During an 8-year period, the top 400 wealthiest people each saw an increase, on average, of $1 billion apiece. Together, these 400 families have a collective net of $1.27 trillionNote: In his latest commentary on economic matters, Mr. Boschert asks who our government and politicians really favor this Christmas season: the rich and the famous, or regular middle class Joe and Jane Blow who maybe are out of work or barely making ends meet? Let's expand the question and ask whether you employed folks with a salary, small business owners and/or retirees have seen any real growth in your incomes at any time over the past 10 years? And for good measure - with the end of the tax year approaching - what effect will an extension of the Bush era tax cut have on your income bottom lines? The big debate in Washington has been whether to extend the tax cut for the wealthiest or let it expire and take the gains in tax revenues to pay down the national debt (see poll in top left hand column). The debate on that question, of course, is officially over. The House of Representatives is set to approve an $850 billion tax cut bill this week or next, including the tax cut extension for the very well to do, and send it over to President Obama for his signature just in time for Christmas.
Who says the season isn't magical? Lyrics to the Dance of the Sugar Plum Fairy:
See the candy fairies, sugar-plums, jelly-beans, chocolate bars (dance the minuet), With the candied cherries, lolly-pops, peppermints, candy-canes, (as they pirouette), See the FAIRY PRINCESS curtsying, gracefully, beautifully, Swaying to the tune...Music in the air (so entrancing), Flowers in her hair (as she's dancing), Love is everywhere (Ah-h-h-h-h-h-h-h) 'Neath the yellow lemon-drop moon . (Sugar-Plum Fairy Dances), There she goes now, on her toes now, To her yellow lemon-drop moon.
By Rocky Boschert
Financial Editor
The passage of the Republican-Obama Bush tax cut extension would mean a continuation of the Bush policy of trickle-down economics that is supposed to benefit all Americans - for at least 2 more years. Is this a good thing?The evidence appears to be quite overwhelming of who will benefit substantially and who will not. When median family income during Bush's 8 years goes down by $2,200, when we end up losing over 600,000 private sector jobs, and almost all of the job growth was in the Federal government (that is under Bush, not Obama), why would anyone want to continue that philosophy. But that, in a chestnut shell, is what will happen when this agreement is passed.
During the Bush years, the wealthiest 400 Americans saw their incomes more than double.
During an 8-year period, the top 400 wealthiest people each saw an increase, on average, of $1 billion apiece. Together, these 400 families have a collective net of $1.27 trillion.
When President Bush first took office, he inherited a $236 billion surplus in 2001 and a projected 10-year surplus of $5.6 trillion. The war in Iraq, by the time our last veteran is taken care of, will probably end up costing us something like $3 trillion, adding enormously to our national debt.
So when we talk about Iraq, it is not only the terrible loss of life that our soldiers and the Iraqi people have experienced, let's not forget what it has done to the deficit and the national debt. We did not pay for the war in Iraq. We just put it on the credit card.
James Dimon, CEO of JPMorgan Chase, received $89 million in total compensation over the last five years - a bank that we now know received hundreds of billions in low-interest loans and other financial assistance from the Federal Reserve and the Treasury Department.
His bank was bailed out big time by the taxpayers. But under the legislation the President negotiated with the Republicans, Mr. Dimon will receive $1.1 million in tax breaks.
The Republicans filibustered a bill to provide a $250 check to disabled veterans trying to get by on $15,000 or $16,000 a year. But Mr. Dimon, who made $89 million in the last 5 years, will get a $1 million tax deduction if this agreement is passed.
The top richest 1 percent of America already today owns more wealth than the bottom 90 percent.
According to the Citizens for Tax Justice, if the Bush tax breaks for the top 2 percent are extended, these are some of the people who will benefit and what kind of benefits they will receive:
1) Rupert Murdoch, the CEO of News Corporation, would receive a $1.3 million tax break next year.
2) Vikram Pandit, the CEO of Citigroup, the bank that got a $50 billion bailout, would receive $785,000 in tax breaks.
3) Ken Lewis, the former CEO of Bank of America - a bank that got a $45 billion bailout - the guy is already fabulously wealthy - would receive a $713,000 tax break.
4) The CEO of Wells Fargo, John Stumpf, who is the CEO of Wells Fargo, would receive a $318,000 tax break every single year.
5) The CEO of Morgan Stanley, John Mack, whose bank got a $10 billion bailout, would receive a $926,000 a year tax break.
