1%’ers Get More Bonuses: Increased Annual Income and Bank Regulators Ease Bank Liquidity Requirements

Jan. 2013
With the New Year, we’ve been looking back at the past to try to come up with some good New Year’s Resolutions. Making resolutions generally means looking for what’s less-than-ideal in our lives and formulating plans to change things. While most people examine themselves, we can also examine our living situations. Continuing, good resolutions are generally rooted in careful detailed examinations of the past, and being willing to drop previous preconceptions, instead seeing thing as they are, through the lens of the data of our personal and shared histories.

Unfortunately, in retrospective, the realities of the past few economic years do not offer very promising pictures for the broad economic futures of US Middle Class folks, like myself and our children. Looking back, we find two very different economic stories from the past few decades.

Consider in comparison:
As average Middle Class income was falling, the average 2010 single-year pay inc
reased by 11.6 percent for the wealthiest 1% households.

Break down the data further and we find:
The top 0.1%‘ ers saw their incomes rise by 21.5 percent in just that 2010 single year..

Nice, eh… Middle Class income falls by 10% and …

Also note that those at the top were more likely to “earn” , rather than inherit their riches. This means that these increases were the result not of inheritances, but due to changes in tax policies and changes in regulatory policies that created systems where they caused a $7 trillion crash for the rest of us, as they increased their income – not to mention cutting their taxes while starting 2 wars…. => Fiscally irresponsible supposedly “Capitalist” and “Free Market” policies supported by Bush and the Tea Partiers, were policies that grew the Public Debt by $6.5 trillion due to the unfunded 2 “Wars on Terrorism” while transferring yet more wealth to the wealthy top 2%.   In comparison, consider that Obama’s “stimulus” programs added another $2 Trillion…

So, the Big Lies that Reagan told, and the Big Lies that the Right keeps telling: Claiming that rewarding the rich with lower taxes turns into them creating more jobs are just that:  Big Lies, told over and over….    e.g. Mitt Romney never really created jobs… (except for day-traders and take-over artists). He did manipulate trades and deals to get himself a bankroll of $250 million, with $50 million a year in “investment” returns, while paying only 14.7% taxes vs. 27% Federal taxes paid by Middle Class individuals who actually work and who actually produce things.

Does it really make sense to tax the rich (top 2%’ers) at just 17% average net tax payments to the Federal govt, while plumbers, electricians, and common workers pay an average of 27%.

Why do Middle Class people pay 58% higher tax rates than the wealthy?

Now consider:
~ In the Clinton era expansion: 45 percent of the annual total personal income gains went to the top 1 percent.
~ In the Bush recovery, the 1%’ers took 65 percent of income gains.
~ Under the tax and investment regulatory rules/policies that Obama inherited: the top 1%’ers gobbled up 93 percent of the total income gains.

(These are all official US Census Bureau figures – to allay the concerns of doubters.)

This is yet more evidence that the Big Lie of the Laffer Curve, the Big Lie of Trickle Down economics, and the Big Lies that we should allow the wealthy to have substantially lower tax rates than the rest of us – Where all of these Big Lies should be rejected by Americans, and rejected by the Tea Partiers and other “no new taxes” believers who have been howling “NO TAX INCREASES” for anyone.

Again, the Tea Partiers, Republicans, and Libertarians need to stop supporting the wealthy who have been raiding the public till and the private business tills for the last 30 years.

Yes, the Tea Partiers should be grateful to the few wealthy individuals who have funded the Tea Party movement: The wealthy who have paid for the medium and large Tea Party events.    Still, even though a few wealthy individuals have paid the Tea Party’s bills, individual rank and file Tea Partiers should   work-for   and   vote-for   what is good for the entire country – not for more continued benefits and protections for their benefactors

Why not advocate a fair tax system – where we all pay the same rates?
Yes, we have had the Big Lies of arguing over “progressive tax rates” and “regressive tax rates”, but when 30 years of real world data how that the wealthy actually consistently pay much lower rates than the rest of us, then the arguments against “progressive” tax rates are clearly yet another Big Lie that obfuscates the realities of who is paying and how much they pay…

To my friends who argue “No New Taxes”: The rich have bought off just enough Right Wing common people (including Tea Partiers) and Right Wing politicians to create 3 decades of systems where ultimately the 1%’ers have rewarded themselves with 93% of the income gains, as Middle Class incomes fall, and Tea Partiers and “No New Taxes” pledgee’s march around under banners proclaiming fairness… Their tax system proposals are horribly out of balance, and getting worse. They build ever larger piles of money, and they do NOT invest it in creating jobs.

Me? I think we should:
Follow the money…. Go with the data… Choose reality, over hype and Big Lies….
and….. Choose Ideologies and efforts that actually fit reality.

Address the big and real problems, and ignore the media’s (including Limbaugh) chatter about their pet Big Lies.

