american dream & income reality

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Next Slide : The Great Recession The phoenix is an ancient legend of a fiery bird, reborn of ashes, and living a thousand years bringing with it prosperity and justice. Much like the legendary Phoenix rose from death, the American Dream was birthed during the destruction and pain felt during the Great Depression. This dream was so strong it escaped from the collective subconscious into the realm of reality… and lived for decades!

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Next Slide :

The Great Recession

The phoenix is an ancient legend of a fiery bird, reborn of ashes, and living a thousand years bringing with it prosperity and justice.

Much like the legendary Phoenix rose from death, the American Dream was birthed during the destruction and pain felt during the Great Depression.

This dream was so strong it escaped from the collective subconscious into the realm of reality… and lived for decades!

Next Slide (Chart):

Bloated and Rotting

Fast forward to 2010. The U.S. is defined by a new crisis.

Record or near record:

-Poverty -Unemployment-Foreclosures-Lack of savings-Bankruptcies -Inequality

-Subpar education

-Foreclosures

-Infrastructure neglect

Runaway costs:

-Transportation-Medical Care-Housing

Next Slide (Chart):

Income Growth 1979-2007

Banking Failure and Structural Decay

-Since Dec 2007, 300+ and counting bank failures

-Recently, the financial sector received highest percent ever or near record percent 1.) of domestic corporate profits …41% and 2.) of total contribution to GDP …8%

-Stock market (S&P 500 index) fell 38.5% in 2008.3rd worst fall since 1907, 37.7% drop & 1931, 52.7% fall

Working poor +$1,800 income growth over 28 years.

Middle Class +$10,400 growth over 28 years.

Rich +$1,323,000 growth over 28 years.

Next Slide:

Income Growth Percentage

Source: cbo.gov

Working poor 11% income growth over 28 years.

Middle class 19% income growth over 28 years.

Rich 241% income growth over 28 years.

Next Slide:

Points of InterestsSource: cbo.gov

Meager income gains made by the working poor and middle class have been nearly swallowed by inflation.

Income and wealth realities in the U.S. are comparable with the robber barons from Russia and Venezuela. In fact, income inequality is actually worse in the U.S.A.

2007 financial wealth owned by the top 1% was 42.7% while the bottom 80% owned 7% of all financial assets. Source: Wolff (2004, 2007, & 2010).

If you benefit 241% more… the reasonable thought is topay more. Let’s see what the tax rates have been.

Next Slide (Graph): Tax Rates for the Working Class & Rich 1979 - 2007

Top marginal rates (bright red arrows) in 2010 are taxed on income above $363,651.

Capital gains rates (brick red arrows) apply to investment income… most “financial” income passes through these rates. The super rich are taxed at this rate…

Tax cuts for the rich have been nearly twice that of the working poor’s tax rate (purple).

Next Slide (Chart): The Real Meaning Behind Economic Growth.

“You bet I cut taxes at the top. That encourages entrepreneurship. What we Republicans should stand for is growth in the economy. We ought to make the pie higher.” -G. W. Bush

-Quote attributed to a February 15th 2000 Republican debate.

Next Slide (Chart): The Dow in perspective..

Did the economy grow? And who benefited?

Since 1979 the stock market has exploded (black line).

Income growth for the top 1% mirrors the Dow’s historic climb.

Income growth for 99% of Americans have largely been excluded from these historic gains.

Next Slide (Chart): Making the top 1% look like beggars...

Income Source: cbo.gov

Top 400 Incomes (AGI) (orange line). Or revenue the govt. can tax after the rich deduct part of the yacht purchased and used for taking clients out for a spin.

What the super rich are actually paying on AGI income (olive arrow).

Top 400 saw income increase of 637% while effective taxes dropped 44.5%.

Next Slide (Chart): The DOW in perspective..

Source: cbo.gov

“That a peasant may become king does not render the kingdom democratic.” -Woodrow Wilson

The last 15+ years have fueled the rich’s income at a greater rate than even the market’s explosive growth.

Next Slide: Class Warfare

Source: cbo.gov

“There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.”

-Warren Buffet was named by Forbes (2008) as the world’s richest man.

Next Slide (Chart):

Income Inequality & Economic Instability

Unemployment Source: http://www.bls.gov

Real Unemployment “Official” Oct. 8th 2010

unemployment numbers are 9.6% or $14.8 million unemployed Americans.

TIPP polling unit revealed 27.8% of all households with one or more of it’s members are looking for employment.

Many economists estimate real unemployment closer to 22%.

Top 10% income as a percentage of total incomes.

The last time income inequality was this extreme... 1929.

“Cashing in” and selling their market position, many investors with deep pockets helped kick off the Great Depression in 1929.

Misery spawned during the G.D. was captured by an influential author who coined this famous mantrain 1931…

Next Slide: Author of the “American Dream”

IRS Income as a Chart Source: Professor Emanuel Saez

The American Dream is rooted in the Declaration of Independence.

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

James Truslow Adams originally coined the iconic mantra “The American Dream” in his 1931 book, The Epic of America.

James Truslow Adams said it best, "that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement.

It is a difficult dream for the … upper classes to interpret adequately, and too many of us ourselves have grown weary and mistrustful of it.

It is not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.”

While many include affordable housing and economic opportunity for everyone as part of the American Dream, the original meaning is deeper.

Currently, the costs of housing, transportation, and receiving medical care is a bad situation and getting worse.

Without real income gains and more importantly, income equality, the American Dream is simply impossible. The American Dream, quite possibly, is dead…