How much more can 'job givers' take?
By Leonard Boasberg Trying to explain why his fellow House Republicans had surrendered on a temporary extension of a payroll-tax cut and of unemployment benefits just before Christmas, Speaker John Boehner said his caucus decided: "Why not do the right thing for the American people, even though it's not exactly what we want?"
By Leonard Boasberg
Trying to explain why his fellow House Republicans had surrendered on a temporary extension of a payroll-tax cut and of unemployment benefits just before Christmas, Speaker John Boehner said his caucus decided: "Why not do the right thing for the American people, even though it's not exactly what we want?"
I don't know if he intended to put it quite that way. In any case, though, what is it that the Republicans want? On what grounds are they so desperate to protect the rich from paying their share?
Warren Buffett, Bill Gates, and other super-wealthy Americans have essentially been pleading, "Raise my taxes, please." But Republicans argue that doing so would destroy the ability and initiative of "jobs givers."
As it happens, that theory was put into practice for nearly eight years under George W. Bush. And according to the Bureau of Labor Statistics, around a million jobs were added to payrolls between January 2001 and January 2009. That's less than a twentieth of the number added during the Clinton administration, before Bush's income-tax cuts.
So much for that theory.
Jeff Madrick, a former New York Times columnist and the author of The Age of Greed, wrote recently in the New York Review of Books that much of what happens on Wall Street has little impact on the real economy, "except to waste hundreds of billions of misdirected savings that are plowed back into useless speculation and casino-like gambling by the very rich on trades among themselves." None of which creates jobs.
The real "jobs givers" are the people who have jobs, who buy stuff, who pay their bills, and who go to restaurants and movie theaters - in short, the people who create demand, to which businesses respond by investing and expanding. And if people don't have income, they obviously can't buy anything.
The Occupy movement has focused attention on the lopsided distribution of wealth in America, which has become as extreme as it was just before the Great Depression. A Time magazine poll in October found that nearly 80 percent of Americans agree that the disparity between rich and poor has grown too great, and 68 percent agree that the rich should pay more in taxes.
Between 1979 and 2007, according to a recent Congressional Budget Office report, the wealth of the top 1 percent of households grew 275 percent, while the wealth of the bottom 20 percent grew only 18 percent. As for the wealth of the middle 60 percent, it expanded less than 40 percent.
As Madrick pointed out, a lot of the runaway wealth at the top "comes from financial investments, stock options, and other special financial benefits available to the exceptionally rich - much of which is taxed at very low capital gains rates."
Supreme Court Justice Louis Brandeis once said, "We may have democracy, or we may have wealth concentrated in the hands of a few, but we cannot have both." I think we'd better decide which it's going to be pretty soon.