Democrats & Liberals Archives

Prosperity for Rich; Depression for Poor

We hear so much about the current Great Recession being almost as bad as the Great Depression. This is not exactly so. For rich people there is NO recession of any kind. For poor people, the depression is WORSE than it was in the Great Depression.

You don't believe this? The Center for Labor Statistics has done an exhaustive study that makes clear that this is so. The study divides the American working population during the 4th quarter of 2009 into ten categories - deciles. Category 1, the lowest decile, consists of those making up to $12,499, and Category 10, the highest decile, consists of those making $150,000 or more.

It found that those in the lowest decile (up to $12,499) had an unemployment rate of 30.8% while those in the highest decile ($150,000 or more) had an unemployment rate of 3.2%. 30.8% is greater than the quarter of the total working population that was out of work during the Great Depression! And 3.2%? That's robust prosperity.

The rich are prospering more than ever before. The poor are living in "a third-world country."

And yet, Congress concerns itself with tax cuts; how much of a tax cut can you give a person who is making $12,500? Congress worries about loans to business; will any businesses receiving such loans hire these poor people? Congress is trying - or at least, it advertises that it is trying - to reduce the deficit; will a deficit reduction bring jobs to the poor?

No. No. No. To bring jobs to the poor that need it most the government must spend big on something like infrastructure programs that require lots of unskilled labor. If we do this, of course the deficit will increase. However, those of us suffering most will benefit. After we build a healthy economy we will be in position to do something about the deficit.

Why does Congress worry so much about credit, mortgages, taxes, investment, and deficits when the crying need is for jobs for non-skilled workers? Why is Congress so concerned with helping the rich who live in wild prosperity and does not seem to care about the poor who are jobless, helpless and homeless?

To solve a problem you must first define it. The problem today is not that we are in a Great Recession. NO. The problem is that those on the bottom of the economic ladder are suffering from the biggest depression in history and the rest of us, the relatively affluent, don't give a damn. If we did, we'd insist on Congress passing a big infrastructure jobs program.

Posted by Paul Siegel at February 15, 2010 7:30 PM
Comments
Comment #295682

Paul,

What are the deltas since 2000 for these deciles?

Posted by: Rob at February 15, 2010 7:52 PM
Comment #295684

Paul

I am surprised that unemployment among the poor was only 30%. You would assume that your income falls when you lose a job. What you have there is a kind of tautology. If you don’t have a job, you tend to have a low income. When you get a job, your income rises.

You are missing dynamism. Most of us have been unemployed. I was and I had no income during that time.

You are right that tax cuts don’t help people who don’t pay taxes and the poor don’t pay taxes when you net their benefits. That also is a tautology.

Your point is misplaced. Indeed raising or lowering taxes doesn’t much affect those who don’t pay taxes. So in your mind that means taxes are not an issue?

Posted by: Christine at February 15, 2010 8:02 PM
Comment #295686

Paul,
Agreed. I lost my job recently. It was no surprise. Now, instead of paying a pretty fair amount in taxes, I’m collecting unemployment. I distinctly receiving a tax cut thanks to Bush and the GOP. Sadly, it was not nearly enough to offset the loss of my job. For the company, the revenue losses caused by the destruction of the economy, especially lack of job creation and outsourcing, played an imortant role. The catstrophic collapse of the economy due to the failure of the banking sector- a failure caused chiefly by deregulation and, essentially, thievery on a colossal scale- well, that was the final straw.

It seems painfully obvious that we face increasing oil prices. A lost decade is virtually certain unless we can redesign American infrastructure away from oil dependency, and towards green energy sources. It seems painfully obvious, whether a person thinks it necessary for national security reasons or to amerliorate Global Warming.

Truly, though, I do not think we are capable of changing. The realization for the need to change will not occur until the horse is out of the barn. It will be too late. For all but the wealthiest Americans the spiral downward will continue. We face the continued decline of the middle class, and the relegation of working people to the working poor, with third world status for most of the population not far behind.

In addition, a portion of the population is actively opposed to change, because they perceive the failure of the country as a way to regain power. They unwittingly represent the power of corporations such as Exxon & Big Oil, the Health Care industry, and other multinationals.

Posted by: phx8 at February 15, 2010 8:18 PM
Comment #295690

Phx8,

This is what drives me nuts. Christine sees it as tautology. Losing your job means you are poor, so unemployment is meaningless. Don’t worry your pretty little head about such things. We need tax cuts for the rich. It’ll trickle down their leg on you.

