But you neglect the context. Such rates could be imposed because of the Great Depression and WWII.

How so? I'm ignoring for a second that there were high marginal rates during other times periods than the ones you mention. And here's another curiosity. The 50s were a boom, the 30s a bust. And the top marginal rates were high (>70%) during both periods. Sorry, I just don't see a correlation. My point was that having a high marginal rate for top earners does not make the economy grind to a halt. Investment didn't drop to zero, and the factories didn't all get boarded up just because the people at the top had to pay higher taxes.

And the prosperity which followed the conclusion of that war was largely due to our overwhelming victory

True. I didn't mean to imply that the great prosperity of the post-WWII era was a product of high taxes, just that it wasn't squelched by them.

and to the UNIVERSAL draft which allowed it. 16 million men served and they all had to be rewarded.

Now you're talking. Reward the people doing the heavy lifting. What a concept! We'll make a progressive out of you yet.

Posted at July 3, 2008 3:46 PM in response to Class Warfare and the New Gilded Age

The rich are supported, in the literal sense, by workers, without whom they never would've become rich to begin with.

As a mental exercise, take all workers out of the picture. How does a billionaire accumulate a $billion worth of wealth with his own two hands? The answer is: he can't. Not in a lifetime. Not in a thousand lifetimes. A billionaire gets a $billion by benefiting from the labor of many hands besides just his own.

This notion that the wealthy create wealth out of thin air, and the rest of us are just parasites, is almost exactly wrong.

Laborers, on the other hand could exist just fine without the wealthy. They would exist as farmers, craftsmen, etc. Just as they did for 1000s of years before capitalism was invented.

Wealth is the product of work. Invest your capital, shuffle your papers, play your financial shell games. But, at the end of the day, someone somewhere actually has to do some work. That caviar doesn't just end up on that cracker by magic. And the people who do that work ... are workers. And they deserve a bigger slice of the pie, IMHO.

Posted at July 3, 2008 12:11 PM in response to Class Warfare and the New Gilded Age

Actually, markg8, the top marginal rate used to be >80% during the 40s and >90% (!) during the 50s. Check it out:
http://www.truthandpolitics.org/top-rates.php

And, magically, mysteriously, economic chaos did not ensue. The rich didn't wind up in the poor house, and they certainly didn't take their balls and go home. There was actually an age of relative prosperity for, if not all, then at least many. It was the golden age of America's middle class. People earning below the median income could actually, y'know, afford houses and sending their kids to college and stuff. Go figure.

Posted at July 3, 2008 11:55 AM in response to Class Warfare and the New Gilded Age

L0ngT0m,
Although I agree that Clinton's record, professionally and legislatively, hardly qualifies her to be "Labor's Lion", I'm puzzled by your statement about credit card companies. Are you referring to the Bankruptcy Bill of 2005? If you are, then she did not vote in favor of that as you can see here.

She was not present, because Bill was undergoing major heart surgery that very day. But, she was on record as being strongly opposed to the bill, and did vote in favor of many of the amendments which were proposed (and rejected by the GOP, and certain Dems) to ameliorate the worst aspects of said bill. In the end, it didn't matter. The GOP voted as a bloc, and there were enough Democratic supporters that even a filibuster wouldn't have been possible.

There are plenty of things to hang around Clinton's neck, the Iraq War authorization chief among them, but the Bankruptcy Bill? No. That is false. Were you referring to something else?

Posted at May 21, 2008 5:00 PM in response to What If Hillary Clinton Returns to the Senate as Labor's Voice?

there's really no fair argument
to deny Obama those 55 delegates.

Unfortunately, Jed, fair has nothing to do with it. If the Michigan delegation is seated, Clinton will get most of those "uncommitted" delegates, because she arm-wrestled for them at the district and state-level conventions. Those uncommitted delegates were never Obama's or Edwards' delegates to begin with. Uncommitted really means uncommitted in this case. Obama has zero claim on them. Nevermind that Obama and Edwards supporters were told to vote uncommitted. Sucks for them, but their votes will in all likelihood end up counting for the candidate that they opposed.

