Can you give a link or cite for the Social Security data you're discussing?
Thanks!

Posted by JW Mason on Oct. 25, 2010 at 03:11 PM

Not to worry. Bloomberg has a story today about how "consumer spending" will
soon take us up and out of the recession.

Posted by Chris Marquesas on Oct. 25, 2010 at 03:19 PM

Is this mostly the result of management stealing from shareholders because of
our ineffective and incestuous boards and the way board members fill each
other’s pockets? Can anyone tell me?

Posted by Lee Zehrer on Oct. 25, 2010 at 03:48 PM

What is the title of the SSA payroll tax data report released Oct. 15 2010
referenced in Scary New . . . .

Posted by Melody Specht Kelly on Oct. 25, 2010 at 03:49 PM

Thank you for a concise summary, backed by irrefutable data, of 50 years of
economic treason. Here's wishing that both parties lose in November.

Posted by Joe M. on Oct. 25, 2010 at 03:55 PM

screw the rich. may they all burn in
hell eternally. greedy bastards all of
them

Posted by nick diamond on Oct. 25, 2010 at 04:20 PM

I'd like to work up some additional statistics. Where did you get your data?

Posted by Jeremy McMillan on Oct. 25, 2010 at 04:56 PM

Evil 'Reaganism' really? It couldn't have anything to do with bringing oh one
to two billion Chinese, Indian and other workers in at the low end of the
labor scale. That 'evil' gave billions a better life free from stupid
dictators and in the process messed with the wage scale and buying power of
similarly skilled workers in the US and elsewhere. Not that there isn't
greed at the top end of the scale but don't ruin your argument and distort the
truth by ignoring other factors.

Posted by Steve adams on Oct. 25, 2010 at 08:48 PM

I have not seen either a list of 74 names (or names of Households) nor what
institutions they may be associated with. The later should be of utmost
importance.

Posted by Jim Kistner Jr on Oct. 25, 2010 at 10:13 PM

David, I love you, but your posts are TOO LONG. Could you please clean them up
a bit!

Posted by Jacob A Geller on Oct. 25, 2010 at 10:50 PM

"tax-subsidized mechanisms that encourage American manufacturers..." I'm sure
you've written about this and the remainder of that paragraph. I'm not
disbelieving but would like some details. Can you or one of the commenters
point me to a source or two? Thank you. Frank

Posted by Frank de Libero on Oct. 25, 2010 at 11:13 PM

Great scoop David. Funny that both Treasury and the Census Bureau provide less
precise data than the Social Security Administration (its like somebody forgot
to "clean up" the data over there). :o)

Of course, these numbers understate the extent of income inequality. The SSA
currently tracks only wage income, the new Unearned Income Medicare
Contribution created by the new Healthcare bill doesn't take effect until
2013. Even then, unrealized capital gains will be uncounted (and untaxed).

Posted by beo wulf on Oct. 26, 2010 at 02:17 AM

Interesting article. I am curious if you have inflation data for the same time
periods you reference.

Posted by Jim B. on Oct. 26, 2010 at 08:27 AM

Boy, where to begin....

How is wealth created? How are jobs created? And just how is the relative worth
of one's labor determined? If one unravels these enigmas, obfuscated by huge
smokescreens such as yours, one finds that there are natural forces at play.
The "base" creates jobs? Does dirt create trees?

We can no more control the natural economic forces than we can the sun's
temperature. In fact, there is a large body of economic theory which concludes
the greater the attempt to effect a certain economic outcome, the less likely
that outcome is achieved.

Thus, it is far better for workers to keep more of their earnings, not less.

Call it Reaganism, but that's really a red herring, isn't it?

One more thing: your "pie." did it get bigger or smaller.

If one is more concerned about the wealth of others, one will never be happy,
as someone will always have "more."

No, the America I was raised in taught me it was far better to develop one's
talents to achieve one's purpose in life, regardless of income.

Posted by Bubba Schwartz on Oct. 26, 2010 at 09:16 AM

Ditto to what Jeremy McMillian said.

Despite all the bad that came from globalization and the excesses resulting
from financial liberalization, the good that came out of it include lifting
something like 20% of humanity out of abject poverty in the 3rd world.

There isn't a skyscraper in Shanghai or a factory in Sao Paulo that wasn't
'financed' somehow.

Part of what the developed world is suffering is a long-overdue comeuppance
caused by living far beyond our means for far too many years.

Evolution and survival IS Darwinian...

IMHO

Posted by Noel Chun on Oct. 26, 2010 at 10:51 AM

Are the subsidized Chinese and Indian industries sustainable? After our next
crash, we won't be buying a lot of Chinese electronics or talking to Indian
customer service reps about our account balances. Both of those depend on the
working and middle class having some money.

I love the altruistic angle some of you commenters are pushing. Was India a
dictatorship between 1950 and 1980? Is China a free state now? Come on! Our
economy is responsible for improving quality of life in China and India since
when? If anything, we should take responsibility for the economies US
lawmakers, executives and investors have been destroying: Mexico, South and
Central America, and any African "republic" where a US oil company operates.

Posted by Jim O. on Oct. 26, 2010 at 11:31 AM

To Bubba Schwartz:

Yes, DIRT creates TREES

Posted by Sean Madden on Oct. 26, 2010 at 11:48 AM

David, PLEASE convert your tables and graphs to images rather than PDFs!

Posted by david b on Oct. 26, 2010 at 12:00 PM

I read your book "Free Lunch" and I found the information therein compelling.
Having just finished your article on Tax.com, I am wondering what it will take
for the American people to hear and understand what you are saying? I only hope
that they do so sooner rather than later, and I applaud you for publicizing
this information and attempting to inform the people about this dire situation.
Thank you, regards, Christopher G. Walker

Posted by Christopher G. Walker on Oct. 26, 2010 at 01:11 PM

One easy little act of solidarity, could resolve these problems. If we ALL
quit paying our mortgages, in sympathy for those who have, are, and will, have
their homes repossessed, the income stream sustaining our robbers would be
greatly reduced. Maybe enough to slay them.

Posted by Jane a. m. on Oct. 26, 2010 at 02:23 PM

It's a good blog post, but I don't get what you are suggesting? When an
American worker making, for example, rubber seals gets paid $13/hr, and his
Indian counterpart makes $3/day for the same product, how could you not expect
a massive stagnation of wages? Further, how could you not expect a massive
increase in pay for the guy who figured out how to manage a China supply chain?