Christine advocates the short sighted, cheap oil argument. Even Republican T. Boone Pickens sees the fallacy of this argument. Yes, oil is cheap short term. That’s the sucker bet. It enslaves the US. But then Christine thinks service jobs, like McDonald’s and CDO’s from Goldman Sachs are the answer. Don’t worry though, as long as we take the Swiss stance of neutrality and melt down the gold teeth of the Jews, we’ll be just fine.

Why explain monetary policy to the masses as self defensive in nature as long as we have Cheney fantasizing about torture as good policy? Let’s make sadomasochism and Jack Boots a feel good thing.

If the real position of Republican enslavement policy is exposed, it gets kind of scary.

Posted by: gergle at February 15, 2010 8:44 PM
Comment #295695

Gergle

It is the appropriateness of each.

Unemployment is a bad problem and it looks like it will stay bad for a long time. BUT using unemployment to argue for or against tax cuts is just wrong.

re oil - I think we should push up the price of oil. My argument is that as long as oil is cheaper than the alternatives, people will choose oil. People wish alternatives were cheaper. Wishes don’t buy you much in the real world.

Re jobs - I point out a fact that nobody can deny. Manufacturing jobs have been disappearing if/even when total production is going up.

Even if we produced 3x as much steel as we did a generation ago, we would need fewer steelworkers to make it because of technology improvements.

If you want to enslave people, keep them working at the dirty old levels or technology.

Posted by: Christine at February 15, 2010 9:33 PM
Comment #295702

Christine,
Manufacturing is not slavery. While it is true new technologies can bring about efficiencies and increased productivity, we’ve gone one step further: we have exported the technological jobs that permitted the efficiencies in the first place. In addition, efficiencies and productivity are not the be all and end all.

Low level manufacturing jobs can still be profitable right here in the US, and permit workers to make a living wage. Nike, for example, exports shoe manufacturing to southeast Asia. There is no reason those shoes cannot be profitably manufactured in the US. Decades ago, the textile industry was exported; once again, it could have been produced profitably here.

Manufacturing is essential to the health of the economy. Otherwise, we’ll be left with nothing but ‘service’ industries and corporations like Goldman Sachs, ‘a vampire squid sucking on the face of humanity.’

Posted by: phx8 at February 15, 2010 10:15 PM
Comment #295703

phx8

I have no problem letting people do whatever types of work they choose. I recognize that using old technologies may add to costs. Sometimes the trade off is worth it. But I don’t think anybody really wants to go back to the way the made steel or mined coal fifty years ago.

Even if Americans chose to do everything the way we did fifty years ago, we cannot stop others from changing.

The Japanese tries that and they were surprised how far they had fallen behind when Commodore Perry sailed into their harbor. The Chinese tried to turn the clock back early in the 20th Century. It didn’t work. Mao tried to do the “simple tech” and millions literally died. They learned their lesson. Do we have to suffer as much to learn ours.

Posted by: Christine at February 15, 2010 10:22 PM
Comment #295707

Christine,
There is no need to turn back the clock. Technologies will inevitably cause job losses and new idustries will arise. In that regard, capitalism is a very successful philosophy. The problem comes about when outsourcing undermines wages and job creation, and that is the position we are now facing. Wages have remained flat for most people or actually declined. The situation with jobs is just terrible. And yet, corporations continue to make profits and increase productivity at the direct expense of working Americans. If the goal is to create a deflationary spiral, and make American workers poorer and poorer, then we are certainly on the right track.

This is what makes infrastructure investments so criticial. Government led initiatives can create jobs in America, because only the federal government is large enough to provide the enormous amounts of capital, financed by- you guessed it- taxes, and additional deficits.

That is a frightening proposition, given the current situation. It really is. However, the alternative is worse, action is necessary right now, and time is of the essence. Even if we embarked on large scale spending on infrastructure and all of the job creation & expansion of the tax base it would entail, it will be somewhere between 2017 and 2019 before we get back to where we were when Bush took office in terms of jobs, and that assumes a rate of job creation the same as during the Clinton years.

What makes it especially aggravating is that the GOP is doing everything possible to prevent such action. At a moment when time is of the essence, the GOP is doing everything in its power to prevent action. The Republican party wants the country to go into the tank, because they see obstructionism as a way of regaining power, and promoting their own corporate interests.

