When capitalism goes haywire

As a kid, I used to pore over baseball statistics. These days, I’m increasingly finding myself obsessing over statistics about income inequality instead.

I try to keep in mind that economics, at best, is a shaky science. And, as a book by the same title once opined, “Statistics don’t lie, statisticians do.”  Still, I find it awfully hard to reach any conclusion other than that all those Americans who believe in the largesse of the country’s economic elite are downright delusional.  Or, to put it another way, the tap of trickle-down economics is actually wrench dry and hermetically sealed.

Yet another set of numbers to back this view can be found in an oped piece in today’s New York Times penned by two college professors, one from Yale and the other from the University of California, Berkeley.  Titled “Don’t Tax the Rich, Tax Inequality Itself,”  the piece nonetheless provides yet more compelling data to show how swiftly and sharply the disparity of income has grown, not merely between rich and poor, but between rich and everyone else.   Perhaps the most startling numbers that Ian Ayres and Aaron Edlin put forth are those comparing the income of those in the top 1 percent and those at the American median — the midpoint, a place in which the true middle class is lodged without conceivable challenge.

The authors compare two sets of data. In 1980, the year of Ronald Reagan’s election as president, the average income of the top 1 percent of Americans was 12.5 times that of the income of those at the median.  A quarter century later, in 2006, the last year for which such data is available, the average income of the top 1 percent was 36 times greater than that American family smack in the middle.   In other words, in a single generation, the disparity between rich and middle had increased threefold.  Once more, threefold, in a single generation.  There is nothing to suggest it has reversed course since.

And yet, we have a Republican-led House of Representatives that believes it can, with impunity, first absolutely refuse to raise so much as a dollar in taxes on millionaires to pay for a continued cut in the Social Security tax and then refuse to continue the Social Security tax cut at all. (This, of course, is the same party that claims to have never seen a tax cut it doesn’t like).

The result, unless there is some 11th hour rescue, is that the same median-income family will have to pay an additional $1,000 or so in taxes in 2012 in the midst of this country’s exceedingly fragile recovery.

It’s miserable economics, but the GOP leaders are banking on the fact that it will prove good politics.  Make the economy worse, they reason, and the president will be cooked come November.

What’s astonishing is that they just may be right. It may be that Americans are so brain-washed by the rhetoric of big government as the cause of all evil that they’ll gladly blame the Democrats in the next election for not eliminating more of the government so that the rich, through their nonexistent largesse, will create more jobs.  Presidential candidate Rick Perry has even proposed a part-time Congress that, he said a few debates back, would meet every other year.

Of course, given the performance of the last Congress that wouldn’t make a whole lot of difference.

But cynical jokes aside, the solution in 2012 is not to hand extremists — and some of these folks are just that — the full reigns of government because they’ve succeeded in paralyzing the economy and blocking any effort to dig out of hole we’re in.

The solution should be to elect people committed to bringing back some semblance of economic equity back to American life.  That doesn’t mean everyone has to earn the same. It does mean stacking the deck somewhat less sharply to the advantage of the rich. (The list of their special economic benefits — from inheritance tax protection to the cap on taxable income for Social Security — is long.)

We are, after all, a consumer-driven economy. And when those consumers are squeezed and squeezed by the oligarchs above, the consumers and the system they fuel can only collapse.

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About jerrylanson

I teach, write, coach and sing, though you're not required to listen to the latter. I'm a journalism professor at Emerson College in Boston. My third book, "Writing for Others, Writing for Ourselves," was published in November by Rowman & Littlefield Publishing. You can read a sample chapter at www.jerrylanson.com. My passions are politics (generally liberal in outlook), music, mountains, golden retrievers and my grandchildren, though not in that order. Please stop by and mix it up with me. I always answer those who post.
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