The Rise Of The Welfare State: The Scariest Charts You Will See Today

The debate over America’s social safety net is usually defined by liberals as a question of whether or not we “care for the vulnerable members of our society,” or something along those lines. But there’s a thin line between caring for someone and enabling them, leading to dependence. And, as the latest Bureau of Labor Statistics data illustrate (via these great graphs by Zerohedge), dependence on the government is on the rise. In a big way.

We’ve covered the tragedy of foodstamps before here at Dustinstockton.com, but what the latest data shows is that the number of Americans on foodstamps is on the rise. Though some of this is related to the recent economic collapse, it’s clear that we’re fast becoming a nation of government dependents. 46.5 million Americans, nearly a sixth of this nation’s population now receives foodstamps… even with a relatively high unemployment rate of 8 percent, that’s an unreasonably high number.

If you’re still thinking that all this is just a product of a weak economy, this chart will change your mind. Not only is the foodstamp rate higher than the unemployment rate, we’re seeing even stronger growth in the number of Americans taking disability benefits. Obviously a weak economy does not increase the number of injuries, so there’s little choice but to conclude that more and more Americans are simply lining up for a handout.

And why not? Not only does the government advertise the benefits of its handouts, it even gives out free cell phones to people on foodstamps. And all this costs is a mere $81b in higher taxes paid by those of us who foolishly choose to keep working instead of joining the line at the government handout window.

Sadly, though, this problem goes even deeper than just unfairness or the sheer cost of these benefits. America is, and has always been, a nation of strivers, entrepreneurs, and fiercely independent individualists. These are our greatest national strengths, and as a country we seem to be abandoning them for the comfort of social welfare. Not only will this ruin our budget, but we risk losing the very engine of American success… and without that, we will never return to the greatness that has defined this country’s history.

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59 Responses to The Rise Of The Welfare State: The Scariest Charts You Will See Today

  1. Greg says:

    Bed wetting socialist Liberals for ya, ABO in the Presidential election!!!!!

  2. AxDog says:

    The barbarians have overwhelned the public coffers! Buy guns, ammunition and gold. I’m looking forward to educating the inner-city gang-banger about the nature of a true warrior!

  3. DLC says:

    CLOWARD and PIVEN Strategy ?

  4. Jill Klausen says:

    If corporations—that are seeing the highest levels of profits in history—stopped using the taxpayers to cover what should be their payroll expense and used the profits their workers are generating to pay them a thriving wage, “dependence” on those programs would plummet.

    Hoarding every dime of profit since the late ’60s/early ’70s to distribute only among the upper echelon of society, has cost this country trillions of dollars in lost tax revenue (smaller earners don’t offshore their earnings to avoid paying taxes on them); forced us to spend billions more than we needed to, to pick up the slack caused by corporate greed; and decimated the middle class, who can now no longer retire on their own savings (which either couldn’t exist because workers haven’t gotten a raise in 45 years, or was stolen from them by Wall Street using legal trickery), can’t send their kids to college without enormous student loans, and literally can’t survive in today’s economy without being in debt (which bankers have orchestrated, by the way, because it means more fees for them).

    The theft of workers’ rightful wages (given that their productivity has increased steadily since WWII while their wages stagnated at the end of the 1960s) has even caused the Social Security fund to be in danger. Had workers been paid their share (based on productivity increases at the minimum, and certainly to include cost of living increases) for the past 45 years, trillions of dollars that went into millionaire and billionaire pockets that was above the $106,800 threshold would have been in the paychecks of those below the threshold and been taxed.

    Until the Republican party accepts these simple cause and effect truths, or until we can overpower them in every corner of government so we can change the rules back to where they were when the middle class and the nation were all thriving together, we will continue to see participation in subsistence programs until our country ends up looking like Mexico and we’re the ones trying to figure out ways to sneak across our northern border.

    Do you want to see some charts that should infuriate you? Take a look at these.

    And this one.

    Now, I understand you’ve been taught to believe certain things about Democrats, but allow me to set the record straight: Democrats want fewer people to have to depend on taxpayer safety nets just like you do!

    But the only way that’s ever going to happen is if corporations stop using us as their payroll departments and pay their own workers wages sufficient to allow them to buy a home they can someday pass down to their children, pay for their kids’ college educations without going into decades of debt, save for retirement, and build their own personal safety net so in the event of an emergency like the loss of a job, they are set to take care of themselves without outside assistance.

    Why aren’t you angry that corporate greed (which our Founding Fathers warned us to keep reigned in, by the way) has cost this country so much of our wealth? Why is it okay with you that the people with the power and control over the purse strings have treated us like we’re peasants instead of what we actually are: the lifeblood of their businesses?

    Work with us. Help us get more people off taxpayer assistance by demanding that our Representatives in government fix the system so that corporations cannot continue to steal from us. And when I say “us,” that includes you. You have been cheated out of a robust economy where your tax dollars could have been used for research that may have found a cure for cancer by now, for repairing our crumbling roads and bridges, for investing in technology that could have already gotten us off our dependence on foreign oil, and myriad other endless possibilities.

    Please try to redirect your anger to the people who have actually caused this mess, and not at their victims.

    Thank you.

    • coalminersdaughter says:

      Hi Jill. Thanks for your well written reply. I would like to suggest that the evil corporations are just one level of “what makes the world go ’round’. I have been an employee of a major US corporation for 30 years. And over the past 10 years I’ve seen thousands of jobs move to India and China and now most recently to Egypt ! Here are some thinking points. The cost to employ one person. Their pay. Their insurance. The payroll taxes. Their office space. The goverenment regulations associated with that office space. (handicap access, electrical standards, air quality and so on) Their benefits, health care, 401K, stock investment plan… Their paid vacation time. The office supplies… all of these expenses to maintain one employee can be calculated down to a “cost per hour”. For a decent job (annual income 70K to 100K) that cost is $82/hour. Now… take those same static costs, lose some government overhead regulations, lose some employee benefits (ie healthcare) hire some very intelligent people who happen to live in a 3rd world country with questionable quality of life / living standards… and guess what ? The cost of that employee just got reduced to $12 / hour. Technology has made it possible that any human that can type / talk / program a computer can perform that job from ANYwhere. So the greedy bastards are capitalizing on just that. The money is going back into their stock options their pay and the result is what we’re seeing now.. what we’re seeing in your charts… and also in the charts that started this chain.
      So. How does the USA compete in this brave new world? It’s my opinion that the jobs will continue to leave the country as we American’s somehow think we’re entitled to this blessed nation and this high standard of living. I don’t think we’re entitled and world economics will make us wake up and smell the coffee. We’re too expensive.
      You can point the finger at union hourly wages. You can point your finger at health care. You can point your finger at government regulations and taxes … but it is ALL of these issues that contributed to that outstanding $82/hour number… it’s all of it.
      The news media and politicians keep us all distracted by their “talking points”. They keep us distracted by the “issue de jour”…. which oftentimes don’t amount to a hill of beans in the grand scheme of things.
      When will the jobs come back to America ? When a couple of things happen. When China and India mature into the expensive, “I’m entitled” mentality and secondly, when Americans will be willing to work for a total cost of $12/hour. Companies / corporations DO NOT care where the labor is performed… as long as it gets performed. Not too different than slave labor is it ? Only difference is we have a little cash in our pockets to give us a sense of control over our lives. We get to have a decent roof over our heads, a few trinkets and food. The really wealthy that had huge numbers of slaves in the 17th,18th & 19th centuries … their overhead was the same…. taking care of the LABOR. Rest assured that the really evil wealthy will always exist and move the minions around the globe like pawns. Personally I’ve come to peace with my middle class status as I’ve had a really good life. Never wanted for anything and worked my butt off for ‘the man’ for 30 years… I’ve been better off that MOST people on this planet and for that I’m grateful.

      • Jill Klausen says:

        I just noticed that my reply to this from yesterday isn’t appearing to anyone but me because it’s still awaiting moderation, so I hope there’s no problem if I repost it.

        Thank you, coalminersdaughter. First, I’d like to ask you to please change the way you have characterized my position about corporations. I never said, nor do I believe they are “evil.” But they have been very poor actors in this country over the past half century, and it’s perfectly appropriate to call that behavior out. In fact, if we hope to change anything, we must.

        That said, I can boil the answer down to one simple stat: gargantuan CEO pay relative the average worker in America.

        Here’s the thing—we have plenty of money in the corporate coffers to pay American workers $82/hour or more and still be 1.) profitable and 2.) not change the cost of goods sold. How? By taking the trillions of dollars that are now paying only CEOs and top executives and paying workers with it. We work for it, too!

        The average wage for a worker in America in 1965 was $17.54/hour. In 2008 it was a pathetic $18.52/hour, which is nearly a 0% increase over 40 years. Forty years of increased productivity and extremely higher costs of living.