Today I caught a few minutes of Limbaugh, and it was crazy. He seriously argued that Global Warming was a worldwide conspiracy foisted upon the world by scientists, in order to foster socialism. It was nuts. It was not, however, surprising. McConnell represents the coal interests of KY. Inhofe represents oil in OK. The GOP is doing everything possible to prevent re-regulation of the banking sector, despite the disaster caused by that sector. Again and again, we see corporate interests destroying the interests of the American people through the instrument of the GOP and ‘moderate’ Democrats. Speaking of insanity, the so-called conservative SCOTUS judges recently ruled that corporations could invest as much as they wanted in elections as a matter of people exercising free speech.

Nice rant, eh?

Posted by: phx8 at February 15, 2010 10:52 PM
Comment #295712

Paul

“Your point is misplaced”

—Christine

“Let them eat cake.”


—Marie Anttonette

Posted by: bills at February 15, 2010 11:51 PM
Comment #295715

Paul
Let’s start calling it what it is,the Republican Recession. They did it. It was they that de-regulated and failed to oversee the financial and mortgage industries. It was their anti worker polices that drove and kept wages,flat,at best. People that earn enough do not have a problem making mortgage payments. It was they that pushed for unfair trade agreements with no mention of labor rights. It was they that controlled all branches of the federal government for the last eight years and now we all have to bear the burden of repairing the damage that they,with their bizarre,self serving greed masquerading as some sort of idealogy has brought to the country and the world. The Republican Recession!
Watch the blame shifting attempt. Lets blame the Freddie,Fannie and the community redevelopement act for the bubble. Of course lets not look at the exact same bubble occuring in commercial real estate that has absolutly nothing to do with Fannie,Freddie or the community redevelopement act. Lets not look at the bone head policy that allowed banks to bet other peoples money to make the short killing that let them take home millions for themselves,at a low tax rate BTW, and lose billions for the rest of us.Instead ,what we hear is allegiance to the failed and discredited supply side myhtology that got us in to this mess.They won’t learn because their greed won’t let them.Won’t cut it. Its the Republican Recession.They are so fond of spouting off about the poor needing to take personal responsibility. Now its their turn. Come on,show us poor working class slobs a good example. Take the blame and help repair the damage, or at least get out of the way.

Posted by: bills at February 16, 2010 12:18 AM
Comment #295722

Phx8

re climate change - this is another example of an inappropriate response. We have a real problem of climate change, but the response is more like an international redistribution plan. We should stick to solving the environmental challenge.

Bills

The same goes for Paul’s use of tax cuts and unemployment. They are not related in the way he puts them. He essentially states that you cannot get a tax cut if you don’t pay taxes. That is true, but not useful.

If you are doing all the work and I am sitting on my rear watching you, it is disingenuous for me to complain that allowing a rest-break is an unfair gift to you.

Posted by: Christine at February 16, 2010 1:41 AM
Comment #295724

Christine
“If you want to enslave people, keep them working at the dirty old levels or technology.”

You have been hitting on productivity advances a bit. You are ignoring the most important aspect. Usually wages have kept at some level of parity with productivity. They have not and they have not entirely as a result of anti-union,anti worker policies put in to effect by the Republican Party. Had wages even been allowed to advance anywhere close to the productivity advances the economy would not be in the shape it is in. There would be less crime. Families would be able to afford having one parent stay home to care for the children. College educations would not be out of reach etc.etc. Instead we adopted schemes that redistributed the bulk of the increased wealth from those that actually created it to the parasites at the very top. Then we gave them tax breaks!Supply side economic cultist have brought the country to its knees.
Just what are the people displaced by productivity advances supposed to do? They can’t afford to care for their children. They can’t afford to go back to school.They can’t even afford health coverage.More typical‘“Tough luck for them’” Republican reasonning? Maybe they should just drop dead to preserve the inheritance tax.

Posted by: bills at February 16, 2010 2:07 AM
Comment #295726

Bills

Crime has been dropping since the early 1990s. It has dropped again since the great recession. Crime is not closely tied to the economy. It went down during the Great Depression. It went up during the boom times of the 1960s. It went down during the boom times of the 1990s. It went down during the brief recession in 2001-2. It went down during the boom from 2003-7 and it went down during the recent downturn.

More people are in university in the U.S. than at any time.

Posted by: Christine at February 16, 2010 2:18 AM
Comment #295741

Percentages of crimes per capita hit its peak during the Reagan/BushI years (1980-1990), so maybe it isn’t the economy that triggers bad behavior, but rather bad behavior that triggers bad behavior?

