Economic recovery in the US actually made 99% of Americans poorer, top 1% captured 121% of gains

"Striking it Richer," a paper by Emmanuel Saez (an economist at UC Berkeley) looks at the way that the dividends of the slow US "economic recovery" have been distributed. Saez finds that 121% of the economic gains since 2009 have been captured by the richest 1% of Americans -- in other words, despite economic growth, the poorest 99% of Americans actually got poorer through the "recovery."

This confirms a pattern that Matt Stoller highlighted: that income inequality increased more under Obama than under Bush. And the new Saez paper also describes how it came about. In short form, income to the top 1% is significantly influenced by capital gains. Remember, the tax reporting is not clean here: rising equity and bond markets help all those private equity and hedge fund professionals, who are able to get capital gains treatment for what ought to be labor income. But the paper also stresses that the lower orders were hit hard in the aftermath of the global financial crisis than in the dot-bomb era, which also saw a big drop in capital gains. That isn’t as hard to understand. The collapse of the dot-com mania didn’t impair the real economy overmuch because it was not fueled in a meaningful way by borrowings. By contrast, the housing bubble, and more important (in terms of damage to the financial system) the much housing exposure created synthetically by CDOs that consisted entirely or mainly of credit default swaps was highly geared, hence when it collapsed, it took credit providers down with it.

Yes, Virginia, the Rich Continue to Get Richer: the Top 1% Got 121% of Income Gains Since 2009 [Yves Smith/Naked Capitalism]


    1.  Meaning they got 100% of the gains, and then took some more of what was already there, about 21% of the gains more. Hence 121%, hence the poor getting even poorer.

        1. It means the same thing. Language can be slippery, even (or especially) when it comes to math. Though this particular quirk I only recall seeing once before, in a Krugman op-ed a year ago. (“So how much of that Obama job loss took place in, say, the first half of 2009? The answer is: more than all of it.”)

        2. So what you’re saying is that the point is clear, accurate, and you understand it beyond a shadow of a doubt, but it’s very important to find a way to deflect the discussion into semantics? 

        3. While you’re trying to bicker with trite, pedantic semantics, the rich are laughing all the way to the bank.

          What’s the grand point of all this except to detract from what really matters?

      1.  I’m reminded of people being confused by the statistic the some military units took greater than 100% casualties in the 90 days after D-Day.  In that case the answers are the two Rs: replacements and returned to duty.  People got added to the units, and some people were injured more than once.

    2. If there is a net gain; but a bunch of people lose, the remaining people can gain an amount greater than 100% of the net gain…

        1.  Yes, but not necessarily a subset of “the gains”.  They got 100% of “the gains” and then 21% of “the gains”‘s worth of “our shit”. 

    3. If you ask people how hard they work, many say that they “give 110%.”  Since they’re only getting paid 100% of their salary, one has to presume that excess is going to someone else’s wallet.

      1. Yes. The people who have money create the recession. People who don’t have money have to dump their investments at a loss in order to survive. The people with money, who are not cash-strapped, buy them up at bargain prices. That’s the whole point of economic cycles: the middle class’s money flows to the rich.

          1. so presumably you’re no fan of 401k’s as pensions? or do you plan to survive later in life on cat food?

          2. Their savings.  Their 401Ks.  Their homes.  These represent survival in the long run, and cash-strapped people liquidate their assets to stay financially afloat.  When that much money, stock, and real estate gets dumped into the economic pool, it’s the wealthy that benefit the most, since those assets return to their ownership to keep or dispose of as they like. In terms of ‘real’ wealth, the rich have never been richer — that’s how you get a number like 121%.

          3. You’re saying that people who lost money are not victims?  Lovely.
            And the ones who willfully stole and cheated?  Oh well, then, I guess?  They did what they will do.

          4. But don’t you know, poorer people are ALWAYS irresponsible, lazy and totally had it coming. It’s a big FAVOUR the wealthy is doing the world by keeping these useless, petulant children in their place.

          5. So what do you think, savings account?  You realize that the 1.5% interest they give you is below the current rate of inflation so that savings accounts actually decrease in value over time instead of increasing?

            Putting money in the stock market is, quite unfortunately, the only way reliable to earn money with savings faster than inflation eats it away.  In the case of retirement savings a savings account makes no sense because anything you put it now will be essentially worthless in 30 years.

          6. But if you are looking at a 30 years time frame, you have nothing to fear from market cycles as far as your 401(k). However, if you put money in the stock market that you can not survive without through one market cycle you are indeed foolish – whether or not other investments are returning little or nothing, regardless of inflation. Never risk principal you may need SHORT TERM to survive.

          7. Anyone who puts money they need to survive into the stock market is a fool, and can not blame that on anyone except themselves.

            Maybe you didn’t notice, but a lot of people lost what they thought were stable jobs. And “investments” includes houses, which they were paying for with the income from the jobs that they lost.

