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The rich don't control Washington
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Contrary to popular wisdom, the rich don't control Washington. The poor and the middle-class do.
This will surprise most Americans. We've been conditioned to believe that Washington is a den of corruption, overrun by well-paid lobbyists, and lawyers who manipulate government policies to favor the rich and corporate interests. Ordinary Americans don't stand a chance against this juggernaut.
But look at what the government actually does, and a completely different picture emerges.
Ron Haskins, a scholar at the Brookings Institution, recently presented some fascinating figures on government spending. From 1980 to 2011, yearly outlays for the 10 largest programs for the poor went from $126 billion to $626 billion in inflation adjusted dollars.
Then there are the programs aimed primarily at the middle-class. The biggest, of course, are Social Security and Medicare. Put together, all these programs accounted for almost 60 percent of total federal spending in 2011.
Meanwhile, what about the rich and well-to-do? Well, they're paying for almost all of that spending. According to the Congressional Budget Office, the richest fifth of Americans pay nearly 70 percent of all federal taxes.
The point is not that the rich are victims. Their lawyers and lobbyists often do secure beneficial tax breaks, subsidies and regulatory preferences. But focusing mainly on these victories distorts our picture of government.
Our problem is not that the rich have taken over government. Our problem is that politicians, on the left and right, are doling out money to everyone -- particularly the poor and middle-class. That's why our budget deficits are so huge and so intractable.
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To Doug L.: Thank you for taking time and trying to bring some sanity and truth. There is more and more of the disinformation, where a little part may be true but is used to introduce falsehood. This is what Samuelson did -- engaging in propaganda. First of all, they always talk only about federal taxes. Secondly, they never talk about the wealth accumulation by the 1% (actually even less: 0.01%). Somehow, inspite of the 1% 'suffering' and paying so much taxes--the income disparity increased tremendously during the last 30 years --and the wealth grabbing by 1% is larger and larger. Again, it is not about so much the taxes--but the fact that the CEO's and the highest level of the management are behaving like mafiosos --and receive compensation without any relationship to company's well being. In fact, their compensation grows when they downsize thousands of their workers (for no reason--just to get a blip in stock share prices and collect bonuses). They are not company founders or innovators--they are clerks who advanced mainly because of their unethical and ruthless behavior. Wall Mart's 'associates' must supplement their paychecks with food stamps. The financial sector--which produces nothing --they even do not lend us (small businesses, individuals) money-this sector is is a parasite taking free money from the Fed and then speculating with it either on stock market (producing constant upheaval and ruining companies by wild speculation) or gold and currencies. When they lose in their gambling--we bail them out. Corporations 'outsourced' pensions to 401k's (which Wall Street is raiding more and more frequently); they downsized older people--and transferred us to earlier Social Security programs and Medicare--again, unloaded us into the government care. Any gain, any profit (including from wars) is privatized; all the costs are more and more transferred to the government. They take their cut without leaving any obvious trace by syphoning money from us (low wages, no benefits) and the government (subsidies, special rules, bailouts, dumping workers at the government steps). Now, they scream about the deficit and write articles about the poor and middle class benefiting from the government handouts. But this propaganda was not enough. Not only falsehood must be spread--but now they want us to applaud it. Today, Market Place was talking to the guy who was conducting a survey on how we see the rich. The questions asked by the survey were so designed that any moron would know that the outcome could be only this: "Americans love the 1% ; moreover, the respondents believed that they, the 99%, will become one day the 1%. Even the seniors." As I said, if you have read the poll questions --you would know what the goal of the poll was: to pacify us, to keep us happy--if stupid. The Market Place was broadcasting this nonsense without asking one intelligent question. There was no time--they needed to report on Brad Pitt and the perfumes.
The financial sector produces nothing. Do you have a loan on a car or home? Thank a bank. Do you have car insurance, health insurance or life insurance? Thank an insurance provider. Do farmers enter a market agreement to "lock in" prices for crops they grow because they can't afford the risk? Thank a speculator. If your company is out of cash this week, do you still get paid? Thank a bank for helping to manage cash flow. Do you have a credit card? Thank the credit card provider. Does an airline want to lock in fuel prices on a 20 year contract, thank a speculator. Remember, financial transactions involve two parties. Ever heard of Caveat emptor?
