The United States of America – A Graphic Narrative of Recent Socioeconomic Trends

[Graphs/images taken from a number of sources; all graphs/images are for educational purposes only]

During the post-World War II boom, economic growth was spread fairly equitably across the different income groups.  The economic philosophy most commonly followed during this time came from John Maynard Keynes, who believed that governments must practice deficit-spending, especially in times of recession, in order to promote full-employment. Keynesian economic philosophy influenced FDR’s New Deal programs and promoted the idea of government stimulus programs to create jobs.

From 1979 to the present day, the economic growth has mainly benefitted families with incomes over $75,000, particularly the richest 20% of the population.  During this same time period, the top tax brackets have seen their tax rates drop.  The main economic philosophy practiced by politicans, particularly Ronald Reagan, came from Milton Friedman and his seminal work Capitalism and Freedom. This supply-side theory promotes free enterprise and followers believe that government interference is ineffective and unnecessary (e.g. flat tax is better than progressive tax, government should not create jobs, etc…).  The only problem is that in practice this theory has been a failure for the bottom 80-90% of income earners (i.e. the vast majority of Americans).

[taken from the Center on Budget and Policy Priorities]

If we focus on the growth of the wealthiest Americans, the income growth disparity is even more pronounced.  During the past thirty years the richest 1% saw their incomes increase by 232%, compared to a very modest 10% increase for the bottom 90%.

[Source: Taken from the Institute for Policy Studies ]The last time income disparity was as unequal is it is today was 1928, the year the stock market crashed on the eve of the Great Depression.  The “Roaring 20’s” was a decade characterized by government deregulation, “laissez-faire” capitalism, and the disproportionate wealth disparity between the top few and the middle and lower class – much like the past 30 years has been in this country.

Since Nixon took over the presidency, every sitting president has presided over a shift in economic policies that have either favored the richest 20% or have done nothing to shift the ratio in a downward direction.  In essence, the ability to obtain the “American Dream” by working hard and moving up the socioeconomic ladder is becoming increasingly more difficult due to socioeconomic policies.

The richest 400 families in this country have benefitted from current economic policies, including a decrease in their effective tax rate. Many Republicans and even some Democrats want to extend Bush’s tax cuts, which are set to expire in 2011.  They erroneously claim that this would raise taxes – it won’t; it would simply allow the temporary tax cuts to expire.

As a comparison tool, the tax cuts for the richest 1% cost the U.S. government $79.5 billion in just one year.  In other words, we spend less money on education, homeland security and protecting the environment than the amount the top 1% saved in one year due to the Bush administration’s overly generous tax cuts for the rich.

Tax policy info. taken from Minnesota Senator Franken's website

Another trend coinciding with the rapid concentration of wealth at the top and the stagnation of the middle class is the change in federal tax policies.  The income tax rate for the highest income bracket was 91% between 1954 and 1963; the lowest rate between this time period was 71% in 1970.  Between 1971 and 1981, the income tax rate for the wealthiest bracket was at 70%, but between 1982 to 1986 it was down to 50%.  Today, during the worst recession since the Great Depression, the income tax rate for the richest tax bracket is a mere 35%.  With most states reporting budget shortfalls, it should be obvious to any politician that the most effective and moral thing to do for the country at this moment is to substantially raise the tax rate on the wealthiest 5% of Americans.

Billionaire investor and businessman Warren Buffet

[Story taken from The Times Online (UK)]

Warren Buffett, the third-richest man in the world, has criticised the US tax system for allowing him to pay a lower rate than his secretary and his cleaner.

Speaking at a $4,600-a-seat fundraiser in New York for Senator Hillary Clinton, Mr. Buffet, who is worth an estimated $52 billion (£26 billion), said: ‘The 400 of us [here] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter.  If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.’

Mr. Buffet said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent.  Mr. Buffett told his audience, which included John Mack, the chairman of Morgan Stanley, and Alan Patricof, the founder of the U.S. branch of Apax Partners, that U.S. government policy had accentuated a disparity of wealth that hurt the economy by stifling opportunity and motivation.

