Thursday, January 6, 2011
To Whom Much is Given
Someone questioned my interest in politics. The fact is, I have more time now for things I lacked time for while working. Nor did I find it expedient to preach politics from the pulpit. Moreover, I have an even bigger stake in politics today living as a Senior Citizen on a fixed income (without a cost of living increase like working people receive), while watching our American socio-political system tilt heavily toward those who have the least of economic worries.
While you process that, allow me to quote a prominent professor, a well-known economist, a man who worked under three Presidents. In his newest book, Robert Reich writes: (Aftershock/Knofp/2010/54-55). Note the statistics he gives, some of which I have emphasized, made bold, or underscored.
“Although the depression was far more severe than the Great Recession that officially began in December 2007, the two episodes are closely related. As Mark Twain once observed, history does not repeat itself, but it sometimes rhymes. Had America not experienced the Great Depression, policymakers eighty years later would not have learned how to use fiscal and monetary policies to contain the immediate economic threat posed by the Great Recession.
“But we did not learn the larger lesson of the 1930s: that when the distribution of income gets too far out of whack, the economy needs to be reorganized so the broad middle class has enough buying power to rejuvenate the economy over the long term. Until we take this lesson to heart, we will be living with the Great Recession’s aftershock of high unemployment and low wages, and an increasingly angry middle class (emphasis added).
“The wages of the typical American hardly increased in the three decades leading up to the Crash of 2008 considering inflation (emphasis added). In the 2000s, they actually dropped (Emphasis added). According to the Census Bureau, in 2007 a male worker earning the median male wage (that is, smack in the middle, with as many men earning more than he did as earning less) took home just over $45,000. Considering inflation, this was less than the typical male worker earned thirty years before. Middle-class family incomes were only slightly higher.
“But the American economy was much larger in 2007 than it was thirty years before. If those gains had been divided equally among Americans, the typical person would be more than 60 percent better off than he actually was by 2007. Where did the gains go? As in the years preceding the Great Depression, a growing share went to the top …
“Economists Emmanuel Saez and Thomas Piketty have examined tax records extending back to 1913. They discovered an interesting pattern. The share of total income going to the richest 1 percent of Americans peaked in both 1928 and in 2007, at over 23 percent …
“The same pattern held for the richest one-tenth of 1 percent (representing about 150,000 households in 2007. Their share of total income also peaked in 1928 and 2007, at over 11 percent. And the same pattern applies for the richest 10 percent, who in each of these peak years received almost half the total.
“Between the two peaks is a long, deep valley. After 1928, the share of national income going to the top 1 percent steadily declined, from more than 23 percent to 16-17 percent in the 1930s, then to 11-15 percent in the 1940s, and to 9-11 percent in the 1950s and 1960s, finally reaching the valley floor of 8-9 percent in the 1970s.
“After this, the share going to the richest 1 percent began to climb again: 10-14 percent of national income in the 1980s, 15-19 percent in the late 1990s, and over 21 percent in 2005, reaching its next peak of more than 23 percent in 2007 … If you look at the shares going to the top 10 percent, or evens the top one-tenth of 1 percent, you’ll see the same long valley in between the two peaks” (peaks and valleys pictured via graphs in book, 54-55).
The thesis of his book suggests that for us to be able to consume the goods we can currently produce, the people of means must share more of their wealth via taxation, salaries, et al, by enabling the middleclass to be better consumers. The fact is we produce more than we can consume. When consumers become less able to consume, that hurts not only the middle class who lose both the products and sometimes their jobs et al, it hurts corporate production interests as well because they are forced to lay off workers, reduce inventories, and lose profits.
This challenges conventional wisdom that says stop investing, lay off workers, tighten the flow of money, et al. IF we could ALL UNDERSTAND that if we don’t all share adequately in the economic pie, everyone hurts, from the poorest welfare citizen to the wealthiest of Wall Street.
I am neither a politician nor an economist, but I am a forthright follower of Christ. I believe Jesus may have had it right after all when he said, “It is better to give than to receive.” It was also Him that said, and I paraphrase, “To whom much is given, much is expected.” I’ll follow Him, whatever party lines that takes . . . . . . .From Warner’s World,
we are walkingwithwarner.blogspot.com