...Greenspan thinks it could be. Rich-poor gap gaining attention A remark by Greenspan symbolizes concern that wealth disparities may destabilize the economy. By Peter Grier | Staff writer of The Christian Science Monitor WASHINGTON - The income gap between the rich and the rest of the US population has become so wide, and is growing so fast, that it might eventually threaten the stability of democratic capitalism itself. Is that a liberal's talking point? Sure. But it's also a line from the recent public testimony of a champion of the free market: Federal Reserve Chairman Alan Greenspan. America's powerful central banker hasn't suddenly lurched to the left of Democratic National Committee chief Howard Dean. His solution is better education today to create a flexible workforce for tomorrow - not confiscation of plutocrats' yachts. But the fact that Mr. Greenspan speaks about this topic at all may show how much the growing concentration of national wealth at the top, combined with the uncertainties of increased globalization, worries economic policymakers as they peer into the future. "He is the conventional wisdom," says Jared Bernstein, senior economist at the Economic Policy Institute, a liberal think tank. "When I'm arguing with people, I say, 'Even Alan Greenspan....' " Greenspan's comments at a Joint Economic Committee hearing last week were typical, for him. Asked a leading question by Sen. Jack Reed (D) of Rhode Island, he agreed that over the past two quarters hourly wages have shown few signs of accelerating. Overall employee compensation has gone up - but mostly due to a surge in bonuses and stock-option exercises. The Fed chief than added that the 80 percent of the workforce represented by nonsupervisory workers has recently seen little, if any, income growth at all. The top 20 percent of supervisory, salaried, and other workers has. The result of this, said Greenspan, is that the US now has a significant divergence in the fortunes of different groups in its labor market. "As I've often said, this is not the type of thing which a democratic society - a capitalist democratic society - can really accept without addressing," Greenspan told the congressional hearing. The cause of this problem? Education, according to Greenspan. Specifically, high school education. US children test above world average levels at the 4th grade level, he noted. By the 12th grade, they do not. "We have to do something to prevent that from happening," said Greenspan. So are liberals overjoyed by these words from a man who is the high priest of capitalism? Not really, or at least not entirely. For one thing, some liberal analysts prefer to focus on the very tip of the income scale, not the top 20 percent. Recent Congressional Budget Office data show that the top 1 percent of the population received 11.4 percent of national after-tax income in 2002, points out Isaac Shapiro of the Center on Budget and Policy Priorities in a new study. That's up from a 7.5 percent share in 1979. By contrast, the middle fifth of the population saw its share of national after-tax income fall over that same period of time, from 16.5 to 15.8. "Income is now more concentrated at the very top of the income spectrum than in all but six years since the mid-1930s," asserts Mr. Shapiro in his report. For another, some Democratic analysts believe that Greenspan's emphasis on education as a cure ignores other causal factors of inequity. Data show an income gap widening among college graduates, says Mr. Bernstein. The quality of US high schools has nothing to do with that, he says. Instead it's partly a function of overall monetary and fiscal policies. "Greenspan takes a very long term view of the situation," says Bernstein. On the other hand, some conservatives label the whole inequality debate a myth. The media's recent focus on the subject stems from its liberal bias and clever press management by Democrats, they say. Inequality studies often ignore the wealth created by rising house prices, for instance - and homes represent the most substantial investment by many, if not most, Americans. Nor do US workers necessarily perceive themselves on the losing end of a rigged capitalist game. A recent New York Times survey found that while 44 percent of respondents said they had a working-class childhood, only 35 percent said they were working class today, points out Bruce Bartlett, a senior fellow at the National Center for Policy Analysis. Eighteen percent said they grew up lower class, while only 7 percent said they remained in that societal segment. When Democrats today raise the inequality flag, they are simply trying to attack President Bush's tax cuts, albeit indirectly, says Mr. Bartlett. "A lot of this is driven by the estate-tax debate," he says. And as Greenspan himself points out, by many measures the economy is doing well. Unemployment is down, GDP is up. Inflation still slumbers. Current standards of living are unmatched. "So you can look at the system and say it's got a lot of problems to it, and sure it does. It always has," Greenspan told the JEC last week. "But you can't get around the fact that this is the most extraordinarily successful economy in history." ------------------------------------------------------------------ So, it's already been reduced to talking points in the calcified and illusory Right vs. Left prize fight, but should the gap be a legitimate source of concern for Americans, regardless of their orientation in the Mickey Mouse Clubhouse of sham politics? I believe so. One thing we all prize is stability, and I can't see how a we can expect stability in a situation like this. At some point, the dissatisfied are going to reach critical mass and demand change.