6) The CEO of Aetna, Ronald Williams, would receive a tax break worth $875,000.
Would anyone like to comment on who really controls our government and who the politicians really favor? Is there really any difference between the Dems and the Repubs when it comes to economic policy and who benefits?
20 comments:
Rocky Boschert - Financial Editor... Really? If it were not for the "rich", how would Arrowhead Asset Management be doing financially? IMHO, any tax rate increase would put us on the downhill side of Laffer Curve, thereby worsening our national economic condition.
If I were as wealthy as the top 1%, I definitely wouldn't want, nor need anymore.
There is more than enough $$ to go around, as well as enough food for the hungry, clothing for the poor, and books for the uneducated.
It appears that massive greed has turned into massive hoarding....where greed is wanting, and hoarding is just gluttony.
I really liked the idea that floating around the net back when the stimulus was in consideration. Give every single one of us $100,000. This would enable all of us to get out of debt, and stimulate the economy with our needs, as opposed to stimulating this 1% to greater greed.
I believe the lowest taxation possible is best for all concerned. As it is, we are taxed too much and from every direction we turn. But I also believe people should pay as they can afford and clearly the most affluent and big corporations with record profits can afford to pay more.
The tax break for the rich should have been allowed to expire to help pay down the debt and President Obama should have stuck to his guns because I DO NOT believe for a second that the extension for the rich will improve the economy by a single penny or a single job. The tax cuts have been in place for about ten years. The results are out there for all to see.
I can tell you I have not seen my personal standard of living improve nor my wages over the past 10 years. The only people I know whose salaries have gone up are teachers and government employees and government contractors.
I agree with Rocky's earlier writings and comments. We live in a plutocracy. Our destiny is fixed.
To my cynical friend Anonymous #1:
I do not manage the money of the rich. All of my clients are middle-class Americans - presumably like you - who need the help of someone like me, someone who understands the games the rich play with your jobs, your pensions, and how to buy politicians. Moreover, the rich do not embody the most courageous aspect of the US economy. Hard working middle class Americans are what makes our country special.
Second, your historical logic is fallacious. The economic booms which started under Reagan (1982) and Clinton (1993) occurred after income tax increases, not tax cuts. And the tax cuts under Bush 2 didn't create jobs, it just made the middle class poorer and the rich richer, as the statistics show. Trickle down economics does not work. Why so many voters hold onto this economic fantasy is beyond my understanding.
The elephant in the room about the Bush tax cut extension is the $10 Trillion we will end up spending for the decade long ill-advised invasion and occupation of Iraq and the now unwinnable war in Afghanistan.
This is money we didn't have - so be borrowed it. We borrowed it by creating out of thin air government bonds (aka "printing money") and selling the bonds mostly to China, who in turn provides cheap labor for American companies - so they can return the products made in China for purchase by 1) unemployed Americans who lost their jobs to the cheap labor in China and to 2)poorer middle class Americans. Twisted logic? No, not to the rich and their US multinational corporations.
What if even a small portion of that money had been used for domestic public education (which is in shambles), or universal health care (which we will go to when all else fails - and it will), or to shore up our long-term social security shortfall?
And sadly, the money cannot come close to addressing the tragic and costly sacrifices that military families and their children have had to endure as a result of the policies forced on Americans by the architects of the New American Century project.
If we hadn't botched the initial stages of the Afghanistan War by diverting our focus to the disastrous Iraq War - which has turned Iraq over to the Iran-friendly Shias, we wouldn't be talking now about questionably beneficial tax cut extensions.
The last thing our economy needs now is tax cuts that do more to help the rich who were made richer from the last recession.
Dear President Obama:
As you know I’ve been peddling my book and while doing interviews, people ask me what I think of the job you’re doing. My answer is the same: He deserves to make decisions without criticism from me. It’s a tough enough job as it is.
Let me just express my private admiration for the job you are doing. Amazing! I say “private” because making my sentiments public would not do either of us any good, if you know what I mean.
First, I can scarcely believe my good fortune as to how your foreign and military policies - “continusistency" is the word I described to my good friend Joe Lieberman — has protected my legacy. More than protected, you’ve proven yourself just as able — and I may say sometimes even more so — to “kick ass” as my Daddy used to say.
My pleasant surprise is darn near limitless. Your Justice Department has not pursued any war crime actions against my people — not to mention Dick and I — that the civil liberties and human rights crowd keep baying for you to do.