Center on Budget and Policy Priorities

This graph shows that, despite the high unemployment and continuing job losses seen today, the government’s stimulus program added jobs and prevented other layoffs from occurring.  In a Congressional hearing, the Economic Policy Institute’s testimony stated that the Recovery Act was not enough to combat the recession (i.e. more government action is necessary in order to curb the unemployment rate and create more demand for goods/services).

Jeff Stahler comic

While nonfinancial corporations are sitting on $1.8 trillion in cash, conservative politicians and pro-business publications like The Wall Street Journal are still calling for tax cuts for the wealthy and even claiming that “subsidizing” unemployment (i.e. giving unemployment benefits) is ineffective in stimulating the economy.  What the editors and op-ed contributors of this newspaper fail to convey to readers is that consumers need disposable income in order to buy (demand) their goods and services (supply).

Center on Budget and Policy Priorities

This chart shows the relationship between periods of recession and an increase in the poverty rate.  In just one year, from 2008 to 2009, the poverty rate increased from 13.2% to 14.3%.  1 out of 7 Americans are now considered to be living in poverty, which by government definition means a family of four living on an annual income of $21,756 or less.

Racial Dimensions of Income Disparity, Inequality and Institutionalized Discrimination

Working Group on Extreme Inequality

As a white American, I sometimes do not even think about how institutionalized racism has become.  Racism can no longer be solely defined by acts of overt aggression and using or accepting the use of the N-word.  Today’s racism is embedded within unequal socioeconomic policies, unfair criminal “justice” practices and the current language used by tea partiers and Republicans when addressing Obama (i.e. he’s a “Muslim” or a “Socialist” or a “Kenyan tribesman”)

Working Group on Extreme Inequality

What is most staggering to me is how little has actually changed since the 1940’s.  The most progress made during this time came in the 1960’s and can most likely be traced to the Civil Rights movement and the pressure that Dr. King and company put on the Johnson administration to address segregation and poverty (i.e. Civil Rights Act of 1965 and the “War on Poverty”)

[All prison data/graphs taken from http://www.prisonpolicy.org/graphs/]

One of the main predictors of a person’s economic success is education.  However, it is difficult to advance educationally when there is a nearly equal chance of being imprisoned.  A closer look will reveal that there is evidence of outright racism within our “Prisoner-industrial complex” society.

Why is it that our country, the United States of America, the supposed beacon of democracy, has the highest incarceration rate in the world?  Is it because we have a criminal society?  Such a simplistic argument ignores the larger picture.  A better question: How can a society best be controlled, demoralized and disenfranchised?

Crime is defined differently by every society.  Why is our definition so broad, particularly in terms of non-violent crimes, such as drug possession?

Any person who is not racist and has a somewhat decent understanding of historical progress knows that there is no such thing as a racial predisposition or inclination towards crime.  Why is our current reality ignorant of this truth?

Given the current patterns of income inequality and economic policies, is it mere coincidence that the incarceration rate has increased exponentially since the 1980’s?

South Africa was pressured from the international community to end their decades-long government policy known as Apartheid.  This policy legalized racial segregation which resulted in the white minority having more political power, wealth, land and social services than the African and mixed majority.  Nelson Mandela, the eventual president of South Africa, was imprisoned for 27 years and finally released in 1990.  Our current system imprisons a staggering amount  of black adult males compared to South Africa towards the end of its racist apartheid government.

If prison growth does not make us feel safer, and since the violent crime rate has been decreasing in major cities in the past decade then why are we building more prisons?  Could it be to control the population and benefit the ones doing the imprisoning?  Shouldn’t we be concerned about the building of private prisons and the fact that people can profit from keeping people locked up?

The rapid rise of the private prison-industrial complex.

Violent crime and property crime has decreased as compared to the growth in population.  At the same time, the incarceration rate has skyrocketed.  Is this just?  Is this effective public policy?  Is this supported by any reasonable social scientist?  What are the effects of this on communities across the United States?