        At the same time, the typical pay for a CEO in 1965 on the other hand, was $430.91/hour ($980,620.00 per year), and it skyrocketed to $5,419.97/hour ($10,839.940.00 per year) by 2008.

        So if we gave CEOs and workers both increases in their wages over the years, but kept the disparity between them closer (50 percent higher as it was in 1965 versus 350 percent higher as it is today), profit margins wouldn’t have changed by a dime. Not a dime. Corporations in America would still be every penny as profitable as they are right now, but we individuals in America would all be wealthier, not just a select few at the very, very top.

        I don’t want to live in a country where American workers aren’t receiving health care benefits if there isn’t a mechanism in place for them to afford to buy it individually on the open market, and Republicans won’t let us institute a system that extricates corporations from the equation. I don’t want to live in an America where workers aren’t protected by safety rules or where small businesses are at a severe disadvantage against mega corporations because they have smaller means.

        A new poll reveals that most small business owners do not list regulations as a top concern or barrier to their businesses; in fact, many respondents view regulations as a way to level the playing field with larger companies.

        Only 14 percent of small business owners cited government regulations as their top concern. Thirty-four percent, meanwhile, considered “weak customer demand” the biggest problem facing their businesses.

        “Despite the heated rhetoric, regulations simply aren’t small businesses’ top concern,” said John Arensmeyer, founder and CEO of Small Business Majority. “Small businesses can be the jobs engine we need to jumpstart the economy, but not if legislators are focusing on something that isn’t their top problem. Policymakers should listen to what real small businesses are saying and act accordingly.”

        I don’t want to live in a country where we have more money than G-d and could easily keep everything stable across the board, including prices and profits, but workers are expected to live on the same wages as those in Third World countries just because someone decided we have to compare salaries to salaries for one set of players but not for the other set—those at the top! The CEOs in America aren’t limiting themselves to the same CEO pay as exists in other countries, precisely because there’s so much money in our economy they don’t have to. But that means neither do workers!

        And you know what? I don’t want you to live in that America, either! Even if you’re comfortable with where you are, I want things to be better for you, too! And not only should they be, but they would be if we hadn’t stripped the protections that allowed this to happen to us in the first place.

        I’m actually better than middle class. I’m probably in the top 10%. I’m not quite, but close to being, subject to higher taxes when we do what Republicans agreed to when they first passed the tax cuts to the highest earners, and let them expire. (You know why they had to make them expire, right? Because there’s a law that says if you do anything that adversely affects the deficit for a period of more than 10 years without offsetting it with equal cuts from somewhere, it must expire after 10 years because it is fiscally irresponsible to allow it to continue beyond that time frame.) But my family didn’t start out there. We were a family of 5 in a tiny two-bedroom house. I now own a house near the beach in one of the most expensive cities in the country: Los Angeles.

        But you know what? I should be doing a lot better than this, too, if I had been paid what was appropriate for my contributions to my employers relative to today’s standards versus those of the 1960s. Am I complaining? Heck no! What I’m attempting to do is illustrate that just because you and I might have made our way through the morass relatively unscathed, most of our fellow Americans have not. And we need to step up and fight for them. They matter. We all matter, not just those at the top. And what they’ve done to our overall economy over the past 40 years has created enormous economic problems for every single one of us below the 1% line.

        And when we stand together and fight for each other, we all win as a people. All of us, shoulder to shoulder, holding inanimate entities to strict standards that don’t diminish one segment of us for the benefit of another.

        We have been robbed. We need to restore dignity to all workers. We need to hold corporations responsible for paying wages that keep people off of any form of taxpayer assistance. If we don’t, then the corporations keep their profits and you and I pay their employees’ payrolls dollar for dollar in what it costs us to keep food on their tables and roofs over their heads. I don’t want to have to pay corporations’ payrolls anymore, dammit, and I don’t want you to have to, either!

        Don’t resign yourself to your lot in life. And most of all, don’t resign your fellow Americans to a lot that is less than they deserve, either.

        “Government is instituted for the common good; for the protection, safety, prosperity, and happiness of the people; and not for the profit, honor, or private interest of any one man, family, or class of men; therefore, the people alone have an incontestable, unalienable, and indefeasible right to institute government; and to reform, alter, or totally change the same, when their protection, safety, prosperity, and happiness require it.” ~ John Adams, Founding Father and 2nd President; Thoughts on Government, 1776

        “We keep countless men from being good citizens by the conditions of life by which we surround them.” ~ Theodore Roosevelt, The New Nationalism, 1910

        Fight with us! Do you have any idea how formidable we could be together?

        Think about that.

        Jill

        • D Campbell says:

          Bravo, Jill!!!

          The response I get when I mention the obscenity of the huge compensation that CEOs and upper management are getting is – they deserve it, they’re smart, they work hard. Bologny! They get obscene compensation because the Board of Directors of their company votes for them to get it. And who makes up the board of directors? – Isn’t it the CEOs of other corporations? (Actually, that really is a question. I read this 20 or 30 years ago, but can’t remember where: that all of these CEOs are on each others’ board of directors, so it’s a case of “you vote to give me obscene compensation, and I’ll vote the same for you”. But I can’t verify it.)

    • cno says:

      I hope you don’t mind Jill, but I’m sharing your post with all of my family and friends. People seem to think that people on welfare and social security are the ones draining our society. I’m not on any kind of financial assistance… yet. But I don’t know how much longer I’ll be able to survive without it. I’m a peon working as a Word Processor in a government cubicle. I make $24,000 a year. My boss, on the other hand, retired from his government job years ago and has been receiving over $7000.00 a month in retirement. But he’s still working in the same job that he retired from, making an additional $150,000.00 a year. So I’m a college graduate bringing in $1600.00 a month and my boss is bringing in nearly $17,000.00 a month? And then, Governor Scott decided I’m making too much money and took 3% of my pay this year. No wonder so many of us are “lining up for a handout”

      Lastly, here’s the kick while I’m already down. My boss is retiring for a second time at the end of this year. The employees are all expected to attend his retirement party for which we must pay for at $30 a head.

      • Jill Klausen says:

        Thank you, CNO. And all the best to you and yours. May we all thrive! That’s my deepest wish.

        Be well,
        Jill

        • SirGareth says:

          Jane,

          Do you think that one is entitled to more that one is worth by being an American?

          The economy is now international. The environmentalists will not lets us exploit our own resources. This means we must pay for these resources with “world dollars” on the world economy You appear to want the life-style “world dollars” will buy but you do not want to be paid in “world dollars”. You want a special deal?

          No, if you cannot work more effectively than a Mexican or an Asian then you must do worse than them, not better.

          No free lunches.

          Now if we can just hand the education of our kids over tot the Asians, they seem to do a far better job of it than we do while spending 1/10 of what we do.

          • Jill Klausen says:

            I don’t understand what you mean. You mean that when workers generate trillions of dollars in profit for the corporations they work for, they aren’t worth better wages than workers in Third World countries, but the CEOs and other high-level executives are?

            Can you explain to me what extra super special skills the CEOs of today have that they didn’t have 40 years ago, and that warrant them commanding tens of millions of dollars a year in pay when their counterparts in those same Third World countries aren’t earning those kinds of figures?

            Why is it that only workers are held to the lower standards of Third World countries and not the executives?

      • SirGareth says:

        CNO,

        You must quit and find someone who will pay you what they think you are worth, perhaps it will be closer to what you think you are worth. The fact that you are a “college graduate” means nothing; its not even worth mentioning, its what you can do better, faster, cheaper, than the next guy that determines your worth and nothing else.

        Of course government is full of overpaid worthless slugs doing nothing. Everyone with an IQ over room temperature knows government doesn’t work.

    • Paul says:

      Jill, I stopped reading your post when you made the ridiculous statement “Hoarding every dime of profit since the late ’60s/early ’70s”. If that is something you truly believe, you are lost. You have been lied to, taught to hate capitalism. What really scares me is that you fail to recognize the pure evil that is socialism and communism and the misery that these systems bring.

      • Jill Klausen says:

        Paul, you should have kept reading.

        I don’t hate capitalism and I want little to do with socialism.

        I want corporations to pay their employees enough that they don’t qualify for taxpayer programs!

        That has nothing to do with socialism and everything to do with expecting better behavior from our capitalistic society.

        • SirGareth says:

          No, what you should want Jane is self reliance – government programs are just picking other peoples pockets who face the same issues you do.

          Do you think government has money?

          We all must compete Jane

        • aharris says:

          No, Jill, you want to blame the corporations because they won’t pay you what you want to think you’re worth. I’m sorry, but some jobs are only worth so much. Thanks to some forces in this country, we have an inflated sense of our own worth and the worth of our labor. People in this country get paid $30/hour to drive a forklift, and that’s before you count in the extra worth of their benefits and pensions which they more of then than not contribute very little to out of their own pockets. When you factor in those things, you are often looking at forklift drivers who are sometimes getting paid as much as $70/hour in value. That makes no sense. Forklift driving is a skill that any high school graduate could be taught easily. There is no way the value of their labor is worth more than the value of my husband’s who has to know the regulatory regimes of the EU, China, the US, much of Latin America, some of the Middle East, and others. He also has to keep track of that information for slightly more than 100 separate pharmaceutical products across their entire production lifetimes and be intimately familiar with their testing protocals because he might be called upon to render an opinion that could initiate product recalls or stop the same. And, he’s sure not getting paid anywhere near that much in value by the time his benefits are factored in, but I’d say that people who carry his particular set of skills and knowledge are far less common than people who can drive a forklift.

