Obama/Bush Tax Cuts Extended

One of the signature elements of Obama's campaign for change was to repeal the Bush tax cuts, which exacerbated a 30-year trend toward increased income inequality. However, along with a much less ambitious healthcare bill, concessions on the relief and recovery bill that received no Republican votes, escalation of the war in Afghanistan and the inability to pass substantive financial and banking reform, Obama has again relented -- showing that change was merely a strategy for election, not a call to arms for the administration once it reached office. 

There were early signs of commitment to the rhetoric, but the just passed election seems to have dissolved all of his resolve and we now find ourselves with yet another Democratic president largely capitulating to Republican ideology: http://www.washingtonpost.com/wp-dyn/content/article/2010/12/06/AR2010120605923_pf.html. Apparently, this is the latest installation in what has become one-way bipartisanship: http://www.washingtonpost.com/wp-dyn/content/article/2010/12/06/AR2010120607123_pf.html, with Democrats folding to Republican demands even when they are in the majority while Republicans make few or no concessions under any circumstances. Maybe it should be renamed as biRepublicanism -- a nod to the Clinton years and continued Democratic fecklessness. Income inequality not only brings up questions of morality and justice, it leads to economic inefficiencies and undermines democracy. Essentially we have set up a system here and globally where economic growth and profits are largely allocated to those at the top as unemployment increases, poverty and quality of life worsen, wages remain stagnant or fall, people in developing countries suffer or die prematurely and policymakers simply reflect the interests of these elites. As Stiglitz and Krugman among many have so aptly argued, this inequality undermines the economy and creates havoc that could see even worse systemic collapse in the future. If you haven't already, I highly recommend the documentary Inside Job to give you further insight into the crash and what was behind it. In any case, let's break down the numbers on income inequality in America today (more to come in future postings):

• Top 1 percent of income earners made 8% of total income in 1980 and 16% in 2004. The numbers are even higher today 
• Top 20 percent control 80% of wealth. Here are the number in 2001. They are much worse today
  
  Top 01%  -  33.4% 
  Next 09%  - 38.1%
  Next 10%  - 12.9%
  Next 20%  - 11.3%
  Middle 20% - 3.9%
  Bottom 40% - .3%
• Between 1972 and 2001, real wages grew overall, but were relatively flat for the average worker. Productivity and profits increased, so where did the money go?

-          Top 1% saw 87% gain ($402,306)

-          Top .1% 181% gain ($1.7 million)

-          Top .01% 497% gain ($6 million)

• CEOs to average worker salary30x in 1970 to
  116x in 90s to
  over 300x today