Read it and weep:
http://www.detnews.com/apps/pbcs.dll/article?AID=/20080424/OPINION01/804240315/1008

Is this by the rules? Unfortunately, this is in full compliance with the archaic, byzantine way that we elect our leaders in this country.

Is it fair? I say hell no. But apparently all is fair in Clinton's scorched earth plan to win the nomination at all costs.

Posted at May 16, 2008 5:09 PM in response to Edwards endorsement shatters Clinton's last hope: her MI/FL gambit

phelicity:
I agree, its hard not to feel that there must be some method to the madness. This is an idea that has been kicking around for awhile. "Its NOT the incomptence, stupid." Josh here at TPM has talked about the neocons' strategy of "spreading the chaos outward" as early as 2003. And there is Naomi Klein's recent book The Shock Doctrine: The Rise of Disaster Capitalism.

Posted at March 21, 2008 3:51 PM in response to "It's Astonishing How Little Thought Was Given."

nima:
the House and the presidency were left to a decision of the people.

Correct re: the House, but you're wrong about the presidency. We do not vote for the president, we vote for electors in the Electoral College. And even the electors we have no constitutional right to vote for. The US Constitution reserves the privilege of choosing electors for ... the state legislatures. Yes, that is right, go look it up: Article II, Section 1, Clause 2. The state legislatures have the right to choose the electors to the EC, or can choose the method selecting them.

As it turns out, the states have deigned (usually) to allow us little people to vote for the electors, but they don't have to. And sometimes they don't. There are instances of state legislatures sending their own slate of electors to the EC regardless of the will of the people.

Posted at February 19, 2008 7:08 PM in response to Democracy in Pakistan, Despite Bush Policies

You can do this for some student loans here in the US. Its called forbearance. I did it when I was laid off a couple years ago. The bad part is that interest still accrues. So you end up with more debt, but its better than default. I think its a great idea.

Posted at January 17, 2008 7:35 PM in response to Financial Life and Death--and Something in Between

I understand what you're saying, Ellen. It is well understood fact that people, Americans at least, tend to judge their station by looking at those above them. I know someone like your uncle. The guy's a multi-millionaire, and owns many properties, including a waterfront condo in West Palm. And he refers to the folks across the water in Palm Beach proper pretty much the same way as you describe, maybe not in so many words. He's loaded, but its the people in Palm Beach who've really "made it". But, if I've come across as sounding like I'm whining because there are other people who are better off than me, then I've failed to make my point.

The main point I've been trying to drive home, in vain it seems, is (sorry for the bold letters again, Dean, but I'm sure you'll still manage to miss the point): the life-style enjoyed by people earning the median income 30 years ago (like my parents, and their parents) is no longer attainable by people at the median today. So does it make sense to still refer to people at the median as middle class? I say no, and Dean Baker apparently says yes. The middle class is being defined downward just to shoe-horn it into the spot where Dean thinks it belongs.

We spend about 42% of our take-home pay (from a top 10% income) on our mortgage, and we live in a house that is near the low end of the market. As incredible as it seems, at least in this part of the country, a no-frills starter home (one-story 3 br 1.5 bath) costs about a quarter mil. A median income earner could've easily afforded this same house in the 70s, but no one earning $43k can afford this house today, or any house in this area. And we moved to this town because the houses here are relatively cheap! Where we were renting before, in my wife's home town about 10 miles from here, this same house would easily go for $400k. She comes from a middle-class family too, and they're all leaving town one by one, because they can't afford to live there anymore.

If you're looking for what's killing the middle class, I think you need look no further than housing costs.