          I can say that he certainly gets compensated enough that we don’t need government assistance … yet.

          • LeAnn Timothy Walters says:

            aharris: my son-in-law works in the blue collar industry, has a high school education and runs a crew of about 8 men in a company that does water service and rig moving for the oil companies. He’s learned how to do explosives and he works sometimes 80 hour weeks. He makes good money because he works his butt off. I have no idea what he makes per hour, but I do know he loves his family and works hard to provide for them and that he comes home every night dragging. Does he deserve it? He isn’t highly educated as your hubby is, but does your husband risk his life by having to go pull a truck off a hillside in a mudslide, or worry about a well blowing. Does he have a cell phone by his side every minute of the day in case a well needs serviced and he might have to go run a water truck at 2 in the morning? What makes me sick is that you think your fuel and your food come from some magic place. what would you do if there were no men and women to pluck your chickens and dump your garbage. Believe me, these people are the ones we REALLY owe. They are the lifeblood of this country and you better appreciate every last uneducated one of them! They EARN every dollar and more and are mostly unappreciated with no retirement and no lifelong benefit package. Why don’t you say “thank you” the next time you see someone sweeping a floor or cleaning a toilet.

          • Jill Klausen says:

            aharris, this isn’t about blaming corporations, it’s about pointing out the facts on the ground so that we as a nation can understand how and why we got where we are economically today, and perhaps come up with a better solution than the ones our two major political parties have singularly embraced up to now.

            1. Corporations are doing what corporations do: squeezing every drop of profits out of their organizations that they can. “Blaming” them for that would be like blaming a hungry lion for taking down a gazelle.

            2. Republicans are doing what they do, which, unfortunately, has become the bidding for major corporations instead of “we, the people” as of late.

            3. Democrats are doing what they do, which is taking up the “populist” mantle in their effort to regain political power and allegedly do something to fix this clusterblank.

            4. If there’s any “blame” to be had, it’s ours. I’m going to remind you of Founding Father John Adams’ words again:

            “Government is instituted for the common good; for the protection, safety, prosperity, and happiness of the people; and not for the profit, honor, or private interest of any one man, family, or class of men; therefore, the people alone have an incontestable, unalienable, and indefeasible right to institute government; and to reform, alter, or totally change the same, when their protection, safety, prosperity, and happiness require it.

            We have allowed our representatives in government to strip away protections that used to afford us greater economic stability in this country. We haven’t been as skeptical of their campaign rhetoric as we should have been; instead just taking them at their word that their policies would actually accomplish what they claim.

            They haven’t, because they don’t. Jobs don’t just magically appear because the people with the power to hire have more and more money. That’s not how economics works. And in fact, we can see clearly that the results of that policy have had a devastating effect on us as a nation.

            And tossing money at things isn’t an answer, either. We need to be sure our money is being used wisely. And while it’s absolutely true that we have more families on taxpayer welfare programs today than we have in decades, increasing the budget for those programs because the need keeps rising isn’t going to solve it, either!

            We have to start asking ourselves why those charts in the original post look the way they do, not just look at them and scream, “WELFARE STATE! DEMOCRATS BAD!” What does that solve?

            This notion that workers have a false sense of their worth in this country is political. I’m asking you to attempt to look at the bigger picture based on pure economics.

            Corporation has $99,000,000.
            It decides to divvy it up thusly:

            CEO gets $13,500,000
            20 executives get $677,000 each
            1,050 workers get $41,700 each

            Workers can’t support a family of 4 in today’s economy on that $41,700, so you and I supplement their payroll with food stamps, low income housing tax credits, school lunches for their kids, medicaid when they get sick, etc.

            And by the way, with that distribution of the $99,000,000, the Social Security fund receives $5,700,000.

            Now take that same $99,000,000 and do this with it instead:

            CEO takes a reasonable 50x the average worker’s salary instead of 350x, or $3,800,000
            20 executives each earn $191,000
            1050 workers each earn $76,000

            It’s the same $99,000,000, and the CEO and executives are still rolling in big dough, but now you and I are off the hook for any social welfare programs those employees needed under the first scenario. Corporations are paying their own workers. And now they can afford to not only feed and house their own kids, but there’s money for leisure (pumping more back into the economy, which drives demand which creates the need for more jobs!), they can save for a rainy day and not have to go on long-term unemployment or tap into Social Security if they lose their job or become sick, they can set up college funds for their kids so they aren’t forced into debt if they want to pursue a career that requires a higher education, like becoming a CEO for instance.

            And under that distribution of the $99,000,000, the Social Security fund gets $10,200,000—double what it did in the first example.

            So which is better for America? Which is better for families? Which is more fiscally responsible? Which keeps taxpayers out of the corporate payroll subsidizing business? Which reduces participation in welfare programs and would actually cause those charts above to start looking like a bell instead of one face of a hill?

            And while you’re at it, ask yourself why you think some jobs are “only worth so much.” Who gave you that idea? Why is today’s CEO “worth” 350 times the average worker and not some other random amount, like 50 times, or 100 times? Are you really suggesting that over the past 45 years the only people whose worth has increased have been the CEOs? If the distribution of the $99,000,000 I outlined in the 2nd scenario above had been the norm for the past 45 years, wouldn’t you naturally believe that was the value of those workers? I contend that just because they haven’t been enjoying the fruits of their labor and we have become accustomed to these salaries as the norm among our workforce, that we falsely think that’s all their jobs are worth. Why on earth does it “make no sense” for a forklift driver to make $70/hour, but it “makes sense” for a CEO to rake in $13.5 million for sitting behind a desk? Why is it we feel the need to “justify” one group of workers’ salaries but not the others, as if enormous CEO salaries should just be a “given,” but worker salaries have to be “justified” when the money is there to provide those workers a similar increase in their earnings over the past 45 years as CEOs have enjoyed?

            You and your husband have been screwed by the same disparity in income distribution that that forklift driver has been. Your husband should be making triple what he’s making … at least! You only think he’s being compensated “enough” because that’s what you’ve been conditioned to accept.

            We can do better.

            But it’s up to us to demand that happen. It’s our government. And our 2nd President of the United States of America gave us a government that allows us the incontestable, unalienable, and indefeasible right to totally change it when our protection, safety, prosperity, and happiness require it.

            It requires it now. I’m asking you to help us fix it with solutions that will work. The Democrats are the only party that is on the right path by at least understanding where the problem originates and wanting to do something to address it. With the Democrats we have a good chance of getting sensible protections put back into place that will level the playing field for all of us, including you and your hard-working husband. The Republicans are telling us to keep doing what we’ve been doing for the past 45 years—in fact, they want us to double down on it.

            In the words of Dr. Phil: How’s that been workin’ out for us?

            Not so good.

          • Jill Klausen says:

            GAH! I copied down the wrong number for the executive pay in example 2. It should look like this:

            CEO takes a reasonable 50x the average worker’s salary instead of 350x, or $3,800,000
            20 executives each earn $762,600
            1050 workers each earn $76,000

          • Jill Klausen says:

            ::Sigh::

            Scenario 1 got the wrong numbers, too. Change that to read:

            CEO gets $13,500,000
            20 executives get $2,100,000 each
            1,050 workers get $41,700 each

    • Marlin Hauer says:

      Ms Klausen, Are you out of your fact gathering mind? I suggest you look at what Obamas record is, especially NOT HAVING A BUDGET in 3-4 years!!! Get off the proverial band wagon if you really have nothing truthful to say! While republican presidents havent done as much as they could have sometimes, at least they make an effort! BLATANT overspending of Democrat presidents has, and will always be a norm! By the way,I am not Republican, I am TEA PARTY quickly ascending to TAKE our country back from the scoundrels we trusted. Marlin

    • David Pond says:

      Jill, that was one of the most thoughtful and well reasoned response to conservative perspectives by a liberal I have ever read. I usually only see a lot of name calling and hate but you seem to have put a lot of thought into your position. Of course, I completely disagree with you but at least you are laying out a good case. Greed is an evil that we cannot escape except to reject. Some of the most poor people can be the greediest and a financially successful CEO can be more generous than anybody. These character traits are not a function of wealth. We could make greed illegal like hate crimes but I can’t imagine how that would benefit anybody. It is impossible to arbitrate, let alone define, when we make the transition from wise investment to greed but it’s abundantly clear that without the profit incentive it would never be possible to provide for the needs of ALL society. History is clear on this issue. Worker productivity isn’t simply a function of harder, smarter workers. We have better tools and methods provided by the very business leaders you disparage to increase that productivity. Without incentive, they would never seek those tools. There is so much good in the heart of those who see the inherent inequality of outcomes but we need to celebrate success in that by the success of the fortunate/hard working business owners, we all benefit. God bless you.

