This Thanksgiving the United States has 46.2 Million People Living in Poverty – Banks Got Bailed out and We Got Sold Out

Today many of us are preparing for a Thanksgiving feast we will serve in our homes tomorrow.  My prayers go out today to the millions of Americans who are out of work, and the record 46.2 million who are currently living in poverty.  Sadly, this is not because people don’t want to work. It is the result of policies our government has chosen to pursue, from the lobbying of those who benefit from the policies and laws that have been changed. This inequity is more severe in the U.S. than it is in nearly all of West Africa, North Africa, Europe, and Asia. We’re on par with some of the world’s most troubled countries, and not far from the perpetual conflict zones of Latin American and Sub-Saharan Africa. Our income gap also continues to get worse, having widened both in absolute and relative terms since the 1980s. The Congressional Budget Office has released a disturbing analysis showing the growth in income inequity in the last 30 years.

I am grateful for the Occupy Movement for having the courage to take a stand and raise their voices about the extreme injustice taking place in our country. This an answered prayer for me. I have been so angry seeing the robbery and fraud perpetrated on Americans since 2007 when I saw what was happening in the mortgage markets. The OWS protest “Banks got bailed out, while we got sold out” is true. Its been happening for some time now, since 1979, when the first change was made to the capital gains tax. It has gotten worse and worse with the lobbying influence and Citizens United the landmark decision by the United States Supreme Court in 2010 saying that Corporations are people, allowing the flood gates of secret funds to pour into the political process. But, “it’s crystal clear that the Bush  tax reduction on capital gains and dividend income in 2003 was the cutting edge policy that has created the immense increase in  net worth of corporate executives, Wall St. professionals  and other entrepreneurs”. My post  “FINALLY! A BILL WITH BI-PARTISIAN SUPPORT, BUT WHERE IS OUR TAX HOLIDAY?” details the proposed corporate tax holiday, another way to pass money through to CEO’s, executives, and shareholders through dividend payments. For example, Steve Ballmer of Microsoft received about $1.5 Billion in dividend income,  taxable at 15%, that’s only $225 million. Meaning he netted $1.275 BILLION. Any one making under $200,000 a year is  subject to 35 percent tax. It doesn’t take a calculator here to see how easy it is to get richer and richer. Earlier this year, the Federal Reserve gave permission for several banks to pay higher dividends. Jamie Dimon, chief executive of JPMorgan Chase, stands to eventually reap nearly $6 million a year in dividend payments from the stock he owns, an amount that equals almost a third of his total pay in 2010. Capital One’s chief executive, Richard D. Fairbank, could earn nearly $3 million a year as the credit card giant weighs a similar move. Several other banks have said they plan to pay a similar percentage of earnings to shareholders. So chief executives stand to reap especially large gains because they are traditionally among the biggest holders of company stock.

Did you know?:

  • The top 0.1 percent– about 315,000 individuals out of 315 million Americans– are making about half of all capital gains on the sale of shares or property after 1 year; and these capital gains make up 60% of the income made by the Forbes 400.  The lowering of the capital gains tax over the years, currently at 15 percent is the key ingredient in the explosive income growth of the one percent.
  • In just the last generation, the richest one percent almost quadrupled their incomes.
  •  The average wealth of the one percent is 225 percent than the wealth of the typical household – the highest it has ever been in our country.
  •  Three decades ago, CEO’s made about 40 times as much as an average worker. Today CEO’s makes almost 200 times as much as regular employees.
  •  Last year, half of Americans earned less than $26,000 while CEOs at top 500 companies raked in an average of $11 million.
  •  I am sure I don’t need to make this point – you probably already know your earnings don’t go as far as they used to. It isn’t your imagination. Over the past decade, earnings for middle-class Americans actually fell. In fact, working Americans’ wages are now a lower percentage of our economy than they’ve ever been. The divide between the richest and the poorest is worse in America than it is in nearly all of Europe and Asia and much of Africa. It’s about as bad as in Rwanda and Serbia – and it’s bad for our economy. People need jobs.
  • The growth of wealth for the one percent is not the result of hard work nor an accident. The wealth has been made off the backs of the working classes, because they have been able to buy lobbyists and congress officials to write laws that benefit them.

Many years ago Late Justice Louis Brandeis issued a warning to our nation, and it is more true now than it was then –  “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.” We have to make up our minds to restore a higher, fairer capital gains tax to the wealthiest investor class– or ultimately face increased social unrest.