I honestly couldn't care less about being rich, meaning its not something I strive for. I get so sick of the whole damn rat race that I think I'd be happier living in a tepee and doing subsistence farming, foraging, and fishing. But, I've got a family to support and they don't want to live in a tepee. So, no, I don't really care how "the other half" lives, Ellen. I just didn't much care for being demonized by Dean Baker, who seems to be lumping me in the same group as the robber barons he was writing his post about. So, I tried (in vain I guess) to describe the difference between rich people and people like us who have not much left over after paying our mortgage, two car payments (both are economy cars), and all the other fixed expenses necessary to get by. Disposable income is what makes you rich, not being in a certain income percentile.

There are people who have benefited greatly from the GOP policies of the last 25 years. And there are people who have managed to hold on to just what they had before. And then there are lots and lots of people who have gotten screwed. I am lucky enough to belong to the middle group, and we have managed to break even by earning way more money than our parents ever had to just to attain the same damn things they attained. But, that's all we've done is break even. Apparently, narrowly avoiding getting screwed with everyone else, means I should get blamed for the screwing. That's not exactly blaming the victim, but it certainly isn't blaming the perpetrators. There is indeed a class war going on, and if anyone still thinks I'm on the winning side of it, I really don't know what else to say.

As for me? I know which side my bread is buttered on. My fate is tied to the fate of the middle class, even if Dean Baker thinks I don't belong there. And I will be voting for politicians who will fight, actually fight, for the middle and lower classes. I want to see the stuff the GOP has done actually rolled back. F**k bipartisanship. I'm pretty sure I'm voting for Edwards.

Posted at January 1, 2008 12:29 AM in response to Santa Claus Comes to Wall Street

Dean,

Thanks for responding. So, I've had a couple days to cool off from my tirade. And I've got a proposal for you: I'll try to drop my snotty tone if you do the same. I know its childish to say, "But, he started it", but is was the tone of your original comment that set me off:

sorry, anyone who gets over 100k a year is not middle class -- at least not on this planet. They might be a rich person who has trouble with numbers, but they are not middle class.

Translation:
"not on this planet" - if you disagree with me you're on a different planet, i.e. you're crazy
"trouble with numbers" - or you're just plain stupid

Since I did disagree with you and don't like being called crazy or stupid, I got angry and pretty much called you stupid and crazy in return. I apologize. Now can we both cut the crap, and debate this? You have not addressed any of the points I was trying to make, and just keep pointing out which percentile 100k occupies.

I am not arguing that my life is tough. Its not. If you thought that was what I was arguing, then please reread what I wrote.

I also am not arguing that I don't make far above the median. And I am not arguing that I am not in the top 10% of earners.

I am arguing that proximity to the median has absolutely nothing to do with being in the middle class today. I'm getting the impression from rereading your comments that you are insisting that the middle class, as you define it, must straddle the median somehow. That is just wrong, wrong, wrong. Someone offered El Salvador as a counter example that clearly refutes your assumption. The folks occupying the median there are probably living in poverty, actual poverty. And any middle class is probably far up toward the top of the scale. And the middle class there are probably earning many times the median. Doesn't matter. Poverty is poverty and middle class is middle class no matter where on the income spectrum you may find them for a given society. Like the definition of obscenity, I know it when I see it. It has to do with living standards, not position relative to the median.

Class structure is based on degrees of financial freedom, and the ability to attain or gain access to certain things. Tom Wright mentioned home-ownership and ability to send the kids to college as hallmarks of the middle class, and that's the way I learned it too. The median household income in 1976 according to the US Census was $36k. That's about what my dad was making. Add in my mom's part-time income and it was a bit more than that. Interestingly (to me, if not to you) was that they bought their first home that year, for about that same amount. So the median income in 1976 was about the price of a starter home. That house was roughly the same size as the house I'm in now. The neighborhood then wasn't quite as nice (a bit more tightly packed) as the one I'm in now, but was comparable. The median household income in 2003, again according to US Census, was $43k. My wife and I bought our first home that year. Would you believe there weren't any $43k houses available? Really, the market started at about $200k around here. We paid (mostly borrowed) $270k. And just so we can compare apples with apples, I just checked listings for the area where my parents bought that house in 1976, and a similar house (3 br 1.5 bath) on the same street is on the market now for $325k. Heck, I probably delivered newspapers there. So, the cost of housing has gone up, according to my admittedly less than scientific methods, a whopping 800%, while the median income has gone up 20%. If the cost of one of the pillars of the middle class has gone up so drastically, with respect to income, shouldn't that figure into your calculations somehow? Can a couple making $43k even afford a house at all today? If they can't, then they do not belong to the same "middle" class as a couple, like my parents, earning the median 30 years ago.