Posted by: Marysdude at February 16, 2010 11:17 AM
Comment #295745

Dude
Cute

Christine
You did not answer my question or address where all the wealth went from all this production increase.
More people in universites? There are more people. What is the percentage comparison. More people voted for Al Gore in 2000 than had ever voted for a presidential candidate. There was more people. You know this. Is that one of those squishy Heritage foundation numbers that don’t stand up to scrutiny? Sorce please.

Posted by: bills at February 16, 2010 11:50 AM
Comment #295753

For 99% of the people “Trickle Down” was a dismal failure. For the other 1% it was an unqualified success. It just depends on your point of view. Wake up tea baggers we’ve already had the redistribution of wealth.

Christine —- Some of those one tenth of one percent on the top never did an honest days work in their life. I’m tired of listening to Republicans talking about the poor people who are too lazy to work.

Posted by: Mike the Cynic at February 16, 2010 1:53 PM
Comment #295763

Mike

I don’t like idle people, rich or poor. But reconnize that some of the rich are lazy doesn’t change the fact that some of the poor are poor because they are lazy.

Posted by: Christine at February 16, 2010 3:49 PM
Comment #295764

Bills

You can look up the numbers on Wikipedia and other places - http://en.wikipedia.org/wiki/Educational_attainment_in_the_United_States

Posted by: Christine at February 16, 2010 3:53 PM
Comment #295768

There are lots of reasons for poverty other than it is George Bush’s fault.

If Paul would run the same numbers only screen for job skills or years in the education system, you would get the same basic result. Unemployment rate is far lower among those with job skills and higher education.

Also if you run the same numbers and search for marriage you will find that those at the top are married with two earners. Generally those at the bottom are unmarried with one earner. So marriage and number of wage earners in the family has a dramatic effect on poverty.

I know there are multiple exceptions. (Can see the comeback about how “I was laid off and I am married”) but generally looking at the whole picture, those at the bottom have less education, fewer job skills and are single. Those at the top have more education, more skills and are married with more than one wage earner.

You can also measure by hours worked per week. Those at the top tend to work many more hours in a week. Those at the bottom put in far fewer hours on the job. It is common for those at the top to put in 50 or 60 hours a week, and those at the bottom to put in 20 or 30 hours a week.

At the bottom one earner, single few job skills working part time. Those at the top tend to be married with college degrees, two wage earners working more than 40 hours a week.

The key to helping those at the bottom is job skills. The only true way to help them is to improve their skill level.

Posted by: Craig Holmes at February 16, 2010 5:38 PM
Comment #295770

Craig said: “There are lots of reasons for poverty other than it is George Bush’s fault.”

True enough. Poverty has been increasing steadily nearly every year since 1959 in raw numbers of individuals and families. That is a product of population growth as much as any other factor.

One of a host of causes often overlooked was the emptying of our psychiatric hospitals and abandoning state run psychiatric facilities for drug therapy instead. An abysmal failure for patient’s whose illnesses deny them the ability to acquire or maintain their medication regimen.

It is no accident that so many of our Veteran’s are homeless, given the psychological stresses and maladaptive behaviors that develop to combat those stresses. Prescriptions are often not their medication of choice, and their ability to make sound decisions lies at the core of their illness. The result is homelessness out of the reach of the VA and help that is there if they only had the ability to make sound choices.

Attempting to blame poverty on the actions of one president over 8 years is a woefully inadequate assessment of such complex and intractable problem in the context of a rapidly growing population, a significant part of which begins life in America in poverty to begin with.

Posted by: David R. Remer at February 16, 2010 5:57 PM
Comment #295776

David:

I agree with your post.


I would be thrilled to be corrected. However the only true way I know of to help the poor is through improving job skills.

I think we should reflect on this as we allocate our state and federal budgets.

Posted by: Craig Holmes at February 16, 2010 8:33 PM
Comment #295795


There are contributing factors to being poor and some have been mentioned here. Lazyness, mental illness and or substance addiction are contributing factors but they are not exclusive to one class.

We should not lose sight of the fact that the majority of those who are considered poor work every day and if many of them weren’t receiving government assistance they would be a lot poorer than they are.

If the other classes had endured the same hardships as the Lower Working Class and the Blue Collar Working class from globalization and the current recession they would be far more scared than they are now and they would be absolutely furious. Big changes would be in the wind and if Republicans and the Democrats rightwingers tried to hold their ground as they are now, they would be politically massacred.

