To Visit Banana Republic, No Need To Leave U.S.

[TampaYankee]

Op-Ed Columnist

Our Banana Republic

By NICHOLAS D. KRISTOF Published: November 6, 2010

In my reporting, I regularly travel to banana republics notorious for their inequality. In some of these plutocracies, the richest 1 percent of the population gobbles up 20 percent of the national pie.

But guess what? You no longer need to travel to distant and dangerous countries to observe such rapacious inequality. We now have it right here at home — and in the aftermath of Tuesday’s election, it may get worse.

The richest 1 percent of Americans now take home almost 24 percent of income, up from almost 9 percent in 1976. As Timothy Noah of Slate noted in an excellent series on inequality, the United States now arguably has a more unequal distribution of wealth than traditional banana republics like Nicaragua, Venezuela and Guyana.

C.E.O.’s of the largest American companies earned an average of 42 times as much as the average worker in 1980, but 531 times as much in 2001. Perhaps the most astounding statistic is this: From 1980 to 2005, more than four-fifths of the total increase in American incomes went to the richest 1 percent.

That’s the backdrop for one of the first big postelection fights in Washington — how far to extend the Bush tax cuts to the most affluent 2 percent of Americans. Both parties agree on extending tax cuts on the first $250,000 of incomes, even for billionaires. Republicans would also cut taxes above that.

The richest 0.1 percent of taxpayers would get a tax cut of $61,000 from President Obama. They would get $370,000 from Republicans, according to the nonpartisan Tax Policy Center. And that provides only a modest economic stimulus, because the rich are less likely to spend their tax savings.

At a time of 9.6 percent unemployment, wouldn’t it make more sense to finance a jobs program? For example, the money could be used to avoid laying off teachers and undermining American schools.

Likewise, an obvious priority in the worst economic downturn in 70 years should be to extend unemployment insurance benefits, some of which will be curtailed soon unless Congress renews them. Or there’s the Trade Adjustment Assistance program, which helps train and support workers who have lost their jobs because of foreign trade. It will no longer apply to service workers after Jan. 1, unless Congress intervenes.

So we face a choice. Is our economic priority the jobless, or is it zillionaires?

And if Republicans are worried about long-term budget deficits, a reasonable concern, why are they insistent on two steps that nonpartisan economists say would worsen the deficits by more than $800 billion over a decade — cutting taxes for the most opulent, and repealing health care reform? What other programs would they cut to make up the lost $800 billion in revenue?

In weighing these issues, let’s remember that backdrop of America’s rising inequality.

In the past, many of us acquiesced in discomfiting levels of inequality because we perceived a tradeoff between equity and economic growth. But there’s evidence that the levels of inequality we’ve now reached may actually suppress growth. A drop of inequality lubricates economic growth, but too much may gum it up.

Robert H. Frank of Cornell University, Adam Seth Levine of Vanderbilt University, and Oege Dijk of the European University Institute recently wrote a fascinating paper suggesting that inequality leads to more financial distress. They looked at census data for the 50 states and the 100 most populous counties in America, and found that places where inequality increased the most also endured the greatest surges in bankruptcies.

Here’s their explanation: When inequality rises, the richest rake in their winnings and buy even bigger mansions and fancier cars. Those a notch below then try to catch up, and end up depleting their savings or taking on more debt, making a financial crisis more likely.

Another consequence the scholars found: Rising inequality also led to more divorces, presumably a byproduct of the strains of financial distress. Maybe I’m overly sentimental or romantic, but that pierces me. It’s a reminder that inequality isn’t just an economic issue but also a question of human dignity and happiness.

Mounting evidence suggests that losing a job or a home can rock our identity and savage our self-esteem. Forced moves wrench families from their schools and support networks.

In short, inequality leaves people on the lower rungs feeling like hamsters on a wheel spinning ever faster, without hope or escape.

Economic polarization also shatters our sense of national union and common purpose, fostering political polarization as well.

So in this postelection landscape, let’s not aggravate income gaps that already would make a Latin American caudillo proud. To me, we’ve reached a banana republic point where our inequality has become both economically unhealthy and morally repugnant.

I invite you to comment on this column on my blog, On the Ground. Please also join me on Facebook, watch my YouTube videos and follow me on Twitter.

See original article at:http://www.nytimes.com/2010/11/07/opinion/07kristof.html

[TampaYankee]

In another forum Oz posts the question: Is the American Dream Still Alive. http://www.maleescortreview.com/forum/index.php?/topic/5635-is-the-american-dream-over/

The above post is an answer to that question. Unquestionably it is alive and well for the top 1% and probably for the top 10%, maybe the top 20%. Also, unquestionably the income gap is widening between those and everyone else. That is 'widening' not widened. It is still growing, even in these terrible economic times. These two articles demonstrate clearly how shameful the GOP is for demanding that tax cuts for the wealthies of us be extended even though it will add 700 trillion to the deficit that hurts all of us and our children and their children.

More GOP talking out of both sides of their mouth: cut the deficit and debt but extend tax breaks for the rich. They are sickening in their support of unbridled greed at the upper incomes while sacrificing basic essentials like education of our children and afforadable health care and coverage for those who could not be previously covered at affordable rates or any rate in many many cases. How can you not love these guys?

[RA1]

I am afraid that both parties are talking out of both sides of their mouths and their rear ends also. Without a doubtt the US needs to address the widening gap between the very wealthy and the rest of us but more taxes is NOT the answer. Less spending will help, a LOT. We need to get the bottom and middle UP, not the top DOWN. The government needs to get out of our lives and let "real" capitalism thrive. That means the almost indistinguishable "both" parties.

As far as the US being a banana republic as regards the "spread" between upper and lower income groups, what is the income of those in the bottom of the BR's? How does that compare to the lower end in the US? Let's compare apples, not bananas.

Best regards,

RA1

[Lucky]

God forbid we should tax those who have money!

[RA1]

You have some money, how much should the US tax you? I think you entirely miss the point. But, that is OK. I forgive you.

Best regards,

RA1

[lookin]

As we begin our national debate between the haves and have-nots, Hugo Chavez ups his ante.

Hugo Chavez defends state takeovers of apartments

Nov 7, 11:01 PM (ET)

By CHRISTOPHER TOOTHAKER

CARACAS, Venezuela (AP) - Facing a wave of criticism from business leaders, President Hugo Chavez is defending his order for government officials to seize control of residential complexes.

Chavez promised Sunday to crack down on construction and real estate companies that he accused of unjustly boosting prices, which he labeled "housing fraud."

The president, a self-proclaimed revolutionary who idolizes Cuba's Fidel Castro and is currently on a visit to Havana, called his decision last week to order the expropriation of six residential complexes and "the temporary occupation" of eight gated communities in Caracas and other cities "an act of justice.

"Venezuela's consumer protection agency and state prosecutors are investigating complaints that construction companies and real estate firms are illegally charging buyers high interest on unfinished apartments, even though the buyers settled on a price years ago and made down payments.

"We have decided to put an end to this type of organized crime," Chavez wrote in his weekly newspaper column.

Companies accused of violating consumer-protection regulations deny any wrongdoing.

Full article