This Thanksgiving as we give thanks for what we have,  and the freedoms we have, let us not forget the power of our voice. And the power of voting with our feet. It is up to all of us to do what we can to stand together for a government that is fair to all it’s people not just the top one percent.

As we express our gratitude, we must never forget that the highest appreciation is not to utter words, but to live by them.”

                              John Fitzgerald Kennedy

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5 Responses to This Thanksgiving the United States has 46.2 Million People Living in Poverty – Banks Got Bailed out and We Got Sold Out

  1. RSOpengart says:

    It is important, when discussing the capital gains tax reductions, to include the fact that historically, US income tax policy favored income from labor over income from investments. The income tax originated in the early 1900s and it’s specific stated purpose was to keep people from getting too rich! (BTW – all of this was in the media at the time the rates were reduced, including the potential harmful effects.)

    The reduction in capital gains tax rates is, as you say, a key driver in the increased income inequality. Many, mainly watchers of Fox News, will say something about how they should get to keep more of the money they “worked” to earn. Those who know the facts need to point them out – “they,” the richest 400 households, already own more wealth than 150,000,000 Americans. You or I will be lucky to make in our entire lifetimes what these people “earn” in a year. For the majority of the top 1%, an average of 60% of income is from investments.

    Economists have studied the effect of tax rates on investment and proven that they have little or no effect on the behavior of the wealthiest. What are their alternatives, for one thing? Keep it in their mattresses? Capital gains taxes are paid when the investor divests – sells. Higher rates lead to longer term investments, less speculation and high risk “gambling,” making it harder for bubbles to get started or grow.

    It isn’t enough to mention capital gains taxes. Most people need a mini-lesson in economics (history and government as well). So many people, people my age and older, don’t seem to remember what it was like in the US prior to Reagan’s presidency. If they do remember something, it’s the oil embargoes of the 70s and the long gas lines. Hardly anyone seems to remember the days when schools had art and music classes, full time school nurse, librarian and janitor. Students could go out for sports and not have to buy anything or pay any fees. National parks didn’t have any user fees. Congress could sit down, both parties together, to pass the Civil Rights Act, Medicare, the Environmental Protection Act.

    Money needs to be taken out of the equation. Even the best Congresspeople, ones that truly want to serve their constituents not the rich, must spend most of their time raising money for the next election cycle. If SCOTUS is going to give corporations the same rights as people and treat money as speech, it’s time to think outside the box. Where does most of the campaign money go? Television ads. So ban all campaign ads from TV. No candidate ads, no PAC ads, no 512-something ads. There is a good argument for a ban: manipulating the behavior of consumers has become a science. Corporations have poured huge sums of research money into determining what ads work. The same psychological manipulations can be, and are, used in political ads which is just wrong. We have laws to close all bars and taverns on election day, so voters can’t be manipulated with alcohol. Why should it be allowed through TV? If an outright ban isn’t possible, restrict ads to 30 or 60 second spots featuring the candidate speaking, just standing or sitting and speaking to the viewer about why we should vote for that candidate. Or whatever they want to talk about. The TV time should be free too; the people still own the airwaves. The only way we will get a government that puts the 99% ahead of the 1% or even considers us equally, is to take money out of the election process.

    • karla Rove says:

      I agree with everything you wrote, well thought out, it brought back memories of the old days you mention! I appreciate the time you took to write it. I do the best I can to provide information on the topic, attempting to stay to about 1000 words per blog, for the attention span problem. I agree people need to understand history, and that blog would have to be 10,000 words easily since so much of this started in the 1980’s and has been non-stop since then…. I hoping to help my readers understand just how the capital gains tax changes since the late 90’s from 28% to 20% to 15%. That last 5% has made such a difference. I hope to be writing soon about the problem with money in politics, but have gotten sidetracked by the Central Banks decidingto get the printing presses in high gear.

  2. Lauren says:

    If we had 0 people living in poverty in the United States, capital gains taxes were non-existent, and the American people were fully versed on our economic history, it would not change the fact that we, The American People, got “sold out.” Unfortunately , Americans are not well versed on American politics nor our economic situation (particularly the severity of it), and those who are knowledgeable are persistent about furthering their partisan ideological view points. Truth is there are few left who are willing to look at the facts as they are. And at the end of the day we have only ideals. And it will be our detriment.
    Don’t occupy Wall Street. Wall Street, after all, functions exactly as it was created to function.
    Occupy DC. Then, maybe, we can put change in motion.

  3. Pingback: The Reality Distortion Field of the Plutocracy | KARLA ROVE

  4. Pingback: The Reality Distortion Field of The Plutocracy | KARLA ROVE

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