Monday, August 6, 2012

A man with a duck on his head ....

If you see a man walking down the street with a duck on his head, you will probably say that you saw a man walking down the street with a duck on his head.  No spin required.  You won't seek out someone to say for you that it was a duck walking down the street with a guy on its derriere.

Feel free to disagree; I'm sure the duck will appreciate your efforts.
Our observations span decades, you and I of the boomer generation.  Here's what we've seen ...

A better quality of life; the decline ...

This first graph looks at the years with high taxes and growing inflation  (1949-1979) compared to the following three decades (1979-2009) that saw lower taxes and declining inflation.

Real income growth has disappeared since the 1960's for all except the wealthy, and the gap between the rich and the rest has widened dramatically.  It's more significant in the marketplace than most of us realize.  The solution we were offered... 'Let them eat credit.'  A crash followed where the middle class suffered much more than the wealthy, and the poor most of all.

The ever-widening gap between rich and poor. 

Here, the average income (which reflects the overbalanced effect of the wealthy few) is compared to the median (which better reflects a midpoint for us all).  Note the accelerating change.

The middle class produces more each year and receives a
progressively smaller and smaller share of the benefit.
As the middle class strangles, the wealthy take a larger and larger bite out of the national economy and out of the profit of our labor. Their disproportionate and continually increasing share of national productivity (chart, left) indicates systemic flaws in national policy, law, and governance.  The middle and lower classes have received a progressively smaller share of the rewards of their labor. Neither the Republicans nor the Democrats, it appears, have offered a plan for mitigation of the risk inherent in such imbalance.

Still rudderless ...
Balance of trade, a balanced budget, and a reasonable tax structure are all missing from the agendas we're offered by the candidates, their parties, and the media.

Financial reform is still in the 'pretend' stages.

"There are three big fault lines — one is rising inequality, which pushes inappropriate spending such as encouraging households to buy houses subsidized by government lending. Second is the inadequate safety net which causes a whole lot of inappropriate stimulus in bad times, and I'd say especially stimulus coming from the Federal Reserve in the form of low interest rates. Third is the fact that many countries have grown in a way that emphasizes exports, which leads to overconsumption in countries like the U.S."
~ From the economist who predicted the '08 crash in detail.  Read more HERE> 
Bi-partisan attempts at regulating the financial marketplace follow the recommendations of the financial industry rather than sound principles.  Changes favor a continually more powerful position for the financial behemoths.  Patchwork legislation continues to ignore the underlying problems.  Neither party, despite good intentions, offers a coherent solution.

The frustrating failure of leadership ...

The graphic right shows the growth of government over the last 40 years.  Our income is up a quarter, and our government expenditures are up more than ten times that amount.  That's government spending, not industry growth.

The graphic below shows that the ability or inability to balance the budget is truly bi-partisan.

Click on this graph to see the details.

Just so we're clear, that's what we've seen.  This or that politician becoming president, this or that party ruling in congress offers no suggestion that these things will change.  The issues are not partisan, they're systemic and fundamental.