We’ve all seen these statistics before in one form or another, but David Cay Johnston does an excellent job going into more detail for us in an article he published late last month. As he correctly notes, when things get extreme like this you ultimately end up with serious social unrest. Furthermore, as I have pointed out for years and years, this kind of disparity does not happen under free markets with rules and regulations applied equally to all. It happens under totalitarian societies, whether fascism, communism or crony capitalist corporatism (which is the model in the USA). It only happens when a very small oligarch class takes over the political process of a nation and then uses it to game the system.
However, I would take exception to Mr. Johnston’s conclusion that the root problem is the tax system. While I do not for one moment deny that the oligarchs game the tax system to provide loopholes for themselves, this is not why the 1% of 1% has taken all the wealth of the nation. This is much more related to the Federal Reserve and its policies of printing trillions of money out of thin air and distributing it to the oligarchs, either directly or through low interest loans. If you tax the rich more, they will still make more because they will still have the access to the cheap money. The Federal Reserve is the core cancer of the entire thing and they must be stopped. Some excerpts below:
The average increase in real income reported by the bottom 90 percent of earners in 2011, compared with 1966, if measured at one inch, would extend almost five miles for the top 1 percent of the top 1 percent.
Remember, we got off the gold standard in 1971, after which the Federal Reserve could print as much as they wanted and distribute it wherever they wanted…and they have.
Incomes and tax revenues have grown from 2009 to 2011 as the economy recovered, but an astonishing 149 percent of the increased income went to the top 10 percent of earners.
If you wonder how that can happen, the answer is simple: Incomes fell for the bottom 90 percent.
Despite being bedridden most of the day with an awful cold, I fought through it to record my longest interview ever. It was with the excellent radio host and webmaster of blacklistednews.com, Doug Owen. The entire show is two hours, but I come in halfway through…enjoy the ride!