Stopping wealth transfer to the 1%

Ever since the recession started there has been significant transfer of wealth in the US away from the middle class and toward the upper 1% of the population. This is an acceleration of a trend which has been going on for 40+ years, so many of the underlying issues must pre-date both Obama and even GW Bush by a generation. However the massive acceleration of this trend during the Obama administration, indicates that his policies are inadvertently worsening the situation. (And yes it is inadvertent, Obama is a liberal ideologue, more liberal than even most Democrats. He is not doing this on purpose.)

In the long term, this will be disastrous for the USA. The middle class is the bedrock of our capitalist system. Situations in which the 1% has almost all the wealth and the 99% has almost none, are typical of a 3rd world economy not a first world one. So we need to reverse the flow now while there is still time.

Step 1 Stop outsourcing jobs!!! The manufacturing jobs that the many in the lower middle class and middle middle class once depended on are gone. Now companies have started outsourcing science and technology jobs that many in the the middle middle class and upper middle class depend on. The few manufacturing jobs that are left (aside from small specialty shops) have transformed from being able to support families to being minimum wage sweatshops. Science and technology are heading in the same direction (no they are not there yet, but wages are way down as more and more of these jobs disappear overseas). We can't have a functional economy composed of nothing but McDonald's employees and Wall Street tycoons.

Democrats want to raise the minimum wage which won't do any good as long as companies can not pay it by transferring the jobs overseas. So unless they fix this problem raising the minimum wage is a feel good bandaid, that will actually make the situation worse not better.

Republicans want more "free trade", which is actually a good idea when done right. If done right, any jobs lost are replaced by new jobs of equal or better quality to the ones lost. And the overall benefits to BOTH economies further increases the positive impacts. The problem is that we are so eager to increase "free trade" that we have signed such one sided deals that USA jobs which pay good wages are being replace by jobs which pay low wages or not being replaced as well. The famous quote by Will Rogers is only to true!! "We never lost a war and we never won a conference in our lives. I believe that we could without any degree of egotism, single-handed lick any nation in the world. But we can't confer with Costa Rica and come home with our shirts on." I think some of the militaries of the world may be more challenging than he is giving them credit for but he is dead on about our inability to negotiate.

I contend that Obama is less averse to the 1% than you believe. His father was African. Despite Britain's influence, the idea of growing an economy for the benefit of everyone appears to be lost on most African governments. Wealth disparity is the rule in most African countries.

Obama spent a big part of his childhood in Indonesia. That nation stands as the definition of kleptocracy. The rich there are obscenely wealthy and the poor are truly abject in their poverty.

Obama spent years learning about US politics in Chicago. Talk about corruption and cronyism. When I grew up there, unless your precinct delivered the vote for get about getting any city services.

I believe that he believes strongly in socialism. Yet, I believe he agrees with Orwell too, "Some animals are more equal than others". In other words, Obama has very few issues with the 1% prospering, so long as he is part of it.

It is not the concentration of wealth in the top 1% that is the problem. IIRC, the top 1% earn a few $100,000 per year and have a net worth of a few $1 million. This is comfortable but not staggeringly wealthy. More importantly, most of the top 1% became wealthy by getting educated and/or working their asses off. If they inherited much, it was a family business that required hard work to prosper.

The problem is the concentration of wealth in the top 1/10th % where incomes are in $1 millions per year and net worths are in the $10 millions to $100 millions or $ billions. Most of these people either inherited great wealth that manages itself or are entertainers, athletes or some other profession where only the luckiest few are extremely successful. These people are hostile to the 1% below them whose work ethic they disdain and want to keep them down. They are eager to employ policies that destroy the middle class to accomplish this goal. They also understand that in democratic society, they need the votes of the bottom 50% to accomplish their goals. They intentionally select populist demagogues such as Obama who can win the votes of the poor but with the understanding that their policies will rape only the moderately rich to protect the interests of the true elites.

The most eloquent metaphor for the US political system is THE BURNING CITY by Niven and Pournelle.

I contend that Obama is less averse to the 1% than you believe. His father was African. Despite Britain's influence, the idea of growing an economy for the benefit of everyone appears to be lost on most African governments. Wealth disparity is the rule in most African countries.

His father was long gone by the time Obama was old enough to be influenced by him. Some of his ideas may have been passed on second hand though Obama's mother. Although how willing she would be to pass on the ideas of someone who dumped her, I don't know.

Obama spent a big part of his childhood in Indonesia. That nation stands as the definition of kleptocracy. The rich there are obscenely wealthy and the poor are truly abject in their poverty.

Just at the right age to have a major impact on his world view.

Obama spent years learning about US politics in Chicago. Talk about corruption and cronyism. When I grew up there, unless your precinct delivered the vote for get about getting any city services.

Too true.

Obama has very few issues with the 1% prospering, so long as he is part of it

Most politicians share that view. That's a big part of the problem. In his case he seems to believe in wealth for the chosen few (himself and his friends but NOT anyone who disagrees with him), socialism for the rest of us.

Manufacturing has declined in the US as a percentage of total economic activity, but it has not disappeared. Foreign owned companies are assembling their cars here. Those jobs are no longer union, but they do employ Americans.

