Economic Realities Versus Fantasy Politics

I’m working on a post about science communication, so I’ll leave you with a juicy excerpt and link to a post by Matt Taibbi where he describes the intersection of crony capitalism and economic inequality (italics mine):

Here’s the thing: nobody needs me or Bernie Sanders to tell them that it sucks out there and that times are tougher economically in this country than perhaps they’ve been for quite a long time. We’ve all seen the stats — median income has declined by almost $2,500 over the past seven years, we have a zero personal savings rate in America for the first time since the Great Depression, and 5 million people have slipped below the poverty level since the beginning of the decade. And stats aside, most everyone out there knows what the deal is. If you’re reading this and you had to drive to work today or pay a credit card bill in the last few weeks you know better than I do for sure how fucked up things have gotten. I hear talk from people out on the campaign trail about mortgages and bankruptcies and bill collectors that are enough to make your ass clench with 100 percent pure panic.
None of this is a secret. Here, however, is something that is a secret: that this is a class issue that is being intentionally downplayed by a political/media consensus bent on selling the public a version of reality where class resentments, or class distinctions even, do not exist. Our “national debate” is always a thing where we do not talk about things like haves and have-nots, rich and poor, employers versus employees. But we increasingly live in a society where all the political action is happening on one side of the line separating all those groups, to the detriment of the people on the other side.
We have a government that is spending two and a half billion dollars a day in Iraq, essentially subsidizing new swimming pools for the contracting class in northern Virginia, at a time when heating oil and personal transportation are about to join health insurance on the list of middle-class luxuries.
And while we’ve all heard stories about how much waste and inefficiency there is in our military spending, this is always portrayed as either “corruption” or simple inefficiency, and not what it really is — a profound expression of our national priorities, a means of taking money from ordinary, struggling people and redistributing it not downward but upward, to connected insiders, who turn your tax money into pure profit…..
This is why you need to pay careful attention when you hear about John McCain claiming that he’s going to “look at entitlement program” waste as a means of solving the budget crisis, or when you tune into the debate about the “death tax.” We are in the midst of a political movement to concentrate private wealth into fewer and fewer hands while at the same time placing more and more of the burden for public expenditures on working people. If that sounds like half-baked Marxian analysis… well, shit, what can I say? That’s what’s happening. Repealing the estate tax (the proposal to phase it out by the year 2010 would save the Walton family alone $30 billion) and targeting “entitlement” programs for cuts while continually funneling an ever-expanding treasure trove of military appropriations down the befouled anus of pointless war profiteering, government waste and North Virginia McMansions — this is all part of a conversation we should be having about who gets what share of the national pie. But we’re not going to have that conversation, because we’re going to spend this fall mesmerized by the typical media-generated distractions, yammering about whether or not Michelle Obama’s voice is too annoying, about flag lapel pins, about Jeremiah Wright and other such idiotic bullshit.

But a fist bump! AIIGGHH!

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5 Responses to Economic Realities Versus Fantasy Politics

  1. Tony P says:

    Some of us see through the distraction to the real issues. It is so true, but I see this as a looting of the federal government by those in the upper income brackets.
    And they should be summarily tried and sentence passed upon them. Hmm, something similar happened in Russia a century ago. And it will happen in the U.S. too.

  2. SR says:

    “We are in the midst of a political movement to concentrate private wealth into fewer and fewer hands while at the same time placing more and more of the burden for public expenditures on working people”

  3. bwv says:

    Why so few economic conservatives (of which I am one) look at these issues around the defense industry continues to be a disgrace. Whatever degree the public purse is being looted by ag interests, plaintiff’s attorneys, public employee unions and other democratic interest groups it is a fraction what is going on in the defence industry.
    But in a democracy the public budget is too often a tragedy of the commons. The incentive of every elected official, bureaucrat and interest group is to take as much as they can without regard for the good of the public as a whole.

  4. A says:

    SR points to a Wall Street Journal Editorial, which is not really a trusted source (WSJ News reporting is normally ok), but rather a cheerleader for ‘supply-side’ economics and other discredited views.
    But I’d believe the IRS data (which WSJ probably cherry- picked). These can be found at,,id=96679,00.html#_grp1
    Downloading one of their spreadsheets, one finds that between 1986 and 2005, the share of total income by the top 1% (for returns with positive AGI)rose from 25.75% to 39.38%. (2001 to 2005: 33.89 to 39.38%, the 2001 number reflecting the bursting of the internet bubble).
    The average tax rate for the top 1% is 23.13%
    WSJ’s complaint is that the top 1% income earners earn 22% of all income, and pay 40% of all taxes (in 2006, the web site seems to have only data to 2005, and the data I found there for 2005 seem to be different; perhaps the WSJ added in earners in the top 1% with negative AGI? Well, If any reader has the time, please check).
    Well, I’d say paying just 23.13% in taxes is not so bad, considering that when you make >~364k$(in 2005) after taxes (of 84k$) you still have ~280k$ left. Then, to earn so much money, you probably took advantage more of the country’s taxpayer-paid infrastructure than the bottom 50%.
    Also, taxation on corporations fell over the years, benefiting whom most?
    And who benefited from the deregulation, say Enron?
    As Churchill said, taxes are the dues one pays for living in a civilized country (or something to that effect); the neocons seem to try to convince us that all taxes are bad (but bailouts for firms too big to fail are ok).–

  5. Hume's Ghost says:

    Can anyone actually even imagine a set of circumstances that would get the Wall Street Journal to say anything other than that the results of supply-side tax cuts for the rich are super awesome?
    The WSJ seems to think that as income inequality increases, the tax system becomes more progressive despite the effective tax rates resembling something like a regressive flat tax.

    As Johnston’s book shows (p. 31), the top 10% of American taxpayers saw their average income rise 88.6% between 1970 to 2000, from $119,249 to $224,877 (inflation-adjusted); their percentage of the total U.S. income increased from 33% to 48%. The bottom 90% of American taxpayers saw their average income go from $27,060 in 1970 to $27,035 in 2000, and their percentage of total U.S. income dropped from 67% to 52%. Within the top 10%, those at the 90-95th percentile saw a 29.6% increase in income between 1970 and 2006, those from the 95th to 99th percentile saw a 54.2% increase in income during that period, those from the 99th to 99.5th percentile saw an 89.5% increase in income, and those in the 99.5th to 99.9th percentile saw a 144.8% increase in income (p. 34). Those in the 100th percentile saw a 558.3% increase in income from 1970 to 2000 (p. 36).
    The result of Bush’s 2001, 2002, and 2003 tax cuts by 2010 will be an increase in the share of taxes paid by the bottom 95% of taxpayers by 3.8%, and decrease the share of taxes paid by the top 5% by 3.8%. The top 1% will see a decrease in their share by 2.7% (p. 94).Looking at it another way, the percentage of income paid as taxes by the top 20% of taxpayers in 2001 was 19%; the percentage of income paid as taxes by the bottom 20% of taxpayers was 18% (also p. 94). That’s practically a flat tax today, yet the relative burden on the poorest is much greater than on the richest, since a smaller percentage of their income is discretionary.

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