Most Recent Data:
Latest reports show that (ironically) Middle Class income dropped very slightly in 2012, while the latest Bloomberg financial reports that the top 1%’s saw another 22% increase in 2012… on top of their  2011 and 2010  10% annual increases.

Hmmmm…    Just found another current report on the fiscal realities of how the rich top 2%’ers have manipulated the systems to their benefit:

“How aggregate income has changed”

http://go.bloomberg.com/multimedia/americas-growing-income-gap-shows-two-recoveries-in-action/

So what do these decades of data show?

The 2 big benchmark events:
1. Reagan’s big changes in government spending and reducing taxes mark the start to a split in the data,   and
2. the end of the Cold War marks another change.

1.   With Reagun’s changes, the pieces were put into place to begin the special rewarding of the rich, while chipping away at the rights of ordinary individuals:  Reagun and Bush the 2’nd really chewed into personal freedoms, and both dramatically increased the “police state” qualities in the USA.   Note how the curves start to separate during Reagun’s “Greed is Good” era.

2.    With these biases set into Govt. policies,  when the large economic benefits due to the end of the Cold War kick-in (along with increases in worker productivity due to computers),  who got the benefits?

Did / Do the worker’s who actually do the work, receive any share of the pie?

Or   do the rich take the lion’s share of the spoils, as they have taken 93% of the last 4 years of income increases?

Consider that these 1%  turkeys  and their crooked regulatory practices:

~ Caused $7 trillion of a fiscal crisis,
~ Crippled real estate values,
~ Crashed Middle Class retirement account values,
~ Caused an unemployment crisis,  . . .

and then after causing all this:  They reward themselves with years of ever bigger portions of the economic recovery:  taking an obscene 93% of the rewards –   as they recruit Tea Partiers and other Right Wing middle class people to “defend their rights”….

New Year’s Resolutions:
Resolution: Write your Congressman and Senators to CUT GOVT SPENDING.

Resolution:  RAISE TAXES even more on those who have NOT paid anything near their fair share for 30 years….

Consider:  The problems of the rich manipulating the tax systems and regulatory systems to benefit themselves have only been getting worse – as they just now got Federal Bank Regulators to AGAIN reduce liquidity requirements for US Banks (lowering the cash reserve requirements on US Banks),   …   all    while they have NOT been creating the new jobs promised by Right Wingers and so-called “Capitalists”, since Reagan’s ultimately-empty promises. Capitalism is not Mercantilism. (Mercantilism = The politicians climb into bed with the rich and powerful – and create regulatory, legal, and tax systems that benefit the rich.)

Resolution:   GET THE US TROOPS OUT of Italy, Bosnia, Kosovo, Germany, Afghanistan, Korea et al… Let them solve their own problems.

Resolution: Stop spending 100’s billions on the US Navy to keep cheap oil supplies flowing to China, Japan, Korea, Indonesia, and Taiwan.

Resolution:   Let them pay to defend their own oil…. US taxpayers also pay to benefit big international companies and foreign govts., while we accumulate bigger and bigger deficits that our children and grandchildren will have to pay, … all so the US wealthy can have basically the lowest tax rates in the industrialized world.

Resolution:   Stop bankrupting the US treasury to reward the rich.

Resolution:   Stop trying to be the world’s policeman.

Whew…..

A HAPPY NEW YEAR to ALL,
steve

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Post Script:
Economic facts on where we could make 2013 spending cuts of at least $1.5 trillion to eliminate deficits:
There is roughly $900 billion in planned 2013 Federal spending on each of 3 departments: the Defense Dept, for Health Care, and for Pensions (SSI?),  out of $3.8 total Federal Govt. budgeted 2013 spending. http://www.usgovernmentspending.com/united_states_total_spending_pie_chart

There will also be $250 billion spent on interest to pay the debt, which makes roughly $3 trillion total of 2013 federal spending on the US Military, pensions, Health Care, and Debt service, out of $3.8 Trillion total.

These simple facts show that to get $1.5 trillion in cuts to balance the budget,     without raising taxes,     we must either
~ Cut pensions (including military pensions and SSI) – which is unacceptable to most people.
~ Cut guaranteed interest payments on our debt – not allowed legally.
~ Cut Health Care spending. or
~ Cut Military spending.

With the existing 120,000 military personnel in friendly safe countries of Germany, England, Japan, and Italy;    with between 700 – 1,200 overseas military installations in over 75% of the world’s countries,     do reasonable people believe that military cuts are not possible or reasonable?

Even if we completely eliminated US federal health care spending ($900 billion), we cannot balance the budget without cutting the Military or raising taxes.

As pointed out in the article above, Middle Class folks have been paying an average of 58% higher tax rates than the wealthy (2%’ers) for roughly a decade – which could mean it is time for the wealthy to pay their fair share or … cut Military spending.

Any alternate proposals on where else to make the cuts???

The economic facts point to Military spending as the most productive area to make cuts, causing the fewest economic impacts???

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© Steven M. Fry

Read on, MacDuff.