| Instructor Notes for Week 14 –Chapter 18 - Economic Policy
This Chapter and this topic are very important for the public to understand because there has been so much political rhetoric and misinformation distributed about the economy by the corporate owned media. The selftest is therefore a bit longer this week with 60 questions. There is much to learn and it is a topic that most people avoid if possible. However, the USA cannot afford to avoid this topic with the current unemployment rate and the need for the public to speak as loudly to influence Congress as the lobbyists for corporations and the 1%. The voters decided that they believed President Obama presented the best approach to creating jobs and strengthening our economy with his often repeated call to increase taxes for the wealthy. In spite of being outspent by his opponent’s super pacs three to one, the American public chose to reelect President Obama. If more of the public had truly understood the state of the income gap in the USA, I believe the President’s victory margin would have been much greater.
This is a great video that is well worth your time to watch. Economist Richard Wolff joins Bill Moyers to shine light on the disaster left behind in capitalism’s wake, and to discuss the fight for economic justice, including a fair minimum wage. A Professor of Economics Emeritus at the University of Massachusetts, and currently Visiting Professor in the Graduate Program in International Affairs of the New School, Wolff has written many books on the effects of rampant capitalism, including Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About It. http://billmoyers.com/episode/encore-taming-capitalism-run-wild-2/
It would also be worth your time to listen to this debate that addresses the question our Congress must now actually face. Try not to succumb to the hollow “flat tax” argument as that is quite simply a regressive tax. There is a video and two versions of the audio one of which is condensed if you don’t have much listening time. Please check this out and you can debate all your family at your next Thanksgiving dinner.
Most Americans have no idea how much wealthier the top 1% have gotten in the last couple of decades. The data below is taken from 2007 figures and the situation has grown much more extreme since then.
Measuring the Top 1% by Wealth, Not Income
“But an analysis of the Fed data is still revealing in that it shows the wealth gap, as measured by net worth, is much more extreme than the chasm as measured by income.
The Times had estimated the threshold for being in the top 1 percent in household income at about $380,000, 7.5 times median household income, using census data from 2008 through 2010. But for net worth, the 1 percent threshold for net worth in the Fed data was nearly $8.4 million, or 69 times the median household’s net holdings of $121,000. . . .
Other nuggets about the wealthy from the 2007 Fed data:
— The wealthiest 1 percent took in about 16 percent of overall income — 8 percent of the money earned from salaries and wages, but 36 percent of the income earned from self-employment.
— They controlled nearly a third of the nation’s financial assets (investment holdings) and about 28 percent of nonfinancial assets (the value of property, cars, jewelry, etc.). These measures will be particularly interesting to revisit when the new, post-recession data arrives.
— Money may not buy happiness, but the Fed survey suggests it buys good health. About 90 percent of the 1 percenters describe themselves as being in excellent or good health, compared with 75 percent of everybody else. About 85 percent expect to live into their 80s, compared with 68 percent of everybody else.
— Nearly half of the 1 percenters own two or more pieces of real estate. That was true for just 5 percent of the rest of the population.”
The article below further explains the current decline in incomes.
September 12, 2012, 1:24 pm
Behind the Decline in Incomes By CATHERINE RAMPELL
The Census Bureau just released its sweeping annual report on income, poverty and health insurance coverage.
As my colleague Sabrina Tavernise writes, median household income declined last year to $50,054, a level last seen in 1996 when adjusted for inflation. Here are a few quick graphical bullet points from other findings in the report:
1. Median incomes fell from 2010 to 2011 for all races, although the change was not statistically significant for Asians and Hispanics.
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The Gini Index is a standard measure of inequality, in which higher values represent more unequal distributions of money income. The “equivalence-adjusted income estimate” (blue line above) takes into consideration the number of people living in each household, and how these people share resources and take advantage of economies of scale.
3. Men have gained more jobs in the recovery (dubbed the “he-covery”) but they also lost a lot more jobs in the recession (“man-cession”).
4. There’s more evidence that the work force is “hollowing out,” as there was significant job growth in the first, second and fifth income quintiles, but not in the third and fourth ones.
5. The share of people without health insurance fell. The biggest drop was among those 19 to 25 years old, who can now join their parents’ health insurance plans. (The number of insured children also showed a decline from 2010 to 2011, but it was not statistically significant.)
Source: Census Bureau
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