Widening Income Gap - and a few words on other topics

In the wind up into the 2012 presidential campaign, a number of politicos expressed outrage in the fact that Barack Obama had been stirring up people with the idea that in the recent hard economic times the middle and lower classes are suffering more than the rich.  Obama said let's let the Bush temporary tax cuts for the rich expire  The politicos said “Obama is inciting class warfare!”.

Hold on just a minute.  The 2008 financial and economic crash hurt all of the classes. And it has hurt the lower classes more than the rich - the rich haven't been losing their livelihoods and their homes.  This isn't class warfare - this is something our leaders should admit and should be concerned with.

Incomes have diverged greatly over the last 40 years.  The numbers show very clearly the income gaps have widened – the poor are staying poor and the rich are getting richer (see this article) Three plots from this source:

                                                   [This paragraph just below is also from the same source]

This graph (above) shows the income of the given percentiles from 1947 to 2010 in 2010 dollars. The 2 columns of numbers in the right margin are the cumulative growth 1970-2010 and the annual growth rate over that period. The vertical scale is logarithmic, which makes constant percentage growth appear as a straight line. From 1947 to 1970, all percentiles grew at essentially the same rate; the light, straight lines for the different percentiles for those years all have the same slope. Since then, there has been substantial divergence, with different percentiles of the income distribution growing at different rates. For the median American family, this gap is $39,000 per year (just over $100 per day): If the economic growth during this period had been broadly shared as it was from 1947 to 1970, the median household income would have been $39,000 per year higher than it was in 2010. This plot was created by combining data from the US Census Bureau^[45] and the US Internal Revenue Service^[46]. There are systematic differences between these two sources, but the differences are small relative to the scale of this plot.^[47]

Inflation adjusted increase in after-tax household income between 1979 and 2005 for the top 1% and the four of the five quin-tiles.^[44

Sure, following the 2008 crash, CEOs' pay dropped from near 300x of the average workers' pay down to 180x.  But, with many workers losing their jobs and others having to take on lower paying jobs, most would agree that the poor and middle classes have been hurt more than the rich.  

Isn’t it important that our elected leaders recognize this fact? And isn’t it only right that something be done to provide short term help to those at the middle and the bottom who have been hit the hardest?
                     
(An excellent illustration re the widening income gap - Wealth Inequality in America.  This was
brought to my attention by Patrick Tepesch, April 2013 - see comments.)

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Segue: I was inspired by watching and listening to some of the the RNC speakers last night.   Here's my response to what they said regarding other topics.

Contrary to the rhetoric of the Republican party, high taxes on the rich are not the cause of our current economic problems.  30 to 50 years ago, the rich endured much higher tax rates.   And 30 to 50 years ago unemployment rates were relatively low.  If anything, this would suggest that raising taxes on the wealthy might help to fix our current unemployment issues.

Another plot from http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States#Taxation_2:

The highest earning 0.01% income group ("99.99-100% income group") saw the greatest tax rate reductions since 1960.
Source: Thomas Piketty and Emmanuel Saez, ^[205]

Contrary to the rhetoric of the Republican party, in late 2008 we were on the brink of a financial and economic meltdown, one that could have led to 10’s of millions losing their livelihoods.   But there wasn't a meltdown.  It was averted.  Who  did this?  Let me give you a hint – neither the Senate nor the House of Representatives took the lead in this effort.  And the Republican party actually fought against averting the economic meltdown.

We're still at risk of having that meltdown.   If the Republicans win the 2012 presidential election, will they reverse the constructive efforts of the last 4 years and let it happen?

Contrary to the rhetoric of the Republican party, our financial institutions and our economy are regaining health and jobs are gradually returning.  The Recovery Act is working.

Contrary to the rhetoric of the Republican party, the economy will continue to improve as long as we stay on our current course - continuing with limited debt spending (only as  needed to keep the economy out of recession),  reducing spending that hurts our economy (such as spending on wars and excess spending on defense), increasing spending that builds our infrastructure and helps our economy, keeping inflation at moderate levels, reducing our dependence on overseas oil, supplying short term income security to those hardest hit by our current economic problems, continuing to fix our current economic problems, and making changes that will prevent growing another big economic bubble like the one that led up to the 2008 crash.

Think about these things in the next election, and vote. Vote for those who recognize and acknowledge the widening income gaps and who will do something to try to correct this bad trend.  Vote for those who would back a sensible plan to stabilize and strengthen our economy and financial institutions.  And vote against those who would have let our economy drop off a cliff.