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Economy

What Could The Wealth Gained By The Richest Americans Since 1979 Have Paid For?

Our guest bloggers are Jon D. Wisman, Professor of Economics at American University, and Aaron Pacitti, Assistant Professor of Economics at Siena College.

Why, with the U.S. economy prospering over the three decades prior to 2007, did the quality of life for the overwhelming majority of Americans decline? Inflation-adjusted income more than doubled and wealth increased by 81 percent. So why did most people have to work longer hours and fall deeper into debt to make ends meet? Why did public services deteriorate?

The reason is that as the economy produced ever more, the very wealthiest Americans grabbed practically all of the gains.

Just how much did the rich grab? Between 1979 and 2007, inflation-adjusted income, including capital gains, increased $4.8 trillion — about $16,000 per person. Of this, 36 percent was captured by the richest 1 percent of income earners. The richest 10 percent captured 64 percent, almost twice the amount collected by the 90 percent below.

What happened to the gains in wealth was even more dramatic. Between 1983 and 2007, total inflation-adjusted wealth in the U.S. increased by $27 trillion. If divided equally, every man woman and child would be almost $90,000 richer.

But of course it wasn’t divided equally. Almost half of the $27 trillion (49 percent) was claimed by the richest one percent — $11.7 million more for each of their households. The top 10 percent grabbed almost $29 trillion, or 106 percent of the total. Meanwhile, the bottom 90 percent suffered an average decline of just over $16,000 per household.

What could be bought with the $29 trillion increase in the top ten percent’s wealth over the past three decades? Strikingly, it covers all of the expenses necessary for our future collective well-being — the very expenses that, we’re told, can’t be funded because of budget deficits and rising public debt.

The American Society of Civil Engineers estimates that the United States needs to spend $2.2 trillion over the next five years to meet its infrastructure needs. To ensure that Social Security can pay all promised benefits for the next 75 years would cost $8.6 trillion. Providing all needed Medicare funding for the next 75 years would cost a total of $4.6 trillion.

To pay for all Medicaid, the Children’s Health Insurance Program, and subsidies for purchasing health insurance through the Affordable Care Act for the next 10 years would cost $1.5 trillion. To close all projected federal budget deficits until 2021 would cost $7 trillion. Taking back the $29 trillion would cover all of these needs and the $5.1 trillion that would be left over could pay off about one-third of the national debt.

The rich managed to capture this $29 trillion because they gained greater command over the political process, which allowed them to engineer economic policy for their own gain. Their greater wealth meant greater command over the political process, which in turn made them wealthier. The explosion of corporate lobbyists and corporate campaign contributions leveraged their political influence.

The rich promised that everyone would benefit from deep tax cuts for the wealthy and welfare cuts for the less privileged. Deregulation, weaker unions, and freer trade, they argued, would make the economy grow more rapidly, creating jobs and raising everyone’s incomes.

But these promises never materialized. Between 1948 and 1976 — a period in which taxes were far higher, the safety net stronger, regulations stiffer, labor unions stronger, and inequality lower — GDP grew an average of 3.8 percent per year and unemployment averaged 5 percent. Since then, GDP growth averaged only 2.8 percent and unemployment averaged 6.4 percent.

Americans need a new social contract, one that partially recaptures the $29 trillion rip-off, offers protection against it happening again, and moves us toward a more equitable and democratic society. So how can we take back the rich’s ill-gotten gains?

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Election

Scott Brown’s New Woman-Friendly Ad Glosses Over His Anti-Woman Voting Record

Sen. Scott Brown (R-MA) released a new ad on Friday geared toward moderate Massachusetts voters who are suspicious of Brown’s social conservatism. Brown has been trying hard to paint himself as a moderate pro-choice Republican in spite of his party’s extreme anti-choice positions — and his own voting record.

The ad features a woman claiming that Brown is pro-choice and supports equal pay:

Scott Brown is pro-choice, and he supports a woman’s right to choose. I like that Scott Brown is independent, he really thinks for himself. His record shows that he supports women, he supports families. When my daughters grow up, I want to make sure that they have good jobs with equal pay, and I know Scott Brown will fight for that. I support Scott Brown because I know he wants to get our economy moving forward again. I’m a mom, I have a family, and I know that Scott Brown will fight hard for families.

Though the ad claims “his record shows that he supports women,” Brown’s voting history actually reveals the opposite. The senator has co-sponsored several anti-choice bills, including the Woman’s Right To Know Act, which would force a woman to wait 24 hours before getting an abortion and review pictures and information about her fetus. He supported the notorious Blunt Amendment –which would allow employers or insurers to deny women any health coverage they morally oppose — and sought to prevent insurers from using any federal funds to cover abortions in the Affordable Care Act. Brown has also voted to defund Planned Parenthood and voted against the Paycheck Fairness Act, in spite of his ad’s promise to “fight for” equal pay.