    1. Surely you jest – the Fed pumping $84B per month to the financial sector while diluting our purchasing power is what’s good for the middle class.  Didn’t Bernanke say so?

    2. Piss poor design.  It’s all coming tumbling down. Income inequality this vast (and growing) ends up being very bad for everyone (even them). They are simply such mentally disturbed, addicted megalomaniacs they can’t help themselves at this point.

      Corporatist pigs wildly feeding at the trough with mud covering their greedy eyes… just as the hungry predators slowly and silently gather behind them.

      No wonder they’ve turned America into a police state; But what happens when the police state turns… on them?

      1. what happens when the police state turns… on them?
        An appealing thought, but I fear shit has to get even worse, much worse, before that happens.

          1. Nice, but hardly a case of widespread insubordination and more a case of a few cops with an actual conscience.

          2. You should read through the links more carefully.  It’s been entire departments, not just “a few cops”.  And, all over the country.

    3. Yep. Our country, and much of the world, are run by people who, while they were back in college, had their attention drawn to third world dictatorships that were in the news like the Pahlavi regime, the Pinochet regime, the Somoza regime, the Marcos regime, and said, “Damn! How come we can’t have anything that nice at home?!?”

      1. Naomi Klein’s ‘The Shock Doctrine’ came as close to describing how ‘they’ went about formenting a quiet, controlled economic revolution as anything I’ve read in the last 10 years.

        1. what’s hilarious is that working class rubes and the like are still foaming at the mouth about our “socialist” president and all the ills visited upon the USA by “liberals” while at the same time having their pockets picked but a controlling class of the most wealthy people in the world. 
          It was a brilliant takeover and couldn’t have been done without duping every Gomer into believing that a gay couple might move in next door and turn their world upside down..

  1. It’s not a recovery, its just a consolidation of power. That’s all the last 20+ years have been politically. The economics just are catching up and reflecting that.

    1. I like your thinking, but I think it began with the flip of an economic policy switch 30 years ago, to reflect a more idealistic, ideological, nostalgic, mythical vision of society called Reaganomics (Thatcherism, Neoliberalism). The World Bank and IMF have flipped this switch all over the world and it has failed virtually everyone everywhere – except the newly emergent 1%. I suggest a good first step to fixing the problem is flipping the policy switches back. But it seems the consolidation of power makes this rather impossible. So – I guess it’s feudalism for us then.

    1. There are many finer words to choose from: Corporatism, Cronyism, Oligarchy, Plutarchy that don’t confuse the issue.

        1. Maybe it’s because we’re perceived as having won the Cold War, and socialism has failed to spread, that folks have failed to take a good long look at the darkside of the ‘winner’.  I concur — this is capitalism and this is what it looks like in the information age.  It hasn’t changed; we have.

        2. Oh, there’s more going on here than just Capitalism. This isn’t just the result of the ebb and flow of open markets for goods and services, finding optimal prices by competition.

          I think this should more properly be called Democratic Fascism, where corporate interests and a handful of economically powerful individuals tell the state what to do, and Elections are held periodically to stop the exploited masses from revolting.

          1. You are nostalgic for early capitalism, like when markets first emerged as a power which could destabilize monarchs and spread wealth more evenly than feudalism did.

            Regrettably, we are now in late stage capitalism.  The very end-game, in which the markets have been allowed to grow and chug away unchallenged to their logical conclusion: The winning capitalists have captured control of both society and the state, and in doing so, become the architects of the market themselves.

            Perhaps it doesn’t feel like the capitalism you learned about in school, but it is the inevitable result (and stable end-state) of free market economics.  It’s important to remember this, lest we think that the free market can somehow solve the mess we find ourselves in.

          2. Early capitalism wasn’t so great for poor people either.  Factory workers in UK and US cities in the late 19th century had essentially the worst standards of living and work conditions that I’ve ever heard of any human being having outside of chattel slavery.

            Arguably chattel slaves were treated better because they were property and thus not disposable like wage slave factory workers were.

          3. “it is the inevitable result…”
            debatable. It’s certainly where we are.

            “…(and stable end state)”

            Good grief – no it isn’t! It’s a nasty downward spiral, accelerated by the refusal of the “winning capitalists” to fail.

            The “early capitalism” you say I am nostalgic for is not mine: it is that of every Libertarian I have ever met. As is the nostalgia you attributed to me.

        3. Central bank money creation “out of thin air” is exactly the opposite of capital.  You can go on calling a duck a horse, but people who know what ducks and horses are won’t be impressed.

          But if you’re making mint selling ducks for horse prices, one can understand being apologetic for the deception.

      1. Well I recall back in the 1990’s when communism was falling apart, the thing said was, “Well as an ideal communism is very nice, however in reality it doesn’t really work as power corrupts”.

        I think what we are seeing here is that ideals, are exactly that, and capitolism is no different.

        As you may recall, communism economically fell like a deck of cards once all the window dressing was removed.

