Economic outrage

Today the President meets with legislative leaders of both parties to continue an excruciating game of chicken over whether D.C. dithering, spin, distrust, duplicity, and cowardice will converge at the moment our national debt ceiling maxes out, and flip the U.S. government's power switch to off.

I'm no economist, so I'll spare the blogosphere One Finger Typing's opinion in its author's own words. Instead, I'm going to cherry-pick from the nation's newspaper of record, a former Secretary of Labor, and a Princeton professor of economics who won the Nobel Prize in 2008.

No, it's not Joe Sixpack's take on how things work, but Joe Sixpack can post to his own blog. This one's mine.


Where's money going?

From an article titled, We knew they got raises, but this?, published by the NY Times, 2 July 2011:

The final figures show that the median pay for top executives at 200 big companies last year was $10.8 million. That works out to a 23 percent gain from 2009. [...] And it’s not as if most workers are getting fat raises. The average American worker was taking home $752 a week in late 2010, up a mere 0.5 percent from a year earlier. After inflation, workers were actually making less.

Which tide lifts whose boats?

From UC Berkeley Professor and former Secretary of Labor Robert Reich, Republican distortions a sign of desperation, published on 3 July 2011, in the SF Chronicle:

[...] rather than depress economic growth, higher taxes on the rich correlate with higher growth. During almost three decades spanning 1951 to 1980, when the top rate was between 70 and 91 percent, average annual growth in the American economy was 3.7 percent. Between 1983 and the start of the Great Recession, when the top rate dropped to between 35 and 39 percent, average growth was 3 percent. How to explain this? Easy. Since the early 1980s, a larger and larger share of total income has gone to the top (the richest 1 percent of Americans got 10 percent of total income in 1980 and get more than 20 percent now). That's left the vast middle class with insufficient purchasing power to boost the economy - without going deep into debt. Lower tax rates on the rich - including lower capital gains rates - have exacerbated this regressive trend.

A nation of people or a nation of corporate balance sheets?

From Nobel laureate Paul Krugman, in an op-ed titled Corporate Cash Con, published on 4 July 2011 in the NY Times:

And now trickle-down economics — specifically, the idea that anything that increases corporate profits is good for the economy — is making a comeback. On the face of it, this seems bizarre. Over the last two years profits have soared while unemployment has remained disastrously high. Why should anyone believe that handing even more money to corporations, no strings attached, would lead to faster job creation? [...] Lack of corporate cash is not the problem facing America. Big business already has the money it needs to expand; what it lacks is a reason to expand with consumers still on the ropes and the government slashing spending. What our economy needs is direct job creation by the government and mortgage-debt relief for stressed consumers. What it very much does not need is a transfer of billions of dollars to corporations that have no intention of hiring anyone except more lobbyists.

The big picture

Connecting the dots yet? No? Here, let Professor Reich show you how: