The Commons is a weblog for concerned citizens of southeast Iowa and their friends around the world. It was created to encourage grassroots networking and to share information and ideas which have either been suppressed or drowned out in the mainstream media.

"But if the cause be not good, the king himself hath a heavy reckoning to make, when all those legs and arms and heads, chopped off in battle, shall join together at the latter day and cry all 'We died at such a place;' some swearing, some crying for a surgeon, some upon their wives left poor behind them, some upon the debts they owe, some upon their children rawly left. I am afeard there are few die well that die in a battle; for how can they charitably dispose of any thing, when blood is their argument? Now, if these men do not die well, it will be a black matter for the king that led them to it; whom to disobey were against all proportion of subjection." (Henry V, Act V, Scene 4)

Saturday, December 15, 2007

Report Says That the Rich Are Getting Richer Faster, Much Faster

Report Says That the Rich Are Getting Richer Faster, Much Faster

The increase in incomes of the top 1 percent of Americans from 2003 to 2005 exceeded the total income of the poorest 20 percent of Americans, data in a new report by the Congressional Budget Office shows.

The poorest fifth of households had total income of $383.4 billion in 2005, while just the increase in income for the top 1 percent came to $524.8 billion, a figure 37 percent higher.

The total income of the top 1.1 million households was $1.8 trillion, or 18.1 percent of the total income of all Americans, up from 14.3 percent of all income in 2003. The total 2005 income of the three million individual Americans at the top was roughly equal to that of the bottom 166 million Americans, analysis of the report showed.

The report is the latest to document the growing concentration of income at the top, a trend that President Bush said last January had been under way for more than 25 years.

Earlier reports, based on tax returns, showed that in 2005 the top 10 percent, top 1 percent and fractions of the top 1 percent enjoyed their greatest share of income since 1928 and 1929.

The budget office report takes into account a broader definition of income than tax returns that is known as comprehensive income. It includes untaxed Social Security benefits, welfare, food stamps and part of the value of Medicare benefits, giving a fuller picture of incomes at the bottom than tax data.

Much of the increase at the top reflected the rebound of the stock market after its sharp drop in 2000, economists from across the political spectrum said. About half of the income going to the top 1 percent comes from investments and business.

In addition, Congress in 2003 cut taxes on long-term capital gains and most dividends, which advocates said would encourage people to turn untaxed wealth into taxable income. Some economists have said that the increase in incomes at the top is illusory and is in good part simply converting untaxed assets into taxed income to take advantage of reduced tax rates.

The Congressional Budget Office report made no attempt to explain the increases in income in its annual report on effective federal tax rates paid by people at different income levels.

Asked how much of the increase at the top was from the tax cuts rather than market gains, Peter R. Orszag, the budget office director, said, “I can’t give you an answer to that because we just don’t know.”

Chris Frenze, Republican staff director for the Congressional Joint Economic Committee, said the increase in top incomes is much more modest if viewed over longer time periods. Since 2000, he said, the average income of the top 1 percent has risen $97,900, or 6.7 percent, the same percentage increase this group had from 1992 to 1997.

Jared Bernstein, an economist at the Economic Policy Institute in Washington who characterizes the Bush administration’s policies as YOYO economics, based on You (Are) On Your Own, said the differences in income growth explained why so many Americans have told pollsters that they are feeling squeezed.

“A lot of people justifiably feel they are working harder and smarter, they are baking a bigger and better pie, and yet their slice is not growing much at all,” Mr. Bernstein said. “It is meaningless to middle- and low-income families to say we have a great economy because their economy looks so much different than folks at the top of the scale because this is an economy that is working, but not working for everyone.”

At every income level Americans had more income, after adjusting for inflation in 2005 than in 2003, but the increases ranged from almost imperceptible for the poor to modest for the middle class and largest for those at the top.

On average, incomes for the top 1 percent of households rose by $465,700 each, or 42.6 percent after adjusting for inflation. The incomes of the poorest fifth rose by $200, or 1.3 percent, and the middle fifth increased by $2,400 or 4.3 percent.

The share of all federal taxes paid by the top 1 percent grew, but only slightly more than half the rate of their growth in incomes because of the tax rate cuts. The top 1 percent paid 27.6 percent of all federal taxes in 2005, up from 22.9 percent in 2003, while the share paid by the middle fifth of taxpayers declined to 9.3 percent from 10 percent in 2003.