I agree that jobs are being lost. Many very low skill jobs in textiles are simply gone. Those jobs can be done cheaper abroad. US consumers won't buy clothes priced at levels that can be supported by paying US wages. In some ways asking them to do so will decrease their standard of living. Some lost jobs, like call centers, can be brought back if the regulatory cost to employ people can be reduced. Obamacare is an excellent example of how regulations are screwing the workers over. There are many others. Limits on domestic drilling for oil and extracting hydrocarbons are another area that makes it more expensive to do business here.

All these additional costs to doing business make it harder to start a business in the US. Small business is the best way for the average American to collect and retain wealth. Without small businesses accumulating the wealth and leverage necessary to affect the adoption suitable policies, individuals will find it more difficult to compete with corporations and the 1% of wealth owners. Lets focus on the wealth owners more than simply those that earn the top incomes.

Teddy Roosevelt's "trust busting" needs to be revisited. Some companies are too big to exist. I don't like the idea of breaking them up by fiat. Better to enact taxes and regulation that makes consolidating too many corporate resources in one company a severe disadvantage for share holders. As corporations grow larger and incur more of these disadvantages, their share price will drop in relation to their earnings. Lower total earnings mean that a smaller amount will be available to donate to politics from each corporation without hurting the bottom line.

The idea isn't and shouldn't be to take the wealth of the 1% (wealth owners). The idea should be to remove the legislated advantages given to the 1%.

t is not the concentration of wealth in the top 1% that is the problem. IIRC, the top 1% earn a few $100,000 per year and have a net worth of a few $1 million. This is comfortable but not staggeringly wealthy. More importantly, most of the top 1% became wealthy by getting educated and/or working their asses off. If they inherited much, it was a family business that required hard work to prosper.

The problem is the concentration of wealth in the top 1/10th % where incomes are in $1 millions per year and net worths are in the $10 millions to $100 millions or $ billions.

Agreed. I should have said the top 0.1%. That is where the bulk of the wealth transfer is going anyway. The 0.9% below them are getting some but nothing like the truly wealthy 0.1%.

OK so now we have to save the middle class but do it in such a way that we don't damage the lower reaches of the upper class.

Teddy Roosevelt's "trust busting" needs to be revisited.

Agreed

I don't like the idea of breaking them up by fiat. Better to enact taxes and regulation that makes consolidating too many corporate resources in one company a severe disadvantage for share holders. As corporations grow larger and incur more of these disadvantages, their share price will drop in relation to their earnings. Lower total earnings mean that a smaller amount will be available to donate to politics from each corporation without hurting the bottom line

Worth a try. It may be more difficult in practice than simply breaking them up. But it has the advantage that it would be automatic.

the regulatory cost to employ people can be reduced

There is a lot that can and should be done to reduce the regulatory burden. I have seen quotes many times in recent years that a lot of these big businesses are actually encouraging unneeded regulation to keep small businesses from becoming viable challengers to their empires. They of course have the economies of scale to reduce the burden. We are seeing this now with the small banks. The new regulations enacted after the mortgage crisis were written in such a way as to make the compliance burden very difficult for the small banks to achieve in a competitive fashion. And indeed they are selling out to the big banks in increasing numbers. So the small banks which didn't do much to cause the crisis are being penalized, while the big banks who were heavily involved get rewarded by reduced competition. Nice....

From today's news -

THE world's 85 richest individuals now own as much as the poorest half of the 7 billion global population, according to a report released by Oxfam.

The world's elite have rigged laws in their own favour undermining democracy and creating a chasm of inequality across the globe, the charity says.

The report exposes the "pernicious impact'' of growing inequality that helps "the richest undermine democratic processes and drive policies that promote their interests at the expense of everyone else'', the statement said.

This is much in the same as saying water is wet. Granted you have provided some numbers but other than that not much. Be nice to at least have a the news source if print and a url if internet though.

How do you get control of the "law making" that the elites are rigging is the question. In my mind at least.

I would suggest for the US to look back to what has worked and what has not. President Reagan limited it by the governments statistics better than Presidents Obama, Bush and Clinton not so well. So what changed in the philosophy's between all those leader's.

I do have problems actually trusting the statistics. But then again the US is currently a bureaucrat's wet dream. Take a look at all the ways "we" track stuff in our monthly employment report. Then take a look at your employment report(I can't even remember if it is monthly). Just look at them. Think about it some. There is enough data in ours to make a sound byte case for everything under the sun.

Enjoy,
T2M

PS If you actually need the link: http://www.stats.bls.gov/ I no longer have the one for yours, my apologies.

Daryl wrote:From today's news -

THE world's 85 richest individuals now own as much as the poorest half of the 7 billion global population, according to a report released by Oxfam.

The world's elite have rigged laws in their own favour undermining democracy and creating a chasm of inequality across the globe, the charity says.

The report exposes the "pernicious impact'' of growing inequality that helps "the richest undermine democratic processes and drive policies that promote their interests at the expense of everyone else'', the statement said.

Not so minor additional point.

I could care less if Bill Gates and the like have more money than God. I just find the hypocrisy of campaigning for something, achieving the opposite and not being held accountable by the media and the average voter despicable.

In short the whole issue means next to nothing to me when I vote for a particular candidate.

Have fun,
T2M

The communist ideal is "To each according to his needs, from each according to his abilities."

Has one big flaw who decides. Leads to "All animals are equal, but some animals are more equal than others."

Jesus (rather you are a Christian or not) put it best, "The poor will always be with us." And I might add, "and so will the rich."

Poker