      • Jill Klausen says:

        David, you are right, of course, greed comes in all economic groups. But I am not talking about greet at the individual level, but at the macroeconomic level.

        You’re also right that it would be foolish to attempt to legislate against greed. Not possible, even.

        But we had sensible rules in place for nearly half a century that prevented players from capitalizing on their worst instincts at the expense of the country as a whole. And for that half century we all thrived! All of us!

        I want those rules put back into place and I want that America back. And we can have it back if we make the right choices going forward.

        • Johnny says:

          Wanting to loot as much money as possible that someone else has earned to use for your own purposes, is a much better example of greed.

          If you resent the amount of money a CEO earns in managing the entire company that employs you and others in America it is easy, become the CEO. But of course first you must have a bit more skills then word processing to manage a company and I am sure you are working on acquiring those skills.

    • Randy Whitman says:

      What you support is cradle to grave entitlement and spending tax dollars from the 50% that actually pay taxes on creating dependency destroying personal responsibility and continuing to drive goof jobs over sea. Margaret Thatcher said it best Socialism works great until you run out of other peoples money. With your brain trust that is where we are headed. You are part of those who are takers instead of makers. Take it to Greece. It works well there.

      • Jill Klausen says:

        What? That doesn’t make any sense. I’m advocating for exactly the opposite of that.

        I want corporations to meet their own payroll at levels their employees can thrive; building their own retirement funds, their own “G-d forbid” funds, their own college funds, from their own paychecks.

        Democrats want taxpayers out of the “support” business, too! If corporations would use their profits to pay workers the way I’ve described, you and I would both be free from the albatross around both our necks right now.

        Get “government” out of the corporate payroll business! That’s a win/win for everyone!

  5. Denise Walker McGrain says:

    I believe Americans should be there for each other and help those who cannot help themselves.
    The problem now is that for some welfare has become a way of life, even for some – a family tradition.
    Start another one, Work for a living, a great thing to pass on to your children!
    To women on Welfare, who are healthy and able bodied- get off the street corner and close your legs!

    • reallynotunderstandingignorance says:

      Really? You do realize that prostitution is trafficking in persons right? It isn’t something women really want from life. I’m amazed you still buy into that tired old line. Human trafficking is the trafficking of persons for profit or gain.

      wikipedia defines it as:
      Human trafficking is the illegal trade of human beings mainly for the purposes of commercial sexual exploitation or forced labor.

      Big duh.

  6. Robert Lyon says:

    Mr. Stockton’s charts at the top don’t mean what he thinks they do.

    I’m very impressed by the caliber of the discussion here, so I’d like to clarify what exactly we can learn from those charts.

    If we care about real knowledge, when we look at two or three sets of data we want to understand what kind of relationship there is between the data, if any, and what external factors drive trends in the data.

    Data can correlate positively — they move predictably in parallel; or negatively — the move inverse to each other; or have no discernible relationship.

    Mr. Stockton sees that more people are receiving food stamps and disability, while benefits per household are declining. He decides the data mean U.S. society is in decline without any actual evidence or support, but merely because that aligns with his world view. Anyone on a soapbox can do that.

    If I want to understand why food stamp participation is going up, I want to see contextual data.

    I presume that Mr. Stockton wants to use this data to guide social policy decision-making. Yet before looking at any other data we can already see that his preferred policies will more likely make things worse, not better.

    If policy leaders were concerned about a rise in the number of voluntary food stamp recipients, they would tighten eligibility requirements and reduce the benefits each benefit would receive. States across the country have done exactly that, yet participation is rising, not decreasing.

    It’s fairly safe to hypothesize that the more grocery money available in food stamp programs, the more people would participate. But enrollment is increasing when benefits are decreasing, so the data sets are not correlated positively. Without another plausible explanation for an inverse correlation, the data don’t seem to be linked at all, indicating that overly generous benefits are not the problem.

    We’re not heartless people, so we would want to tease out what portion of that increase in food stamp participation comes from able-bodied people who voluntarily choose meager food stamp benefits over working for wages.

    So we need to find data about other factors that increase the need for food stamps, to subtract from the rise in recipients to find out how much of an increase is due to the rising dependency that Mr. Stockton fears. Such as:
    - demographic changes — increases in the numbers of children and senior citizens
    - increases in the genuine disabled population
    - higher number of involuntarily unemployed — people who were laid off and are actively seeking new work.
    - increases in the cost-of-living
    - stagnant wages with decreasing buying power

    A responsible scholar like Mr. Stocktown could only make conclusions about society’s dependency trends once he’s eliminated all other plausible drivers of food stamp participation and narrowed down exactly how many more Americans are choosing food stamp dependency voluntarily.

    The problem for Mr. Stockton is that the evidence he hopes for does not exist. Ms. Klausen is probably closer to the truth than Mr. Stockton. If we want to understand what’s driving the marginal increase in food stamp participation that is unrelated to unemployment, we can find more substantial support and evidence pointing toward stagnant wages and a struggling middle class.

    Ms. Klausen’s theory makes more sense. Employment is slowly rising, but food stamp usage is rising even faster. Since benefits are more meager, and eligibility is more stringent, it’s more likely that the working middle class is falling behind, less and less able to afford groceries.

    So as Ms. Klausen suggests, we who love America should focus our concern on why corporations are getting away with so much outsourcing and outlandish executive pay while paying their workers less and less.

    And the ironic facts that Ms. Klausen points out are exactly the opposite of Mr. Stockton’s thoughtless talking points. It is corporations that are taking advantage of our welfare system — we’re letting them get away with paying indecent wages while the taxpayer has to pick up the slack for society. A healthy free market society has little need for social welfare programs. The reason our economy is unhealthy isn’t because there are too many people dependent on food stamps, it’s because corporations are hoarding cash and raking in record profits while outsourcing good jobs, so that fewer and fewer of us can get by without help even while working.

    • GameGenie says:

      First off, Dustin did not write this piece, although we did discuss these graphs and we have similar views on this issue. But you’re going to have to take my anonymous word on that.

      Second of all, I’m curious to understand how “thoughtless talking points” have inspired an impressive “caliber of discussion.” Either way, thanks for joining the conversation.

      Unfortunately, your critique seems to be equal parts straw man and burden of proof fallacy. I can’t prove in economic terms why these numbers are going up, and I’m not trying to. You may prefer to analyze the data in hopes of coming up with a specific cause that can be mitigated through government intervention, but I believe that Americans have overcome far more trying circumstances than those we face… it is will, not data, that we lack right now.

      It sounds to me like we’re all in agreement that things have gone wrong in America… and I’m just as concerned about the decline of household income as much as I am about the rise of social welfare enrollment. If there’s a major disagreement here (and there may not be), it’s about what we do about these problems.

      I hope to inspire Americans to embrace the competitive dynamism that made America’s economy the envy of the world… that’s the only way the magic is coming back. Looking for a government solutions to economic dynamics like globalization and the “jobless recovery” strikes me as emblematic of the entitlement mentality that I think is the underlying problem here. Using the government’s power to force “the corporations” to cap profits, pay higher wages and “end outsourcing” has been tried before… and believe me, it doesn’t make things better.

      • Jill Klausen says:

        There aren’t any strawmen in Robert’s argument at all, but I’ll let him address those points with you. I will, however, point out that you seem to misunderstand what Democrats mean when we suggest that the solution to this devastating problem lies with our government.

        We believe, as did our Founding Fathers, that there is a justifiable role for a government to take in ensuring that one group of citizens does not take undue advantage of another group of citizens in a society, as that advantage can be both brutal to the individuals and destructive to the general welfare of the entire nation. Again:

        “Government is instituted for the common good; for the protection, safety, prosperity, and happiness of the people; and not for the profit, honor, or private interest of any one man, family, or class of men; therefore, the people alone have an incontestable, unalienable, and indefeasible right to institute government; and to reform, alter, or totally change the same, when their protection, safety, prosperity, and happiness require it.” ~ John Adams, Founding Father and 2nd President; Thoughts on Government, 1776

        We have an indefeasible right to reform, alter or totally change the rules when our prosperity requires it.

        And our prosperity requires it right now more than any time since the Great Depression. It’s why government exists in the first place: to protect the citizenry from both external and internal threats against our survival as a nation. We’re facing an internal threat that has been perpetrated over decades. And the most shameful part is that it’s been done with our implicit approval because the sole beneficiaries of the largesse have manipulated us into believing they have our best interests at heart and that they would do right by everyone in this country if we afforded them this much power and control.

