Go Berserk, Young Man
And young woman, of course. You're being cheated by a free-market system that is out of control.
Consider that a single individual (John Paulson) made enough money last year to pay the salaries of 100,000 teachers.
100,000 jobs. All those potential salaries ($50,000 each) diverted to a man who started making his billions by betting against the U.S. mortgage market.
And he's not alone. In 2009 25 hedge fund managers averaged a billion dollars in earnings. Hedge fund manager James Dinan, who made 'only' $350 million in 2009, advised other hedgers to "stay in the middle of the field" to avoid angering the public.
The hedge fund managers are not alone, either. Based on Tax Foundation figures, the richest 1% has TRIPLED its share of America's income over the past 30 years. Much of the gain came from tax cuts and minimally taxed financial instruments. If their income had increased only at the pace of American productivity (80%), they would be taking about a TRILLION DOLLARS A YEAR LESS out of our economy.
If middle-class incomes had increased at the pace of American productivity, the median household income would now be nearly $92,000, not $50,000.
So if you hear the 'redistribution' argument, keep in mind that the redistribution has already taken place, from the middle and lower classes to the rich.
Meanwhile, profits for the 500 largest corporations rose 81% last year, prompting Fortune Magazine to say "we've rarely seen such a stark gulf between the fortunes of the 500 and those of ordinary Americans."
There used to be a safeguard against these extremes, in the form of progressive taxes. But a 30-year assault on the alleged evils of government has largely taken this away. Many of the billion-dollar paychecks are overloaded with capital gains earnings, taxed at a minimal 15% rate.
Young men and women, you should be very angry. Millions of you have college degrees and/or marketable skills, but you're either unemployed or underemployed because profit-rich corporations have stopped investing in America. They're still investing, but not in America. Pharmaceutical companies move production to China and India because of less stringent inspection standards. Energy companies use subsidies for solar energy research and development to move production facilities to Asia. Everyday products are no longer made in the United States. The examples go on and on.
But these increasingly profitable companies are paying less taxes. According to Citizens for Tax Justice, 12 of our largest corporations actually received tax refunds! The drop in tax revenue is forcing cuts in education, social programs, and national infrastructure. Think of the implications. Do we want programs for music and the arts eliminated from schools, so that only children of the wealthy can participate in them? Do we want our national parks sold to billionaires?
It has been argued that corporations are just following the rules of capitalism, that their only obligation is making profits for their stockholders. But corporations and very rich individuals benefit most from national security, government-funded research, infrastructure, and property laws. Defending the country benefits the rich more, because they have more to defend. Taxpayer-funded research at the Defense Advanced Research Projects Agency (the Internet), the National Institute of Health (pharmaceuticals), and the National Science Foundation (the Digital Library Initiative) has laid a half-century foundation for their idea-building. The interstates and airports and FAA and TSA benefit people who have the money to travel.
In his book "Outliers," Malcolm Gladwell says this about the richest and most successful Americans: "Their success was not just of their own making. It was a product of the world in which they grew up."
The wealthiest individuals and corporations depended on all of America to make their fortunes. Now they're saying they did it on their own, and they don't need government or the American public any more.
That is why the rest of us, especially young people bearing the brunt of the snub, should be mad.
In 1865 newspaper editor Horace Greeley said to those struggling to find success in life: "The rents are high, the food is bad, the dust is disgusting and the morals are deplorable. Go West, young man, go West and grow up with the country." It's no longer that simple for our young people. The country's all grown up, and it's mostly owned by corporations.