How will noodling around with tax policy do ANYTHING to make Herr Schmidt
willing to buy his o-rings from very pricey Jamal instead of very cheap Suresh?

Posted by Jo Gourly on Oct. 26, 2010 at 04:24 PM

If you don't earn any wages, are you still counted as a wage earner? Former
wage earner? Honorary?

Posted by Richard Warnick on Oct. 26, 2010 at 05:21 PM

The America I want to live in cares more about what my neighbor doesn't have
than what I don't have.

How we treat those less fortunate than ourselves -- supply side be damned -- is
much more important than what we keep ourselves.

Posted by Richard C. in PA on Oct. 26, 2010 at 06:15 PM

To Bubba etal, I wonder if you read or understood the part of the blog
regarding destabilizing the base. How much further would you suggest income
inequality can be pushed? The point is not that we could completely control
global forces pushing down wages. But we certainly have it in our power to
control how the total wage pie in America is distributed, should we choose to
do so. Is it in our best interests as a society to have such a chasm continuing
to open between a very few and the vast majority?

Posted by Ralph S. on Oct. 26, 2010 at 07:15 PM

Hey Jim O...

I just worked up a Gini Coefficient for these SSA numbers. Guess what? The US
is at 0.608, right there with Africa and Central America.

http://thinkbait.aphor.net/2010/10/why-us-economy-will-be-in-toilet-for.html

Posted by Jeremy McMillan on Oct. 26, 2010 at 09:35 PM

All the talk about how globalization has magically created a magic new future
for a bunch of formerly terribly poor people overlooks David's point entirely:

The rich are getting richer in leaps and bounds.

The ultra poor are staying poor.

Those who are working in slave labor camps to feed the global beast's hunger
for cheap labor may be doing better than X years ago...but what are the costs
in environmental and social terms? Is an iPod and car any substitute for
demolished ecosystems and life in the hell of a major city?

The middle class is being emptied out, and it seems that most people side more
with the ultra rich and their globalization than with these workers.

Don't worry. Oil is about to get far more expensive. Food too. And this should
provide much more fodder for hating American workers, who organized in the 20th
century for a share of the wealth they created for their masters. How dare
they!

Posted by Wanda Wellstone on Oct. 27, 2010 at 06:34 AM

Mr. Johnston, if the human species survives, Posterity is going to build
statues to honor you. They will place them in The Hall of Heroes To Humanity.
You are a living treasure who writes gems, Sir. Can't wait to read your
upcoming book, though what I really want is for there to be no more necessity
for you to continue working so hard to enlighten sleeping humanity.

In that vein, Bubba has questions: "How is wealth created? How are jobs
created? And just how is the relative worth of one's labor determined? If one
unravels these enigmas...one finds that there are natural forces at play. The
"base" creates jobs? Does dirt create trees?"

And I have answers: Only work creates wealth. Anyone who is not yet certain
that is true, now is an excellent time for you to take a dollar bill out of
your wallet - and tell it to fix you a sandwich.

Your dollar bill will never even make you a cup of tea.

Obviously, it takes the sacrifice of an individual's time and energy to create
wealth (goods and services) - and there is no arguing against that, unless of
course you deny the natural reality of the situation humans living in physical
bodies find themselves in.

So now ask yourself: Is there any possible way any human being can possibly be
sacrificing a billion times the hours and energies to working than the average
person working average hard sacrifices?

Can anyone be sacrificing a million times the time? A thousand times the
time? A hundred times the time? A dozen times the time? Even 3 or 4 times
the time?

Do you begin to see the total irrationality and unjustness of allowing
limitless personal fortunes, when individual contribution to the pool of wealth
is inarguably limited by nature's decree??

Via the onset of division of labor, leading to the necessity to trade to remix
the specialized goods and services, reward became divorced from sacrifice: this
is humanity's biggest-ever logic-whoopsie...and the source of all our troubles.

Next clarification: Only demand creates jobs. To paraphrase Jack Metzgar: It’s
true that rich people invest in companies who hire workers and pay them a wage,
but to say these rich create jobs is like saying that the light coming from the
ceiling of my office is caused by the light switch on the wall. Without
turning the switch on, there will be no light, yes, but the ultimate creator of
that light tracks back to a power station and a national electric grid that
hooks into the wiring behind the walls of my building. In an economy, consumer
demand is the power station, the grid, and most of the wiring. If there is no
consumer demand, businesses have zero reason to hire workers—just as there is
no reason to switch on the light if nobody is using the room.

So - who would have guessed - it IS the working people who create their own
jobs! Wow, what a perspective-shifting revelation!

Next, from the Conceptual Guerilla: "Adam Smith said that once a small elite
had monopolized ownership of land and materials, they would drive wages down to
the level of subsistence. It is the "appropriation of land and stock" - Smith's
terminology - that creates the "market force" that reduces the market value of
labor.

Now, that doesn't mean that certain derivative functions - management,
distribution, and even investment - don't exist, and that labor cannot contract
for the delivery of those derivative functions. If you are the labor producing
automobiles, or any other good or service, a sales force selling those goods
and services is probably necessary. Likewise, certain organizational functions
- we call it "management" - might be useful. Even "investment" has a place,
since the goods and services needed to build and equip a shop must be paid for.

But notice that those derivative functions serve the labor that produces the
value. It is distribution, management and investment that are "costs of doing
business." Productive labor is the business that has these costs. Our
contemporary business model has stood this on its head: the "cost" is
productive labor in an arrangement where "ownership" trumps "production", and
where the owner of materials and facilities is seen as the central player.
Owners have a "natural right" to reduce their "costs" and maximize their
profits. Productive labor is not perceived as having any such right.

But once we see through the upside-down arguments it is plain that productive
labor has the same, and indeed a superior right to maximize its profit, and
that the laws and government have an entirely legitimate function in protecting
these fundamental rights of labor -- fundamental rights that have not hitherto
been recognized.

As a final observation, notice that recognition and protection of the
fundamental rights of labor is entirely consistent with a "market economy,"
where "market forces" are understood to be shaped by certain legal and
governmental constructs. The government has an absolute right and indeed
obligation to shape the fundamental rules of the market in such as way as to
guarantee labor its fundamental rights.”