        The fact that the greed of the rich has brought the world to the brink of economic collapse shows the shortsightedness as how much do you think the amassed wealth of quatloos is going to be worth when everything falls apart.

        I also recall stories of people buying things using wheelborrows full of rubles as hyper inflation basically made them absoultly worthless.

        1. Yes, and using government power to favor certain individuals is cronyism, to favor certain (or all) corporations is corporatism, both both are perversions of capitalism (which needs to be detached from a government to prevent greed from causing harm).

          The term ‘capitalism’ is used frequently as a cover for what really amounts to fascism (see here:)

          and the term is villified by the enemies of actual market freedom to create misplaced fear amongst the population (in exchange for power they will alleviate those fears). But all capitalism really means is that some people save money (capital), then invest that money to their advantage, and the cycle repeats in a non-zero-sum game as total wealth grow through cooperation. This requires real money that can’t be easily debauched (like that wheelbarrow full of cash – the value of which was destroyed by the reigning government) and depends on the price mechanism to send information signals (governments usually try to subvert that).

          1. But the term capitalism was coined by critics of capitalism. It’s always referred to the actually-existing system, and the domination capital has over labor within it, instead of referring to an idealized system.

          2. The “free market” (neoliberal) notions you speak of are exactly what put us here. This IS how capitalism and ‘free markets’ work in the real world, rather than a fantasy one where markets and humans act rationally, and morally in a perfectly controlled environment.

        2. It never had anything to do with capitalism vs. communism. It’s oligarchs all the way down. All the rest is just a distraction.

        1. The newcomer seems terribly enamoured by The Gipper.  I’m guessing she didn’t have to live through that nightmare of a presidency.

        2.  For that matter, let’s compare spending.  Reagan administration wasn’t exactly known for its thriftiness.

  2. Come on America, the Reaganomics experiment has failed.  Just go back to Econ 101, read some Keynes, act like a real country and not like a pyramid scam with a flag!

    1. Economics is politics by another name. Econ 101 don’t teach that. How to fleece the rubes by dressing it up in econ-speak, I mean.

    2. I don’t disagree entirely – trickle-down economics can’t work in a fiat regime because due to guaranteed inflation the returns migrate to the financial sector rather than stay in the local economy.  But, I’m curious how you explain the apparent financial success in the years prior to the burst of the NASDAQ bubble.

      1. The 99% were spending 110% of their incomes to mask their declining standards of living. They were living the American Dream, ie. they were dreaming.

        1. But in order to balance the budget and create a government surplus (via taxation) there must have been real income to support those tax levels.  Do you mean that all of that income was based upon the extension of phony credit and subsequent spending and the balancing of the budget was just a derivative of that phony credit expansion, but laundered through personal incomes instead of being handed directly to the treasury as is now the fashion?  I hadn’t thought of it that way, but it does make some sense, as to how prosperity could seem to return despite the fiat regime and constant inflationary pressure.

      2. As I understand it, Keynesian economics basically means investing public money into infrastructure when things are bad, even if it means going into debts. This extra money injected into the economy helps to recover quickly from a recession and return to normal. When things are good, the government should keep investments under control, using the surplus from the boom to pay back the debt. Basically, the goal is to reduce the amplitude of the “boom and bust” effect to avoid problems.

        The economic model that got us into troubles is the complete opposite. When things are good, the government spends all that extra money (and more!) to pay for all kinds of stuff. This extra money amplifies the boom, creating a bubble. That’s what happened before the dot-com crash and with the real-estate bubble. Then, when things are bad, this model dictates that the government should enter “austerity” mode, where expenses are cut and the government tries to stop the deficit. This sudden stop to investment amplifies the recession, making it longer and rougher. That’s where we are now.

        Basically, this economic model amplifies the “boom and bust” effect, with bigger bubbles and deeper crashes. It’s terrible for the average citizen, but it’s great for the rich who are well positioned to gain from economic bubbles and don’t suffer much from crashes.

  3. Here. I’ll save the ideologues and brown-nosers some trouble:


    Thank you.


          Seriously, I really hate the term “Obamacare”, am I the only one?


          1. He’s not any of those things, but Obama is a willing imperialist tool of capital. That’s why the results of this study are unsurprising to anyone that’s being paying attention. 

          2. I was trying to have a bit of a joke.  Sometimes that’s okay. Also, you seem to be implying that it has been all Obama’s doing, which is hilarious and not true, but you know what? I don’t really care. Sometimes it’s okay to have a bit of a joke!

          3. In response to your comment that is nested too far to reply to: 

            Calling x a “tool” typically does not imply that one thinks the problem is all the doing of x, so you’re attacking a straw-man there.  
            And I’m all for having a little bit of a joke whenever. I’m also for a little bit of the truth whenever.

          4.  “Obamacare” is the slang term for a formally named piece of legislation.

            So is “Bush tax cuts”.