This is not only detrimental to criminals and their families, particularly non-violent criminals, but it is also extremely costly and takes away money that could be used for more important, government provided social services.

Imagine if these tax dollars were used on rehabilitation, education, job training and community development instead of imprisoning an increasing number of citizens.

Imagine how much money and potential resources could be harnessed from putting an end to these overly strict and damaging policies.

Is this just?  Is this the shining democracy we hope our children are brought up in?

This comic, taken from www.realcostofprisons.org, illustrates the rapid rise of the prison-industrial complex.Student Loan Debt – Modernized Indentured Servitude

Another trend that is coinciding with unequal socioeconomic policies and the racist prison-industrial complex is the increasing student debt.  Although education is still touted as the best path towards a better life (i.e. higher pay, better quality of life), the student loan debt has dramatically increased in the past 30 years.

Jeff Stahler comic

College graduates are struggling to find jobs as recent statistics shows that for every job opening there are five applicants.

In other words, there are not enough jobs currently available or being offered to meet the number of applicants, both educated and uneducated workers.

Shouldn’t there be some more programs offered to students who have received their degrees?

Why are many students forced to take on more debt by going back to grad school in order to obtain a degree that will qualify them for a decent job?

An increasing percentage of students have deferred or defaulted on their loans because of this current crisis.

And yet there are many politicians and pundits – particularly the wealthy 1-2%, who are still adamant about getting more tax cuts and cutting more programs that help create and maintain jobs.  Shouldn’t our government want to address this crisis right away?

Meanwhile, corporate managers are now raking in profits once again but have done little in terms of hiring new employees.

Economic Policy Institute analysis

Corporate profits are now higher than they were before the onset of the “Great Recession”.  If companies are not hiring enough to combat the issue of rapid unemployment and underemployment, then the only solution left is for the government to create new jobs – much like FDR’s New Deal programs.  Otherwise there may be an entire “lost” generation of citizens who feel no sense of career identity or who have never experienced financial sovereignty and economic security.

[taken from: http://extremeinequality.org/?page_id=8]

Despite the mortgage meltdown and Wall Street’s casino behavior that caused the global financial crisis, the CEO’s and recipients of the bailout are still making grossly disproportionate salaries and bonuses compared to the average worker.  While these recipients and many politicians who receive corporate contributions are calling for more “freedom” (i.e. less governmental interference in the economy), only a handful of politicians are responsibly sticking up for the average worker.  Shouldn’t the government’s responsibility or goal be to create an environment that promotes an equality of opportunity for all citizens?  An equal opportunity environment is the American Dream.  This is not.

http://www.armscontrolcenter.org/policy/securityspending/articles/fy09_dod_request_global/

“Of all the enemies to public liberty war is, perhaps, the most to be dreaded because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes … known instruments for bringing the many under the domination of the few.… No nation could preserve its freedom in the midst of continual warfare.”

– James Madison, Political Observations, 1795  [http://www.globalissues.org/article/75/world-military-spending]

This pie chart was taken from http://www.warresisters.org/pages/piechart.htm and represents the, “Dept. of Defense ($653 billion), the military portion from other departments ($150 billion), and an additional $162 billion to supplement the Budget’s misleading and vast underestimate of only $38 billion for the ‘war on terror.’ ‘Past military’ represents veterans’ benefits plus 80% of the interest on the debt.”

“The pie chart below is the government view of the budget. This is a distortion of how our income tax dollars are spent because it includes Trust Funds (e.g., Social Security), and the expenses of past military spending are not distinguished from nonmilitary spending. For a more accurate representation of how your Federal income tax dollar is really spent, see the other chart.” [http://www.warresisters.org/pages/piechart.htm ]

Who is really benefitting from all of these policies?  Obviously not average middle-class Americans and definitely not lower-class Americans.  Black Americans are suffering from institutional racism and Muslim Americans are currently being overtly discriminated against.

So who is benefitting?

Jeff Stahler, The Columbus Dispatch

Jeff Stahler, The Columbus Dispatch

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