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Income disparity matters
Robert Reich
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Kai Ryssdal: The Occupy fill-in-the-blank-here movement, has spread to more than 500 places across the country -- mostly in the shape of sit-ins, marches and rallies. Mostly peaceful, too. Though there was more violence in Oakland last night. Sixteen demonstrators were arrested in New York on their way to Goldman Sachs this morning.
Much has been made of the fact that Occupy doesn't necessarily have a unified set of goals. Commentator Robert Reich says: So what?
Robert Reich: Whatever happens to it, the Occupy Wall Street movement has already changed the tune of the public debate.
For the first time in more than half a century, a broad cross-section of the American public is talking about the concentration of income, wealth, and political power at the top.
Last week's Congressional Budget Office report on widening disparities of income in America was hardly news -- it was already well known that the top 1 percent now gets 20 percent of the nation's income. That's up from 9 percent in the late 1970s. But it's the first time such news made the front pages of the nation's major newspapers.
And look at public opinion. A recent New York Times/CBS News poll found that an astounding 66 percent of Americans say the nation's wealth should be more evenly distributed.
A similar majority believes the rich should pay more in taxes. According to a Wall Street Journal/NBC News poll, more than half of people who describe themselves as Republicans believe taxes should be increased on the rich.
The old view was anyone could make it in America with enough guts and gumption. Being rich was proof of hard work -- and lack of money proof of indolence or worse.
But hard work doesn't seem to pay off as it once did. Instead, to an increasing number of Americans the game seems rigged in favor of people who are already rich and powerful.
Nor does wealth trickle down in the form of more jobs and better wages. CEOs are hauling in more than 300 times the pay of average workers. That's up from 40 times average pay -- only three decades ago. What's worse is that workers are losing their jobs, wages and benefits.
The economy is in trouble because the American middle class no longer has the purchasing power to keep it going. That 2.5 percent annualized growth rate for the third quarter hides a crucial fact: Americans spent more, largely on health care and utilities, by dipping into their savings -- and this isn't sustainable.
The Occupy movement is gaining ground because it's hitting a responsive chord. What happens from here on depends on whether other Americans begin to organize and march to the music.
Ryssdal: Robert Reich teaches public policy at the University of California, Berkeley. His most recent book is called "Aftershock: The Next Economy and America's Future." Send us your comments -- write to us.
I read all the statements again and I have to say that Tom Kaz is spot on.
I, too, am sickened to see the masses worked into a frenzy over how they are entitled to the wealth of others because somehow they must have gotten it through theft or deception.
It never occurs to some of these kneejerk looters that they aren't as succesful because they aren't as smart, creative, or industrious as the people from whom they want to steal.
As for you AA - Just what puts you in the position to say what is rightful. I'm not near as financially independent as Bill Gates or Warren Buffet but I work hard everyday for what I make and the thought that you would like to sit in judgement to determine whether or not I'm entitled to the proceeds of my labor makes me wonder what country I live in.
Once again Mr. Reich pursues the politics of populism. If the majority of the people in America think it's OK to rob the industrious to reward the indolent then gosh darn it that must be the right thing to do.
It's NOT OK to use majority rule to determine how someone else's money should be spent. I'm not a kneejerk tea party member and I certainly support the use of taxes to fund Infrastructure and Defense. But I don't support the use of taxes to redistribute wealth from the producers to the politically connected. And that seems to be what Mr. Reich is advocating.
We need a tax system that distributes the burden of government across ALL of us not just the top 50% of producers.
I also reject Outright the assertion that the government should be in the business of creating equal outcomes. Government should create the infrastructure that, in turn, creates equal opportunities but it shouldn't be putting me on the hook to pay for someone else that squandered their opportunities.
I teach my children to work hard, save agressively, give generously, and live morally and they are all successful and capable without the help of government. Why should I be expected to pay for the excesses and stupidity of people who choose not to live like that?
I expected these responses. It's what you typically hear from the public radio crowd.
"The system is rigged" and "the political system responds only to those who have money."
That's funny. The top 1% pays 37% of income taxes but only earns 19% of all income AND the U.S. has one of the highest corporate tax rates in the world. Only Brazil, Uzbekistan, Chad and Argentina have higher corporate tax rates than the U.S.
