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Time to get a really big washer … November 8, 2011

Posted by WillardWhyte in Economy, Justice, Politics.
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… and fix this stupid faucet that keeps dribbling out this same corrosive “trickle” of failed, counterproductive policy.

Trickle-down won’t work because those who already have way, way more than they need won’t do it. They’ll take the tax break — and sit on it. Or invest it where growth looks good and steady over the next five years — in companies and enterprises in markets growing rapidly and consistently.

Which isn’t here.

Because the mass of the population is deleveraging out from under the debris left by the Crash of 2008. And real wages are down and have been for a decade and will be for another decade.

Why? Because even though GDP is back to the level last seen before the crash of 2008, and even though corporate profits are headed for a record this year, none of that has been shared with labor — that means the mass of workers who somehow held onto their jobs and threw their shoulders into the wheel to produce the GDP bounceback and profit bounceback.

Just about all of the recovery went to stock buybacks, restored and bolstered dividends, mergers (that cost jobs) and richer executive compensation, immediate and deferred.

None of that recovery largesse trickled down much past the executive washroom. And I’m not talking unions. I’m talking white-collar wimpos who tell themselves are getting somewhere and that their hard work and sacrifice in the last three years will be rewarded. When?

And the people upstairs who made the decisions about how to divide the corporate gains from the recovery are the very same people the GOP expects to rekindle the domestic economy with a rush to — do exactly what? Invest in exactly what? The next Wall Street bubble maybe. If Goldman or Citi or John Paulson can suck them into the next doomed CDO.

It hasn’t happened in the years since the Bush tax cuts. But still the GOP heads in the Super-Committee offer up a “revenue plan” that includes (if you trust this sourced account from Reuters):

—  Limiting the mortgage tax deduction for second homes, and some other upper-income perks, which would bring in about $250 billion over 10 years.

— In return for not only keeping the Bush tax cuts, but taking the whole upper end rate — which would rise to 39.5 percent if the cuts expire — down to 28 percent, which is what the bulk of the rapidly vanishing middle class pays. No price tag on that baby, but it surely swamps the vacation home deduction.

Not only does the math in that “deal” not produce progress toward whacking a deficit, it further enriches the top end in an era where simply every analysis shows the middle is the group that took the relative haymaker in the recession, benefitted the least from the market and economy rebound fueled by the government stimulus that largely caused the deficit to explode,  and which has absolutely no discretionary spending room left to rekindle the economy with any sort of robust DEMAND FOR GOODS AND SERVICES from our underutilized factories and worker pool.

And why, I ask, must I go to Reuters to learn of this proposal? I guess the Americn media was pretty full up today with Joe Paterno, Michael Jackson’s doctor, Lindsey Lohan in Playboy and whatever other gossip passed for news.

Sigh.

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