        We gave it to them with enormous tax breaks and write-offs and loopholes and they have broken every promise they ever made to us. They did not “trickle down” their windfall, they sent it offshore so they couldn’t be taxed on it. They didn’t use their new-found profits to add more American jobs to their payrolls; they cut jobs and offshored even more so they could widen the gap further, keeping 100% of the difference for themselves.

        There is a righteous cycle in a capitalist society, which we all want to see succeed. Corporations have products or services they want to bring to market; they set a price for those products or services that the community agrees to pay; they hire workers who actually create those products or provide those services; they pay those workers a thriving wage that enables them to actually afford the products corporations are selling; this creates more demand, and more demand requires hiring more workers.

        There are no circumstances under which the mere existence of more money at the top would magically create a need for more workers all by itself. And when you underpay workers (meaning it becomes more and more necessary for them to reach out for other sources of finances to barely scrape by (school lunches for their kids, low-income tax credits, housing assistance, food assistance, medical assistance, credit card debt, student loans, etc.)), there’s nothing left to spend on the products and services that corporations are peddling.

        Demand dwindles, people are let go, they can’t find new jobs, they exhaust what little savings they may have had … and then what? Where are they supposed to go, then? It would be great if every person in America could be an entrepreneur; to start their own business and create success that way. But let’s be realistic—most people just aren’t and never could be. Most people just want to do an honest day’s work for an honest day’s pay, and there’s nothing wrong with that—that should be just as respected as the entrepreneur, because without that man or woman to do that day’s work, how would anything get done?!

        Corporations are inanimate entities and we have allowed them to become beasts that have devoured our economy. We should only allow corporations to do business in America if they are a net benefit to our economy and not a net drain. Any corporation that costs taxpayers billions of dollars to prop up by paying their employees what they refuse to, ought to be required to make up the loss to taxpayers or be shuttered up and told to take a hike! Can you think of a good business reason for a society to accept among its midst, a corporation that was a net drain on it?

        And yet we not only allow it, we’re letting our politicians convince us that they’re somehow our saviors. We can’t speak out against their bad acts or we must hate success, or we must hate capitalism, or we must think they’re evil. Poppycock! I’m a CEO myself—I love capitalism! But we can’t love capitalism so blindly that we let it take on mythical qualities that render it untouchable by a society that it has put at risk of collapse.

        The government is us. It’s We, The People. We have an obligation as citizens to rise up against any entity that threatens our way of life. And today’s laws and rules that govern what we allow corporations to get away with are threats to our way of life. All you need to do is look at the 40 years between the Great Depression and 1970, and the 40 years between 1970 when the rules started changing because the political narrative started changing regarding them, and you can see which way provided a healthy economy with a strong middle class and which way provided a depressed economy with a weak middle class.

        You wouldn’t advocate against rules for driving, or taking drivers off the roads when they break those rules. You wouldn’t advocate against rules for sports, or throwing players off the field when they blatantly flout those rules. You wouldn’t advocate a return to the Wild, Wild West, so I’m pretty sure you aren’t opposed to rules that govern a society on principle.

        We have an obligation to each other here, and one part of our society is struggling to live up to it, working their fingers to the bone just to keep their heads above water, then feeling defeated and despondent when the game is so rigged they not only can’t keep treading water, but actually find themselves sinking; and the other part is putting on proverbial smoking jackets, draping themselves with diamonds, and heading out on their yachts laughing their asses off at the rest of us.

        As Teddy Roosevelt once said:

        We grudge no man a fortune which represents his own power and sagacity, when exercised with entire regard to the welfare of his fellows. Again, comrades over there, take the lesson from your own experience. Not only did you not grudge, but you gloried in the promotion of the great generals who gained their promotion by leading their army to victory. So it is with us. We grudge no man a fortune in civil life if it is honorably obtained and well used. It is not even enough that it should have been gained without doing damage to the community. We should permit it to be gained only so long as the gaining represents benefit to the community.

        Let’s return this great nation to its best decades, where anyone who wanted to get ahead could do so if they applied themselves and worked hard. Give us back reasonable restrictions on what corporations are allowed to do so that we aren’t collateral damage in their gamesmanship anymore. Use our government for the very purpose it was created: “for the protection, safety, prosperity, and happiness of the people; and not for the profit, honor, or private interest of any one man, family, or class of men.”

  7. SirGareth says:

    Jill

    Regarding your comment:

    “Can you explain to me what extra super special skills the CEOs of today have that they didn’t have 40 years ago, and that warrant them commanding tens of millions of dollars a year in pay when their counterparts in those same Third World countries aren’t earning those kinds of figures?”

    No I cant but its not my money is it, unless Im a stock holder and I dontt hold much stock today. As for us its really not our business what one private party pays another. Look at the size of Micheal Jackson’s estate. How about a football coach who can bring in 5 million a year (and I am forced to underwrite the cost of their stadiums etc)

    If you want to go after people who are paid way to much go after the “public” (government) sector. start with the Preezy who lives essentially for free with billions of taxpayer cash supporting his lifestyle.

    Leave it to the owners of our companies to sort out what the hired help (including CEOs) make.

    You really sound like a Marxist when you complain what one private party decides to pay another private party by suggesting its any of your business

    • Jill Klausen says:

      SirGareth, your position seems to be that we have no obligation as a society to ensure that one group isn’t taking such undue advantage of another that it risks our very economic survival.

      That position is contrary to everything our Founding Fathers stood for. Everything. My position is right in keeping with the principles of governance laid out by our Founding Fathers. I’ve provided a couple of quotes above; here’s another one:

      “‘Political writers,’ says a celebrated author, ‘have established it as a maxim, that, in contriving any system of government, and fixing the several checks and controls of the constitution, every man ought to be supposed a knave, and to have no other end, in all his actions, but private interest. By this interest we must govern him, and by means of it make him co-operate to public good, notwithstanding his insatiable avarice and ambition. Without this we shall in vain boast of the advantages of any constitution, and shall find, in the end, that we have no security for our liberties, and possessions except the good-will of our rulers—that is, we should have no security at all.’” ~ Alexander Hamilton, Founding Father and 1st Secretary of the Treasury, Citing David Hume, February 5, 1775

      In other words: If we do not govern against “insatiable avarice (greed) and ambition” in our society, we will have no security for our liberties.

      I understand that you may bristle at that notion right now because you’ve been taught to believe government is the enemy and should be extricated from every aspect of society when possible. But government is us. Government is ours to use by creating laws and rules that prevent powerful entities the ability to rise up and destroy us from within.

      We can both sincerely respect the fortitude and risk-taking that have gone into many, many corporate entities, and champion their success, and at the same time say to them, “but you will not be allowed to act in ways that bring harm to us.” And an honest businessperson would say, “That’s fair.”

      The Democratic principles that guide our policies are inherently American at their core. We stand for what our Founding Fathers stood for: freedom, security, and prosperity for all, not just for the few.

  8. Robert Lyon says:

    The commentary is better than the article.

    It’s not a fallacy to hold an author to account for unfounded assertions. Correspondent Klausen, otoh, offers actual evidence.

    Your vague boogie-man does not exist here; you make lots of poor assumptions about societal responses to corporate excess. I’d like to see less corporate money in government. Why do you think corporate tax codes are mind-bogglingly long and complex?

    Corporations should be able to compete in free markets without extorting government largesse. If you want to roll over and surrender to corporations, fly their flags. I believe in the Constitution of the United States of America, and I approve of measures to keep private greed out of public resources and taxpayer pockets. .

    I understand that truth matters less to you than your moral righteousness. If you were truly concerned about improving this country’s economy, you’d argue that we should double or triple food stamp programs. You don’t add any value to public policy discussions by failing up understand why we have food stamp programs in the first place.

  9. Gary Baker says:

    Ms. Klausen,
    You have covered a number of areas, some with more merit than others. While I believe you are well intentioned, I think you are somewhat misinformed. Taking your subjects one at a time: Your first mistake is linking the rise in food stamps to corporate profits. While they may or may not be correlated, any link is ridiculous. Food stamps accrue most often to the unemployed, not the employed. You lump in a lot of other issues on the side (housing), college, medical insurance, etc., but all of those call for a level of income well beyond that of food stamps. Most corporate employees who are with their company for any length of time will have an income that places them above the food stamp level, so clearly that comment does not apply.

  10. Gary Baker says:

    You state that you are not “socialist.” Based on my reading, fascist (from an economic standpoint) may be more accurate. Fascism applauds government control of private enterprises, as well as wage fixing. You insist that corporations have “stolen” the wages of workers. This assumes that you know what a worker is worth, how much they should earn, etc. You really don’t. There is no way you can. Each time governments have stepped into the realm of fixing wages and prices, it has resulted in price increases and/or shortages. College costs are a great example. By attempting to “reduce the cost” of a college education through grants and loans, the government has made it one of the fastest rising expenses in the US, on a par with medical care, which has also increased in cost largely due to government subsidies. More later.