Once people take to heart what these truthful things mean, we have won most of
the battle against the extreme inequality that is killing us all and this
planet.

Bottom line, the human species will either rid itself of the geno-sadistic idea
to allow unlimited personal fortunes, or we will succumb to the results of
having the next and the next and the next wealthpower giants, ad infinitum
until the violence attached to the injustice sets off the global bombs.

Murder the idea to allow the unlimited personal fortunes capitalism we have
now, and switch to fairpay justice capitalism, or you will get history on
repeat on steroids kaboom.

Posted by Xavier Onassis on Oct. 27, 2010 at 10:05 AM

By the way, my screenname is pronounced 'Save yer own -uh - keesters'.

The rich get richer while the poor get poorer means precisely this: The rich
are getting more and more for a unit of work while the poor are getting less
and less for the same unit of work. Never forget that work = an individual's
sacrifice of time and energies.

The pool of wealth is FINITE: the number of workers working is finite, the
hours they can sacrifice to working are finite, so the amount in the pool of
wealth is finite. (People who try to deny that are confusing the actual with
the potential for that number to grow or shrink.) This means that overpay has
nowhere to come from but from underpay. Overpay-underpay is legal theft. And
every theft comes with an angry person attached.

Equality breeds no strife.

James Madison: The purpose of government is justice.

E=mc2 is not a fact subject to emotive persuasion.

Add it up, humanity. Use your acorns to save your bacon. Campaign for fairpay
justice and get a golden age of sustainable global peace and plenty, or deprive
every future generation the chance to exist.

“The patience of the oppressed has always been the most inexplicable, as well
as probably the most important, fact in all history.” -Author Amos Elon from
The Pity of it All

Posted by Xavier Onassis on Oct. 27, 2010 at 10:34 AM

One more thing:

The original great American Dream of Freedom was this: The great dream of
FREEDOM FROM the TYRANNY of the European moneypowers.

It was NEVER the dream of freedom to grow limitlessly rich at the expense of
your neighbors.

Americans today have quite forgotten the very reason their founders and
ancestors created America.

Can we all say "oops"?

Posted by Xavier Onassis on Oct. 27, 2010 at 10:55 AM

One might reasonably guess that those in the upper decile are probably
deferring some of their wages in 401(k) accounts -- and at a higher rate than
lower income workers.


Xavier Onassis (and others), you might appreciate the ideas of Henry George.
There is a 39-page synopsis of
"Progress and Poverty" at
http://progpov.menaceofprivilege.com/notes_with_intro.pdf, and I commend it to
your attention.

Posted by Wyn Achenbaum on Oct. 27, 2010 at 12:31 PM

I am no economist but I question the unemployment rate at 22%. I think it is
much more than that. The difference between the current state of our nations
disaster and the "Great" depression is that during the first depression there
was no unemployment for people. If you take into account those on unemployment
and those, like myself, who were contract workers and did not pay into
unemployment (therefore don't qualify) I believe the rate is more like 45%.

Posted by Sharon D. on Oct. 27, 2010 at 02:06 PM

Just want to thank you for all your important work. I wish that it was not
necessary, though.

Posted by Kellie Brown on Oct. 27, 2010 at 02:51 PM

You go, Wyn. Funny you should mention my old pal Henry George. I learned a
lot reading him. He'll be in that Heroes Hall, too, someday. I voted early on
Monday, and good Henry G actually got a few write-in votes on my ballot.

As thanks for giving people that link, Wyn, I'll give you another one (a very
short and very little-known Mark Twain piece) just as useful for helping us all
unlearn what simply isn't true:

http://www.envisioneer.net/RainForest/

You're going to love it.

Sharon, being contracted, you're paying taxes at a higher proportional rate
than any other group, right? Seeing as how you pay double in for your Soc.
Sec.?

Posted by Xavier Onassis on Oct. 27, 2010 at 05:03 PM

It is tragic that we still won't discuss the role that welfare played in
preventing the sort of tragedies that are becoming common today. During
economic downturns in the past, families could at least rely on welfare to
enable them to keep their families together and tide them over until conditions
improved.
Without a safety net, people are losing everything -- including their children
-- and it will be almost impossible for most to get back on the economic
ladder. A vital secondary role is that welfare gave people the option of
turning down jobs that paid poverty wages, ripped off or abused workers, and
had dangerous working conditions. This compelled businesses to pay fair wages
and comply with safety and labor laws. That's no longer the case. Desperate
people must take whatever they can find, and can't risk their jobs by reporting
bad employers.

Posted by Diane H. Fabian on Oct. 27, 2010 at 10:20 PM

Thanks XO ... for pronouncing your name, and for the link. Quite by accident,
I came across something of yours from 6/08 on the Bill Moyers PBS blog a few
hours ago, and I'm happy to meet you! Returning the favor, you might enjoy
lvtfan.typepad.com and wealthandwant.com. I am particularly interested in the
kinds of privilege which concentrate wealth and income into a narrow range of
pockets, and collect data on the magnitude of the problem.

I am continually amazed by the lack of curiosity even bright people display
with respect to the mechanisms that concentrate income and wealth, and reduce
employment and entrepreneurial opportunities. I appreciate DCJ's efforts to
identify some of them.

I think Henry George largely got it right, and has a lot to tell us about how
we might go about creating a more just and efficient economy and society.

Is your Twain reference the link to "Archimedes"? A great piece! -- it also
appears at wealthandwant.

Posted by Wyn Achenbaum on Oct. 27, 2010 at 10:28 PM

"Data" is plural. "Look at this data" or "this data is" are incorrect. "Look at
these data" or "these data are" are correct.

Singular: datum
Plural: data

Posted by grammar is important on Oct. 28, 2010 at 09:59 AM

Hi David - and thank you for the information.


But wouldn't "Every 34th wage earner in America in 2008 went all of 2009
without earning a single dollar" be just one of every thirty four, so about 3
in one hundred? Of does that leave out the growth inpopulation? Where did that
come from?

Because when you look at the total workforce of 150ish million, 30 million are
unemployed or underemployed. That would be 1 in 5. What sample is the SSA
looking at? I looked a bit at the data from the link you provided.

