Has the 1% Caused Our Economic Woes?

The Occupy Wall Street crowd emphasizes the growing disparity of wealth between the poor and the rich.  They typically make the incorrect assumption that it is this disparity that is the cause of the poor getting poorer.  This assumption is in turn based upon the false premise that there is a fixed amount of wealth, and that if one gets more, someone else (or multiple others) loses out by an equivalent amount.  Hence, if one gets a raise, someone else, or multiple someones, somewhere, are getting less.  A parallel illogical thought would be that if one gains weight, then someone else, somewhere else, will lose a comparable amount of weight.

Additionally, in our modern statistics-oriented society, the overall growing disparity in wealth portrayed in various graphs is not experienced by either rich or poor.  The poor know that they are poor.  The rich know that they are rich.  The poor may know they have less disposable income than they did, say, ten years ago, and the rich may know that their assets have grown over the past ten years, but the disparity between the two groups is not directly experienced.  The leftist premise is that the disparity is the cause of the pain, whereas actually it is the diminished buying power that is the actual source of pain.  The statistical category "disparity" is portrayed as an economic thumbscrew that is putting a punishing pressure on the poor and middle class, an invisible but nonetheless real torture device that is increasing the pain of those millions of people.  However, that view is an intellectual illusion -- disparity is an effect of other political and economic dynamics.  For example, is the poverty in our major cities caused by the profits of rich people or by misgovernance of those cities, which has been in the hands of Democratic leftists for decades?

If even half of the rich in the top 1% lost one half their wealth overnight, the poor and the middle class would not feel one iota of improvement in their lives.  In fact, the poor would be worse off than they are now, and the disparity between themselves and the rich would be even greater.

Why this search for the rich bogeymen -- the so-called 1%?  Even if there is some truth to the evil effects of wealth disparity, it obviously is only one of a complex of factors that have detrimental effects on the economy.  Haven't manufacturing jobs been exported by the U.S. to an incredible degree for forty years?  We no longer build merchant ships or railroad or subway cars; we no longer have machine shops.  We have outsourced toy-making, many pharmaceuticals, clothing and shoe manufacturing, and sneaker manufacturing.  Products from windshield wipers to shoelaces have been outsourced.

It may also be that government policy and indifference to its regulatory functions favor the rich, and that this is a form of crony capitalism exercised by purposely looking the other way at the bureaucratic level of government.  Why is it that under Obama as well as under Bush, not one person at Standard & Poor's, which gave AAA ratings to mortgage bundles that were essentially worthless, not one person in banking, not one person at AIG, not one person who has speculated in derivatives or bundling of secondary mortgages has gone to jail?  Government auditing mechanisms were completely ineffectual.  The SEC failed totally.

The Fed may also be blamed more than the 1%.  How is it that vast sums were given out by the Fed under TARP without public oversight as to which institutions received the money, what debt it paid down, and the extent of the repayment that has taken place?  Progressives, so-called, and Republicans both agreed on these bailouts.  They agreed on the secrecy of the bailouts.  They agreed that to receive the money, institutions would only have to sign one single-spaced typewritten page, with no conditions on the use of the money, which lack of conditions in the bailout led to some of the bailouts being used for, incredibly, bonuses!

If one is prone to believe in conspiracy theories, why not look at the secret membership and backdoor dealings of the Fed instead of the top 1% of earners?  The Fed is governed by a limited number of individuals whose members are known to each other, though not to the public.  It's interesting that D. Kucinich (Socialist) and R. Paul (Libertarian) both were cosponsors of a bill to require a complete audit of the Fed (under present law, there are many areas of Fed activity and communications that are not open to review).  But a complete audit of the Fed, like that given to all other financial institutions, is still disallowed.

Further, as every community organizer knows, Saul Alinsky taught that one cannot demonstrate against a percentage (like 1%).  You can only demonstrate against a person or persons or against a particular institution -- e.g., a government agency, legislative center, court, or business.  So why can't we get down to brass tacks, fix blame where it ought to be fixed, investigate what needs to be investigated, simplify that which is overly complex (including the tax code and the rules governing the vast game of derivatives and mortgage secondary markets [they're still there]), and stop pointing fingers at some super-rich class that among its members may have various culpabilities in the difficulties faced by our present economy and by society on an ongoing basis?  Justice needs to be promoted, and not destruction of a class.

