Friday 19 August 2011

All the rich are not billionaires

Two plus two doesn't equal five. Seems obvious; it's a no brainer, right? Heck, I'm sure even Forest Gump would get that one. However, when you enter the political arena, all bets are off. Two plus two can be made to equal five. If anybody says two plus two equals four, they could find themselves branded a socialist or worse. Hitler said two plus two equals four and we all know how bad he was so if you say the answer is four, I say you're anti-Semitic and denying the Holocaust.

At this point, you may be smiling or giving a little chuckle while thinking that I'm being funny and will to go on to write some hilarious comments about government. Who doesn't laugh at stupidity? However what if I'm serious? What if the issue I'm trying to describe isn't about stupidity being funny but about stupidity being institutionalized, idolized and raised to the heights of blind worship as the lemmings follow one another over the cliff?

The Daily Show - Aug 18/2011
Granted, this television show is a comedy show. But as the host Jon Stewart likes to say himself by leaning into the camera, "We don't have make a joke here. We're not making this up." because the story itself is so absurd, it defies belief.

In the August 18th episode, Mr. Stewart talks about the "uneccentric" billionaire Warren Buffett and his op-ed piece in the New York Times "Stop Coddling the Super-Rich" where he states that he and his other mega-rich friends have been coddled long enough and should be paying their fair share in taxes. In a clip of Buffett, he makes the statement that his tax rate is less than his cleaning lady.

USA: The Comedy Network: The Daily Show

Canada: Comedy Central: The Daily Show

Mr. Stewart goes on to show clips from various media outlets, conservative media outlets like Fox News, which label this "class warfare". Neil Cavuto of Fox News says, and I quote, "Class warfare from the affable billionaire Warren Buffett who should stop assuming that the rich are all billionaires." Another commentator asks, "Is he completely a socialist?"

Stewart certainly milks that last line for a lot of laughs. The second richest man in the U.S., the third richest man in the world is a socialist. "You really haven't got a f**kin' clue what socialism is, do you?" Stewart goes on to mock the Fox news commentator by saying with a Brooklyn accent, "Hey that George Clooney always bangin' different broads. What a queer."

Now what follows is the most amazing illogical reasoning I have seen in a long, long time. Critics go after the idea of raising the marginal tax rate on the top 2% of the rich by saying that this would not solve the debt crisis of the United States. Such an increase has been estimated at providing an extra $700 billion over the next ten years but is dwarfed by the U.S. debt currently standing at $14.5 trillion dollars with a 2011 deficit of $1.3 trillion (About.Com). However the same people turn around and say that 50% of Americans pay no tax and "that hole" needs to be plugged. Note that the emphasis is on the idea of people paying no tax and at first glance, that seems like a huge injustice in the system. After all, why go after those who are already paying taxes? Why not go after those who are not paying taxes?

Stewart goes on to point out the facts. 50% of Americans own 2.5% of the wealth in the U.S. or $1.45 trillion. These people are for the most part so poor, they pay no taxes because they earn nothing or next to nothing or they earn so little tax credits for the poor reduce their taxable income to nothing. However Stewart now points out the big joke by saying that if you took half of everything these people own, that is, half of $1.45 trillion, you would end up with $700 billion, the same amount of money you would get if you implemented the proposed increase of the marginal tax rate on the top 2% of the rich.

The Business Insider provides a chart which graphically shows that 50% of the American population own only 2.5% of the wealth in the country.

The Business Insider goes on to analyse Mr. Buffett's op-ed piece.

When presented with these facts, those who argue against tax increases on the super-rich--or, even more absurdly, for more tax cuts--often point to President Ronald Reagan, observing that his tax cuts for the wealthy helped usher in a long economic boom.

This ignores the point that Reagan also raised taxes. And it ignores how high tax rates on super-rich people were when Reagan cut them: In 1980, the top bracket was a startling 70%. It also ignores how Bill Clinton raised taxes and took the US budget from the perpetual deficits of the Reagan years to a surplus. It ignores how George Bush's tax cuts helped plunge the budget back into a deficit and lead to the worst recession since the Depression. It ignores how the US prospered all through the 1950s and 1960s, when marginal tax rates were super-high. And so on.

In short, it ignores almost all the economic data we have. And it appears to be based on a rigid ideology--almost a religion--rather than common sense.

Ignore economic data. Based on a rigid ideology rather common sense. Reagan gives tax cuts: the perpetual deficits of the Reagan years. Clinton raises taxes: surplus. George Bush cuts taxes: plunge the budget back into a deficit and lead to the worst recession since the Depression. I can't help thinking that even Forest Gump would be able to see this one.