          5. Yes, that’s true…what does that have to do with someone not liking the term?  (I also think it’s a stupid term.)

      1. Obama is neither a Marxist nor a socialist (under socialism, profits are shared, under Obamaism, losses are subsidized) nor is he an imperialist capitalist.

        He’s basically a small-timer with zero significant experience (Illinois state senator, “author” of two autobiographies) who coasted into the White House on a wave of intellectual-sounding rhetoric, ethnic appeal, and exasperation with that inarticulate Texas shitkicker.

        I’m totally unsurprised by the fact that he’s been led around by the nose on every issue, domestic and foreign, since he took office.

        Some of the rubes who bought into the Obama image are sure surprised, though.

  4. Anyone who finds such information totally screwed up can at least rest easy knowing we’re truly in late-stage capitalism.

    Well, maybe not rest easy, given that what comes after late-stage capitalism is quite likely huge amounts of tumult. D’oh!

  5. First, we need to stop making this a battle between upper, middle and lower class. There are two classes in America – working class (99%) and rich (1%). The rich “earn” money through dividends and capital gains – and pay 10-20% tax on those gains. There are people who earn a lot of money in the “working class”, but they get their dollars from a job, and those earnings are reported on a W-2 form. Those high earners pay 27% of their earnings into federal taxes, because the alternative minimum tax really works on those people.

    Obama’s recovery, and he tells us every week that the economy “is going in the right direction”, has benefited only the rich. His main tool has been to push higher taxes, not on the rich, but on the higher income working class. There are too few of those people to really pay this country’s bills, so we remain increasingly in debt. What that policy has done, is killed job growth. In 1980, the percent of people in the labor force who had jobs was 64%. (See the table) After Reagan’s policies, which were aimed at the working class (lowering W-2 tax rates), the economy grew, and the percent of labor force with jobs reached an all-time high of 68% – this despite more and more people entering the workforce every year. Starting in 2009, that rate fell (as we might expect given the recession, although no recession in the past 30 years had caused such a drop), AND IT HAS NEVER RISEN SINCE. That’s right, throughout the Obama recovery, we have not budged from Jimmy Carter era labor force participation rates far below what they were under Reagan, Clinton, and Bushes.
    What his plan has been successful at, through his buddies at the Fed, has been to keep non-home asset prices high. Who owns the most non-home assetts (stcks and bonds) – the rich. Not necessarily the high earning working class, but those people who can sit back not work, and live off investments.

    So next time you want to bash Reagan and glorify Obama, remember the rich do better under both of their policies. The rich always seem to do better. But ask which has been better for the working class. Millions more Americans had jobs under the policies in place before Obama’s “recovery”.

    1. Funny you mention Reagan. I was thinking today: blame it on the fall of the USSR. Really. I believe during the Cold War the US had to prove the American worker had a better life than the communist counterpart. When the communism fell, and finally China joined the game, there was no more reason to fear the American worker revolution. They simply don’t have anywhere to run anymore.

      The problem is that all the wealth the 1% is absorbing doesn’t make much sense without an actual country to spend it. I come from a 3rd world country where the rich cannot enjoy the cities at their fullest, simply because there is so much poverty. Imagine a country where you have all that money, but cannot date your girlfriend on a belvedere with a wonderful view at night, because you can get robbed and killed.

      1.  simple, they’ll just build their own city and malls where they want and put a wall around it with a minimum yearly wage requirement to enter … No need to even get close to “those wellfare people”….

        1. Go to any 3rd world country and you’ll see they already have wonderful malls and gated communities. But one thing you don’t realize is how rewarding it is to be able to simply walk on a street and make a picnic on a park. You can’t build walls around the grand canyon, half-moon bay, fisherman’s warf…

    2. First, we need to stop making this a battle between upper, middle and lower class.

      Um, the upper class started the class war, not the rest of us.

      Sure… they’d really love us to forget that and sing “kumbaya” while they royally fuck us all over.  But, sorry…  some of us have had ENOUGH.

      So next time you want to bash Reagan and glorify Obama

      Dude, get real.  It’s the income inequality.  I’m certainly not cheerleading Obama and his Skull & Bones death cult economic advisor, but you need to expand your horizons a bit.


      And this chart while you’re at it:

      1.  My point had nothing to do with who started what. Maybe I should have used the term “stop viewing” instead of “stop making”, but my point was that there are rich people, and then there are high earners. The rich don’t work – they grow their riches by investments, which we tax at a ridiculously low rate. The problem is, those of “you who have had enough” often fail to target your angst specifically enough. High earning WORKERS get lumped with the “rich” category despite paying very high income tax rates. (The true rich like to hide behind us – pointing to OUR rates as if they paid those rates.)

        My second point was not that income inequality does not exist. Of course it does, and I see no reason it should not. Absent that difference, I have no reason to work, or if I must work, why would I work so hard? So the question is not, “Will there be inequality?”, or even, “How much inequality will there be?”, but instead which policies/system provides better for the rest of us 99%. We are seeing right now the contrast between between Reagan policies of 1980- 2008 and Obama’s more socialist approach. If you are old enough to make the comparison, ask, am I better off now than 10 years ago? It’s a much better question than, “Is Warren Buffet better off now than 10 years ago?”