And overseas, all I see are five stars. You are roaring in Afghanistan, dispatching our great special forces into Yemen, saying, like me, that you’ll go anywhere in the world to kill those terrorists. When you said you would assassinate American citizens abroad suspected of “terrorism” — that news came over the radio during breakfast when I was eating my shredded wheat and I almost choked with amazement. You got cajones, buddy. I was hesitant about crossing the border into Pakistan — but you, man, are blasting away. Even Dick, who would never say it publically, told me he is impressed.
There is one big difference between you and me. I never cracked a law book. You are a top Harvard lawyer and teacher of constitutional law. So when you do what I did, man, it’s — what’s the word — legitimatocracy!
Domestically, sure you rag Wall Street, but you continued the big bail out of our banker money friends and their supporting cast. Sure, you’re tougher with your words, but they deserve it — remember when I said that the Wall Streeters “got drunk” and “got a hangover”?
What I get such a kick out of is how you handled the unions and libs who backed you with dreams of Hope and Change. How smoothly you let them learn they got nowhere to go, just as we used to tell our conservative wing the same thing (though now they’ve been reborn as those growling nutcase Tea Partiers).
You have been such a great president — backing me on so many things — keeping the tax cuts and shelters, support for my oil and gas buddies, big loan guarantees for nukes, keeping Uncle Sam from bargaining down insurance and pharma, expanding free trade, not going tough on China (my Daddy especially liked this one), avoiding class struggle rhetoric and so on.
You want to know how confident I am about you? Even though you called waterboarding “torture,” I proudly admitted approving its use to protect our country and its freedoms. Isn’t that really what the Presidency is all about, along with saying how we honor our troops and the entire national defense thing?
All I can say is "You da Man, Soul Brother."
P.S. Barbara is a big fan. She calls your term so far Obamabush.
So let me get this straight. The US has one of highest (actually the highest) corporate tax rate in the "industrilized" world, yet we are in the lower 25% of revenue generation as a percent of GDP. And, the Bush tax cuts had nothing to do with the economic boom during most of his presidency. In fact, if we say the more money corporations make, the more money the "rich" make, I would argue we need a large tax reduction to increase national revenue.
Moreover, it is the corporations, and the "rich" that create wealth, and it is the growth of this wealth you are betting your "middle class" investors money on Mr. Boschert. It seems it would be to yours, and your investor's, andvantage to allow these corporations, and the "rich", to keep more of their working capital. Sorry, just pointing out the obvious.
Is last Anonymous the same as #1 Anonymous? If so, hello again.
Politician rhetoric "trickle down economics" did work at one time. Just as Keynesian spending economic stimulus worked at one time.
But now, with global competition for cheap labor and new markets for emerging economy consumers, Americans now see a system of "trickle over" economics - give corporations massive amounts of corporate welfare, i.e economic policy legislation, to move jobs overseas and cut American labor because it facilitates Wall Street share price appreciation. That is what corporate lobby money gets from the politicians.
And when you say "economic boom" during the Bush years. What economic boom are you talking about? The Standard and Poor 500 stock index made NO money (even a loss) from 2000 through 2008 respectively. So the average investor made no money during the Bush years. But Wall Street ending up making their rich owners and investors tons of money. Is that your Bush economic boom?
Yes, I get that often: "you're a hypocrite advisor" - trashing Wall Street on the one hand but making money off their shenanigans on the other. Oddly, I have that moral delimma as part of my job. And ironically, I have made more money for my clients during the Bush years "shorting" Wall Street than trusting its "pump and dump" rhetoric.
Just remember, Anonymous, when you hear all the CNBC talking heads glorifying the the virtues of Wall Street and its money masters, start selling into the cheerleading. CNBC does exemplify Wall Street exactly. Just watch what they show on the channel after Midnight and on weekends: Infomercials.
Oh yes, last Anonymous. America does not have anywhere near the highest corporate tax rate in the developed economies. Not when you include all the scam tax write-offs, tax shelters, and money laundering strategies approved by your friendly corporatocracy politician - both Repub and Demo.
But you are a great example of the power of their marketing and propoganda efforts. And I don't mean that snidely. I also believed the lies in front of the details for so many years.
Rocky is the poster child for liberal hypocrisy. What an absolute idiot. I love the way he claims to be omniscient, about how to profit from the "right-wing conspiracy".