Thank you for the post.

Posted by interested in this on Oct. 29, 2010 at 02:30 AM

pst pst Wyn, I am swamped, but please please please see the page linked below
and then get in touch with me at the addy you'll find there!

http://www.conceptualguerilla.com/?q=node/5194

...because we humans are in a globalocal emergency, the wealthpower giants who
roil and boil and spoil the world have declared full-on economic fight to the
death with global labor, and, ya know, the colossal destruction of human and
planet happiness just might be important.

David, my words of high praise for you were simply recognition of the very
happy fact that your books have the great power to cause everyday Joes and
Janes to say "Well, DAMN - I never knew ANY of this! And just what the bleep
ELSE have I been unaware I was unaware of?!"

And that big fat "D'oh!" moment - when Homer Simpson suddenly realizes how
under-informed he's been and how very wrong he has been getting his thinking -
THAT is when the learning that matters begins.

Your ability to cause people to have "D'oh!" moments, David, is as rare as is
it crucial.

So, you see, I did not give you praise higher than you deserve.

Namaste, Sir - and you are VERY cordially invited to read that linked page,
too. I dare to suggest there is nothing more valuable and sensible on the
whole world wide web, even though I do not write nearly as well as you do,
alas.

Posted by Xavier Onassis on Oct. 29, 2010 at 11:41 AM

Illegal Immigrants are taking the skilled and unskilled labor. They aren't
taking CEO, Software Developer nor ER Doctors jobs.

There are 100 other factors you are ignoring. It's like saying some chemical
in cash makes you live longer based on rich people being healthier.

Most are self-made driven people, who take care of themselves and can afford to
since they work their tails off.

Posted by Mark Techie on Oct. 29, 2010 at 07:40 PM

Not a comment on the article -- which was quite good, small grammatical errors
not withstanding -- but on the comments. I feel like I've found the cool
mountain stream of the Interweb here -- postings by intelligent beings with
actual thoughts. My deepest thanks to you all.

Posted by Janaki R on Oct. 29, 2010 at 11:01 PM

Oddly (or, perhaps, not that oddly), there is no differentiation between imcome
disparity and wealth creation. The first of course is easy to measure; the
latter much harder. Who cares what income disparity there is if the people at
the bottom continue to do better. It is not unethical to have wealth disparity.
It is unethical to steal from people. It is also unethical to pretend you care
about people when all you want is the power to do with others' property what
you want to do with it, having the arrogance and hubris to believe that you
know better than anyone else what should be done with others' property. More,
it is unethical to impoverish the poor based on an unjust theory of justice,

Posted by Troy Camplin on Oct. 31, 2010 at 02:01 AM

Thick? "Thick" is a housewife cleaning the oven until it sparkles while the
house burns down around her and her family. Focus on any perceived grammatical
imperfection in what David wrote = cleaning that oven.

It is time to get really really real like we never got real before, People.
And focus on grammar is SO NOT keeping it real.

Another point: Self-made people? Really? There is somebody out there who
thinks people make themselves?

Look, we do NOT create ourselves. The guy who got born with better gifts -
higher intellect, greater brawn, better health, more talents or abilities - he
is the guy who was better-paid from the get-go by whatever you think creates us
than was the guy who got born with lower IQ or a health handicap or lesser
talent, etc.

AND NOBODY GOT TO CHOOSE WHICH GIFTS THEY DID OR DIDN'T GET. Nobody who was
born lesser-gifted CHOSE that, and nobody who got born better-gifted sacrificed
anything at all to be born with greater gifts with which to make his way
through this life.

Is it a fair race when the Greyhound beats the Dachshund by a mile???

Happiness is in reality. We are in unreality.

To say that people deserve to be paid for having received greater gifts in the
birth lottery is as silly as saying you should all pay me because somebody gave
me a Christmas gift - which is absurd and everybody knows it.

We are not born with equal gifts. We are, however, born with equal needs to
have a place to put our feet - since humans cannot just float in air - ahem -
and equal need for food and clean water, for shelter from the elements, for
medicine when we get sick, for education...etc. It is from the equal needs we
have that our equal rights are derived. The unequal gifts we receive at birth
are irrelevant in this matter of determining how much wealth people deserve. As
a matter of fact, being born unequally gifted by no choice of our own argues
for paying the lesser-gifted MORE than anybody else, as they have been
handicapped from the start and it isn't their fault they have to strive to make
their way through life using poorer gifts.

(Time spent developing the gifts you did get does deserve pay, because it takes
sacrifice of time and energies to study, to develop gifts - but no sacrifice to
get them originally.)

Overpay has nowhere to come from but from underpay. If economists would stop
teaching the lie that the pool of wealth is infinite, people would see quite
clearly that overpay has nowhere to come from but from underpay. I am quite
confident that no one can give me the logical, soundly reasoned justification
for forcing the lesser-gifted to give up their rightful pay in order to overpay
the better-gifted, when both are equally limited by nature in how much they can
sacrifice to producing the wealth being divided.

Learn to hate these false arguments for overpay (and there are many more I have
not mentioned here), like you hate tyranny and slavery and misery and
extinction - because that is what they are.

Pursue your happiness with all mindfire!

Posted by Xavier Onassis on Oct. 31, 2010 at 08:20 AM

Harvard and Duke U tested 5,000 with a short list of wealth distribution for
Usa and Sweden. 92% chose Sweden.

World Forum polls have, consistently, for many years shown happiest people live
in Socialist nations.
olduglymeanhonest



Socialist Nations.

Posted by clarence swinney on Oct. 31, 2010 at 03:11 PM

1999 and 2000 law changes screwed middle class enriching the richest of rich. A
few Investment Houses took over 80% of local bank Deposits.

Rich Investors went into a frenzy in new Casino Derivatine Of America.
Invested in Gambling not in stocks
which build businesses and jobs.
Dow was 11,720 in 2000 now 11,100.
237,000 Net New Jobs per month were created in Clinton 8 and 31,000 in Bush 8.
Yet! Ultra Rich grew in numbers and amount of Wealth.
It was a period of little Value added.
It was simply a Gambling period.