  11. Bill says:

    So Jill;
    Please tell me who these “corporations” are? Where do “they” live? What do all these greedy execs do with their money, do they have really big mattresses?
    All the surveys in the world will not answer these qyestions. Corporations are reallythe stockholders who own their stock. And you are free to become one. Just risk your own money.
    As to “outsourcing” jobs, are you opposed to people in India having work opportunities and getting ahead? That would be shameful if you wrere that biased, or isn’t that racist in the DNC handbook?
    So a company makes a profit. If you want, in America, all YOU need to do is form your own company, as millions have, and compete with better products, services or pricing. You can surely do that, can’t you? Just get all your welfare friends together and start to work. Go to a bank, (not a venture capitalist or equity firm like evil Bain) and borrow what you need. Solyndra did it with no economic justification, so can you. But I am sure you would not want taxpayers to bear any cost since you are so independent and have all the right answers, you would never fail.
    So start, pay all your employees an equal share, regardless of what job they do. Floor sweepeer at age 18, or head of corporate finance at age 60 matters not. They all contribute and deserve the same. And you too.
    Then make a better product and convince me, do not get Washington force me, to buy it.
    Then and only then can you honestly enter this debate with your point oif view having merit. Until yo udo this, you are nothing more than a cummunalist doomed to live your fantasy world and fail.
    When you come back, please tell us all what government business has provided a better service at a better price to the voluntarily consuming public.

    • Jill Klausen says:

      Bill, since you have (intentionally?) misread all of my posts here, there is no reason for me to waste my time answering the majority of your loaded questions. Suffice it to say, what you describe me advocating and what I have clearly laid out here don’t even remotely resemble each other.

      I will, however, answer your last question, “what government business has provided a better service at a better price to a voluntarily consuming public?”

      Medicare.

      (And before you scream “involuntary” at me, allow me to remind you how many signs popped up all over the country in tea party rallies that read, “Keep your government hands off my Medicare.” Americans love their Medicare and most would tell you you can take it away when you pry it from their cold, dead hands.)

      • Margaret laureys says:

        Oh Jill, whoever you are, please sign onto message boards wherever I go from now on. Your comments have been more edifying than anything I’ve read in the NYT, HuffPost or various sundry right wing, left wing blogs. I’m an Independent; I read them all.

        Are you a teacher? You said “CEO” but I’m sensing someone who’s lectured in Econ and Govt. I need to know what sort of person would give this much time and respect to a message board that, quite frankly, gave every indication of being mud fest. I happened upon the original article because it was posted on my FB by a sibling who’s in the Tea Party. I thought I should be fair and take 2 secs to scan it and move on. I fully anticapated the comment strand to be informed by poor-bashing “Welfare Queen” rhetoric.

        But now here I am an hour later and still reading because, lo and behold, someone with knowledge, insight and patience is fueling the comment strand.

        Thanks for allowing me to dip in and out of an anonymous partisan comment strand without feeling dirty & in need of a shower.

  12. Allen says:

    The community organizer’s re-election plan – More and more people on the public dole dependent on ObamaMoney (which is really our money, of course!).

  13. GameGenie says:

    Is it troubling to see corporate profits jumping skyward while household income and hiring drop? Of course, no question. What I’m wondering is how Robert and Jill would address the problem. Demonizing “the corporations” doesn’t fix the problem, but it does justify the kinds of policies that satisfy populist redistributionist anger while making the underlying economy less sound. Just as increasing social and corporate welfare is sold as the government helping people or the economy, when in fact it largely serves to create a culture of dependence.

    Going back to the point of my original post though, it doesn’t matter all that much to me which side of the contrived partisan divide is in power… if Americans don’t reject entitlement in all its forms and rediscover the value of endeavor and competition, we’re screwed either way.

    • Jill Klausen says:

      What I’m wondering is how Robert and Jill would address the problem.

      I’ve already said quite clearly what I’d suggest we do: reinstate the protections we had in place, the stripping of which has directly affected and exacerbated this problem. You want me to be more specific? Let’s start with putting Glass-Steagall back. Let’s raise the top marginal tax rates to at least the Clinton era rates so there’s less incentive to hoard to the top. Stop giving preferential treatment to capital gains and treat them for tax purposes at least at the exact same level as income from labor. This, too, will disincentivize those at the top from hoarding everything and funneling it into instruments that unfairly steal tax dollars from we the people, and at the same time start returning this country to the moral position of respect for the labor that drives our economy.

      And here’s a novel idea: How about we enact a law that says that if a person applies for any taxpayer assistance and proves to be qualified based on their income, send the damn bill to the corporation that’s underpaying them so badly that they actually qualify for these programs … time 10. I bet they stop underpaying their own employees if they knew they’d be hit with severe fines for passing off their payroll responsibilities onto the rest of us, wouldn’t they?

      Demonizing “the corporations” doesn’t fix the problem, but it does justify the kinds of policies that satisfy populist redistributionist anger while making the underlying economy less sound.

      Absolute nonsense. Stop with the talking points. You are underpaid and have been underpaid for 45 years now. That’s just simply a fact that every economic source confirms. Your wages—assuming you aren’t a CEO with one of the Fortune 500 corporations—have literally stagnated since 1965. STAGNATED. You cannot look at that basic fact and tell me that workers across the board haven’t earned a penny of increased income over nearly half a century, but CEOs are gods who have deserved to hoard 100% of the proceeds from your labor. You’ve been taught to call our fight to get our money back “redistribution” because it keeps your party in power. The real term for it is THEFT. Out and out theft of every penny of what we’ve generated in profits for half a century going into the pockets of the wealthy donors of our elected representatives so they keep writing laws that will let them keep doing that to us, is THEFT.

      I should think you’d want to stop being ripped off as much as any of us.

      Just as increasing social and corporate welfare is sold as the government helping people or the economy, when in fact it largely serves to create a culture of dependence.

      I have REPEATEDLY addressed why this notion is wrong. Right now we’re increasing social welfare because without it people will literally starve. The only way we’re ever going to be able to reduce the need for it is to force corporations to pay their own workers and stop foisting their responsibilities off onto us. Period. So long as minimum wages are grossly insufficient to survive on, let alone thrive; so long as there is no penalty for paying a full-time salary that still qualifies a family for food stamps; so long as there are no protections from banks and other financial institutions on Wall Street from playing games with our savings and screwing us out of our life savings while not only forcing us to cover their irresponsible behavior, but still having the unmitigated gall to demand hundreds of millions of dollars in bonuses and raises, this situation is only going to get worse. Unbelievably worse.

      What, pray tell, does the Republican party say they intend to do to fix it? What? Not a damn thing, that’s what. They deny it’s even a problem in the first place.

      Going back to the point of my original post though, it doesn’t matter all that much to me which side of the contrived partisan divide is in power… if Americans don’t reject entitlement in all its forms and rediscover the value of endeavor and competition, we’re screwed either way.

      How do you suggest we legislate competition in such a way that it eliminates entitlements?

  14. Gary Baker says:

    Ms. Klausen, I really do admire the effort and detail that you have gone into while making your point. I do not agree with your conclusions, but the effort taken is admirable.

    Let’s begin with a purely factual matter: Your note on the relative spending of administrations is TECHNICALLY acurate, but HIGHLY MISLEADING. The low spending increase in the Obama administration recorded is essentially an accounting gimmick. He got a double-digit spending increase passed in the prior fiscal year so that most of it was credited to Bush. Afterward, it became the new baseline. If you compared the actual spending under his administration vs. others, the increase is double digit, as shown by the rampant increase in deficits.

    • Jill Klausen says:

      As a purely factual matter, you’re incorrect.

      [Calculate spending] the WaPo way, including the (bogus) assignment of 2009 TARP addition to Obama, do it my way (with the correct 2013 endpoint), OR do it [Market Watch's] way, you still get essentially the same result: spending under Obama increased more slowly than under any president since the 1950s.

      Read more: http://www.rollingstone.com/politics/blogs/national-affairs/why-obama-is-no-big-spender-20120531#ixzz22GKsmoPR

      It doesn’t even matter how you do the math. The answer is always going to give you a rate that is lower than that of previous presidents.

      WHICH IS IRRELEVANT as far as food stamp or welfare usage goes, which is the subject of this post, so if you don’t mind, I’d prefer to go back to discussing that.

  15. Gary Baker says:

    Now, as to the attitude attributed to the Founding Fathers, I think you have misinterpreted the intent. Rather than economic, I think they were more interested in personal morality and religion. Other quotes that you will find from Adams include:

    “[I]t is religion and morality alone which can establish the principles upon which freedom can securely stand. The only foundation of a free constitution is pure virtue.”

    “Liberty can no more exist without virtue and independence than the body can live and move without a soul.”

    There are several more in that vein, but you get the picture. I think Adams would be horrified by the secular approach of politicians today. Also, if you read carefully the quotation that you have posted, it is a plea for a truly impartial government, one that looks after the interests of all the people. I have no doubt that he would be shocked beyond words at the government pandering to sub-groups at the expense of equal opportunity for all.Now, there is a good point about how society cannot protect business to its own detriment, but that point has not been demonstrated.

