For REAL???!!!. . .

(from http://online.wsj.com/news/articles/SB40001424052702303519404579352551767664072?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB40001424052702303519404579352551767664072.html by James Piereson)
""Income inequality" has emerged as the issue du jour in U.S. politics, threatening to displace the unpopular health-care law and the slow-growing economy this election year. Speeches and columns now routinely attack the banks or "the undeserving rich" and call on Washington to do something to redistribute income from the "super rich" to the poor and middle class. Democrats from President Obama to the new mayor of New York City are leading the charge on behalf of the "99%."

This crusade is based on three questionable claims. One is that the wealthy are mostly Wall Street bankers benefiting from rising stock and real estate prices, or executives who pay themselves extravagant salaries. Another claim is that such people unfairly benefit from a system that taxes capital gains at half the highest marginal rate paid by those who earn salaries and wages. Then there is the assertion that the "super rich" have abundant funds that can be taxed to improve the living standards of everyone else.

All of these claims are false. By promoting them, the president and his supporters may hope to distract attention from ObamaCare and the economy. Yet they are igniting hopes they can't possibly fulfill. . ."


(from http://scalar.usc.edu/works/growing-apart-a-political-history-of-american-inequality/index)
" . . . This shared prosperity of the postwar years was no accident or lucky combination of circumstances.  A "rising tide" of robust economic growth does not necessarily lift all boats.  Political struggle and policy choices determine whose boats rise. The inequality of the 20th century's early years actually began closing before economic growth took off in the 1940s, as a consequence of the political response to the Great Depression. . . "


(from me. . . )
Mr. Piereson seems content with making the sole point that wealth inequality is basically untrue because the 1% of the population holding the majority of wealth does not consist exclusively of bankers and Wall Street wizards but includes sports, movie, rock and roll and other 'entertainment' types in addition to 'business' executives who draw salaries.  And this point alone contents Mr. Piereson that there is no inequality of wealth (with no mention of course about caring for the less fortunate) and that ". . . At a time of slow economic growth, mounting government debt, a stalemated politics and the impending retirement of the "baby boomers," the attacks on the "one percent" look more and more like a diversion from America's real problems."

FOR REAL, Mr. Piereson???!!!

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The OWS protesters. . .

". . . are filling a large hole in America’s democracy. Congress, the president, the media, and even the think tanks were not reflecting the frustration, confusion and anger among Americans. They talked, they did not listen. I have witnessed these people several times now, talked to the group twice, talked to them in private—they listen. It is quite wonderful.

But what bugs me most is the widespread criticism of their ignorance of economics. What they know and what Wall Street and much of Washington do not is that the American model has been failing for decades. Look at income inequality. More important, look at average hourly earnings adjusted for inflation, now back to their 1969 level. Look at our crummy roads, our unequal education, our uniquely absurd healthcare system. Look even at relatively weak capital investment.

Then they are lectured by people like the Competitive Enterprise Institute that they do not understand how markets work. There have been no free markets by neo-classical or even Hayekian standards for decades on Wall Street. When there is no transparent pricing of derivatives, there is no free market. When five major banks control the entire market, there is oligopoly, not free markets. When enormous banks in every avenue of finance exchange information within their own companies, information asymmetries, not to mention potential for insider trading and front-running, are rife. When the conflicts of interest between ratings agencies and their clients are built into Wall Street, who can but laugh that this is real competition. And what about asymmetric financial incentives that made the bankers rich? They rewarded risk when you won, but did not penalize when you lost.

Don’t lecture the OWS movement about competitive markets. In league with Washington regulators, Wall Street learned how to rig those markets. And then they could misprice risk and lead to runway speculation that was bound to result in failure. One number always grabs me. Private financial firms wrote 18 percent of mortgages, which resulted in 42 percent of all serious defaults. There is the culprit. And then they didn’t have the capital to cover the losses. They drove the housing market sky high. Then they built debt on the bad mortgages.

Don’t make the mistake of thinking that even had markets run on more competitive lines speculation and crisis would have been completely avoided. There is little in neo-classical theory that suggests mild corrections are all that is needed to set economic growth on its inevitably stable path. But people like Alan Greenspan, Larry Summers and Ben Bernanke stuffed the deep crises of 1982, 1987, 1989, 1994, 1997, 1998 and 2000 into that mild model. The great moderation was born.

Then wise guys who cannot help but champion Wall Street with little sense of history tell us that all the OWC criticism is unwarranted. Capitalism must be allowed to make mistakes. This is true.

But on balance, OWS is not against capitalism, it is against wild capitalism. And it is against injustice. Is Wall Street?"
(by: Jeff Madrick, TripleCrisis Op-Ed http://www.Truth-Out.org)




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More money. . .

. . . issues. (Root of all evil? Maybe not ALL, but MANY!)

The Wall Street Journal ran an article last week about why it's a 'BAD IDEA' to tax wealthier folks at a higher rate.

A former economic forecaster for California, said that the state was overdependent on its wealthier citizens. Upon encountering a group protesting state spending cuts whose signs said "We Love Jobs!", this forecaster thinks THEY are missing the real problem. California, he says, depends upon the top 1% of 'earners' (important choice of words on his part, don't you think?) for almost half of its income tax revenue. That's the guys making more than $490,000 per year.

But do you know why this forecaster thinks that's a PROBLEM???? It's because theses unfortunate 'earners' have "especially volatile incomes." They are the state's most unstable income group, according to this financial wiz. (Such a sad story, isn't it????)
He further 'justifies' his argument by stating that New York, New Jersey, Connecticut and Illinois being the states most heavily reliant on taxes from the rich are now among those with the biggest budget holes.

The top federal tax rate—which applies to joint filers reporting $379,000 in taxable income—is still twice as high as the rate for joint filers reporting income of $69,000 or less. But alas, as they've grown, the incomes of the wealthy have become more unstable. That unconscionable growth of income, read GREED, is how we got into this economic mess in the first place. Between 2007 and 2008, the incomes of the top-earning 1% fell 16%, compared to a decline of 4% for U.S. earners as a whole. But they didn't tell us about the rise on the other side of the 'mountain.' As they've grown, the incomes of the wealthy have become more unstable. (I think I'm gonna cry!) Because today's highest salaries are usually linked to financial markets—through stock-based pay or investments—they are more prone to sudden shocks. Again, I think our problem here is obvious and this 'street' dog is barking up the wrong tree.

Many republicans advocate a flat tax in California to reduce volatility and keep high-earners from leaving the state. Instead of a steeply disproportionate income tax rate, a flatter, broader tax rate would help stabilize the most volatile of California's revenues, they say. The other camp says, and I think rightly, that the volatility problem can be solved by making sure citizens are fully employed and decently paid. Progressive tax systems are the best way to equalize the rising riches at the top and rising poverty at the bottom. Flattening the tax system only adds to income inequality.

So in short, the Wall Streeters and conservatives would prefer a different system. . . tax the poor people whose incomes (if they have incomes) are not as 'volatile' as the rich people and, VOILA!!! Problem solved.

Is it me or is something wrong with that picture??????????



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