2000 Financial Modernization. Yuk!
olduglymeanhonest
David Cay is younghandsome lovablehonest. Great man. Mon Hero.

Posted by clarence swinney on Oct. 31, 2010 at 03:25 PM

Everybody knows money is power. Oddly "very, very oddly" Tony has concluded
from my very strong arguments against allowing anybody having power over
others... that I want power over others. Right. I'm arguing for getting rid
of the idea to allow people having power over others because I want power over
others. That is some very serious irrationality there, Tony. The arrogance
and hubris on display is certainly not mine, Petal.

You don't GET wealth disparity - you get nothing CLOSE to the disparity we
have an inequality factor residing in the billions is what we have - without
stealing from people, Tony. That's the whole point of understanding just what
it is that creates wealth and of understanding the distinction between
self-earned wealth and other-earned wealth: to stop the stealing going on NOW.

How do you know who the thieves are? The thieves are the ones with the heaps
and heaps of money, Hunny.

The wealthpowerful are in possession of other-earned, not self-earned wealth,
Tony. It is not physically possible to self-earn an overfortune. Overfortunes
are gained courtesy of myriad legal thefts that exist in our system (and by
successful illegal thefts).

There is no REASON to have superrich. There is every REASON not to have
superrich.

I'll make everyone a bet: I'll bet you cannot tell me the very good reason
humans ever had for allowing unlimited personal fortunes. Anybody who can tell
me the very good reason humans ever had for allowing limitless personal
fortunes gets a yummy freshbaked cranberry oatmeal walnut cookie.

I'll be waiting for all the good reasons to pile up below

Posted by Xavier Onassis on Oct. 31, 2010 at 04:59 PM

Hi, clarence. I agree that David is every bit as ornamental as he is useful
(but I might be biased since he and my husband look somewhat alike.)

There's a distinction to be made between hard socialism and soft, to my mind.
Hard would be a centrally planned/command economy and the means of production
belonging to the state, and soft would be our social security system that keeps
our sweet grannies alive. Much to the eternal frustration of my wonderful
socialist friends, I myself still have reasons to think capitalism is actually
a good workhorse for humanity - only being worked very badly. Don't blame the
horse for the results, blame the bad working of it. It is entirely possible to
install a mechanism (or two) at the macro-macro level that corrects in one
stroke (or two) for ALL the ways wealth gets maldistributed by our system. You
can actually leave all the current legal theft mechanisms in place, and still
prevent inequality from growing to extremes - and reverse the gap's automatic
ever-escalating. And you can do it without everybody learning to love new isms
and ologies - and without shocks to the economies.

The wealth produced justly belongs in the hands of the producer of the wealth -
that is what I believe. It doesn't belong in the hands of the state any more
than it belongs in the hands of a wealthpower giant who didn't self-earn it.
My problem with Socialism is simply that I don't see how it is any guarantee
that the money gets into the hands of the person who sacrificed to produce the
wealth. I am not yet convinced that central planning of an economy can beat
the capitalist system at providing the goods and services people want. Yes,
the state should have the monopoly on issuing the nation's credit - it's
ridiculous that private bankers have been handed that power that belongs by
right only to the working people of the country. But I have not yet been able
to convince myself - I have not found the reasoning to indicate it - that
ownership of the means of production has to be removed from private hands for
anything to work right.

It's similar to my thinking about government: yes, government has been devoured
by superwealth, but, hello libertarians and republicans, the answer is not to
get rid of government, the answer is to get rid of the superwealth that eats
all governments. All governments are pirates if you let them be pirates.
There's no use in crying about that fact: we constitute governments as a
necessary evil for the benefits we wouldn't have without them.

You have to be vigilant, as the founders told us.

Vigilant ABOUT WHAT is the question.

Vigilant about economic inequality, is the answer.

Think about this: A car operates under fixed mechanical laws, right? But that
doesn't mean we let those laws take the car anywhere it wants to go: we steer
the car that is operating under fixed laws so it goes where WE want it to go.

I don't think it's hard socialism people love about the most egalitarian
countries. Seems to me it's the smaller wealthgap their social-democracies
provide. Which makes perfect sense since there is so much evidence out now
from studies that proves greater economic equality benefits every member of the
society on the most important quality of life aspects.

Capital formation is highest in the most egalitarian countries, too, btw.

(And lastly, here is where a rib-cracking hug for another unsung hero, our
moderator, goes.) (You already get 3 cookies, whoever you are.)

Posted by Xavier Onassis on Oct. 31, 2010 at 07:00 PM

Tony was also wrong in his assertion that the underpaid are gaining ground.
Wages have stagnated for decades here, it's a race to the bottom of the global
wage scale for everybody when capital goes where it wants while labor can't,
speculation in the totally rigged gambling casino that is the global finance
economy has driven prices artificially higher, and governments all over the
world are now being forced by the central bankers to impose austerity measures
on working people who make the wealth, not on the rich whose money rakes
money.

Pay in this world ranges from a thousand dollars a second to a thousand dollars
a lifetime: the work is spread, the wealth is not. The work is taxed, the
wealth is not. Things are so backwards and upside-down, it's almost crazy to
even try to speak to it. 50 million working people starve to death each year
on this planet and still no economist gets it! Should we laugh, or cry?
Maybe we're so far from reality and justice we can't think our way back to it
from here. But does it make any sense not to try?

How obvious can it get, that the wealth is flowing from poorer to richer at an
ever-escalating pace?

"The rich have given to the poor a little food, a little drink, a little
shelter and few clothes - the poor have given to the rich, palaces and yachts
and an almost infinite freedom to indulge their doubtful taste for display; and
bonuses and excess profits, under which has been hidden the excess labour and
extravagant misery of the poor." - Gilbert Seldes

"The modern English oligarchy does not rest on the cruelty of the rich to the
poor - it rests on the unfailing kindness of the poor to the rich." - GK
Chesterton

1% are overpaid, 99% are underpaid. Jeepers! Why is it so damn hard to
convince 99% of people to accept a big raise in pay?! Have we been wired back
to front or something? People have brains, but we sure are doing a good job of
keeping them away from our reality. Are we thinking with our elbows?