    Since you are very concerned about differences in pay, I would challenge you to show me any evidence that differences in wages cause economic problems or that equality in wages promote advantages. Right now, you take that as an article of faith. I do not.

    You may not have noticed, but some of the priniciples you mention have been tested in the past, and have failed spectacularly. The automobile unions in Detroit continued to raise labor wages beyond their productivity level. The result was uncompetitive, bankrupt businesses and a city that still has not begun to recover. Third parties are seldom in a position to evaluate what an employ “should’ earn. When they try, things fall apart.

    • Jill Klausen says:

      Whether or not any of our Founders, including Adams, was at all religious is entirely irrelevant to their opinion about the purpose of government being for the benefit of all and not the few at the top. There’s simply no logical way to argue that religiosity somehow makes a lick of difference to that philosophy, which is factually where they stood. Go back and look at the history of why they fled England in the first place and why they fought for our independence from the crown (Hint: religious freedom regardless of their own personal religion was tantamount, as was escaping the influence of money and powerful business interests in government!)

      Since you are very concerned about differences in pay, I would challenge you to show me any evidence that differences in wages cause economic problems or that equality in wages promote advantages. Right now, you take that as an article of faith. I do not.

      I’ve been doing that throughout this thread, but I’ll put more sources at the end of this post.

      And as for your contention that we’ve tried better wages before and they failed, that’s just simply spin that you’ve been sold to convince you to oppose unions because they are a threat to CEO wealth and Republican power. But what’s non-partisan and clear is the utter disparity between the soundness of our country’s economy from the 1930s through the 1960s and how the middle class thrived, and the utter collapse of it since wages began to stagnate and citizen and worker protections got stripped away from us between 1970 and today.

      Further reading:

      25 Signs That Middle Class Families Are Being Wiped Out

      “The middle class in America is being systematically wiped out, and most people don’t even realize what is happening.

      “Every single year, millions more Americans fall out of the middle class and become dependent on the government. The United States once had the largest and most vibrant middle class in the history of the world, but now the middle class is rapidly shrinking and government dependence is at an all-time high.

      “So why is this happening? Well, America is becoming a poorer nation at the same time that wealth is becoming extremely concentrated at the very top.”

      Continue reading: http://articles.businessinsider.com/2012-04-17/news/31354389_1_middle-class-midwage-jobs-politicians-and-federal-bureaucrats#ixzz22GOuZrfb

      30 Statistics That Show The Middle Class Is Dying Right In Front Of Our Eyes

      “Once upon a time, the United States had the largest and most vibrant middle class that the world has ever seen. Unfortunately, that is rapidly changing.

      “The statistics that you are about to read prove beyond a reasonable doubt that the U.S. middle class is dying right in front of our eyes as we enter 2012.

      “The decline of the middle class is not something that has happened all of a sudden. Rather, there has been a relentless grinding down of the middle class over the last several decades.”

      Continue reading: http://articles.businessinsider.com/2012-01-03/home/30583284_1_middle-class-jobs-americans#ixzz22GPSflDv

      Joseph Stiglitz: The Middle Class Has Been Screwed Over The Last Decade

      Continue reading: http://www.businessinsider.com/joseph-stiglitz-why-the-rich-need-to-pay-more-taxes-2012-6#ixzz22GPqhXay (contains video)

      This Is How Income Inequality Destroys Societies

      “If you’re at the top, and you think that widening the wealth gap doesn’t affect you, let me put this gently: you are completely and totally wrong.

      “Richard Wilkinson, Professor Emeritus of Social Epidemiology at England’s University of Nottingham, recently did a TED Talk about what he found while researching his book about income inequality, The Spirit Level. You can check out his whole presentation here.

      “The basic thesis is that social ills, like crime and teen pregnancy, that have long been associated with poverty, actually have a stronger correlation with income inequality.

      “Worst of all, income inequality eats away at social mobility. In Wilkinson’s own words: “If Americans want to live the American dream, they should go to Denmark.”

      “This is information that’s easy to ignore, but once you see the charts, you’ll see it’s not easy to deny. Income inequality is crippling and dangerous to our country and every country. The good news is that it doesn’t matter how you close the wealth gap, through taxes, like Nordic countries, or by equalizing pre-tax income by increasing company democracy, like Japan.

      “All that matters is that you close it.

      Click here to see how inequality destroys societies >

  16. joe champa says:

    Last month a 21 year old single employee, no kids and living with her father came into my office and said she couldn’t work here anymore. I asked if she was giving me notice of just leaving. She asked what the difference was, I told her if she gave me proper notice if she needed a recommendation I’d give her one if she walked out I wouldn’t. She oh, ok and proceeded to clock out and left. The next week she called from the food stamp office and needed some information to get food stamps. I told her to bring me the application and I’d get it to her when I could. She wanted it over the phone. Ha! She brought the application to me and it said she was supposed to fill out the first 11 items. I informed her of that and then her mother called wanting the information. I explained to her I wasn’t enabling her and if she wanted it she’d have to do it the proper way. Then her grand mother called …. to end this story it took me over two weeks to get her the information. Sadly, we are giving food stamps to anyone who asks. There is no reason this girls should be allowed to apply let alone get this hand out. She told them she quit lived with her dad and still was allowed and encouraged to get them. God help this country if we get four more years of Obama.

  17. joe champa says:

    Dear Jill,

    I’ve perused your posts and couldn’t agree with you less. Our fore fathers came to America because they could not speak their minds, were over taxed and yearned for freedom of Religion. Your quotes are not from the Declaration, Constitution or Preamble or anything the men who founded our country signed or included when they stuck their necks out so you and your ilk could live in the most prosperous and greatest country in History.

    What makes your stand so frivolous is the stand against Chick Fil A. Now we can’t state what we feel, are overtaxed. Gods is out and homosexuals are trying to become the mainstream of America. They’ve coined a new catch word “Haters” to anyone who differs from their agenda. It sounds like what or fore fathers fled to escape.

    I’m sure you don’t run a business, have to worry about payroll or taxes but you’er quick to attack, admonish and condemn those of us who contribute to this great country. You can quote, misrepresent and twist words around but it’s not the huge mega corporations that make this country great it’s the small ones. The next time you drive down a road where there are businesses, to your wonderment you will see hundreds of small businesses and offices that make this country great, and thats but one road. It’s ok to look at them and be amazed at what you’re missing.

    I don’t make it a habit to respond to people I don’t know but you are so lost and out of touch with the real business world I had to post. Have a nice day!

  18. Jill Klausen says:

    By the way, I’m enjoying this conversation. Thanks for having it with me and hearing me out. This issue is too important to relegate to political talking points and manipulation.

  19. Shannon Hinkle says:

    This is the best conversation I have read on the economic issues facing our country in a long time. Thanks to everyone who has contributed! I recognize good points on both “sides”, and also recognize everyone posting wants our country to be stronger and the lives of its citizens better. The disagreement is how to best achieve that.

    I want to throw in my two cents regarding “corporations hoarding profit”. Yes, the gap between executive and common labor pay has widened. This is true in most developed nations I believe. Why? Well, productivity has indeed increased, largely via technology and application of process sciences. The people who make these advances, including those who took risks to finance them and risks making decisions that could cost them their jobs, etc., have been rewarded with market rates regarding compensation. If you remove these rewards by leveling wages, or in any way interfering with the market forces, people will slowly stop taking those risks, working the hours necessary to develop the new technology, etc. Progress becomes slower and slower. Also, people are more mobile. Many of these people will seek jobs in countries where they can still receive market value for their work.

    That said, how could we get away from the “need” for so many to lean on government support? I do not have a great answer for this. I believe Americans have come upon a sense of entitlement. While yes, some folks do work 80 hour weeks in dangerous jobs (and these folks usually manage a decent living), many do not. Few people work the hours our grandparents worked. Not only in jobs, but also raising gardens, doing odd jobs, etc. While at the same time, most folks have more luxuries such as cars, TVs, etc. Things that were hardly necessities 2 generations ago. Unfortunately, I think Americans have a hard lesson ahead of them. You cannot live beyond your means, you cannot expect someone else to give you handouts, and you earn what you contribute. Not just how many hours you work. It is about the value returned in a job. If you can do things others cannot, you should receive more for that work. How much more is determined by what others are willing to pay you for it. If you don’t, why should you do it? There are of course philosophical answers to this, but I don’t think human nature and history proves them out. This is why communism has failed, and why socialist countries all over Europe are starting to struggle. And, in my opinion, why we are having the problems we have today.

  20. Jill Klausen says:

    Gary, my reply to your 3:09PM post is still awaiting moderation, fyi. Just wanted you to know that I didn’t ignore that post.

