Obama's Tax Plan Will Help Almost All Americans, So Why Are Some Still Against It?
October 30, 2008News & Politics
Last week I ventured into the "spreading the wealth" discussion with a post attempting to unpack one aspect of why even some people who might be helped by the kind of economic policies Obama is proposing are against them anyway. It was a rather long post, so I wrapped it up without getting into another aspect of the debate that I alluded to briefly and hoped to get back to in another post.
You know, the one that passed without any help for homeowners on the verge of homelessness? Yeah. That one. But the transfer started long before that. We're just living in the aftermath.
I can't claim to have figured it out all on my own. Paul Krugman did that, two years ago. (Maybe that's one of many reasons why he has a Nobel Prize and I don't.)
Last week I ventured into the "spreading the wealth" discussion with a post attempting to unpack one aspect of why even some people who might be helped by the kind of economic policies Obama is proposing are against them anyway. It was a rather long post, so I wrapped it up without getting into another aspect of the debate that I alluded to briefly and hoped to get back to in another post.
While the McCain/Palin campaign attempts to whip people into a lather with a liberal use of the "socialism" label, invoking fears of a wealth transfer, it's easy to forget that a huge wealth transfer has been underway for a while and is going on even now. We call it "the bailout."
Never mind that it takes an utter lack of an “irony gene” to speak of “steal-from-the-rich,” when only after the taxpayer-funded $1 trillion bailout of the financial sector that got us into the current economic mess — welfare for the wealthy, essentially — was passed has Washington started talking about a stimulus package for the rest of us. It takes Joe himself to bring it on home.
You know, the one that passed without any help for homeowners on the verge of homelessness? Yeah. That one. But the transfer started long before that. We're just living in the aftermath.
I can't claim to have figured it out all on my own. Paul Krugman did that, two years ago. (Maybe that's one of many reasons why he has a Nobel Prize and I don't.)
America has never been an egalitarian society, but during the New Deal and the Second World War, government policies and organized labor combined to create a broad and solid middle class. The economic historians Claudia Goldin and Robert Margo call what happened between 1933 and 1945 the Great Compression: The rich got dramatically poorer while workers got considerably richer. Americans found themselves sharing broadly similar lifestyles in a way not seen since before the Civil War.
But in the 1970s, inequality began increasing again -- slowly at first, then more and more rapidly. You can see how much things have changed by comparing the state of affairs at America's largest employer, then and now. In 1969, General Motors was the country's largest corporation aside from AT&T, which enjoyed a government-guaranteed monopoly on phone service. GM paid its chief executive, James M. Roche, a salary of $795,000 -- the equivalent of $4.2 million today, adjusting for inflation. At the time, that was considered very high. But nobody denied that ordinary GM workers were paid pretty well. The average paycheck for production workers in the auto industry was almost $8,000 -- more than $45,000 today. GM workers, who also received excellent health and retirement benefits, were considered solidly in the middle class.