But let's come back to this idea of a "rigid ideology". Notice how the conservative media use buzzwords like "class warfare" and "socialism". Notice how the conservative media focus on the idea that 50% of Americans pay no taxes. But, but, but the "no tax" refers to federal income tax and the statement in no way looks at what taxes anybody would be paying elsewhere at a state level or a municipal level. However the most important point left out of this rhetoric is that these 50% of Americans are the poorest in the country. The poorest! Stewart comically adds, "Ya hear that poors? The free ride esta over. So it looks like you'll be walking to work... assuming you have a job. Chances are you don't have a job."

I repeat: the poorest 50% of Americans only own 2.5% of the wealth in the U.S. Is anybody asking who owns the other 97.5% of that wealth? The conservatives don't stop there though. They go on to push the idea that in America, everybody can work hard and get rich or sit idly on their duff and do nothing. Yep, those poor 50% of Americans are a lazy, no good for nothing burden on society.

At the beginning of this article, I tried to be funny. I don't find this amusing anymore. This is no longer a Forest Gump lack of I.Q.; this is no longer Three Stooges stupidity. This is a blind adherence to an ideology. This is a stubbornness to make the solution fit the theory regardless of logic or facts.

Final Word
Is this a phenomenon of people getting together as groups? Do we all become a little stupid when we're surrounded by other people? Do we naturally gravitate to others we perceive as being the leader? Do we follow whatever we perceive to be the common opinion? Are we basically passive and want somebody else to run our lives? Are we too lazy to investigate the issues and find out the right answers and opt to blind follow the voice of our accepted leader? Are we really no better than an individual gazelle that unquestioningly follows the herd?

Tax the poorest people in America. Think about that. The U.S. has a $14 trillion debt and a $1.3 trillion deficit and people are saying that the answer is to go after a group of people who have a measly 2.5% of the wealth. Nobody is going to mention anything about the other 97.5%?

Reagan lowered taxes and had deficits. Clinton raised taxes and had a surplus. Bush lowered taxes and had deficits. Obama wants to raise taxes and the Conservatives go nuts? Neil Cavuto of Fox News said, "Warren Buffett should stop assuming that the rich are all billionaires."

I sit here writing this and I am stunned. No, I am beyond stunned. Two plus two truly does equal five. Or three, or six, or whatever you want the answer to be.

"There is a controversy among scientists about whether evolution is a fact or not.... There are hundreds and hundreds of scientists, many of them holding Nobel Prizes, who believe in intelligent design."
-Michele Bachmann, October 2006, candidates debate in St. Cloud, Minnesota

[Policeman on sidewalk directing the crowd] Move along folks. Nothing intelligent here.


Wikipedia: Distribution of wealth
The distribution of wealth is a comparison of the wealth of various members or groups in a society. It differs from the distribution of income in that it looks at the distribution of ownership of the assets in a society, rather than the current income of members of that society.

Wikipedia: Wealth inequality in the United States
Various sociological statistics suggest the severity of wealth inequality "with the top 10% possessing 80% of all financial assets [and] the bottom 90% holding only 20% of all financial wealth."

Professor G. William Domhoff, Sociology Dept., University of California at Santa Cruz
Who Rules America?
This document presents details on the wealth and income distributions in the United States, and explains how we use these two distributions as power indicators.

Some of the information may come as a surprise to many people. In fact, I know it will be a surprise and then some, because of a recent study (Norton & Ariely, 2010) showing that most Americans (high income or low income, female or male, young or old, Republican or Democrat) have no idea just how concentrated the wealth distribution actually is.

Business Insider - Apr 9/2010
15 Mind-Blowing Facts About Wealth And Inequality In America by Gus Lubin
The rich are getting richer and the poor are getting poorer. Cliché, sure, but it's also more true than at any time since the Gilded Age. The poor are getting poorer, wages are falling behind inflation, and social mobility is at an all-time low. If you're in that top 1%, life is grand.

chart: Distribution of wealth 2007
bottom 50% have 2.5% of the wealth


I couldn't resist throwing this humdinger in.

"I find it interesting that it was back in the 1970s that the swine flu broke out under another, then under another Democrat president, Jimmy Carter. I'm not blaming this on President Obama, I just think it's an interesting coincidence."
-Rep. Michele Bachmann , on the 1976 Swine Flu outbreak that happened when Gerald Ford was president, April 28, 2009

Wikipedia: 1976 swine flu outbreak
Infections were only detected from January 19 to February 9, and were not found outside Fort Dix.

Wikipedia: Gerald Ford
Ford was the 38th President of the United States, serving from August 9, 1974 to January 20, 1977. He was Republican.


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1 comment:

Anonymous said...

As always, so well researched and documented. I keep saying the same dumb thing: the times are scary. How far we've fallen since FDR...