Bob, I guess if I am a paid advertiser, I can say whatever I like in your publication. After all, if capitalism if good enough for evil Republicans, it's got to be good enough for the Roundup.
Anonymous, who calls me an absolute idiot, must take one to know one. We all have our blind spots. If you, who calls me a liberal idiot, can show me with numbers and real statistics how our country is better off under the rule of our antiquated two-party duopoly corporate welfare state, please enlighten us.
Otherwise, have the courage to state your name, your credentials, and your position, and let's debate these points specifically in a public forum somewhere.
I'm sure the Roundup would give us the media space where "my payola" to Bob Ochoa would do wonders for his struggling Blog.
Come out of the hateful shadows and put your mouth where your money is, Mr. Angry Name Caller.
Wow, how much anger and hate does Anonymous 5 have to unload to prove his point? And the way Rocky talks about the duopoly political system and how they are one in the same, he certainly is not even a common thinking liberal. Anonymous can't even get his labels correct.
I guess when people don't know what someone else is talking about, or doesn't like what they are saying, they have to categorize someone a liberal or a conservative to put their own ignorance and small thinking into some understandable framework.
I'd like to know what Rocky thinks about Ron Paul's desire to abolish the Federal Reserve Board?
Why is this Blog turning into an advertising platform for Rocky Boschert’s “Personal Finance” business? The Roundup used to be commercial free and somewhat independent but may now be moving toward a NASCAR business model. If conservatives were to buy more advertising space on the Blog would the Roundup become more conservative? How about us Federalists or Libertarians? I have always known that the Roundup was slanted toward the left but this obvious commercialism is troubling. Frankly Rocky’s comments aren’t all that valuable anyway and very predictable.
To the Anonymous who asks about Sen. Ron Paul's Federal Reserve Board (Fed) stance: The Fed is a career revolving door for Goldman Sachs (aka "government sachs"). I believe the Fed should either be abolished, redesigned or stripped of its power to manipulate the stock market for the benefit of its member banks, to prop up the appearance of market prosperity, and to print money willy nilly for the benefit of political manipulation.
To the Anonymous who thinks I manipulate the Roundup for my own purpose:
Your anger makes me think you are a corporatist on the right. But why such an over-concern with political labels and abstractions? Once we all take up the daily Wall Street injustices — credit-card ripoffs, unsafe drugs and contaminated food, dangerous work environments due to cost cutting and shareholder value — affecting people everywhere, common ground can be found.
Another obstacle to a focused political citizen movement is that the concentrated power of big money and lobbies have so overtaken both political parties and controlled the parameters of political conversation that progressives and libertarians fail to recognize their similarity, which are deep aversions to abusive concentrated power of any kind - corporate or government.
As a result, the anticorporatists in both camps are reluctant to collaborate in principled action because they have battled over diversionary issues for so long. And in many ways, it is in the power elites best interest to keep us fighting amongst ourselves.
Yet this reluctance may be fading as abuses of corporate power, especially when supplemented by state power, become more plain to all. The multitrillion dollar bailout of an avariciously reckless Wall Street rammed through Washington, without any input from an angry public, epitomized shared outrage.
Sir, you can call me liberal, an idiot, irrelavent, or whatever, but when Ron Paul and Barney Frank work together - like they recently did with the Sustainable Defense Task Force, consisting of experts "spanning the ideological spectrum," something positive is happening. They recommended a 10-year, $1 trillion reduction in Pentagon spending that really disturbed some in the military-industrial complex.
Finally, Bob Ochoa knows the difference between politically-manipulative advertising pressure and a voice that the conservative corporatists (probably most Republicans and independents, but hopefully not most libertarians) should hear via community dialogue.
And if he were my puppet, he wouldn't put up your comments which call me an idiot and say I have nothing important to say - of which, you may be right.
What is ironic here is I consider myself a fiscal conservative. Why, because I strongly abhor corporate welfare and free market manipulation through lobby money and courts saying a corporation is a human being. I do not support a "free markets" which the duopoly party corporatists envision for us - which is one the Federal Reserve Board represents.
Merry Christmas and Happy New Year to all.
To the Anonymous who asks about Sen. Ron Paul's Federal Reserve Board (Fed) stance: The Fed is a career revolving door for Goldman Sachs (aka "government sachs"). I believe the Fed should either be abolished, redesigned or stripped of its power to manipulate the stock market for the benefit of its member banks, to prop up the appearance of market prosperity, and to print money willy nilly for the benefit of political manipulation.