        Finally, your focus on manufacturing jobs shows you need to expand your horizons a bit. One needs a JOB. Waiting for a manufacturing job may mean missing another opportunity. There were probably a lot of buggy makers in 1915 waiting for the car fad to end and the horse and buggy glory days to return. I’m not saying we won’t continue to have manufacturing jobs, but it’s not going to be a growing job market, so one best consider that when preparing for a career.

        1. High earning WORKERS get lumped with the “rich” category despite paying very high income tax rates.

          Oh, would you look at a graph of income tax rates in the US historically and stop whining?  The highest bracket is just about as low as it’s ever been in the history of the income tax.

          Yes, it would be better to tax capital gains at a higher rate.  There are good arguments that the income tax is too elaborate to avoid loopholes and various ways of cheating and that a VAT tax, while regressive in some sense, might be easy enough to administrate as to eliminate a lot of those problems.  If you weren’t twisting your panties about how unfair it is that you have to pay such a high historically low income tax rate we could talk about these things but when you blather on and on about how high your taxes are it just makes you seem like another fucking Randroid.  I have no interest in talking tax policy with those guys.

        2. but my point was that there are rich people, and then there are high earners

          Sorry, but trite, semantic arguments don’t fly with me. I’d rather face the fact that income disparity is growing (and do something about it) than squabble over your newspeak terminology.

          Let me guess, you also think they should be called “job creators”? Sigh…

          The problem is, those of “you who have had enough” often fail to target your angst specifically enough.

          So you’re one of those who hasn’t had enough, huh? I’ve been quite specific over the years (along with many others that have “had enough”). And, sorry, this isn’t just some untargeted rebel without a cause “angst”.

          I see that you’re new around here. Try lurking more and reading my previous comments and others before you rush to hasty judgement next time. I can give you a quick breakdown on who is (specifically) to blame that’s been brought up many, many times before here in and within its threads over the years by myself and many others who’ve “had enough”:

          The prison-industrial complex.
          The military-industrial complex. (You can educate yourself in detail here as well) – Also, are you aware that they use PSYOPS against our elected politicians and pry more money out of tax payers? Now you are.
          • The absolutely sick corporatist scandal to lie to the public who DIE for their profits. (watch this until the very end and you might end up with some belated “angst” yourself)
          • Wall Street and their collusion with rich corporatists is well documented. Are you not up to speed?

          It’s goes on and on, but I hope this gives you enough to chew on. If you’d like to see more, read more here on the website and in the comments.

          High earning WORKERS get lumped with the “rich” category despite paying very high income tax rates.

          Those that are properly educated know that both the 1% and your “high earning WORKERS” (you all-CAPS emphasized) have had the lowest rates in 30 years.

          Shall we shed some tears for them while, once again, our United States INCOME DISPARITY is worse now than in 1774?

          Do you not understand the importance of income disparity? Forbes breaks it down for you in that link above.

          Finally, your focus on manufacturing jobs shows you need to expand your horizons a bit.

          Quit projecting. That’s just ONE aspect I gave. ALL jobs in both the private and public sector go UP with democrats. Even the holy grail of libertarian desires, the private sector.

          It’s a much better question than, “Is Warren Buffet better off now than 10 years ago?”

          Actually, I think that’s a fine question. He has been getting bargains from hell during this recession. Much more ridiculous value for his money.

          Since the recession, Buffet has acquired:

          • 10% perpetual preferred stock of Goldman Sachs.
          • Helped Dow Chemical pay for its $18.8 billion takeover of Rohm & Haas. He thus became the single largest shareholder in the enlarged group with his Berkshire Hathaway
          • In 2008, Buffett became the richest man in the world. Not bad…
          • In October 2008, he bought General Electric (GE) preferred stock. Received an option to buy 3 billion GE at $22.25 in the next five years, and also received a 10% dividend (callable within three years)
          • In 2009, Warren Buffett acquired Burlington Northern Santa Fe Corp. for $34 billion in cash and stock
          • On March 18, 2011, Goldman Sachs acquired Federal Reserve approval to buy back Berkshire’s preferred stock in Goldman. Buffet has been reluctant to give up the stock which averaged $1.4 million in dividends a day.
          • In November 2011 he bought 64 million shares of IBM stock, worth around $11 billion. This investment raised his stake in the company to around 5.5 percent—the largest stake in IBM alongside one other.
          • In May 2012, he acquired Media General, owner of 63 newspapers. It was the second news print purchase made by Buffett in one year.

          Wow, too bad we’ve got a “socialist” president in office that’s hurting the rich… huh?

          Obama’s more socialist approach.

          Ah, now I see. This is fruitless.

          The End.