Just because fairpay has not heretofore been defined according to principles of
justice does not mean those principles do not exist and the figure cannot be
calculated when we finally get around to doing it. The principles are found in
the Golden Rule (which appears in every religion for a reason) (the Golden Rule
is telling you you're supposed to love yourself so much you will actively seek
NOT to harm others because they will harm you back, duh), and the math is
simple math that any Prom Committee in the country could work out easily. (The
Prom Committee would run this country better, too. They’d pick a theme like
maybe let's play fair and be happy and then they'd do it up bigtime and
beautiful and everything would happen right on schedule and without exceeding
their budget. When was the last time you heard of a Prom being cancelled
because the committee was inept, eh?)

I think the poverty we are suffering from most is the poverty of our horizons.

Wake up and smell the uranium, humanity. And pass the fish for christsakes.

Posted by Xavier Onassis on Oct. 31, 2010 at 08:14 PM

Too many errors, omissions, contextual absences, distortions and misdirections
to correct - some of them embarrassing. Where it has points it fails to expand
them effectively, and when it does expand them it only includes what serves its
own purpose, which is anything but to inform. The wrong questions are being
asked and old, dead-end ideas are lamely revived like Lon Chaney in the Mummy
crawling out of the sand. Its the same warmed over, discredited stuff from the
18th, 19th and early 20 centuries that makes certain that writers like Johnston
et al keep having a job and that Faux news keeps getting to harpoon. This
would not be such fertile ground for Johnston et al and Faux news if public
schools taught anything even resembling the very basics of economics - or even
arithmetic. Absent that, we are headed for a choice between grey, pocketless
tunics and flip-flops or striped pajamas and flip-flops, with the same people
in charge (wearing very snappy uniforms - with shoes), no matter what the
outcome. For me; I'm sticking with flip-flop and snappy uniform futures; can't
lose.

Posted by philip hendricks on Nov. 1, 2010 at 12:55 AM

What might also be forgotten is the fact that since 1980, the American worker
has been asked to co-pay the health insurance premiums, has seen employer-paid
pensions evaporate, and has been asked to pick up the tab on other
business-related expenses that wouldn't have been considered in 1980.

Posted by Bob Rettmann on Nov. 1, 2010 at 01:36 PM

Just once, I'd like to see one of these articles that talks about stagnant
incomes adjust for the questionable official inflation figures. This article
refers to shadowstats.com on unemployment figures. But shadowstats also points
to jiggered official inflation figures, with the actual inflation rate being
rather higher. If you factor in that higher inflation rate, apparently
stagnant wages would in fact have been shrinking.
I agree with Mr. Rettmann above me that increased costs on what had been
government provided services also reduce purchasing power--consider also
tuition fees, for instance.

Posted by Rufus Polson on Nov. 1, 2010 at 06:22 PM

Census Bureau just updated their data on the over $50MM bracket - you need to
re-post your info.

Posted by Craig Me on Nov. 2, 2010 at 01:09 PM

Yes, the stats were just revised down substantially. What do you make of it Mr.
J?

Posted by Jon K on Nov. 2, 2010 at 03:32 PM

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid;=aCXUbSCKHVUE

Posted by Corrected Data Posted on Nov. 2, 2010 at 04:43 PM

philip hendricks: yours is a completely context-free, non-referential post. If
one is not a member of some inner circle of cognoscenti to which you apparently
belong, one has no idea of the specifics of the problems you criticize.

I could copy your post and, changing the name "Johnston" , post it as a
negative comment into basically any blog I visit.

Could you perhaps enlighten us with the specifics of your critique?

Posted by Howard Hawhee on Nov. 2, 2010 at 07:32 PM

Xavier Onassis
Thanks... that was good.

Bob

Posted by Bob Klahn on Nov. 4, 2010 at 02:22 PM

I have read this all through with great interest, and read the comments on both
sides. I have to say that I feel the following:

What is happening to day is without question a form of slavery. For one group
of people to think they have a right to infinite wealth while other are
destined to eternal squalor is just untenable.

That being said, I think most people need a mechanism that forces them to get
up each day and generate some activity that benefits them and ultimately all
society. I'm not saying all people would become layabouts, a lot of people have
the drive to do something (unfortunately some are driven by greed) but the
proportion that are driven are not enough to support the tidal wave of slothful
people out there.

For the moment capitalism seems the best mechanism for the job, BUT the
totalitarianism of the US experiment is not the method the world should adopt
as it is by design destined for a very sad end, somewhere along the lines of
Easter Island and/or Russian/French revolution. We must realise that No
resource is infinite.

I don't know how many of you have seen the movie Wall-E, but it showed a bunch
of obese layabouts that weren't capable of doing anything. This is what would
happen to the human race if we didn't have a system that forced people to get
off their lazy @# and earn their keep. That's why the other totalitarianism on
the socialist side fails. You get people thinking that they deserve to have
everything provided without having to pull their weight. It's what the severe
right wingers are pushing as a reason why the current system should go on (or
get worse).

Now as I said before, both sides are wrong. We need a limit on the wealth any
one person can accumulate but at the same time encourage an overwhelming
majority to work hard towards goals that benefit them and society.

I don't have all the answers (I don't think anybody does) but a system that
guarantees a bare minimum existence for everyone while penalising extravagant
excess would be a good start.

Max

Posted by Max Dirnberger on Nov. 7, 2010 at 10:53 PM

The system that causes people to get up and go to work is in place in every
human body from birth. It's called their digestive system. It's THE
absolutely reliable motivation for ensuring people will work - and the only one
necessary.

Economics 101 is this: Humans are cursed with having stomachs that require
feeding. If we didn't have to feed our stomachs in order to stay alive, we'd
probably choose to spend our lifetimes going swimming or making love or pushing
our kids in a swing or writing poetry or (insert your favorite fun activity
here).

The present system believes in getting 99% to work by underpay and 1% to work
by overpay. The absurd logical conclusion of this view is that the most work
will be done by paying one person everything.

The current thinking says that if you don’t overpay the overpaid, the overpaid
will stop working, and if you don’t underpay the underpaid, the underpaid will
stop working. Which is clearly self-contradictory.

The currently overpaid will continue to work with fairpay because if they don’t
work they won’t get fairpay. The currently underpaid will continue to work
with fairpay because if they don’t work they won’t get fairpay. The correct
motivation for work is fairpay. Neither underpay nor overpay is necessary to
get people to work - just as in nature: if bear no catchee fish then bear no
eatee fish and if bird no catchee worm then bird no eatee worm. The insertion
of money between work and eat doesn’t change the fundamental situation human
beings are in.