The fact is, the economy is largely dependent on the movement of capital so your comfy lives go on uninterrupted. Were there a few crooks involved in the financial sector, sure there were. Fact is, crooks operate successfully in every industry (government, construction, education just to name a few)
Well, Robert Samualson was right about one thing, that most Americans will be surprised to hear that we have been conditioned to believe that Washington is a den of corruption that favors the rich. I am one of those Americans. I'm surprised and saddened that I've been referring to the rich and powerful as: "The Rich and Powerful". I'm changing my ways and advocating for the upper 1% to have more influence on bills that are written that might benefit the rich and give them back some of this control that Mr. Samuelson is saying they don't currently have. Like some sort of... American Legislative Exchange Council or something to help them have direct influence on... what? ...really?! Alright then, how about getting the Supreme Court to overturn some federal laws to allow corporations to use unlimited amounts of money to support or oppose candidates for public office. This way they could... No Way!! Well, clearly the top one percent have a legitimate gripe when compared the income gain percentage to middle-class Americans who have just been raking it in for the last 30 years at 16%, because... oh? The CBO says the top 1%'s income increased by 281%? Well then let's just ask the government to give some of the poor struggling financial institutions $700 Billion, at least $80 Billion just for the stupid mistake of buying all those toxic assets. Oh, yeah, that's right, I forgot. Tax loopholes for the wealthy? Offshore subsidiaries to shelter their wealth? Come on, there has to be some sort of government program for the top 1%. Instead of wasting programs for the middle-class on such ridiculous things as Social Security and Medicare. The middle-class are resourceful and innovative, they can retire on what they have saved and profited from on their Wall Street investments, or continue to work until they're 90 and they can also learn to perform major surgeries on themselves, that will keep their minds active into their later years. The wealthiest need more wealth because the top 20% of the richest own only 85% of the nation's wealth. That's not enough to create jobs, they need...more?
Without getting into the detailed comment that Samuelson's apology for predatory wealth deserves, I would for the moment merely quote Upton Sinclair on cognitive dissonance: "It is difficult to get a man to understand something, when his salary depends upon his not understanding it."
For objective information, see http://www.taxpolicycenter.org/taxtopics/currentdistribution.cfm
Yes, the highest-income quintile pays 67% of federal taxes. They also receive 53% of the cash income.
Many of Mr. Samuelson's distortions and misrepresentations have been pointed out by others. I will only note that the claim of the last paragraph is contradicted by Mr. Samuelson's own newspaper: http://www.washingtonpost.com/business/economy/running-in-the-red-how-th...
The present deficits are due for the most part to the collapse of revenue as a consequence of the recession, and the tax cuts of the George W. Bush presidency, not to "politicians ... doling out money to ... the poor and middle-class."
So by your own data - albeit outdated - the top 20% pay 67% for receiving 53% of the income. Wouldn't it then be fair that they only pay 53% of the bill? Just another basic math problem. If you want to solve income inequality, get more people to get off their ass, study, get to work and be productive.
As another contributor points out below, Samuelson omits from his fairy tale the trillions doled out over the decades since 1947 for war, preparation for war, and the stoking in the public of the fear that sustains these expenditures. Adding to the mischief, he treats Social Security (1) as a program for the poor, and (2) as if it a part of the discretionary budget. His radio essay was propagandistic and, as the tone of these comments show, not at all opaquely so.
Does Samuelson not know about the war budget for Iraq and Afghanistan? Was it's omission inadvertant or purposeful?
In 2011, 31% of our taxes underwrote the military budget. I suppose those with oil interests for whom these wars are waged, those companies that are "PEOPLE," are not rich?! What was it we spent for education? 6%.. and health and humanl service programs ? 7% If you include the Department of Defense,War, Department of Veteran's Affairs and Nuclear Weapons we spent 60% of our tax dollars last year. Samuelson quotes Haskins from the Brookings Institute without acknowledging its strong bias toward the rich and the Republicans. If you want to be credible, BE HONEST and don't quote things meant to be propaganda from the Brookings Institute.
If the poor have so much influence, how is it the policies do not encourage fairer policies for them like lower vs higher interest rates for student loans? Why are Federally subsidized banks making people homeless with foreclosure actions? Why are banks denying applications for mortgages left and right for those who are not wealthy? Get REAL -This commentary was badly skewed.
Agree with K, but she (he?) is nicer than I am. I think that this commentary, allowed to go unchallenged on the air, betrays sloppy journalism. Isn't that something you're trying to change with, let's say "responsible and balanced" opinions? It doesn't work to wait a day for a related but not expressly stated opposite OPINION. It's time to fact check everything, guys, or all J schools will turn into Media departments ala CU Boulder.
Dr. Leigh Kennicott, Ph.D.
CU, Boulder 2002.
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