        3.  but instead which policies/system provides better for the rest of us 99%.

          That’s easy, progressive ones do in real life.

          There were probably a lot of buggy makers in 1915 waiting for the car fad to end and the horse and buggy glory days to return.

          This word salad has nothing to do with manufacturing. Certain specific technologies become outmoded, but that has nothing to do with the larger need to manufacture things that being eclipsed by new technology.

          Anyway, can’t believe I’m responding to this. Obvious t is obvious…

    3.  It’s not even really the 1%, which I think starts at something like 300k/year -which is yes, a damn big pile of money, but still, it’s not really the doctors and lawyers and engineers that are the problem- but the top .1 percent who are the people who play their high-stakes shell games, rig the laws in their favor, and crash the economy with impunity.

    1. If you have a chance to watch Jamie Johnson’s interview with him, you get to see an unvarnished moment of what he is.

      He never believed that his economic prescriptions would benefit anyone but the oligarchs.

      The thing one needs to understand about him, Paul Ryan, Dick Cheney, Rand Paul, and the rest of the rat-kings is that they honestly seem to believe that anyone who advocates for fairness is an idiot, or a liar.

      “All seems infected that the infected spy, As all looks yellow to the jaundiced eye.” – Alexander Pope

      1. He never believed that his economic prescriptions would benefit anyone but the oligarchs.

        What did he say, exactly, that allowed you to peer into his mind and turn him into such a black and white villain?

        Paul Krugman described Friedman as “a great economist and a great man” even while he criticized his theories.

        I disagree with lots of Milton Friedman, but this kind of baseless ad hominem is what you read in places like Red State and Free Republic whenever folks like Krugman or Robert Reich are mentioned.

        1. Really, 16 words are too much for you to read prior to the segment of my post upon which you base your comment?

          Would 12 words have been few enough? Ten? Five?

          1. You see, condescending snark doesn’t work so much if you’ve misread what you’re responding to.

            I saw the interview you’re talking about.

            My question stands.

        2. Anybody who believes in the freedom of capital and markets over democracy and the freedom of all citizens is a ghoul and a villain. I’m not familiar with the quote mentioned above, but neoliberalism at its heart is a defense of hierarchies and existing powers.

          1. I don’t even think Friedman thought that capital and markets could truly exist without democracy and the freedom of all citizens.

            When did he ever say that he “believed in the freedom of capital and markets over democracy and the freedom of all citizens?”

          2. He believed and stated that economic freedom (above all things) was necessary for personal freedom. Something that has historically shown to be false time and time again, as well as currently. In practice it has bred oligarchs and cemented into place political power and existing hierarchies, all which undermine real democracy. It is exactly what we see in the U.S. today.

            I’ll spare you a brief and embarrassing rundown of all the ways that Mises, Hayek, Friedman, and their libertarian offshoots have repeatedly by words and actions praised and excused autocracy, dictatorships etc. At least modern libertarians have the nerve to admit that democracy and libertarianism are not compatible. That’s one step closer to admitting it’s a sick fantasy.

          3. Could you please tell me when Friedman said that he “believed in the freedom of capital and markets over democracy and the freedom of all citizens?”

            And can you tell me what you mean by “economic freedom?”  

            If “economic freedom” is responsible for “cementing into place political power and existing hierarchies,” how do you explain the fact that many countries with no economic freedom still had firmly fixed politcal power and hierarchies?

            Which “modern libertarians” have said that “democracy and libertarianism are not compatible?”

            I’m fairly familiar with the more popular libertarian writers and pundits and I’ve never, ever heard this sentiment expressed.

            I know that Hayek excused Pinochet’s dictatorship and that many libertarians believe he was wrong for doing so.  Though Friedman gave lectures in Chile after the coup (the same lectures he gave in communist dictatorships), he described Pinochet’s regime as “terrible” and “despicable.”

            Many socialists excused Stalin and Mao and Castro.  But that doesn’t condemn socialism.  It condemns the people who excuse tyranny in the name of their preferred ideology.

            I think you’re making the same mistake that ideologues on the right make when they say exactly what you’re saying, while replacing “libertarianism” with “socialism.”

          4. Which “modern libertarians” have said that “democracy and libertarianism are not compatible?”

            Cato, Patri Friedman, and others for starters….  They were right for once…

            Many socialists excused Stalin and Mao and Castro.  But that doesn’t condemn socialism.  It condemns the people who excuse tyranny in the name of their preferred ideology.

            I’m not defending an extremist ideology, you are, and I disagree, I think many examples actually do sink extreme ideologies on any side of the spectrum. You’ll see that I’m not making an argument for communism in opposition to its opposite, but kindred spirit in terms of authoritarianism: Libertarianism.  My actual beliefs in progressive policy are pretty easily defendable, and I can point to real, modern day examples of their implementation for proof.

