The NY Times and class struggle

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The NY Times isn't exactly a revolutionary left-wing publication -- and while columnist Paul Krugman routinely talks about the income and wealth divide, it's not typically a staple of how the Times cover the news. But David Leonhardt is starting a blog on the decline in the middle class and is going to turn it into an article during the later parts of the presidential campaign -- and amazingly enough, he's got it pretty much right:

In addition to the slow growth in overall size of the pie, the share that has been going to anyone but the richest Americans has been declining. The top-earning 1 percent of households now bring home about 20 percent of total income, up from less than 10 percent 40 years ago. The top-earning 1/10,000th of households — each earning at least $7.8 million a year, many of them working in finance — bring home almost 5 percent of income, up from 1 percent 40 years ago. In the simplest terms, the relatively meager gains the American economy has produced in recent years have largely flowed to a small segment of the most affluent households, leaving middle-class and poor households with slow-growing living standards.

It's simple, and it's pretty clear -- as is the fact that it's not random but the result of specific policies. From one of the (many intelligent) comments (my trolls, please take note):

The middle class is an artificial construct, something deliberately created through the enactment of policy. It emerged in the U.S. largely because of political, economic and social changes that were imposed: the New Deal, the Great Society, the creation of the suburbs and highway systems, strong unions that demanded fair wages and protections, etc. All of these developments happened only because people willed them and fought to ensure economic expansion benefited regular people. It could have just as easily gone the other way; indeed, it IS going the other way now (and has been for the last 30 years or so). The choices today are different: to let the markets decide, to deregulate and bolster corporations, to exacerbate the wealth divide, to enforce an unfair tax system, to shift essential costs (healthcare, environmental remediation, etc.) to the taxpayer, and so on. And so the middle class erodes. It should come as no surprise.

What's talked about less in this NYT piece is the role of government in redistributing income. The idea that the US tax system should take more than half of the income people earn beyond a certain point is hardly radical; as early as the 1920s, the highest earners turned over as much as 70 percent to the government -- and unlike today's billionaires, they actually paid it. The JP Morgans of the world got really really rich AND paid high taxes AND gave a lot of money to public enterprises (public libraries, public museums etc.).

That as much as unionization and post-War industrialization created the middle class.

Another interesting comment:

Our "free-market" policies of the last 30 years have favored efficiency and productivity above all else. The result has been sending American jobs overseas on a massive scale. Now we have inexpensive tee-shirts and computers, but vast unemployment and underemployment. Instead, I believe our culture should favor creating as many high paying middle-class jobs as possible without regard to "productivity". This requires protective trade barriers. Yes, prices will go up, but for a more affluent society, it's a cheap price to pay.

Obama talks a good line about the middle class, but he's not offering any specific ideas that would fundamentally change the direction of US economic policy. In fact, the biggest issue in the campaign isn't even an issue.

Oh, and by the way: I have to note that Randy Shaw at BeyondChron is now talking about the important of "class diversity." He's right -- there need to be more tenants (and working-class tenants) on the Planning Commission and Board of Appeals. There also needs to be a consciousness of class issues in general at City Hall -- and a discussion of how policies that favor high-tech companies, like those of his beloved Mayor Lee, are pretty clearly NOT in the interests of protecting class diversity in the city.

 

 

Comments

I'd like to see a planning commission which works to help more tenants become owners, as a home is typically the largest portion a middle class household's net worth. The small percentage of people who own real property in SF (versus almost everywhere else in the country) is unacceptable.

Posted by Guest on Jul. 23, 2012 @ 3:33 pm

This article notes:

In 1979, the top 20% made 44.9% of income and paid 55.3% of all federal taxes in 1979. In 2009, they made 50.8% of income and paid 67.9% of all federal taxes.

The top 1% of earners earned 8.9% of income in 1979 and paid 14.2% of taxes. In 2009, they earned 13.4% of income and paid 22.3% of all federal taxes.

The bottom 20% paid just 2.1% of all federal taxes in 1979. By 2009, they were paying just 0.3% of all federal taxes.

The share of taxes paid by the top 20% keeps going up, while the share of taxes paid by the rest has declined. The "fair share" argument seems lame when you realize a small sliver of society is paying most of the taxes.

http://online.wsj.com/article/SB1000087239639044487320457753725031893104...

Posted by The Commish on Jul. 23, 2012 @ 3:46 pm

Yes, Commish- by definition the "rich" are paying more than their fair share. Fair share can only rationally be defined as your percentage of income relative to the percentage of taxes one pays. So the cry should be the rich should pay "MORE than their fair share!"

Even if one conceded taxing the rich (little revenue here) was smart policy- what is the government going to do with the money? Pay down the national debt - of course not. Pay overpaid public employees even more? Hire more public employees we don't need? Spend it as thoughtfully as they did the Stimulus. Throw it out of a helicopter? WHAT?

I would assume middle-class folks want a vibrant, dynamic economy in which they can thrive - not a handout The debate should be about how to get there.

Posted by Guest on Jul. 23, 2012 @ 10:38 pm

Look there are just too many damn people on the planet. There are way too many rich ass Americans, driving their cars everywhere, living in absurdly too large houses and eating too much of everything, especially meat.

American standard of living will fall and fall and should fall and fall, until everyone in the world is fed.

Given environmental destruction, it is probably worse than that even. This is it, we are as rich as we are ever going to be as a species. It is likely famine and warfare from here on out, until the human race gets down to a sustainable level, probably about 60M people, or 1/100th we are today.

Posted by GlenParkDaddy on Jul. 24, 2012 @ 12:08 am

The US lifestyle is extravagant. HOwever, when the standad of living falls, this does not mean that the overall devastation diminishes. It only means that fewer folks cause the same amount of devastation by their extravagance.
As for taxing the extremely wealthy. That's the least that should happen. There is a consciously greedy bunch of folks who think the world is theirs and the rest of us are just trespassing. If they merely want to pay their "fair share" in taxes, than they should only take their fair share of wealth. Otherwise, we should make them turn some of that unearned income back to schools, jobs, libraries, medical insurance, etc.

Posted by ron on Jul. 25, 2012 @ 9:28 am

The sad truth is that back in the old days the richest Americans really wanted to invest in the future of the country and really believed in the future of the country. Now the very rich (with some exceptions of course) have to be dragged kicking and screaming to pay their taxes and fund public education and infrastructure, which means they probably believe their fellow citizens are a bunch of worthless slobs who deserve a life of slavery. But its really a generational issue, too: the baby boomers have been a generation of failed leaders who accomplished very little for the betterment of humanity except enriching their own narcissistic egos. Maybe the US won't start to improve until they all drop dead and leave a new generation of leaders behind.

Posted by traderkitten on Jul. 25, 2012 @ 10:33 am
hey

As for taxing the extremely wealthy. That's the least that should happen. There is a consciously greedy bunch of folks who think the world is theirs and the rest of us are just trespassing. If they merely want to pay their "fair share" in taxes

Posted by Zalando Gutscheincode on Oct. 22, 2012 @ 12:01 am