The share of their income that the top 1 percent paid in all federal taxes and in income taxes fell. The total tax rate dropped 1.8 percentage points, to 31.2 percent, from 2003 to 2005 while their average income tax rate declined one percentage point, to 19.4 percent, largely because of the cuts in taxes on capital gains and dividends.

Sunday, December 09, 2007

No Fence To Protect Against Foreclosures

No Fence To Protect Against Foreclosures
Dec. 4, 2007(The Nation) This column was written by Barbara Ehrenreich.

Another utopia seems to be biting the dust. The socialist kibbutzim of Israel have vanished or gone increasingly capitalist, and now the paranoid residential ideal represented by gated communities may be in serious trouble. Never exactly cool - remember Jim Carrey in The Truman Show? - these pricey enclaves of privilege are becoming hotbeds of disillusionment.

At the annual meeting of the American Anthropological Association in Washington last week, incoming association president Setha M. Lowe painted a picture so dispiriting that the audience guffawed in schadenfreude. The gated community residents Lowe interviewed had fled from ethnically challenging cities, but they have not managed to escape from their fear. One resident reported that her small daughter has developed a severe case of xenophobia, no doubt communicated by her parents:

We were driving next to a truck with some day laborers and equipment in the back, and we stopped beside them at the light. She [her daughter] wanted to move because she was afraid those people were going to come and get her. They looked scary to her.

Leaving aside the sorry spectacle of homeowners living in fear of their landscapers, there is actually something to worry about. According to Lowe, gated communities are no less crime-prone than open ones, and Gopal Ahluwalia, senior vice president of research at the National Association of Home Builders, confirms this: "There are studies indicating that there are no differences in the crime in gated communities and non-gated communities." The security guards often wave people on in, especially if they look like they're on a legitimate mission - such as the faux moving truck that entered a Fort Meyers' gated community last spring and left with a houseful of furniture. Or the crime comes from within, as in the Hilton Head Plantation community in South Carolina where a rash of crime committed by resident teenagers has led to the imposition of a curfew.

Most recently, America's gated communities have been blighted by foreclosures. Yes, even people who were able to put together the down payment on a half-million dollar house can be ambushed by Adjustable Rate Mortgages. Newsweek reports that foreclosures are devastating the gated community of Black Mountain Vista in Henderson, Nev., where "yellow patches [now] blot the spartan lawns and phone books lie on front porches, their covers bleached from weeks under the desert sun." Similarly, according to the Orlando Sentinel, "countless homeowners overwhelmed by their mortgages are taking off and leaving behind algae-filled swimming pools and knee-high weeds" in one local gated community.

So, for people who sought, not just prosperity, but perfection, here's another sad end to the American dream, or at least their ethnically cleansed version thereof: boarded-up McMansions, plastic baggies scudding over overgrown lawns, and, in the Orlando case, a foreclosure-induced infestation of snakes. You can turn away the Mexicans, the African-Americans, the teenagers and other suspect groups, but there's no fence high enough to keep out the repo man.

All right, some gated communities are doing better than others, and not all of their residents are racists. The communities that allow owners to rent out their houses, or that offer homes at middle class prices of $250,000 or so, are more likely to contain a mixture of classes and races. The only gated community I have ever visited consisted of dull row houses protected by a slacker guard and a fence, and my host was a writer of liberal inclinations. But all these places suffer from the delusion that security lies behind physical barriers.

Before we turn all of America into a gated community, with a 700-mile steel fence running along the southern border, we should consider the mixed history of exclusionary walls. Ancient and medieval European towns huddled behind massive walls, only to face ever-more effective catapults, battering rams and other siege engines. More recently, the Berlin Wall, which the East German government described fondly as a protective "anti-fascism wall," fell to a rebellious citizenry. Israel, increasingly sealed behind its anti-Palestinian checkpoints and wall, faced an outbreak of neo-Nazi crime in September - coming, strangely enough, from within.

But the market may have the last word on America's internal gated communities. "Hell is a gated community," announced the Sarasota Herald Tribune last June, reporting that market research by the big homebuilder Pulte Homes found that no one under fifty wants to live in them, so its latest local development would be un-gated. Security, or at least the promise of security, may be one consideration. But there's another old-fashioned American imperative at work here, which ought to bear on our national policies as well. As my Montana forebears would have put it: Don't fence me in!

By Barbara Ehrenreich
Reprinted with permission from the The Nation.