          5. Cato, Patri Friedman, and others for starters….  They were right for once…

            The Cato Institute has a variety of people working for it with a variety of opinions.  There are people who work for Cato who have written opinions I’m sure you yourself would agree with (marriage equality, due process, foreign policy).  Maybe someone who worked for Cato said that democracy and libertarianism weren’t compatible, but there were assuredly others at Cato who disagreed with that.  Whatever the case, if you can provide a link where someone at Cato asserted that libertarianism isn’t compatible with democracy, I would appreciate it.

            The best known and active libertarians today, it seems to me, are at Reason.  And I can assure you that the folks at Reason (who believe in things like environment regulation and social safety nets) don’t believe that libertarianism is incompatible with democracy.

            I’m not defending an extremist ideology, you are, and I disagree, I think many examples actually do sink extreme ideologies on any side of the spectrum.

            I’m not defending an extremist ideology any more than someone who defends socialized medicine is defending communism.  Pretending that libertarianism must be an “extreme ideology” is to take a very limited and biased view of the philosophy.

            There are socialists who recognize flaws in state power and there are libertarians who recognize flaws in the free market.  There are folks from both sides who are unable to see those things and are more likely to be extremists.

            I don’t consider myself to be a libertarian as I believe in things like universal healthcare and access to education.  But I have some beliefs that are, philosophically, libertarian.  Most people do, I think.

            Why do you consider libertarianism a kind of authoritarianism? This definition…


            …doesn’t seem to reflect the belief in personal autonomy that defines a lot of the philosophy of libertarianism.

            My actual beliefs in progressive policy are pretty easily defendable, and I can point to real, modern day examples of their implementation for proof.

            I think that progressive policy and libertarian policy frequently overlap.  Marriage equality.  Prohibition.  Civil rights.  Criminal justice.  Foreign policy.

            Perhaps our disagreement boils down to semantics.  What is “progressive?”  What is “libertarian?”  Maybe this is the problem.

    2. Friedman advocated a Basic Income Guarantee, i.e. he advocated a system where everyone gets money from the state whether they work or not, without any conditions. Just something to think about.

      1.  My concern would be that when 51% of the population opted for the basic guarantee, what would stop them from voting to boost that “basic” non-worker guarantee to a level above the average worker income, crashing the system.
        In fact, that is what we are approaching now. Though there is no simple guarantee, there is the earned income tax credit, food stamps, Medicaid, Child tax credit, SNAP, Unemployment, Disability, and many other safety net programs. The cost of these programs at the state and federal level is now just shy of 1 trillion dollars per year. I’m not saying any of these programs is bad, or unnecessary. I agree that it is unethical to not have some safety net for our fellow citizens. The question is, at what level do we place that net. Every foot higher costs money, and we are already at an unsustainable level of spending. Is it a coincidence that right now, as we discuss unsustainable spending levels, that 50% of all American’s get some sort of government assistance? Which brings me back to my first sentence.

        1.  The problem there is that we’re not willing to have a serious conversation about health care costs.  The lion’s share of the costs of those program comes directly from Medicaid and other medical subsidy programs.  We just need to decide whether we want to spend millions of dollars to tack a few years of low-quality bed-ridden life to the end of every American citizen’s visit.

          The irony is that best-practice preventative care is often incredibly cheap compared to the gee whiz medical technology circus we have in the states.  A fully public option that focused only on basic medicine and preventative care could be pretty great.  Obviously we still have the problem of poor people dying of cancer and other debilitating diseases where the rich can just spend a few hundred thousand dollars or so to get themselves put back together and a lot of people will find that unjust but I think we need to be realistic.  Being able to spend a few million dollars to extend your life a few years is a new element to the human condition.  We haven’t had to deal with this before.  And I’m not sure it’s realistic to expect to be able to do this for every human being.

        2. My concern would be that when 51% of the population opted for the basic guarantee, what would stop them from voting to boost that “basic” non-worker guarantee to a level above the average worker income, crashing the system.

          My concern, on the other hand, is that we’re running our country based on paranoid fantasies like yours.

  6. Relating growth to pecuniary gain is superfluous in this instance. All of Saez’s figures look at redistribution in the United States, and thus tell a story about the differential gain of the top percentile. Differential gain is about increasing income at a faster rate than others or losing income at a slower rate than others–which is why the top percentile can lose income but increase their share of all national income when everyone else is made to be the bigger losers.

  7. Dang, Cory. I think you got suckered on this one, sorry to say. I’m not anywhere near the 1%, and share investment strategy with folks who make 1/4 to twice my income (speaking to 401Ks). Even when I was making $5/hr back in the day I contributed just to get a match…it’s “free money”. My balance now isn’t what anyone would call “set for life”, but it’s almost 4-fold above what it was in 2008.

    I know there are folks who can’t even spare 10 bucks a week to save or invest (been there) but this story misrepresents reality.

    Raise the minimum wage and make a 401K the norm maybe? Even without a match… I’ve cashed out twice in my life on a 401, still trying to figure out which time was dumber.

