First Class

I've been a bit busy, and haven't visited Arun's Blog for a bit, which is too bad, because he always has interesting things to say. One post that caught my attention is a quote from Bob Herbert of the New York Times:

Bob Herbert in NYT TimesSelect:

"There’s a reason why the power elite get bent out of shape at the merest mention of a class conflict in the U.S. The fear is that the cringing majority that has taken it on the chin for so long will wise up and begin to fight back."

Arun fills in some details about why the non-rich might be getting antsy:

What will rile up the cringing majority?
Perhaps these numbers from Andrew Sum of the Center for Labor Market Studies at Northeastern University in Boston.

Between 2000 and 2006, labor productivity in the nonfarm sector of the economy rose by 18 percent, real wages rose by 1%.

The (excluding farmworkers) 93 million production and nonsupervisory workers' combined real annual earnings from 2000 to 2006 rose by $15.4 billion, which is less than half of the combined bonuses awarded by the five Wall Street firms for just one year.

Most mainstream economists profess to be puzzled by these numbers, but some of their puzzlement comes from ignoring a taxation system that has become markedly less progressive. Inequality hit a low for the century in the years after World War II. The regressive taxes adopted especially under Reagan and Bush have now produced, or helped produce, the greatest inequality in the US since the "Gilded Age" and the greatest inequality of any advanced country.


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