  21. Jill Klausen says:

    ON THE DISTRIBUTIONAL EFFECTS OF BASE-BROADENING INCOME TAX REFORM

    “… drawing on the example of the tax policies advanced in presidential candidate Mitt Romney’s tax plan. Our major conclusion is that any revenue-neutral individual income tax change that incorporates the features Governor Romney has proposed would provide large tax cuts to high-income households, and increase the tax burdens on middle- and/or lower-income taxpayers.

    Further …

    Our major conclusion is that a revenue-neutral individual income tax change that incorporates the features Governor Romney has proposed – including reducing marginal tax rates substantially, eliminating the individual alternative minimum tax (AMT) and maintaining all tax breaks for saving and investment – would provide large tax cuts to high-income households, and increase the tax burdens on middle- and/or lower-income taxpayers. This is true even when we bias our assumptions about which and whose tax expenditures are reduced to make the resulting tax system as progressive as possible. For instance, even when we assume that tax breaks – like the charitable deduction, mortgage interest deduction, and the exclusion for health insurance – are completely eliminated for higher-income households first, and only then reduced as necessary for other households to achieve overall revenue-neutrality– the net effect of the plan would be a tax cut for high-income households coupled with a tax increase for middle-income households.

    So how would this tax scheme help bring the middle class out of its death spiral into the abyss and return us to overall prosperity as a nation? How will a tax plan like this change the charts at the top of this post? How does this benefit the country as a whole, and not just the already wealthiest of the wealthiest Americans to the rest of our detriment?

    • Gary Baker says:

      Well, it would help if you looked at the history of such occurrences rather than relying on partisan pundits. For example, during the campaign, candidate Obama was asked if he would raise capital gains tax rates. He said that he would. The moderator then pointed out that the last time the rates were lowered, the actual revenue went up, at which point candidate Obama muttered something about wanting to be “fairer.” It’s easy to tell from such comments that many people are far more enamored by appearing to be fair than achieving good results.

      Back to history. The first tax on millionaires was attempted in the mid-twenties. The year before, there were 26 or 27 millionaires. The tax was passed, there were none. The following year there was one. Congress repealed the tax, and people began earning more. You can call it greed if you like, but most people act in their own interest.

      Now, the US has varied tax rates extensively over it’s history. Right now, the marginal tax rate is a good deal lower than it was for quite a while, and yet the proportion of the taxes paid by the top earners is actually higher, with those on the lower fifty percent paying little to actually being net recipients. There is no evidence that increasing the marginal rates will actually increase the taxes paid by the upper income, as they are best suited to either avoid the taxes or leave. The middle and lower classes are the ones that can’t avoid the taxes.

      The statement that a greater burden will fall on the middle and lower classes as a result of getting rid of deductions and such has no foundation in actual history. In the past, as I noted, when they raised marginal rates on the upper incomes, the proportion of taxes they paid actually went down. Furthermore, throughout the history of the US, the amount collected by income taxes has generally remained a fairly constant percentage (17 – 19%, give or take) of GDP. Therefore, the key to raising revenue is to raise GDP in such a way that we do not increase government spending (which increases the deficit). The Keynesian fiction that government stimulus causes economic growth was always that, a fiction, and has been shown as such more than adequately for the last several years. The reason is obvious: Government cannot transfer money to provide services as efficiently as the free market. If it could, then we would have spent our way to prosperity long before now. As it is, we have only increased deficits at a record pace.

      The tax plan that benefits the most of the country is the one that encourages growth and business. The Obama administration has done neither. Obamacare will raise the cost of adding employees to a ridiculous level, as well as force religious organizations to close businesses over conscience issues. Less services, lower revenue. Their early example of attacking businesses that they do not approve of (you can build a coal fired generating plant, but it will go out of business) signaled that the government was more than ready to be capricious, thus discouraging investment. Investment was further stymied when Obama nullified existing bankruptcy laws to favor unions over investors in the GM bailout. In doing so, he demonstrated to people with money that he would not honor their rights. And he wonders why people with money are hanging onto it? I don’t know about you, but I’m not going to stick my retirement fund into a business just to have the president hand it over to his union buddies for a political payoff.

      For some historical perspective on taxation and revenue growth, I recommend Economic Facts and Fallacies by Thomas Sowell. His citation section is longer than many authors’ text when it comes to economics.

  22. Mike Jones says:

    Hmm… one of the few well reasoned discussions on this type of topic I have seen – usually just ends up campaign talking points.

    Jill K. has put forth a very compelling argument for “forcing” corporations to pay workers more “fairly”. This WOULD solve or at least mitigate some of the problems we face as a country with a struggling middle class. However, she has ignored a few obvious problems with this “solution”.

    1. Who will buy the now overpriced, uncompetative products? Wages make up a large part of total cost. Will we also become protectionists and levy huge tariffs on imported goods and services? Or these corporations, now offering a “thriving wage” will go away and pay nothing to anyone. See “U.S. auto companies for reference”

    2. Who decides how much? You? Me? a vote?

    3. What is the incentive to better one’s self, get educated, innovate? I can thrive with labor only – not innovation, creation, personal initiative. What about the MANY lousy workers? Shall we continue to ignore their sloth? Do businesses have to pay for unproductive workers also?

    4. Here’s the biggie. Where does capital come from to create companies, innovate, employ? Your model squeezes out the PROFITS of corporations – do you understand why people INVEST in companies? Of course, no one will risk their capital when the upside is capped by “shared” profits. Are the now thriving employees FORCED to risk their own money on their corporations so theirs working capital? What about start-ups? You will say it’s all the CEO and executives salaries that contain the money to distribute to laborors, but I am sure you know this is wrong. The only way to implement your plan is for companies to operate at much lower profit margins – and as such they’ll never exist because they will never get the funds needed to create and innovate!

    So, in as much as the workers utopia would be wonderful, it cannot exist in a globally competitive economic system – which is what we have today. This may be unfortunate but it is reality. Planning around reality just doesn’t work. The bottom line is that IF we are to have a more equal and “fair” economy, we need a system where each person is responsible for continually upgrading their skills, ideas, leadership, etc. to make themselves more valuable in the current global workforce. Sorry, that’s the only way it will work.

    Schooling through 12th grade is FREE. Don’t take advantage of this? You just set yourself WAY back. The internet has almost all the information ever accumulated by mankind! Nearly free! Don’t want to learn more as you get older? Your bad. Companies will always pay more for those that contribute in ways they cannot easily replace – today, raw labor is NOT one of those ways. I realize that not all can make it in this system. Again, a sad reality. We do need a safety net for those who CANNOT, but NOT for those who WILL NOT.

    If we want to lay blame on an institution in the U.S. for our current problems then focus not on evil corporations but look instead at the evil public schools who, like most government run entities, have crumbled even as the $$$ given them has risen to outrageous heights. About 23 of 25 students in our cities leave HS (after TWELVE+ years of formal education) with absolutely no skills useful to the modern workplace! The 2 of 25 that get something useful out of this system are the ONE who has math/science grades to pursue this in college and the ONE who learned a marketable trade. The rest? The system has totally failed them, yet liberals continue to support this completely failed system.

  23. George Kimball says:

    Mike Jones, you are right on the money. It is so tempting to think, as Jill does, that one knows better than the market or that some problem (here overpaid executives) is ‘responsible’ for some social ill (stagnant wages). In free-market economics this is referred to as ‘the fatal conceit’, the idea that the chosen few know ‘better’ than the many – people, companies, churches, dogs and cats – who ultimately drive the economy.

    Yes, some executives basically loot the companies they have charge of, but investors are free to dump those stocks. Others are not looters and deservedly become fantastically rich – like Steve Jobs – by creating what was not there before.

    Executive pay redistribution of any sort isn’t going to fix the fundamental problem. To have a ‘real’ job, an employee must generate more market value than s/he takes away in market-measured compensation. If third world employees generate more value doing jobs that require no education, that is where low education jobs will go. What is so bad about that? Don’t they need jobs and income too – and have much less opportunity than in the US? If a job moves to a poor person overseas Jill sees corporate greed – but no greed on the part of US workers for attempting (for their own benefit) to force unemployment on the world’s very poor. And she sees no greed in attempting to force all domestic consumers to overpay for goods and services for the benefit of a few.

    Education, risk-taking and hard work – that is what makes wealth. The biggest obstacle in the US, imho, is the horrible failure of the K-12 public education establishment. It has created an average education level that is appallingly low (60% of Americans can’t name the three branches of government) while promoting a welfarist entitlement attitude. Worst of all, it virtually ensures that the very poorest kids will have no chance of reaching their potential or of having a higher standard of living.

    The biggest culprits for the current mess of social stratification and stagnation are public-union teachers who are smug, secure, and beyond accountability. They are remorseless, paid for failing miserably at educating the least affluent children – that in addition to using them as pawns to extort from the public education establishment. Nor can one overlook the huge, longstanding and corrupt financial ties to the Democratic party and liberal officeholders.

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