If the rich are rigging the system via campaign contributions, they're doing a lousy job of it.
I also have to laugh at the idea that we have "unchecked capitalism" in this country. The 2010 Federal Register hit an all-time record-high of 81,405 pages of regulations and it's estimated that the annual regulatory compliance costs to businesses is $1.8 trillion. Some unchecked capitalism.
Yes, the rich should pay more tax, and they do. However, the US tax structure has been loaded to favor the rich, by the political efforts of the rich. Maybe the political forces of the occupy movements can move the structure back to favoring the 99%. The 99% certainly has the votes.
I adore Mr. Reich but I have to strongly disagree with his comments. Sure, protesting is fun and maybe effective to get the "message" across, but no one is truly presenting how the CHANGE will come about. Do you honestly think that those sitting in their ivory towers are going to have a change of heart after the protesting hits home? You can't legislate having a conscience, and people will ALWAYS accept low-paying jobs despite principle. Stop telling us to protest like every other talking head out there and give suggestions for solutions!
@Tom Kaz: What you fail to acknowledge is that while the money may have been legally earned, it was not rightfully earned. The top execs make the decisions to pay ridiculous salaries and lay off those beneath to sustain it. The larger corps have lobbied to eliminate higher tax brackets and keep tax loopholes which starve government for funding for social programs that the people have put in place. Sure, they legally have it, but not rightfully so and certainly by not being open with the general public about it. The game is rigged. If you want to turn a blind eye to it, then fine. But don't accuse the poor of being thieves when they've effectively been stolen from the start. BTW, I'm in the top 15% and I still support this cause. What is sad is that the majority of those at the top today may not have done the lobbying, but they aren't going to let things go back to the way they were easily. This is all they've known.
It's not that we are jealous of the rich, or want to "take wealth from someone who earned it" just to punish them and reward some lazy schmuck. The problem is that unchecked capitalism creates a system where money concentrates. Concentrated money creates a system where the political system responds only to those who have money. Political systems that respond only to those who have money remove any sort of limitations and result in unchecked capitalism. It's a vicious circle. It also creates massive bubbles like this last housing bubble that burst as the ultra rich look for places to invest money in places with very high returns.
Taxing every dollar over a million at 39% instead of 33% isn't exactly holding a gun to somebody's head and stealing it. Neither is taxing capital gains at the same rate as labor wages. However, it does have the positive effect of a slowing down the flow of money from bottom to top that we see today.
@Kaz
What makes me sick is what Mr. Reich points out: The game is "rigged in favor of people who are already rich and powerful." And if you don't call the grand rip-off of the lower 99% in the past three years a massive, forced redistribution of wealth, I don't know what is. Just ask those whose "golden" retirement years have been ripped out of their forced 401(k) plans, with no other choice provided by the greedy executives shamelessly making off with OBSCENE amounts of money.
THAT'S what makes me sick.
Robert Reich sickens me.
Using the power of government to take wealth from someone who legally EARNED IT in order to give it to someone who didn't isn't much different than breaking into a millonaire's house, putting a gun to his head, and walking out with arms full of booty. The only difference is the robber has courage, and the progressive voter is a coward.
Does Bill Gates really OWE YOU people anything? Oprah Winfrey? LeBron James? Steve Jobs? Did they take something from you? I would love to hear Reich's twisted answer to that question.
I grew up believing I should give to the needy out of my own free will, not because the government says 'if you don't give us X you will be put behind bars (or we will just take it from you.'
Income inequality isn't the result of malfeasance or fraud. And wealth accumulation isn't a zero-sum game.
Why would some people be opposed to redistributing grades in school, or touchdowns in the NFL, but believe in the forcible redistribution of wealth? Should we take an ice pick to the faces of beautiful people? Should we shackle the fastest sprinters in the next Olympics games? C'mon Libs, is it really unfair that some people are smarter, more motivated, more creative, or work longer hours than others? If you want to be "fair", let's start paying DMV workers the same as neurosurgeons.
And if you're a true blue Progressive, why wouldn't we redistribute wealth from Americans to the Chinese? Hell, the lowest paid American lives like a barron compared to the middle class Chinese.
Reich is stoking hate and envy based on outcomes, not means, and it's thoroughly disgusting.
Btw, I'm not anywhere near the top 1%.
