Much like the legendary Phoenix rose from death, the American Dream was birthed during the destruction and pain felt during the Great Depression.
Thought provoking income analysis over the last 30 years, it's relationship to the Great Depression and the American Dream.
1. Next Slide :
The Great Recession
The phoenix is an ancient legend of a fiery bird, reborn of
ashes, and living a thousand years bringing with it prosperity
and justice.
Much like the legendary Phoenix rose from death, the
American Dream was birthed during the destruction and pain
felt during the Great Depression.
This dream was so strong it escaped from the collective
subconscious into the realm of reality… and
lived for decades!
2. Next Slide (Chart):
Bloated and Rotting
Fast forward to 2010. The U.S. is defined by a new crisis.
Record or near record:
-Poverty
-Unemployment
-Foreclosures
-Lack of savings
-Bankruptcies
-Inequality
-Subpar education
-Foreclosures
-Infrastructure neglect
Runaway costs:
-Transportation
-Medical Care
-Housing
3. Next Slide (Chart):
Income Growth 1979-2007
Banking Failure and Structural Decay
-Since Dec 2007, 300+ and counting bank failures
-Recently, the financial sector received highest percent ever
or near record percent 1.) of domestic corporate profits …41%
and 2.) of total contribution to GDP …8%
-Stock market (S&P 500 index) fell 38.5% in 2008.
3rd worst fall since 1907, 37.7% drop & 1931, 52.7% fall
4. Working poor +$1,800
income growth over
28 years.
Middle Class +$10,400
growth over 28 years.
Rich +$1,323,000
growth over 28 years.
Next Slide:
Income Growth Percentage
Source: cbo.gov
5. Working poor 11%
income growth over
28 years.
Middle class 19%
income growth over
28 years.
Rich 241% income
growth over 28 years.
Next Slide:
Points of Interests
Source: cbo.gov
6. Meager income gains made by the working poor and
middle class have been nearly swallowed by inflation.
Income and wealth realities in the U.S. are comparable
with the robber barons from Russia and Venezuela. In
fact, income inequality is actually worse in the U.S.A.
2007 financial wealth owned by the top 1% was 42.7% while
the bottom 80% owned 7% of all financial assets. Source:
Wolff (2004, 2007, & 2010).
If you benefit 241% more… the reasonable thought is to
pay more. Let’s see what the tax rates have been.
Next Slide (Graph):
Tax Rates for the Working Class & Rich 1979 - 2007
7. Top marginal rates (bright
red arrows) in 2010 are
taxed on income above
$363,651.
Capital gains rates (brick
red arrows) apply to
investment income…
most “financial” income
passes through these
rates. The super rich are
taxed at this rate…
Tax cuts for the rich have
been nearly twice that of
the working poor’s tax
rate (purple).
Next Slide (Chart):
The Real Meaning Behind
Economic Growth.
8. “You bet I cut taxes at
the top. That
encourages
entrepreneurship.
What we Republicans
should stand for is
growth in the economy.
We ought to make the pie
higher.” -G. W. Bush
-Quote attributed to a
February 15th 2000
Republican debate.
Next Slide (Chart): The Dow
in perspective.
.
Did the economy grow? And who
benefited?
9. Since 1979 the stock
market has exploded
(black line).
Income growth for the
top 1% mirrors the
Dow’s historic climb.
Income growth for 99%
of Americans have
largely been excluded
from these historic gains.
Next Slide (Chart):
Making the top 1% look like
beggars...
Income Source: cbo.gov
10. Top 400 Incomes (AGI)
(orange line). Or
revenue the govt. can tax
after the rich deduct part
of the yacht purchased
and used for taking
clients out for a spin.
What the super rich are
actually paying on AGI
income (olive arrow).
Top 400 saw income
increase of 637% while
effective taxes dropped
44.5%.
Next Slide (Chart):
The DOW in perspective..
Source: cbo.gov
11. “That a peasant may
become king does
not render the
kingdom
democratic.”
-Woodrow Wilson
The last 15+ years
have fueled the rich’s
income at a greater
rate than even the
market’s explosive
growth.
Next Slide:
Class Warfare
Source: cbo.gov
12. “There’s class warfare,
all right,” Mr. Buffett
said, “but it’s my class,
the rich class, that’s
making war, and
we’re winning.”
-Warren Buffet was named by
Forbes (2008) as the world’s
richest man.
Next Slide (Chart):
Income Inequality &
Economic Instability
Unemployment Source: http://www.bls.gov
Real Unemployment
“Official” Oct. 8th 2010
unemployment numbers are
9.6% or $14.8 million
unemployed Americans.
TIPP polling unit revealed
27.8% of all households with
one or more of it’s members
are looking for employment.
Many economists estimate
real unemployment closer to
22%.
13. Top 10% income as a
percentage of total
incomes.
The last time income
inequality was this
extreme... 1929.
“Cashing in” and selling
their market position, many
investors with deep
pockets helped kick off the
Great Depression in 1929.
Misery spawned during the
G.D. was captured by an
influential author
who coined this
famous mantra
in 1931…
Next Slide:
Author of the “American Dream”
IRS Income as a Chart Source: Professor Emanuel Saez
14. The American Dream is rooted in the
Declaration of Independence.
“We hold these truths to be self-evident,
that all men are created equal, that they are
endowed by their Creator with certain
unalienable Rights, that among these are
Life, Liberty and the pursuit of Happiness.
James Truslow Adams originally coined the
iconic mantra “The American Dream” in his
1931 book, The Epic of America.
15. James Truslow Adams said it best, "that dream of a
land in which life should be better and richer and
fuller for everyone, with opportunity for each
according to ability or achievement.
It is a difficult dream for the … upper classes to
interpret adequately, and too many of us ourselves
have grown weary and mistrustful of it.
It is not a dream of motor cars and high wages
merely, but a dream of social order in which each man
and each woman shall be able to attain to the fullest
stature of which they are innately capable, and be
recognized by others for what they are, regardless of
the fortuitous circumstances of birth or position.”
16. While many include affordable housing and economic
opportunity for everyone as part of the American
Dream, the original meaning is deeper.
Currently, the costs of housing, transportation, and
receiving medical care is a bad situation and getting
worse.
Without real income gains and more importantly,
income equality, the American Dream is simply
impossible. The American Dream, quite possibly, is
dead…