    My point here is that it’s not just the 1% that’s making a profit… us 80%ers are as well.

    1. Of course! One randomer’s anecdote invalidates an academic study of lots of data!

      Yeah, Cory, you got suckered!

    2. You’re right. Rising income inequality is entirely the fault of the lower class.

      Your personal anecdote proves bailing out Wall St — giving money to the richest people — was the right thing to do.

      Other options for lasting economic recovery could have been a) letting those banks fail, or b) bailing out actual homeowners, or c) investing in the the middle class. But, those were wrong. Thanks for clearing it up.

  8. To be fair, Obama inherited a nasty mess created by a century of skullduggery which was born of a century of witless skullduggery.  He’s not a wizard and can’t change much of it – the system is entrenched, diligent, self-aware and … and … like a barnacle.

    His drive for middle class growth is excellent – a large and powerful middle class educates a lot of people, and is picky and quick to spot a snake oil salesman.  That evolves into a flattening of the power base and hence into action likely to diminish the grip the G.Sachs-class have on the money flows.

    Wealth maximisation is one thing, but you’d be a lot happier living in a two story brick house with good schools and roads than lording it over a jungle clearing stowing thrones on the second floor of your grass house.

    PS the 121% thing is used by some to impress, and some to befuddle.  It’s common.

  9. For perspective, Zoe Williams in The Guardian about how low-income earners (those whose pay is slashed to give to the 1%) are treated today:

    Amazon ranks prominently as a major culprit:

    “Inside Amazon’s flagship factory in Rugeley, Staffordshire, a new way of working is evolving. There is a strong topnote of distrust, evinced by the full-body scanners that workers have to pass, every time they leave, to prove they haven’t stolen anything. The profound insecurity built into the employment model is dressed up as discipline – which is to say, Amazon expects huge seasonal fluctuations in the number of people it needs, yet likes to mask their dismissals behind a misdeameanour, so a lot of people get axed for crimes like being ill. There’s a lifesized blonde lady made of cardboard at the entrance, with a think bubble coming out of her head that says, “This is the best job I’ve ever had!” If that detail alone is enough to make your blood run cold, marry it to the testimony of the chairman of nearby Lea Hall Miners Welfare Centre and Social Club: “The feedback we’re getting is that it’s like being in a slave camp.”

    1. I’m no fan of Amazon’s labor practices, even though I did, uh, help start the company. But in my late teens I also worked at HMV doing stock handling, and came to understand how the overwhelming majority of the company’s reported shoplifting was actually being carried out by us employees. I don’t think that the “strong topnote of distrust” is a positive way to run a company, but I also don’t think that it is exactly lacking in foundational evidence. I’m not sure what the right thing to do is, but neither Amazon’s body scanners nor HMV’s nonchalant (willfull?) ignorance of employee theft are probably not it.

      1. I’m not sure what the right thing to do is

        How about an employee-owned, dividend-paying company that pays decent wages? People are less likely to steal from themselves, especially when they’re making a decent wage and don’t feel like they’re being screwed by the people they’re working for.

  10. Would it be in bad taste to bring back the “Kill the Rich” t-shirts?  Maybe I could make a few extra bucks, I need to save up for my can’t-afford-healthcare-tax.

  11. Ok, I’ll say it. Despite the propaganda to the contrary, the Obama administration is a firmly right wing conservative organization.
    It accepts social and financial inequality as a normative state and is therefore firmly in the right wing. It also is solidly in support of a law and order approach to it’s citizenry and seeks to protect the western status quo making the Obama administration a conservative one.
    No hope of change here. Move along.

  12. Economic “recovery.” I’m sure I read on BoingBoing at some point that William Gibson said, “The future is already here — it’s just not very evenly distributed.” The economic recovery is already here, it’s just unevenly distributed. Also the Depression is here, but that’s unevenly distributed.

    1. Oh, i think they’re perfectly distributed. The rich have all the future and no Depression, and the poor vice versa, as it was meant to be, for ever and ever, amen.

  13. Hatred/fear of the poor bingo:

    – Most are poor because they’re irresponsible, lazy and stupid anyway
    – If we help them, they’ll abuse the system and crash it for all of us!
    – It’s their problem they make the wrong career choices.
    – If only they worked harder, they’d be rich.
    – They ought to stop having kids/houses/stuff they can’t afford.
    – There’s always going to be winners and losers. That’s Life.
    – In this economy, they ought to be grateful to even have their shit-paying jobs.

  14. To: American Leftists

    Subj: Fool Me Once

    By 2011, it was crystal clear to even the terminally obtuse that Obama was pursuing most of the very worst policies of the Bush administration.

    So why was there no challenge to him from the left in the Democratic primaries?

    (Those of you who put party loyalty above principle, please tear up your Happy Mutant card forthwith).

    1. So why was there no challenge to him from the left in the Democratic primaries?

      Is there a left wing of the Democratic Party? Let me get my magnifying glass.

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