Note that the few people who are currently fairpaid continue to work.
Therefore fairpay does not cause unworkingness.

F Scott Fitzgerald - We have used gold for motivation for so long we have
forgotten there is any other way. Our society is so far from nature we have
forgotten the underpinning natural sense in the system.

One argument of the subrational majority of people is that work is unequal,
therefore unequal pay is just. The error here is that this justifies only one
out of an infinite number of possible inequalities of pay. If one works twice
as long/hard, justice pays him twice as much - not any unequal amount from
1000th the average to a million times average.

The inequality of work does not prove that inequality of pay should be
uncontrolled; it argues only that inequality of pay should be proportional to
work, which is very, very different from what we have.

This is our human insane reality: two people do a fortnight's work, and we give
one of them $1 and the other $50,000,000 [average, all his life] $1,000,000,000
[peak rates of pay]. We give 99% of people less than the world average, we give
90% of people less than a 10th of average, so we can give 1% of people more
than average, so we can give 1% of people up to a million times average. We
calmly sit by while a few rake most of the money out of the social pool of
work/ wealth/ products of work. We look in the pool and we say: Isn't it sad
that there is so little in the pool for most people, and we make no connection
between this and the people pumping out most of the water in the pool with a
fleet of siphon trucks.

A fortnight’s pay ranges from $1 to $1 billion. Carve that on to your brain.
Plant the seed of that fact in your mind. Water it with reflection and good
sense. Make that fact king and queen in your mind. Measure
everything in your experience against that fact. There is nothing that can be
anywhere near as profitable to you. If you find within yourself an aversion to
considering it, ask yourself why. Ask yourself is it wise, is it good sense,
have I a good reason to avoid this fact. Maybe this fact is an irritation that
makes a pearl, a very valuable pearl. A pearl of vision that can make a world
that will make this present state of the world seem like a deep hell, a hell
that would drive children to madness.

Again, the income or increase in fortune for a fortnight's work ranges from
US$1 billion to $1. That is, from a million times the average pay, to a
thousandth the average pay. A billion times as much for the same amount of
work! A billionth as much for the same amount of work! I think people cannot
really take that range in. It is beyond the general human powers of
imagination. It is staggering.

It is the mother of all facts about human existence.

Say that the range of pay for a fortnight's work is from $1 to $1 billion and
you have told the story of human existence. That fact is enough to deduce
enormous violence, enormous suffering, enormous disorder, enormous waste of
happiness. A perpetual storm of crisis and disaster, chaos and craziness. And
yet, there is this powerful reluctance to even think of the rich as having
money that belongs to others. Individual minds come to that conclusion, yes,
but it makes no headway in the general thinking. And this reluctance is the
cause we are wedded, welded to war. And war is escalating. War and weaponry
have escalated very dramatically in the last century, and yet there is a lack
of concern, a lack of a general search for answers. We ought to be desperately
seeking the answer, the exit from this nightmare, and we are not. At the same
time, there must be consciousness of the injustice and theft, for it is that
understanding that drives the violence and other disturbance. It is as obvious
as can be that there is enormous poverty and enormous wealth, and that this
cannot be right, that is, that it must be theft, and the cause of most
violence, and yet there is also at the same time a failure to grasp and face
these obvious points.

A just cap on personal fortunes beats all methods past, present, and future for
preventing the circumvention of justice.

Fairpay justice is the non-negotiable price of human survival.

(To Bob: You're welcome, and Thanks ever for saying so out loud.)

Posted by Xavier Onassis on Nov. 9, 2010 at 10:09 AM

Every day, every hour, every human is turning out misery, turning the handles
of a dysfunctional economic system that churns out minced humans' minced
happiness. Not because they are evil, just because they are wrong - just
because they do not dump their mindless faith in human custom and use common
sense.

6 billion people are not acting in accord with what everyone really believes.
People do believe in justice, so let us for once set aside our lemming faith in
the crowd and in custom and bring our behaviour in front of a tribunal of our
own wits.

Governments cannot save us as they are now - they have been devoured by
superwealth. Only a grassroots growth in awareness, realism, sobriety, simple
good sense, maturity, practicality in the people can drive events to safety and
peace.

What has freedom to pursue unlimited personal fortunes given humanity?

Freedom for 99% to be underpaid. Freedom for 90% to be paid less than 100th of
average pay per unit of work. Freedom for 1% to perpetually try to fight off
the 99% underpaid plus the others in the 1% overpaid, the rich rob from the
poor and from each other, too.

It has given us the freedom for everyone, from richest to poorest, to be
embroiled in super-extreme escalating violence, rising to nuclear extinction
soon. Freedom for everyone to be extremely poor in enjoyment, peace, safety,
leisure, relaxation, company, community, health, sanity, order, maturity,
education, trust, generosity, kindness, beauty. Freedom for all to be extremely
rich in danger, labour, war, crime, fatigue, insanity, mis and dis and un
education, corruption, horror, terror.

Nuclear fear fatigue will not stop nuclear extinction coming. Global extinction
bombs and super-extreme (giga-astronomical) pay injustice, increasing fast,
means a boiler, relief valve stuck, pressure gauge in the red and rising. It
must blow soon. We cannot continue marching to where we are headed without
arriving there someday.

The defense costs are exhausting the first world, as they exhausted every
empire and plutocracy in history. We can no longer afford the wealthpower
giants' warmaking. A 60th of the bombs we already have will create enough fires
to put up enough smoke to drop the temperature to three times colder than a
natural ice-age.

The warmongering and the imposition of austerity measures go hand in glove. It
is no time for closed-mindedness, immaturity or delay. It is time to get jiggy
with the fact that it's pay justice for all or misery unto extinction -- these
are our only choices.

The violence and disturbance of the world is proportional to the
overpay/underpay ratio, which today stands at one billion. It is that ratio
that makes all the bombs, all the terrorists, builds all the concentration
camps, inflicts the torture, damages the environment, makes the spies and the
traitors and the secret police, drives the riots and the revolutions, the overthrows and the
assassinations.

Pay justice is not a hardship, is not a loss. It is social, economic and
psychological riches, a hundred-fold increase in happiness.