Brown has tried to distance himself from the Republican Party’s anti-woman platform and asked Reince Priebus to include a rape exception in the GOP’s anti-abortion plank. So far, he has not convinced Massachusetts of his secret pro-choice sympathies; the Massachusetts Right to Life recently announced their support for him as “a senator who votes pro-life.” Beloved Massachusetts boxer Mickey Ward also pulled his support from Brown after discovering his anti-LGBT and anti-union stances. Emily’s List denounced this new ad, accusing Brown of “straight-up lying” and demanding that he “take it down and apologize.”

Climate Progress

House Republicans Voted Against The Environment More Than 300 Times Since 2011

The House of Representatives added to its historic tally of anti-environment votes with a 245 to 161 vote on Friday approving the GOP’s “No More Solyndras Act” — a messaging bill that hampers Department of Energy loan guarantees to clean energy projects.

Under GOP leadership, the House has voted 302 times against the environment since 2011, according to the latest report from House Energy and Commerce Committee Democrats. More than one hundred of these votes have favored profits in the oil and gas industry. Since June, the House has added 55 votes and counting to this list, amounting to more than one vote for every day it has been in session.

Here is a breakdown of some of Republicans’ votes against clean energy and in favor of oil:

– 133 votes targeting the Environmental Protection Agency
– 54 target the Department of Energy
– 128 block measures preventing pollution
– 55 to defund or repeal clean energy initaitives
– 47 votes to promote offshore drilling

The latest vote today had little to do with Solyndra, and even less to do with smart investments in clean energy. After spending $1 million of taxpayer money, holding 12 hearings, and 300,000 pages of documents, House Republicans have found “no evidence” of wrongdoing. Representative Jim Jordan (R-OH) has admitted the ploy is political, and would likely stop on election day.

As the House’s anti-environment record grows, oil, gas and coal’s political spending has reached record levels. In addition to the $153 million in TV ads from fossil fuel groups this election, oil, gas and coal have contributed 88 percent of its $45 million to Republican candidates. According to the Center for Responsive Politics, the coal mining and oil and gas industries have contributed 89-90 percent of their $12.6 million donations to House Republicans.

Check out the full database of anti-environmental votes here.

NEWS FLASH

Outside Groups Spend More Money Promoting Romney Than The Romney Campaign | According to a study of campaign ads between late April and early September of this year, the Romney campaign spent $37.8 million on ads during this period to promote their candidate. Outside groups, emboldened by Citizens United and similar decisions, spent $117.5 million. In other words, more than three times as much pro-Romney spending has come from organizations that can accept unlimited donations from millionaires and billionaires, rather than from campaign spending where donations are capped. In 2008, before Citizens United, outside groups paid for only 4 percent of the ads supporting Republican presidential candidate John McCain.

Alyssa

What Salman Rushdie’s Memoir Of Surviving ‘The Satanic Verses’ Fatwa Tells Us About Nakoula Basseley Nakoula And ‘Innocence of Muslims’

There could not have been a more striking week for Salman Rushdie to discuss how his life changed after Ayatollah Ruhollah Khomeini pronounced a fatwa on him for writing The Satanic Verses than this one. His piece in The New Yorker is written in the third person, which makes sense as a way of examining events that must have been so disassociating that I can imagine it seemed impossible to Rushdie that they were happening to him. And it is a powerful articulation not just of how profound and real the threats can be against people who articulate ideas that fundamentalists find—or pronounce, anyway—abhorrent, but of how these kinds of disasters come to pass, and the dreadful alchemy ideas are subject to when they do.

“Where Americans prize individual choice, Egyptians put a greater emphasis on the rights of communities, families and religious groups,” David Kirkpatrick, Helene Cooper, and Mark Landler wrote in the New York Times today, explaining President Obama’s calls to Egypt in an effort to control the spreading protests at American embassies. And Rushdie writes about attempting to navigate some of those values in his own life as he tried to evade the fatwa: “Yes, we should be conscious of the sensibilities of others, but that did not mean we should surrender to them,” Rushdie writes as the thing he wanted to say when he issued his public statement, on the advice of the British government, after he went into hiding. But this is the crux of the problem that the Times reporters articulated. How do we forge an agreement when one party to a negotiation is demanding the right never to be offended and the other is demanding the right to speak and to be read seriously and thoughtfully?

