Where Do You Suppose The Wealth Of The One Percent Comes From?

The 99% - photo by Christopher Smith

Picture the total wealth of the United States as a giant pie. There are a few people in this country who have slices of pie so large you could combine the slices of millions of average Americans and it still would not equal the massive slices owned by these few wealthy elites.

That is a lot of pie!

It is a fact that the percentage of total wealth in this country owned by the top 1% is greater now than it has been since before the Great Depression. If the share of the pie owned by the 1% has increased what does that mean for the rest of us?

We all get less pie.

It is ridiculous to think that members of the 1% work THAT much harder than the rest of the population and it is equally ridiculous to think they work THAT much harder than their predecessors 30, 40 and 50 years ago.

In fact, it could be the opposite.

Look at CEOs who have all but ruined a company before walking away with tens of millions of dollars in compensation. Look at Republican presidential candidate Mitt Romney who makes an 8-figure income from his wealth. He doesn’t actually work. Instead he makes tens of millions each year from the investment income he receives from his hundreds of millions in wealth. Oh, and he only pays an effective tax rate of 13.9%. What’s your effective tax rate?

See a pattern here? … The game is rigged.

Money equals power and the people with the money are using that power to shape the laws and tax code to their benefit. The result of this manipulation is that they get richer while the rest get poorer.

This is all the result of a failed economic theory known by names such as supply-side, trickle-down, Reaganomics or as George H. W. Bush once called it, “voodoo economics“. If wealth doesn’t trickle down – and it doesn’t – that means tax breaks and legislation which benefit only the rich will result in more of the country’s wealth being distributed to people who are already obscenely wealthy. And since they sit on this wealth earning investment income that means less money being poured into the economy which means fewer jobs and lower wages for the rest of us.

Rule by oligarchy.

How much longer will we allow this country to be run by supply-side “trickle-down” economic theory? Will the people who subscribe to this failed theory ever wake up and realize the damage being done to the poor and middle class? How much more damage needs to be done before people can admit they are wrong?

Unfortunately I don’t think we will like the answers to these questions.

In practice, supply-side economics has been very good to the 1%. Since many members of congress are in the 1%, approaching the 1% or are friends of the 1%, I don’t expect we will see them decry the failure of Reaganomics anytime soon.

It turns out all the Republicans howling about class warfare and wealth redistribution were right, only they got it backwards. The redistribution is to the top 1%. The warfare is being inflicted upon the rest of us.

dks

Recommended reading: Saving the Middle Class by Robert Kuttner

photo by Christopher Smith via Flickr


Economy

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