fiscal situation: Rising health care costs, a brutal recession, and the Bush era. The commission is being pushed by radical conservatives for a reason—it’s part of an effort to gut Social Security. It’s bad economics, bad public policy and it badly misreads the real source of public discontent. Kuttner explains:

“Public concern about deficits is really a proxy for broader unease that government is not delivering enough practical help . . . . The president should be helping citizens sort this out, not caving in to the fear-mongers.”

Fortunately, as Steve Benen notes for The Washington Monthly, Senate leaders appear committed to passing at least some kind of legislation to help put people back to work.

Whatever right-wing pundits say, the U.S. fiscal crisis remains a totally theoretical problem. Someday, if the U.S. budget does not come down, it is conceivable that investors would be reluctant to purchase U.S. debt. For now, that is simply not the case. But the crisis in the job market is very real and requires direct action. Put simply, the deficit is no excuse for inaction.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

The Problem with Profits; Katie Meacham's story

A small story appeared in the New York Times recently that few nationally are likely to have noted. It was published on page MB1 of the New York edition, not exactly high profile placement for a national newspaper, but what it covers should be central to the national debate going on today about health care in America:

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No more bailouts for factory farms

If your widget factory produces too many widgets, you will be stuck with extra inventory, affecting your bottom line.

In contrast, if your factory farm contributes to excess production of pork, high-level elected officials will ask the federal government to bail you out.

I learned from Iowa Citizens for Community Improvement today that last week nine governors, including Iowa's Chet Culver,

requested $50 million of taxpayer money from the U.S Department of Agriculture (USDA) to buy over-produced pork off the market.  This follows similar requests made by the National Pork Producers Council in early May and Iowa Secretary of Ag Bill Northey in June.

The hog factory industry, though, has received two recent taxpayer-funded bailouts from USDA -- one for $25 million in March 2009 and the other for $50 million in April 2008 -- to buy over-produced pork off the market. [...]

Ag economists have warned for months that the pork industry must stabilize prices by trimming the fat and reducing the herd size.  But the pork industry has ignored basic economic rules and continues to increase supply as demand goes down.  This is the result of continuous government subsidies and bailouts to the factory farm industry.

"Corporate ag receives government subsidies and guaranteed loans that promote the expansion of factory farms on the front end," said CCI member Lori Nelson of Bayard.  "And then, when they produce too much pork, they ask the government -- that's us -- to bail them out with huge amounts of taxpayer dollars. The factory farm industry is a house of cards that would crumble as soon as you take away taxpayers propping them up."

The governors of Nebraska, Colorado, Michigan, North Carolina, Wisconsin, Kentucky, Illinois and Oklahoma joined Culver in signing the appeal for federal aid. According to DTN/The Progressive Farmer, "Representatives from the Iowa and the National Pork Producers Councils, Tyson Fresh Foods, Hormel Foods and Paragon Economics support the letter's three proposals for aid."

I've posted the full text of Iowa CCI's press release at Bleeding Heartland. There's no reason to exempt corporate agriculture from basic laws of supply and demand. Taxpayers already pay too much to subsidize factory hog farms, not to mention the hidden environmental costs of air and water pollution.

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Diaries

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