why can't we expect stability in a situation like this? what you say sounds fine but it has no basis. let me ask you this...do you know 10 other people that are so poor and oppressed by the rich masses that they think about looting their possessions? i know no one who even thinks about revolution because they are pissed about how much other people make. if opportunity disappears in america then you have a place where revolution can develop but the bottom line is that opportunity is just as great as ever.
http://www.cnn.com/2005/US/05/10/buffett/ "The rich people are doing so well in this country. I mean, we never had it so good." "It's class warfare, my class is winning, but they shouldn't be." "The rich are winning. Just take the estate tax, less than 2 percent of all estates pay any tax. A couple million people die every year, 40,000 or so estates get taxed. We raise, what, $30 billion from the estate tax. And, you know, I would like to hear the congressman say where they are going to get the $30 billion from if they don't get it from the estate tax. It's nice to say, you know, wipe out this tax, but we're running a huge deficit, so who does the $30 billion come from?" "Well, right now corporate profits as a percentage of GDP in this country are right at the high. Corporate taxes as a percentage of total taxes raised are very close to the low." - Warren Buffett, 6/10/2005
Has no basis? Please don't tell me that you were a history major. recent statistics published by both the New York Times http://www.benadorassociates.com/pf.php?id=15581 and the Wall Street Journal indicate the exact opposite, that economic mobility between various income levels has recently declined for the first time in decades , so your representation of the bottom line being "just as great as ever" is questionable at best and flat out wrong at worst.
god i really hate actually having to take the time to formulate my statements and assertations so they make sense since i am so ******* slow at it. ok well i re-read what he wrote and i just misinterpreted how far he was taking his statements. i put too much emphasis on the critical mass demanding change part and i thought he was implying that this would lead to a socialist revolution where we would overthrow the rich in this country and force them to fix the wealth inequality. that is what i think does not have any basis in reality at the present time or at any point in time in the future unless social and economic circumstances RADICALLY change. and from your link i am more a suscriber to the line of thinking in this statement... when i see a quote like that i can see how someone might just view that as someone who is a dirty conservative who just wants to throw bread crumbs to the poor masses of American society. i can also see it in another light which shows a huge amount of people who have a comfortable living condition and mobility within the middle class of society. while they may never be rich they are still content with a good life and maybe the chance of getting to the top. further your link is more of an argument to change the tax code so that the hyper rich pay all their taxes. perhaps it is more of an argument for a flat tax so that there are no loop holes in the system. it does present the point that the hyper rich are growing fast but it does not show how regular americans are dissatisfied to the point where they want to fix this issue or even punish the hyper rich. do you see my point? there are no signs that show the regular american people are so pissed about this issue that they want to revolutionize the tax code to ensure that these super rich are paying their fair share. i am using this to show that even in the face of growing inequality at the extreme upper echelons of society, which a majority of the america public will never encounter, that stability is not decreasing. show me something that states that the middle class is decreasing and the people from the middle class are sinking into poverty. then maybe i will agree that stability in america is threatened by the wealth gap. also...to say that opportunity is not as great as ever just seems completely opposite from what i see. i guess because i am around a ton of mexicans and latin americans that i see opportunity with them. i see them creating opportunities that they never had for their children and their families. i guess i am just more optimistic like that. [ranting monologue]ok i may have had more than a few holes in what i typed out because i am going very slow today with my logical thinking and figuring out ways to explain it in my head. i didn't really communicate what i wanted to say. this is why i hate typing out these posts. maybe i should just ban d&d, but i do need the practice so my brain doesn't go completely insane and i have a total inability to communicate my convoluted thoughts.[/ranting monologue]
Here's some information from www.factcheck.org (non-partisan) based on Kerry's assertion during the campaign that the middle-class was shrinking. I encourage you to read it yourself. [Please note: I do not support Kerry, or the Democratic party. I'm arguing in favor of people, not political groups].------------------------------------------- The page. There's no standard definition of "middle class," so we looked at households with pre-tax income of between $25,000 and $75,000 -- a group occupying roughly the middle half of the Census income distribution tables. As we noted before, that group grew smaller during the economic recession of 2001 and the initially slow recovery of 2002. Now the new Census figures indicate it continued to decline in 2003, and while this time some of the middle group were moving up , a larger portion were moving down. Moving on Down The table shown here is updated to reflect the latest Census figures, and shows both the one-year change for 2003, and also the three-year change from 2000 to 2003 (covering the period since Bush took office.) The income figures are adjusted for inflation, and shown in 2003 dollars. Since Bush took office, the middle-income group has declined by 1.2 