Posted by: jlw at February 16, 2010 11:44 PM
Comment #295802

Looks like somebody is getting a bit pissed off at
Wall Street arrogance:

http://www.reuters.com/article/idUSTRE61F4JS20100216

While Ben Stein has said some very stupid things of late, I liked this editorial he did.

http://www.nytimes.com/2006/11/26/business/yourmoney/26every.html?ex=1322197200&en=0cf877b05b918674&ei=5090&partner=rssuserland&emc=rss

Posted by: gergle at February 17, 2010 1:23 AM
Comment #295806

Paul,

Conservatives have warned since time immemorial that this is what happens when you raise minimum wage rates and otherwise burden the growth of small businesses with undue regulations and labor cost burdens. Democrats in public office don’t really care how these burdens damage their consitituencies, though, because their very poor constituents still interpret these predations as largesse. The same thing happens in drug-infested neighborhoods, where the dealers who sow devastation by the distribution of their wares are seen as powerful and respected.

It happens for the same reasons, too. The Democratic Party in this country deals in addiction and palliatives.

Posted by: Lee Jamison at February 17, 2010 7:37 AM
Comment #295816

undue is a mighty big word, Lee.

Posted by: gergle at February 17, 2010 12:19 PM
Comment #295834

I wonder if someone who is living in poverty has a hard time relating to a raise in minimum wage as being the culprit…

Us damned Democrats just never understood why, since minimum wage is only enforced at the twenty-five empolyee level, someone would complain about making less millions at the expense of someone being able to feed their child. What kind of jerks does that make us out to be?

Posted by: Marysdude at February 17, 2010 4:08 PM
Comment #295835

Marysdude:

On the minimum wage. I would rather focus on what I know works to help the poor. Increasing their job skills.

Posted by: Craig Holmes at February 17, 2010 4:41 PM
Comment #295842

Craig,

I’m for raising taxes to do that…are you?

Posted by: Marysdude at February 17, 2010 6:17 PM
Comment #295843

PS: It takes a very minimum skill set to achieve minimum wage. If those who are making it now are trained to do better, do we then import labor from South of the border to do the minimum skill jobs? A living wage is just that…if you work for a living, you should be able to live. This ain’t rocket science people.

Posted by: Marysdude at February 17, 2010 6:21 PM
Comment #295857

Marysdude:

No I am not for raising taxes to pay for improving job skills of our young and low income.

I am for changing our budget system to GAAP. then I am for cutting the deficit through cutting future retirement benefits by delaying retirment and then using those dollars to help pay for improving job skills.

This kills two birds with one stone. It helps reduce future deficits by both cutting expenses and raising future revenue by increasing the amount of wages and thus higher amounts to tax.

Raising taxes is money down a rathole in that current spending is increasing so fast that it will bankrupt our country no matter what the tax rate.

Posted by: Craig Holmes at February 17, 2010 11:28 PM
Comment #295938

Craig,

Just how much ‘skill’ does it require to survive in our service oriented society? If you want to raise the retirement age, I can follow many reasons for doing so, but to provide funds to teach folks how to flip burgers ain’t one of my favorites.

If those funds were used to facilitate bringing back some manufacturing to our shores, I might think it worthwhile, but I’m reasonably sure even that would not help much, because those manufacturers would likely be so highly mechanized and eloctronicized as to be almost useless for jobs.

I see no way out of this mess until or unless we reform health care, and only then if we include a vitally needed ‘public option’. A reformed health care system might delay the demise of Social Security and Medicare, and save our economy far into the future. Tax increases on the middle class won’t help because we are losing the middle class at an accelerating rate, tax increases on the poor is just dumb, so any increases will have to be on your precious top ten percent. Tax decreases have proven to be more harmful than helpful, so we are left wishing in one hand and pooping in the other and guessing as to which one fills up first.

Posted by: Marysdude at February 19, 2010 12:12 PM
Comment #295958

Marysdude:

The whole point is to give them the skills so they don’t have to “flip burgers” for a living, as you say.

I agree that we need to radically reform our medicals system.

Posted by: Craig Holmes at February 19, 2010 9:53 PM
Comment #295959

Craig,

Does that mean the burgers will have to learn to flip themselves?

My point is that no matter the skill level…if you work for a living, you should be able to live because you are working for a living. No one should exist in absolute poverty if they are willing and able to do a job that someone else wants or needs done…it’s called a living wage.

Posted by: Marysdude at February 19, 2010 10:26 PM
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