“The British edition of ‘The Satanic Verses’ came out on Monday, September 26, 1988, and, for a brief moment that fall, the publication was a literary event, discussed in the language of books,” Rushdie reminisces. “Soon enough, the language of literature would be drowned in the cacophony of other discourses—political, religious, sociological, postcolonial—and the subject of quality, of artistic intent, would come to seem almost frivolous.” As much as the right to write and to speak, Rushdie’s Personal History here is about the need for both sides in these conversations to be equally engaged. Just as it’s tragic that the people who pronounced a fatwa against Rushdie failed to read his respect for Muhammad’s repudiation of the Satanic Verses, or to recognize that the insults against Muslims in the novel are spoken by villains rather than heroes, it’s infuriating that the people protesting against Innocence of Muslims, the crude trailer for an unfinished film, produced in a way that deceived even the people who were acting in it, are refusing to consider the film’s utter irrelevance in measuring their anger. If only the people who riot against books and movies, who bomb libraries and attack diplomats, would read them and watch them.

Salman Rushdie and Nakoula Basseley Nakoula, the force behind Innocence of Muslims, are very different men. The former is an artist, the later a check-kiter, a meth cook, a fraud. And the thing that divides them most is their intentions. “It did not strike his opponents as strange that a serious writer should spend a tenth of his life creating something as crude as an insult,” Rushdie writes of the frustration of watching the reality of his novel sink under the waters of public conversation. “This was because they refused to see him as a serious writer. In order to attack him and his work, they had to paint him as a bad person, an apostate traitor, an unscrupulous seeker of fame and wealth, an opportunist who ‘attacked Islam” for his own personal gain’…He did it for money. He did it for fame. The Jews made him do it. Nobody would have bought his unreadable book if he hadn’t vilified Islam. That was the nature of the attack, and so for many years ‘The Satanic Verses’ was denied the ordinary life of a novel. It became something smaller and uglier: an insult. And he became the Insulter, not only in Muslim eyes but in the opinion of the public at large.”

Nakoula is, to a certain extent, the thing that Rushdie was accused of being. He described his film as explicitly political—its intent was to provoke, though I doubt whether it will be judged to have met the threshold for inciting violence. A Coptic Christian, he initially presented himself as Israeli and the film as financed by Israeli backers, perpetrating the kind of lie of a Jewish conspiracy to insult Islam Rushdie was accused of being part of. And while, as Rushdie says of his novel in the wake of the fatawa, “the subject of quality, of artistic intent, would come to seem almost frivolous,” it remains relevant here, if only because it is emotionally easier to defend a man like Rushdie than it is to defend a man like Nakoula. The truth, though, is that we must accept the possibility of Nakoulas if we are to have our Rushdies. The challenge, as it was in 1989, is whether it’s ever possible to explain to people who accept the existence of neither why we value the latter enough to tolerate the former.

Health

GOP Congressman Calls Planned Parenthood A ‘Racist Organization,’ Compares Abortion To Slavery

Rep. Tim Huelskamp (R-KS)Rep. Tim Huelskamp (R-KS) compared abortion to slavery and said that Planned Parenthood was a “racist organization” that was “created for the sole purpose of killing” children of color at a conservative religious conference in Washington, DC, Friday.

To loud applause, the congressman unleashed a series of intense accusations about the women’s health organization. He cited his adopted children as the “targets” of Planned Parenthood’s abortion services and said that, outside of slavery, abortion “is the darkest stain on our nation’s character”:

Perhaps the biggest war against our liberties is the war that is being waged against those that are not here today, the unborn. Besides slavery, abortion is the other darkest stain on our nation’s character and this President is looking for every way possible to make abortion or available and more frequent. And he wants you to pay for it. Even if you disagree with it.

Welcome to another provision of Obamacare. Like the pro-slavery forces that invaded Kansas the pro-abortion forces in Washington and elsewhere want us to believe that abortion is not murder. [...]

Ladies and gentlemen, I am the adoptive father of four children, each of them either Black, Hispanic, Native American, and I am incensed that this President pays money to an entity that was created for the sole purpose of killing children that look like mine — a racist organization and it continues to target minorities for abortion destruction. Shame on this President and shame on that party.

Watch it:

Federal funding for Planned Parenthood goes to cancer screenings, checkups, and STI testing. The organization serves roughly 5 million adults and youth a year for those purposes. Under the Hyde Amendment, it is barred from receiving federal funding for abortion services. Neither does Obamacare require any person to pay for abortion services against their religious beliefs. The law does require insurance companies to provide women copay-free birth control, but the abortion pill and procedure are not required to be covered.

NEWS FLASH

Obama Administration Report: Sequester Would Be ‘Deeply Destructive…To Core Government Functions’ | The Obama administration’s Office of Management and Budget today released a report on the $1.2 trillion in automatic spending cuts — the so-called sequester — that will occur if Congress does not reach a deficit reduction deal by the end of the year. According to OMB, there is “no question that the sequestration would be deeply destructive to national security, domestic investments, and core government functions.” Under the sequester, defense spending that is not exempted would be reduced by 9.4 percent, while non-defense discretionary spending that is not exempted would be reduced by 8.2 percent. Non-defense mandatory programs would be cut by 7.6 percent. Earlier this week, House Majority Leader Eric Cantor (R-VA) couldn’t name anything that Republicans would do to cut a deal to preempt the sequester.

