The Screwing Of The American People Continues

Source: Decline of the Empire

After yesterday’s justfied rant, let’s get back to the cold, hard facts today. In Why Tuition Has Skyrocketed at State Schools, Charlotte Rampell of the New York Times Economix blog gives us this splendid chart.

That’s a horrible picture, but it wouldn’t be so bad if income had (at least in part) had kept up with inflation. So you can not truly appreciate the price changes since 1985 unless you look at income gains over that same period.

You can easily see that average pre-tax income for 80% of Americans has been essentially flat since 1979. You do not have to be a rocket scientist to see that income did not even begin to keep up with huge increases in college tuition and health care since 1985, and relatively smaller increases in gasoline and “all consumer items.” Screwed is the word that leaps to mind.

It’s important to understand that the income graph above renders the next graph almost meaningless.

From Calculated Risk

This graph shows that real personal income (less transfer payments) has not yet reached pre-recession levels. But more importantly, this graph tracks personal income in the aggregate, and thus does not reflect the fact that almost all of the income gains over the last 33 years went to the top quintile (20%), and most of that went to the top 1%.

You will be delighted to learn that this happy trend continues unabated. Assuming 2010 was the first year of “the recovery”, we are now informed that Over 90% of the income gains in the first year of the recovery went to the top 1%.

Emmanuel Saez of the University of California at Berkeley has updated his work with Thomas PIketty on the evolution of US Top Incomes to 2010 (pdf).

He finds that:

“In 2010, average real income per family grew by 2.3% … but the gains were very uneven. Top 1% incomes grew by 11.6%, while bottom 99% incomes grew only by 0.2%. Hence, the top 1% captured 93% of the income gains in the first year of recovery. Such an uneven recovery can help explain the recent public demonstrations against inequality.”

The 10 page update offers a clear picture of how income shares have varied over different business cycles, as well as the long-term trends since 1917. Top income shares fell dramatically after World War II, stayed flat, then began to rise in the early 1980s and have returned to their pre-War levels.

I hope it is even easier for you to understand why I gave The Daily Show’s Jon Stewart such a hard time yesterday for telling us that the economy is improving, and the real problem (in his blinkered view) is that the Republicans don’t want it to.

Thus the screwing of the American people continues and no amount of misleading, irrelevant blather, whether it comes from The Comedy Channel or Fox News or National Propaganda Radio or CBS News is going to change that. In particular, the outcome of this year’s presidential election is not going to change the inevitable outcome, which is the further deterioration of economic conditions for the large majority of Americans, and the debasement of their quality of life.

Read more at Decline of the Empire