(Sorry, I made a huge calcuation error, and thus had to rewrite this. It would actually take one hundred years of the top 1% sharing all their income, with the government taking none of it, before each person would have $1,000,000, not one year, as I mistakenly said before.)
Joseph E. Stiglitz, in his Vanity Fair article, Of the 1%, by the 1%, for the 1% , suggests that the top 1% of Americans is growing increasingly isolated from and unsympathetic toward the other 99%, and that this trend, if followed, will be to a revolt against the American government similar to those of Egypt and Libya. I tend to agree that elitism is a leading cause of trouble for the average citizen. Too many laws have been passed that protect the rich. Too many of our nations’ law makers are hand selected from the rich, by the rich, for the rich. I also believe that the threat of a violent overthrow of the US government is a growing possibility. However, both overturns in Egypt and Libya followed decades of suspension of popular elections. In the US, although a slate of candidates is often heavily influenced by elitists of the RNC and DNC, the elections are still essentially “free”.
According to Stiglitz, the “One Percenters” currently make nearly 25% (he doesn’t say how nearly) of US income and control 40% of its wealth. While this is an astonishing figure, it pales in comparison to the figures of 80-90% that are often thrown around in casual conversation. The disparity can probably be traced to a common tendency of many people who feel oppressed to exaggerate just how oppressed they are. With a total US GNP (vs. GDP) of about $14.5 trillion, the top 1% generate an income of about $3.5 trillion, or enough that, if they were to distribute their total income for the year to each man, women and child in the US, they would give each of them $10,000. It is rational to think that doing this even one time would go a long way toward eradicating the problems of everyone in the US. But it is also simplistic.
Let’s compare the US Government to a large cotton ball. Every year, trillions poured into the government till. Like water in a cotton ball, most of it is absorbed, and a little trickles out of the bottom. Truth be told, the 1% is already contributing heavily to this cotton ball, and in fact contributes the majority of the funds to this cotton ball. Yet the more funds are poured into the cotton, the larger the cotton ball becomes. It even grows so fast that it now can absorb water at twice the capacity that the water is being poured in. So, now it will take not only all of the income from the 1%, but all of their income for six years, before any more starts trickling out of the bottom. This is because the national debt has grown to over 100% of GNP. Actually, since the top 1% already contributes heavily to the federal till in one way or another, it will take more than a decade. If you think the economic engine is broken now, what do you think killing the engineers for ten years would do to fix it?
I agree that the top 1% should want to help the rest of us. Where I disagree is that the government is the vehicle by which they can best do this. Stiglitz believes it’s the government’s job to invest in infrastructure. To a certain degree, yes. The government should fix federal infrastructure, such as federal highways. But the government should not be involved in creating or mandating new technologies. This leads to fiascoes like Solyndra and the Chevy Volt. Over time, technologies are best spurred on by individual innovations. What the government could do is to stop propping up the money machines of older technologies and start inhibiting the large companies from buying off and intimidating new technologies that threaten the incomes of their deep-pocketed lobbyists and campaign contributors.
Mr. Stiglitz and I agree that the small guy is in trouble. I believe that, fundamentally, most people agree with us, not matter what the ideological flavor. The question always come down to: is this a problem or a solution? Is giving government more power a problem or a solution? I vote problem. It taxing the stuffing out of the rich a problem or a solution. I vote problem. I think Mr. Stiglitz would vote the other way. But this is really too simplistic. Because imposing more taxes and regulations on the rich never stops with the rich. And it’s these growing taxes and regulations that have stifled and killed the middle class. However, he does point out correctly that the rich look out for the rich, and they have the money to buy the political clout.
The real issue is: who is going to be responsible for re-leveling the playing field, so that all Americans have an equal shot at the American dream? We know that the people on top have no incentive to help out. They are now kings of the hill, and they want to stay that way. So it’s incumbent upon the bottom feeders to do it. There are two alternatives. One is legal and the other extra-legal. We can change the course of our government by electing decent, hard-working officials from among ourselves. Or we can simply revolt.
The first course is the safer, but it is definitely the harder road. Those on the bottom are there in large part because of a lack of education in things legal political, and financial. If we are to rise up and throw off the oppression of the arrogant elite, we need to know how to beat them at their own game. Also, there is truth in the statement that power corrupts and absolute power corrupts absolutely. One can see this in the history of the unions, which began as good organizations for the protection of workers and degenerated in many cases into payed-off political stooges.
Perhaps the way to prevent cronyism is to give everyone term limits. But, let me illustrate to work-around. I used to belong to SPEBSQSA, the national barbershop-style singing organization. In it, a quartet can only be national champions once. This way, more singers have a chance to compete for the top prize. But, what in effect ends up happening is that the winning quartet breaks up and these men join others from previous winning quartets to form new quartets and become champions again. So the cronyism and inbreeding continues. The same with government officials. They are like the gofer game at the carnival. If you smash them down in one place, they just pop up somewhere else. So, to really get rid of cronyism, we have to get rid of ALL the cronies.
The 1% aren’t going to come down easily. I don’t even think we need them to come down. What we need is for government to stop using them as a political prop to distract us from the point that spending is out of control. And we, the 99%, need to understand that not all of the 1% were born with a silver spoon in the mouth. Many of them worked very, very hard to get where they are. I’m sure there were a lot of them that got a break or were the recipient of some favoritism. So what? Who of us wouldn’t take advantage of that. I’m sure a lot of them felt that they would “give back” once they made it. Some probably forgot, and some probably don’t think they’ve made it yet (greed tends to skew the truth); but there are also a lot who have given back.
Nobody was ever successful without a dream. Everyone wants to be special in some way. The 1% are the royalty of this country. Rubbing shoulders with royalty is one way to feel special. For those who use money as a measure of success, having the opportunity to become royalty is the biggest dream of all. For many, having a happy and healthy family is the biggest dream. For others, it is having the ability to help others. We all need dreams that we can become something better. We can do it. But we need to focus on what we can do. We can vote for better leaders. We can become smarter. We can work harder. We are the problem, and we are the solution.
This just in! According to a new study by the CBO (Congressional Budget Office), the richest 20% pay 70% of the taxes! Bottom 20% pays .3% As a representative of the bottom 20%, I want to thank the rich people for doing more than their share. PRB (July 11)