The Occupy Wall Street crowd emphasizes the growing disparity of wealth between the poor and the rich.  They typically make the incorrect assumption that it is this disparity that is the cause of the poor getting poorer.  This assumption is in turn based upon the false premise that there is a fixed amount of wealth, and that if one gets more, someone else (or multiple others) loses out by an equivalent amount.  Hence, if one gets a raise, someone else, or multiple someones, somewhere, are getting less.  A parallel illogical thought would be that if one gains weight, then someone else, somewhere else, will lose a comparable amount of weight.

Additionally, in our modern statistics-oriented society, the overall growing disparity in wealth portrayed in various graphs is not experienced by either rich or poor.  The poor know that they are poor.  The rich know that they are rich.  The poor may know they have less disposable income than they did, say, ten years ago, and the rich may know that their assets have grown over the past ten years, but the disparity between the two groups is not directly experienced.  The leftist premise is that the disparity is the cause of the pain, whereas actually it is the diminished buying power that is the actual source of pain.  The statistical category "disparity" is portrayed as an economic thumbscrew that is putting a punishing pressure on the poor and middle class, an invisible but nonetheless real torture device that is increasing the pain of those millions of people.  However, that view is an intellectual illusion -- disparity is an effect of other political and economic dynamics.  For example, is the poverty in our major cities caused by the profits of rich people or by misgovernance of those cities, which has been in the hands of Democratic leftists for decades?

If even half of the rich in the top 1% lost one half their wealth overnight, the poor and the middle class would not feel one iota of improvement in their lives.  In fact, the poor would be worse off than they are now, and the disparity between themselves and the rich would be even greater.

Why this search for the rich bogeymen -- the so-called 1%?  Even if there is some truth to the evil effects of wealth disparity, it obviously is only one of a complex of factors that have detrimental effects on the economy.  Haven't manufacturing jobs been exported by the U.S. to an incredible degree for forty years?  We no longer build merchant ships or railroad or subway cars; we no longer have machine shops.  We have outsourced toy-making, many pharmaceuticals, clothing and shoe manufacturing, and sneaker manufacturing.  Products from windshield wipers to shoelaces have been outsourced.

It may also be that government policy and indifference to its regulatory functions favor the rich, and that this is a form of crony capitalism exercised by purposely looking the other way at the bureaucratic level of government.  Why is it that under Obama as well as under Bush, not one person at Standard & Poor's, which gave AAA ratings to mortgage bundles that were essentially worthless, not one person in banking, not one person at AIG, not one person who has speculated in derivatives or bundling of secondary mortgages has gone to jail?  Government auditing mechanisms were completely ineffectual.  The SEC failed totally.

The Fed may also be blamed more than the 1%.  How is it that vast sums were given out by the Fed under TARP without public oversight as to which institutions received the money, what debt it paid down, and the extent of the repayment that has taken place?  Progressives, so-called, and Republicans both agreed on these bailouts.  They agreed on the secrecy of the bailouts.  They agreed that to receive the money, institutions would only have to sign one single-spaced typewritten page, with no conditions on the use of the money, which lack of conditions in the bailout led to some of the bailouts being used for, incredibly, bonuses!

If one is prone to believe in conspiracy theories, why not look at the secret membership and backdoor dealings of the Fed instead of the top 1% of earners?  The Fed is governed by a limited number of individuals whose members are known to each other, though not to the public.  It's interesting that D. Kucinich (Socialist) and R. Paul (Libertarian) both were cosponsors of a bill to require a complete audit of the Fed (under present law, there are many areas of Fed activity and communications that are not open to review).  But a complete audit of the Fed, like that given to all other financial institutions, is still disallowed.

Further, as every community organizer knows, Saul Alinsky taught that one cannot demonstrate against a percentage (like 1%).  You can only demonstrate against a person or persons or against a particular institution -- e.g., a government agency, legislative center, court, or business.  So why can't we get down to brass tacks, fix blame where it ought to be fixed, investigate what needs to be investigated, simplify that which is overly complex (including the tax code and the rules governing the vast game of derivatives and mortgage secondary markets [they're still there]), and stop pointing fingers at some super-rich class that among its members may have various culpabilities in the difficulties faced by our present economy and by society on an ongoing basis?  Justice needs to be promoted, and not destruction of a class.

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