Wednesday, June 6, 2012

Rich Recover, 99% Not So Much

Great Recession vs Great Depression Recovery
There have been many comparisons of the Great Recession of this century with the Great Depression of the last. Indeed, some have referred to the Great Recession as the Lesser Depression. These two economic disasters have many characteristics in common. They do, however, differ radically in one important respect.

During the recovery from the Great Depression the vast majority of the public experienced increased income and the richest folks not so much. In contrast, so far only the richest Americans have benefited from the recovery from the Great Recession.

The data used in the chart may have been subject to a little cherry-picking, especially with regard to the years chosen for comparison. Nevertheless, it is obvious that things have changed between 1933 and 2009 that grossly favor the super rich at the expense of the bottom 90%.

It's not much of a stretch to conclude one of the main culprits, as discussed in Legacy of Ronald Reagan, is the advent of supply-side, trickle-down, Reaganomics. The chart there shows that income growth was independent of income group in the decades prior to the introduction of the aberrant theory of trickle-down economics. Since that time, essentially all income growth has gone to the wealthiest Americans and nothing to the middle class. 

U.S. Supreme Court decisions such as Citizens United that advanced legitimacy of the notion of corporate personhood and opened the floodgates of unlimited political spending by monied interests to the detriment of the 99% are also partly to blame. Lord Acton said, "Power corrupts; absolute power corrupts absolutely." Reaganomics and the Supreme Court have given absolute power to those with deep pockets. Our democratic republic has become an oligarchy of the rich. Taking back that power is going to be a bitch.

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