The cost of the other pillar of middleclassdom, higher ed, has also grown faster than income. As has the third, heretofore unmentioned pillar, access to health care.

The way I interpret the fact that I'm in the top 10% and yet, oddly, still occupying the same station in life as when my parents were earning the median, is that the price of a traditional middle class life is going up, way up, and fewer people are able to attain it. I know I'm not alone in that interpretation. There are books being written about it. The street I live on is one of the original post-WWII suburbs, built to house the New Deal middle class. Nothing screams middle class like a row of ranch houses. The people who live here have always been middle class. Today it costs nearly half of my take-home pay (on 97k/yr) to live here. And its hamburger. Its nice hamburger, don't get me wrong, ground sirloin, no flys on it. But, hamburger nonetheless. It is currently being repackaged as steak (by yourself and others), and sold at a considerable markup. But, sorry, its still just hamburger. Its a middle class life. So, it seems that fewer people are able to afford even the hamburger (never mind steak) and are having to eat beans instead. They're being told to accept less, pretend its more, and pay through the nose for it. But, they're soothingly reassured by you that they're still in the middle class, and that the people they should resent are the "robber barons" who are lucky enough to still be able to afford the hamburger.

Those earning above $100k are among the winners in the conservative nanny state. They didn't win as much as Bill Gates and the hedge fund boys, but they got more than their fair share.

Oh, brother. You're really testing my resolution to not be snotty. *sigh* More than my fair share, eh? That certainly is one way of looking at it. Another way of looking at it is that, if it now takes a top 10% income to afford a life-style that my parents enjoyed at the median 30 years ago, then most Americans are now getting far less than their fair share. The stuff I have is what used to be considered a "fair share". As far as being one of the winners in the Bush economy, I guess it depends on how you look at it. I am a winner, but not in the way you apparently mean. I won because I still have a job in my career, at least until they can find someone in India to do it. I won because I was lucky enough to keep my seat in the ever-shrinking game of musical chairs that is the modern American middle class. For today. But, check back next year. And if you're a betting man, you should bet on me being more downwardly mobile than upward. Because I ain't in the failing upward set that you described in your post.

It seemed to me that the point of your post (which I agreed with) was that the rules are different for people at the top of the heap. For most of us (myself included, sorry Dean), if we win we win, and if we lose we lose. For those at the top, if they win they win, and if they lose ... they still win. What I'm chafing at is being included in that group by you or anyone. I do not belong to that group, and I'm nowhere near it. I work in an industry that's particularly vulnerable to outsourcing and I've been laid off three times. Twice in the past 2 years. In fact I've spent 4 months unemployed in the past 2 years. It could happen again literally at any time. And, I can assure you there are no golden parachutes here in coach (which is where I fly, literally and figuratively). For two of the layoffs I got 1 month's salary for a severance, for one of them they continued my medical for 2 months beyond my severance date (a gift for which I was very thankful). For one of the layoffs, I got nothing. No parachute of any kind. I'm clearly not in the same class as the people you're talking about. Please don't confuse me with the real robber barons.

And btw, the 97k is our combined household income and we don't have any investment income. Not that I expect it would matter to you.

Posted at December 30, 2007 7:11 PM in response to Santa Claus Comes to Wall Street