Would anyone (outside a madhouse, or even in a madhouse) suggest we'd be safer
and happier by taking 90% of wealth off 90% of people and giving it to 1%? No,
not in a million years. So take to deepest heart the fact that our reality is
that we have pay injustice over a million times worse than that. Take to heart
the fact that we can be super-extremely happier, just like 100 children with
1000 sweets before them who stop playing a game of all-grab-for-all (grab off
each other and grab back, too) with the sweets, and eat 10 sweets each and then
play together.

I am not talking about giving money to people regardless of whether they
deserve it. I am talking about giving money back to people who have earned it.
Exorcising the false justifications for pay for no work will lift you and
everyone up into maximal freedom, unimaginable happiness, incredible
productivity and progress, extreme reduction of war and crime.

We must go back to the root cause of 99% of all our unnecessary suffering,
which is overpay-underpay - we must prevent anyone having the power to keep on
engineering new legal thefts. Will humans act with wise self-interest? Will we
re-activate our pursuit of happiness with realism? Will we after all these
years jump out of our various mental grooves in time to dive into the ocean of
gifts that pay justice has for us?

Imagine what would happen if a majority became firmly decided against further
continuance of the simple-minded, tyranny-producing freedom to pursue limitless
personal fortunes and we made private inheritance public, seeing as the heirs
of wealthpower giants have done nothing, no work - to create that free-gratis
wealth. If public inheritance replaced the nonsensical, irrational practice of
private inheritance, you would lose the chance to perhaps inherit once from
your own rich uncle Joe, but you’d gain the much, much larger benefit of always
inheriting every time any rich uncle Joe was called home to his maker. Imagine
if we also instituted the practice of giving equal shares of a 1%-a-month money
supply increase (debt-free money issued by the government sans interest due) -
and I mean giving this money to everyone in order to avoid the big bureaucracy
it would take to distinguish who deserves. The inflation effect (the small and
planned inflation beats the harder-to-control inflation we already get courtesy
the banksters) would decrease the wealth at the top more than the free money
would increase it, and the monetary effect would increase the wealth at the
bottom more than the inflation would decrease it -- we would at last be headed
in the right direction, the wealthgap would be gently but constantly shrinking.

I think there would be rejoicing. I think we would begin to feel proud of
ourselves. I think our spirits would lift. I think we would recognize with
relief that we had at last conquered that disease of pursuit of unhappiness.
The well of humanity would start to fill.

It is terribly true that when you push a person down you have to stay down with
them. The richest person in the world is as poor in safety as the poorest. We
are all living in this near perfect hell of nuclear extinction looming, of
approaching autogenocide, of bombs, bullets, isolation, crises, danger,
disorder, lack of social trust, hope-fatigue, fear, paucity of admirables. We
are all huddled in ourselves, like moles in burrows, trembling hard, watching
the news daily, hourly, checking the distance of terrors and horrors, trials
and troubles.

And it's all so completely unnecessary.

Posted by Xavier Onassis on Nov. 9, 2010 at 10:35 AM

If I may add a note on the graduated income tax:

Theodore Roosevelt said:

"No person should receive a dollar unless that dollar has been fairly earned.
Every dollar received should represent a dollar's worth of service rendered,
not gambling in stocks, but service rendered. The really big fortune, the
swollen fortune, by the mere fact of its size acquires qualities which
differentiate it in kind as well as in degree from what is possessed by people
of smaller means. Therefore, I believe in a graduated income tax on big
fortunes, and in another tax which is far more easily collected and far more
effective, a graduated inheritance tax on big fortunes, properly safeguarded
against evasion, and increasing rapidly in amount with the size of the estate."

And the people thought: Good, we are stiffing it to those rich people. Boy,
I'm glad I'm not having to pay such high tax rates.

But the people were fooled again -- because the graduated income tax in
unlimited personal fortunes capitalism is in fact another legal theft.

Here's how it works: If a person who is getting out of the pool of wealth 100
times what he or she puts in pays only a 75% tax rate, they still get out 25
times as much as they put in. A person being underpaid and paying a 25%
taxrate is still being robbed - by the underpay. A person being underpaid
should be getting a negative tax-rate that brings their pretax income up to
equality with what they contribute by their work. If both people are
producing $1000 of work products, the person pulling out 100 times as much as
he put in, and paying a 75% taxrate, would be getting $25,000, and the person
being underpaid 20%, and taxed 25%, would be getting $600. The one putting in
$1000 and taking out $25,000 in money and power, the other putting in $1000 and
getting out $600 in money and power.

This is not justice. This is far from it.

If only Teddy (or Jefferson) had thought of public inheritance, the just
sharing of deceased estates among everyone. If they had, they would have
turned around the downward slide of America from democracy to decline and
fall. The force of erroneous tradition was still bending Teddy's reform
thinking away from sense, but once/if people had seen how much money and
political power they were getting from public inheritance, Teddy would have got
more presidential terms, and been the greatest President. And he would have
given a practical demonstration to the world, and saved millions of lives, and
saved billions from unnecessary sufferings. Saved the entire infinite future
of the human race from an infinity of giant unnecessary sufferings. If only
he had seen that all inheritance is other-earned, that any other-earned money
is a license to create violence and destroy happiness.

There is the further point that, with unlimited-personal-fortunes systems, with
the corruption of ever-expanding bureaucracy and tyranny, you don't know that
money going to the government is getting back fully to the people who earned it.

David's books certainly show us many ways that legal thefts are shifting money
from earners to non-earners. How many thefts does he have to expose and how
many books does he have to write before people see an immediate need to counter
for the ceaseless drift of wealthpower into a fraction few hands?

Solving for the problem at the macro-macro level has to be far easier and far
more doable than trying to identify and dismantle the myriad legal thefts
piecemeal. New legal thefts will always keep coming while we run behind
attacking each of the old ones.

Posted by Xavier Onassis on Nov. 9, 2010 at 06:59 PM

Geez, the way that you are acting so shocked about the 5X increase in income
for the top earners.. what? you want to piss us off? NO! Those people EARNED
that money through their own means, as I am sure that you would be glad to do.
Instead of whining, why don't you try it for yourself? It simply takes a good
plan, and some years of very hard work. But, you don't really want to work
that hard do you?

Posted by Apex Predator on Dec. 23, 2010 at 01:54 PM