To the Anonymous who thinks I manipulate the Roundup for my own purpose:
Your anger makes me think you are a corporatist on the right. But why such an over-concern with political labels and abstractions? Once we all take up the daily Wall Street injustices — credit-card ripoffs, unsafe drugs and contaminated food, dangerous work environments due to cost cutting and shareholder value — affecting people everywhere, common ground can be found.
Another obstacle to a focused political citizen movement is that the concentrated power of big money and lobbies have so overtaken both political parties and controlled the parameters of political conversation that progressives and libertarians fail to recognize their similarity, which are deep aversions to abusive concentrated power of any kind - corporate or government.
As a result, the anticorporatists in both camps are reluctant to collaborate in principled action because they have battled over diversionary issues for so long. And in many ways, it is in the power elites best interest to keep us fighting amongst ourselves.
Yet this reluctance may be fading as abuses of corporate power, especially when supplemented by state power, become more plain to all. The multitrillion dollar bailout of an avariciously reckless Wall Street rammed through Washington, without any input from an angry public, epitomized shared outrage.
Sir, you can call me liberal, an idiot, irrelavent, or whatever, but when Ron Paul and Barney Frank work together - like they recently did with the Sustainable Defense Task Force, consisting of experts "spanning the ideological spectrum," something positive is happening. They recommended a 10-year, $1 trillion reduction in Pentagon spending that really disturbed some in the military-industrial complex.
Finally, Bob Ochoa knows the difference between politically-manipulative advertising pressure and a voice that the conservative corporatists (probably most Republicans and independents, but hopefully not most libertarians) should hear via community dialogue.
And if he were my puppet, he wouldn't put up your comments which call me an idiot and say I have nothing important to say - of which, you may be right.
What is ironic here is I consider myself a fiscal conservative. Why, because I strongly abhor corporate welfare and free market manipulation through lobby money and courts saying a corporation is a human being. I do not support a "free markets" which the duopoly party corporatists envision for us - which is one the Federal Reserve Board represents.
Merry Christmas and Happy New Year to all.
Our government and politicians are more interested in perpetuating wealth and the wealthy (God knows for what??? maybe to keep enriching themselves) than they are in floating the boat for everybody. Propping up the rich and holding down the poor and mid income earners is not a smart economic model for our country. I'm really tired of how stale this debate has become always inside the same old stupid box as if America has completely lost its imagination.
Wow, last Anonymous, you are exactly right. I have allowed myself to get pulled into a stale debate here with some of my reflexive comments. Your honesty is a good Christmas gift.
Thanks for your incisive yet simple comment. I will try to do better next time. Keep your input coming.
And your lack of name calling shows integrity and class.
Fair Tax anyone?
Rocky... I've been reading your past stuff to try to understand where you're coming from. I see a major incongruity.
You get the corporatocracy... the effective joint venture between large corporations and government. You understand that both work to benefit a relative few, without regard to the outcomes for the rest of us.
Ok... Here's where it gets weird... Nobody in D.C. cares about you, but you still want to give them your money, and you want other people to be forced to give theirs, too.
Social Security isn't secure. The DoD plays offense. Homeland Security is reading your emails, listening to your phone calls, and a whole lotta other stuff. The EPA doesn't protect the environment, the SEC doesn't restrain or punish Wall Streets misdeeds and yet your government bailed them out to the tune of 12 Trillion borrowed taxpayer dollars. The Fed. The FDA. Fannie. Freddie. A foreign policy that creates chaos and then fights it.
And you want to give them your money.
The federal, state and local governments will be asking for more in 2011 and into the foreseeable future. At what point will you say "enough"?
I've read that about half our income is taken in taxes and government fees. That's 6 months a year we work for them. Is that not enough? Is 7 months enough? Is 8?
What if its only two? What would you do with that other 4 months worth of income you're paying as taxes now (a 66% increase in your disposable income). What would you do with it? Something good, I'm sure.
Simple answer, Sam. I don't oppose taxes at any level of government if the money is used smartly and to benefit the parts of society that needs the help. Taxes are not a black and white issue, except to those who cannot understand life other than in some black and white way.
No taxes; everything decentralized; all government is ineffective and the private sector is always better - all black and white NONSENSE thinking.
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