Five Reasons Why The Very Rich Have NOT Earned Their Moneyby Paul Buchheit April 16, 2012
The wealthiest Americans believe they've earned their money through hard work and innovation, and that they're the most productive members of society. For the most part they're wrong. As the facts below will show, they're not nearly as productive as middle-class workers. Yet they've taken almost all the new income over the past 30 years.
Any one of these five reasons should reinforce the belief that the rich should be paying a LOT more in taxes.
1. They've Taken All the Middle Class Wage Increases
In 1980 the richest 1% of America took one of every fifteen post-tax income dollars. Now, according to IRS figures, they take THREE of every fifteen (doc) post-tax income dollars. They've tripled their cut of America's income pie. That's a trillion extra dollars a year.
For every dollar the richest 1% earned in 1980, they've added three more dollars. The poorest 90% have added ONE CENT.
Yet the average American factory worker, according to Berkeley economist Enrico Moretti, produces $180,000 worth of goods a year, more than three times what he or she produced in 1978, in inflation-adjusted dollars.
So workers have TRIPLED their productivity over 30 years while the richest 1% have TRIPLED their share of income. Worker pay remained flat as the top 10% took almost all the productivity gains since 1980.
2. They've Mismanaged Key American Industries
We have the most expensive health care system in the world. Failing banks have survived because of taxpayer bailouts. Management-approved shortcuts have led to workplace deaths and chemical leak disasters. Companies lobby for cap and trade laws so their profits can pay for their pollution.
Over twenty percent of Americans are unemployed or underemployed as big companies hoard $2 trillion in cash. 93% of post-recession income (pdf) is going to the 1% "job-creators" with no appreciable increase in jobs.
Private tuition is skyrocketing, with student loans reaching the $1 trillion mark. Bonuses continue for executives at Ford and Bank of America and Sirius and other companies who have underperformed and/or laid off workers.
No, the captains of industry have not earned their money because of their top-notch management skills.
3. They've Benefited from 50 Years of Public Research
The very rich have made their fortunes in good part because of taxpayer-funded research at the Defense Advanced Research Projects Agency (the Internet), the National Institute of Health, the National Science Foundation, and numerous other government agencies.
Consider just a simple communications device. Computer chips and audio/video/voice technologies grew out of decades of funding at the Department of Defense, the Air Force, NASA, and public universities. The pieces of the device were put together by a procession of chemists, physicists, chip designers, programmers, engineers, production-line workers, market analysts, testers, troubleshooters, etc., etc. They, in turn, couldn't have succeeded without another layer of people providing sustenance and medical support and security and administrative assistance and transportation and office maintenance for the technologists. ALL of them contributed to the final product.
But over the years private businesses have received government contracts to produce and market the results, and "entrepreneurs" have rearranged the pieces into products that seem to appear out of the magical world of a single individual. more
Thursday, April 26, 2012
This is pretty good stuff. If you are a person who needs some good responses to those who are giving you a variation of the "rich deserve to be rich" argument, here is a good place to start. If course, there are always exceptions. There ARE Producer Class rich folks and mostly, they earned their money. Fortunately, the public understands the difference—witness the spontaneous outpouring of genuine grief when Steve Jobs died. People are NOT so sympathetic when it comes to the ill-gotten gains of the banksters.