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Welcome to the 1 percent recovery

Mon, 05 Mar 2012 19:56:00 +0000

There was a brief debate focused on the following question: Would the gains of the economy continue to accrue to the top 1 percent once the recovery started, or would they have a weak post-recession showing in terms of raw income growth as well as income share of the economy? The top 1 percent had a rough Great Recession. They absorbed 50 percent of the income losses, and their share of income dropped from 23.5 percent to 18.1 percent. Was this a new state of affairs, or would the 1 percent bounce back in 2010?

We finally have the estimated data for 2010 by income percentile, and it turns out that the top 1 percent had a fantastic year. The data is in the World Top Income Database, as well as Emmanuel Saez’s updated “Striking it Richer: The Evolution of Top Incomes in the United States” (as well as the excel spreadsheet on his webpage). Timothy Noah has a first set of responses here. The takeaway quote from Saez is, “the top 1 percent captured 93 percent of the income gains in the first year of recovery.”

The hypocrisy of Wall Street “capitalism”

Thu, 01 Mar 2012 17:16:00 +0000

The phrase “Wall Street” is evocative in American culture. For generations, it has referred to the showcase of American capitalism: our financial services system that ensured the efficient use of funds by channeling capital to its most productive use. Indeed, the governing ethos in America is that Wall Street is the heart and soul of our capitalist economy.

As I have written before, capitalism involves four basic principles: absolute responsibility for anything and everything that happens to your company (i.e. total accountability), equal justice under the law, compensation based on the real value created for society, and competition, which involves failure and what is often called creative destruction.

The CEO of JPMorgan Chase, Jamie Dimon, has repeatedly touted the success of his efforts and disparaged critics. Earlier this week he compared compensation in the banking industry to the struggling media world, suggesting that the banking industry was far more successful. In speaking to journalists, according to Bloomberg, he noted, “Worse than that, you don’t even make any money… [while] we make a lot of money.”

The deep roots of the war on contraception

Tue, 14 Feb 2012 17:28:00 +0000

Republicans for Planned Parenthood last week issued a call for nominations for the 2012 Barry Goldwater award, an annual prize awarded to a Republican legislator who has acted to protect women’s health and rights. Past recipients include Maine Senator Olympia Snowe, who this week endorsed President Obama’s solution for insuring full coverage of the cost of contraception without exceptions, even for employees of religiously affiliated institutions. And that may tell us all we need to know about why President Obama has the upper hand in a debate over insurance that congressional Tea Partiers have now widened to include anyone who seeks an exemption.

The rise of the zombie candidate

Wed, 11 Jan 2012 16:04:00 +0000

Robert Farmer, a legendary Democratic fundraiser of the 1980s and 1990s, once described how presidential campaigns ended: “People don’t lose campaigns. They run out of money and can’t get their planes in the air. That’s the reality.” Most candidates would run out of money long before they ran out of potential votes or plausible paths to victory. The winner of the nomination would often be the candidate with enough financial reserves to keep going when the others couldn’t afford jet fuel, and Farmer’s skill was in making sure that his candidates -- Michael Dukakis in 1988 and Bill Clinton in 1992 -- had that advantage.

The moral crisis of modern capitalism

Wed, 09 Nov 2011 21:35:00 +0000

The Occupy Wall Street protesters were not immune to the news of Steve Jobs’ passing. “A ripple of shock went through our crowd,” Thorin Caristo, a leader of the movement’s Web outreach, told the Associated Press. He later called for a moment of silence from the stubborn assembly at Zuccotti Park, and the 99 percent paid tribute to an exceptional member of the other club.

The gesture failed to move some. National Review’s Daniel Foster envisioned “viscera of a thousand heads exploding from the sheer force of cognitive dissonance,” while conservative columnist Michelle Malkin said that the protesters honoring Jobs’ life and work “without a trace of irony” provided the “teachable moment of the week.” The lesson, it seems, is that one cannot critique capitalism without also rejecting every single capitalist, a conclusion that is not only logically flawed but one that was famously rejected by William F. Buckley Jr., the ideological avatar of the modern conservative movement and a founder of the National Review.

Was Planned Parenthood’s founder racist?

Wed, 02 Nov 2011 16:35:00 +0000

Birth control pioneer Margaret Sanger is back in the news this week thanks to GOP presidential candidate and abortion rights opponent Herman Cain, who claimed on national television that Planned Parenthood, the visionary global movement she founded nearly a century ago, is really about one thing only: “preventing black babies from being born.” Cain’s outrageous and false accusation is actually an all too familiar canard — a willful repetition of scurrilous claims that have circulated for years despite detailed refutation by scholars who have examined the evidence and unveiled the distortions and misrepresentations on which they are based (for a recent example, see this rebuttal from The Washington Post’s Glenn Kessler).

You will never pay off college

Wed, 26 Oct 2011 20:00:00 +0000

Put on your monocle and top hat and pretend you are part of the 1 percent for a minute. Your first task is to write a set of legal codes about the collection of debt in this country, specifically student debt. And you want to be kind of a jerk about it. What's the one thing you could do for student debt that you don't do for any other type of debt, one that would radically shift the relationship between student loan creditors and debtors both practically and symbolically?

How about this, from the Debt Collection Improvement Act of 1996: "Notwithstanding any other provision of law ... all payments due to an individual under ... the Social Security Act ... shall be subject to offset under this section."

What this means is that when it comes to collecting on student loans, the government can take funds from your Social Security check. There are rules to the offset: the first $750 a month can't be touched, and only 15 percent of benefits above can be taken to pay back student loans. But this is still a radical break in the social contract with no equivalent for private debts.

What do the “1 percent” actually do?

Fri, 14 Oct 2011 20:45:00 +0000

This originally appeared on New Deal 2.0.

Look, a crazy anti-capitalist anarchist carrying a bizarre sign incompatible with the basic tenents of liberals:

Or not.

A lot of emphasis is on the "99 percent" versus the "1 percent" in these protests. But who are the 1 percent and what do they do for a living? Are they all Wilt Chamberlains and Oprahs and other people taking part in the dynamism of the new economy? Nope. It's same as it ever was -- high-level management and the financial sector.

Suzy Khimm goes through the numbers here. I'm curious about occupations. I'll hand the mic off to "Jobs and Income Growth of Top Earners and the Causes of Changing Income Inequality: Evidence from U.S. Tax Return Data" by Bakija, Cole, and Heim. This is the latest and greatest report on occupations and inequality. Here's a chart of the occupations of the top 1 percent:

Why we need a bold new jobs program

Tue, 06 Sep 2011 22:01:00 +0000

To those who say that our expenditures for Public Works and other means for recovery are a waste that we cannot afford, I answer that no country, however rich, can afford the waste of its human resources. Demoralization caused by vast unemployment is our greatest extravagance... I stand or fall by my refusal to accept as a necessary condition of our future a permanent army of unemployed... [W]e must make it a national principle that we will not tolerate a large army of unemployed and that we will arrange our national economy to end our present unemployment as soon as we can and then to take wise measures against its return.

- Franklin D. Roosevelt