FacebookTwitterGoogle+RedditEmail

Three Big Lies of the Super-Rich

by PAUL BUCHHEIT

When it comes to the economy, too many Americans continue to be numbed by the soothing sounds of conservative spin in the media. Here are three of their more inventive claims:

1. Higher taxes on the rich will hurt small businesses and discourage job creators

A recent Treasury analysis found that only 2.5% of small businesses would face higher taxes from the expiration of the Bush tax cuts.

As for job creation, it’s not coming from the people with money. Over 90% of the assets owned by millionaires are held in a combination of low-risk investments (bonds and cash), the stock market, real estate, and personal business accountsAngel investing (capital provided by affluent individuals for business start-ups) accounted for less than 1% of the investable assets of high net worth individuals in North America in 2011. The Mendelsohn Affluent Survey agreed that the very rich spend less than two percent of their money on new business startups.

The Wall Street Journal noted, in way of confirmation, that the extra wealth created by the Bush tax cuts led to the “worst track record for jobs in recorded history.”

2. Individual initiative is all you need for success.

President Obama was criticized for a speech which included these words: “If you’ve been successful, you didn’t get there on your own…when we succeed, we succeed because of our individual initiative, but also because we do things together.”

‘Together’ is the word that winner-take-all conservatives seem to forget. Even the richest and arguably most successful American, Bill Gates, owes most of his good fortune to the thousands of software and hardware designers who shaped the technological industry over a half-century or more. A careful analysis of his rise shows that he had luck, networking skills, and a timely sense of opportunism, even to the point of taking the work of competitors and adapting it as his own.

Gates was preceded by numerous illustrious Americans who are considered individual innovators when in fact they used their skills to build upon the work of others. On the day that Alexander Graham Bell filed for a patent for his telephone, electrical engineer Elisha Gray was filing an intent to patent a similar device. Both had built upon the work of Antonio Meucci, who didn’t have the fee to file for a patent. Thomas Edison’s incandescent light bulb was the culmination of almost 40 years of work by other fellow light bulb developers. Samuel Morse, Eli Whitney, the Wright brothers, and Edison had, as eloquently stated by Jared Diamond, “capable predecessors…and made their improvements at a time when society was capable of using their product.”

If anything, it’s harder than ever today to ascend through the ranks on one’s own. As summarized in the Pew research report “Pursuing the American Dream,” only 4% of those starting out in the bottom quintile make it to the top quintile as adults, “confirming that the ‘rags-to-riches’ story is more often found in Hollywood than in reality.”

3. A booming stock market is good for all of us

The news reports would have us believe that happy days are here again when the stock market goes up. But as the market rises, most Americans are getting a smaller slice of the pie.

In a recent Newsweek article, author Daniel Gross gushed that “The stock market has doubled since March 2009, while corporate profits and exports have surged to records.”

But the richest 10% of Americans own over 80% of the stock market. What Mr. Gross referred to as the “democratization of the stock market” is actually, as demonstrated by economist Edward Wolff, a distribution of financial wealth among just the richest 5% of Americans, those earning an average of $500,000 per year.

Thanks in good part to a meager 15% capital gains tax, the richest 400 taxpayers DOUBLED their income and nearly HALVED their tax rates in just seven years (2001-2007). So dramatic is the effect that anyone making more than $34,500 a year in salary and wages is taxed at a higher rate than an individual with millions in capital gains.

There’s yet more to the madness. The stock market has grown much faster than the GDP over the past century, which means that this special tax rate is being given to people who already own most of the unearned income that keeps expanding faster than the productiveness of real workers.

And one fading illusion: People in the highest class are people of high class.

Scientific American and Psychological Science have both reported that wealthier people are more focused on self, and have less empathy for people unlike themselves.

This sense of self-interest, according to a study published in the Proceedings of the National Academy of Sciences and other sources, promotes wrongdoing and unethical behavior.

Can’t help but think about bankers and hedge fund managers.

Paul Buchheit teaches Economic Inequality at DePaul University. He is the founder and developer of social justice and educational websites (UsAgainstGreed.orgPayUpNow.org,RappingHistory.org), and the editor and main author of “American Wars: Illusions and Realities” (Clarity Press). He can be reached at paul@UsAgainstGreed.org.

 

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

Weekend Edition
January 20, 2017
Friday - Sunday
Paul Street
Divide and Rule: Class, Hate, and the 2016 Election
Andrew Levine
When Was America Great?
Jeffrey St. Clair
Roaming Charges: This Ain’t a Dream No More, It’s the Real Thing
Yoav Litvin
Making Israel Greater Again: Justice for Palestinians in the Age of Trump
Linda Pentz Gunter
Nuclear Fiddling While the Planet Burns
Ruth Fowler
Standing With Standing Rock: Of Pipelines and Protests
David Green
Why Trump Won: the 50 Percenters Have Spoken
Dave Lindorff
Imagining a Sanders Presidency Beginning on Jan. 20
Pete Dolack
Eight People Own as Much as Half the World
Roger Harris
Too Many People in the World: Names Named
John Berger
The Nature of Mass Demonstrations
Stephen Zielinski
It’s the End of the World as We Know It
David Swanson
Six Things We Should Do Better As Everything Gets Worse
Alci Rengifo
Trump Rex: Ancient Rome’s Shadow Over the Oval Office
Brian Cloughley
What Money Can Buy: the Quiet British-Israeli Scandal
Kent Paterson
Mexico’s Great Winter of Discontent
Norman Solomon
Trump, the Democrats and the Logan Act
David Macaray
Attention, Feminists
Yves Engler
Demanding More From Our Media
James A Haught
Religious madness in Ulster
Patrick Bond
Tripping Up Trumpism Through Global Boycott Divestment Sanctions
Robert Fisk
How a Trump Presidency Could Have Been Avoided
Robert Fantina
Trump: What Changes and What Remains the Same
David Rosen
Globalization vs. Empire: Can Trump Contain the Growing Split?
Elliot Sperber
Dystopia
Dan Bacher
New CA Carbon Trading Legislation Answers Big Oil’s Call to Continue Business As Usual
Wayne Clark
A Reset Button for Political America
Chris Welzenbach
“The Death Ship:” An Allegory for Today’s World
Uri Avnery
Being There
Peter Lee
The Deep State and the Sex Tape: Martin Luther King, J. Edgar Hoover, and Thurgood Marshall
Patrick Hiller
Guns Against Grizzlies at Schools or Peace Education as Resistance?
Randy Shields
The Devil’s Real Estate Dictionary
Ron Jacobs
Singing the Body Electric Across Time
Ann Garrison
Fifty-five Years After Lumumba’s Assassination, Congolese See No Relief
Christopher Brauchli
Swing Low Alabama
Jon Hochschartner
The Five Least Animal-Friendly Senate Democrats
Pauline Murphy
Fighting Fascism: the Irish at the Battle of Cordoba
Louis Proyect
Is Our Future That of “Sense8” or “Mr. Robot”?
Charles R. Larson
Review: Robert Coover’s “Huck out West”
January 19, 2017
Melvin Goodman
America’s Russian Problem
Dave Lindorff
Right a Terrible Wrong: Why Obama Should Reverse Himself and Pardon Leonard Peltier
Laura Carlsen
Bringing Mexico to Its Knees Will Not “Make America Great Again”
John W. Whitehead
Nothing is Real: When Reality TV Programming Masquerades as Politics
Yoav Litvin
Time to Diss Obey: the Failure of Identity Politics and Protest
Mike Whitney
The Trump Speech That No One Heard 
FacebookTwitterGoogle+RedditEmail