Wednesday, March 7, 2012

Recovery? What Recovery?

Worried about the financial plight of the top 1% in the aftermath of the Great Recession? Panderbear recommends reading Striking it Richer: The Evolution of Top Incomes in the United States by University of California economist Emmanuel Saez. It will definitely set your mind at ease. While the rich did take it on the chin during the Great Recession, it turns out in the two years since the recovery began they have done quite well.

You may ask, "What recovery?" If you haven't experienced much in the way of economic recovery perhaps it's because in 2010, the first full year post-recession, the top 1% captured fully 93% of all income gains, while the 99% split the remaining 7%. For Panderbear that amounted to about a buck and a half. For those with incomes similar to Mitt Romney's, whose income was about average for the top 0.01%, the increase was something north of $4,000,000. On average the bottom 90% actually lost ground.

Income Distribution

If you think the top 1% of income earners in the country getting only 93% of all income growth is a raw deal for the wealthy, then vote for whichever candidate wins the Republican nomination. Every one of the remaining four candidates proposes cutting taxes on the rich even more and all but Ron Paul also propose increasing income taxes on the poor and middle class.

If you have been left wondering, "What recovery?" and, like Panderbear, you think transferring even more wealth from the poor and middle class to the rich is a bad idea, then consider voting for President Obama, the only candidate actually proposing to make the federal income tax structure progressive again. You know, the way it was in the good old days of Panderbear's youth when Eisenhower was president, the middle class was thriving, and the American Dream was alive and well.

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