LGBT

Marylanders For Marriage Equality ‘Celebritize’ Campaign With New York Fundraiser

Gov. Martin O'Malley (D) speaking out for equality, flanked by John Waters.

Maryland Gov. Marin O’Malley (D), his wife Katie, and a score of celebrities joined forces Thursday evening in New York City to raise money and support for marriage equality. On hand were Susan Sarandon, John Waters, Josh Charles, Ed Norton, Barbara Bush (daughter of President George W. Bush), and Russell Simmons, among others. The Maryland Marriage Alliance’s Derek McCoy accused the campaign of “trying to celebritize the issue” and attacked them in a fundraising email this week:

Backed by Hollywood donors, homosexual activists are already proclaiming victory in their efforts to redefine marriage in Maryland. They are taking their fundraising out of state where they can attract major donors. We know that in spite of the millions that they will receive from movie stars, Marylanders WILL NOT allow marriage to be redefined.

But McCoy’s campaign is just as guilty of “trying to celebritize the issue”; it’s just that Kirk Cameron and Brad Pitt’s mom don’t accomplish the goal in the same way. In fact, since Maryland for Marriage can’t find its own celebrity endorsements, it co-opts random statements from the likes of Bill Cosby and J.R.R. Tolkien instead. It’s also worth noting that the anti-equality effort has its own fair share of out-of-state funding, but it all comes directly from the National Organization for Marriage, which is managing their campaign.

Watch videos of John Waters and Susan Sarandon speaking out for equality, courtesy of The Baltimore Sun:

NEWS FLASH

Virginia Board Votes To Force Existing Abortion Clinics To Comply With New, Restrictive Regulations | The Virginia Board of Health voted 13-2 today to require existing abortion clinics to meet newly-instated facility regulations. Previously, board members decided to grandfather in existing providers so that they were not forced to spend thousands of dollars on unnecessary updates, but state Attorney General Ken Cuccinelli refused to approve the decision. Ahead of the vote, the board only allowed 100 people into the meeting and limited public comment about the regulations to one hour, but opponents gathered outside to protest the expanded regulations. ProgressVA accused the board of prioritizing “political agendas over evidence-based medicine.” “It is simply disgraceful that the Board would bow to right-wing bullying,” Anna Scholl, executive director of ProgressVA, said in a statement.

Justice

Colorado Governor Comes Out Against Marijuana Legalization Initiative

As Colorado voters prepare to consider a November ballot initiative to legalize and regulate marijuana, their governor, John Hickenlooper (D-CO), has come out against the initiative in no uncertain terms. Hickenlooper’s office released a statement decrying the amendment as harmful to children. Amendment 64 would allow the state to regulate and tax cannabis in the manner it currently handles alcohol. The NAACP has endorsed the initiative out of concern for the disproportionate impact petty drug possession charges have on the lives of young African Americans.

While acknowledging the injustice of felony charges for petty possession, the governor vaguely suggested there are other ways besides legalization to handle the problem:

Colorado is known for many great things — marijuana should not be one of them. Amendment 64 has the potential to increase the number of children using drugs and would detract from efforts to make Colorado the healthiest state in the nation. It sends the wrong message to kids that drugs are okay.

Federal laws would remain unchanged in classifying marijuana as a Schedule I substance, and federal authorities have been clear they will not turn a blind eye toward states attempting to trump those laws. While we are sympathetic to the unfairness of burdening young people with felony records for often minor marijuana transgressions, we trust that state lawmakers and district attorneys will work to mitigate such inequities.

When ThinkProgress asked the governor’s office what alternative legislation Hickenlooper would support to address these “inequities,” a spokesperson said he was unaware of any pending proposals. During Hickenlooper’s tenure as Mayor of Denver, the city legalized petty possession of marijuana for anyone over 21 years old, though police can still make arrests based on state law. A majority of Denver Republicans voted to support Amendment 64, which is very similar to the city initiative.

Amendment proponent Mason Tvert called the statement “one of the most hypocritical statements in the history of politics” due to Hickenlooper’s former ownership of the Wynkoop Brewing Company brewpub in Denver. The governor’s stance also puts him at odds with 47 percent of Colorado voters who currently support legalization. Even vice presidential candidate Rep. Paul Ryan (R-WI), who is staunchly against marijuana legalization, felt the need to declare his support for states’ rights on the issue during a visit to the state.

However, Hickenlooper’s statement also shows some pragmatism in warning the federal government “will not turn a blind eye” toward state legalization. The Justice Department has cracked down on Colorado’s state-sanctioned medical marijuana program in the past year and shows no sign of relenting.

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