percentage points , and now constitutes less than 45% of all households. At the same time, households with less than $25,000 in income have grown by 1.5 percentage points, and now make up 29% of all households. So a large number of households have slipped out of the middle group and into the lower-income range over the past three years. Furthermore, that process did not stop in 2003 despite the resumption of job growth in September and 4.4% growth in the economy as measured by Gross Domestic Product. The middle-income group lost 0.4 percentage points in 2003. The upper-income group -- those with income over $75,000 a year -- has also suffered since Bush took office, declining by 0.4 percentage points over three years. However, upper-income households bounced back a bit last year, by two-tenths of a percentage point, and now are back at just over 26% of all households. So by this measure, the "middle class" continued to shrink in 2003 , and while some "middle class" households moved to the upper-income group, a larger proportion moved down. (Note: These figures are subject to some rounding error that could make any one of them off by a tenth of a percentage point or so.) Shrunken, Stagnant Income Another indicator: the Census Bureau reported that median household income declined by $63 from 2002 to 2003 , to $43,318. "Median" means that half of all households had more income than that, and half less. Census officials characterized the median income figure as "unchanged" in 2003 because the decline was so small as to be well within the margin of error. But even so, median income has declined by $1,535 since Bush took office , or 3.4 percent. And while the decline leveled off last year and may even be climbing again in 2004, most households are clearly worse off economically now than they were when the President was sworn in. Falling Into Poverty Another indication that the middle class continued to shrink in 2003 is the increase in the number and percentage of persons living in poverty. According to the Census Bureau, the number of people living below the official poverty line grew by 1.3 million in 2003, to 35.9 million. That's nearly 4.3 million more poor persons than when Bush took office , an increase of nearly 14%. ------------------------------------------------------------------------ This is all based on census data. There is more information in the link, some specific to the Kerry/Bush debate, some relevant to this subject.
Here in Texas, the Senate finally succumbed to the business lobby and passed the House version of the State's tax bill that Perry pushed. The only people, besides business, who will benefit are those making over $100,000 a year. If you and/or your family's income is less than that, then you will see your taxes go up. I can't wait to see the spin the state Republican Party leadership puts on that little nugget. Any of you Texas Republicans going to enjoy higher taxes and fewer state services? Toll roads, anyone? We'll be getting a tax cut (we qualify), but I would much rather see the State of Texas run by the sane, not the corrupt, and see our taxes go up. That the entire country is getting screwed as well, unless you are rather well off, surprises me not at all. Keep D&D Civil!!
This guy wouldn't mind a few bread crumbs throwing his way. He is probably entertaining the idea of leading a socialist revolution... ================================================================= Ebbers loses most of assets All but $50,000, house for his wife By Leon Lazaroff Tribune national correspondent Published July 12, 2005 NEW YORK -- Bernard J. Ebbers, the former WorldCom chief executive once worth more than $1.5 billion, will be left with just $50,000 in cash and a modest house for his wife in Jackson, Miss., under a settlement approved by a federal court judge Monday. The proposed civil settlement would strip Ebbers of more than $40 million in assets and require him to pay $5.5 million in cash to a fund for WorldCom shareholders. "Basically we left them with their furniture and the silverware," said Sean Coffey, a lawyer for New York State Comptroller Alan Hevesi, the lead plaintiff in the investor suit and head of the state's Common Retirement Fund. ...
I agree that the trend is definitely observable at this point. I also think that things are going to have to get much, much MUCH worse before anyone will care enough to look into reasonable solutions.
way to take my words way out of any context they were written in. i'm not too sure what you are even implying with that post. if you are implying that this is an example of some sort of way that the poor are striking back against the rich then you are wrong. someone being stripped of funds they acquired thru fraud is not that. or maybe you are implying nothing and just posting something here.
Man, I forgot to include a smiley in my post. I thought it was light hearted enough (if one agrees Ebbers deserves this punishment) not to invoke a serious response. These days tensions are really high.
That's a good point. I wonder if such statistics can be garnered. An influx of poor people into the US would cause some wage depression as well as increase the number of tabulated poor. I suppose any numbers found to prove or disprove the former would be highly subject to debate but the latter should be trackable. IMO - it is very difficult to deny that there does exist a wage-depressing effect when the supply of unskilled labor increases. Of course - this also leads to lower consumer prices.
Lower income families also tend to have more children, so there could be an increase in the ppercentage of people living in poverty simply through differing birth-rates as well.
yeah that happens sometimes when you post stuff online. i guess thats why smilies run rampant online. but i have been more tense lately not too sure why. oh well sorry about that.
Deckard - sorry this is offtopic, but if I remember, you or your wife were connected to or interested in school finance somehow? If so, can you send me an email through the BBS? (I tried you but it said you weren't accepting them)
