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| Entertainment mogul David Geffen's post from his $590 million yacht in the Caribbean, where he is "sheltering in place." |
I met real American heroes this morning at 7 am at the local Market Basket grocery store--an employee standing in the falling snow warmly greeting and counting patrons as they walked into the store. At the checkout counter both the cashier and bagger were friendly, helpful, chatty for that hour of the morning, smiling warmly. In the midst of this COVID-19 pandemic, these employees, making about $17,000 a year risk exposure every day to pay their rent, feed their kids, and ensure that we can get needed supplies. They probably hold other jobs too because a family of 4 with an annual income of less than $25K lives in poverty today in the U.S.. 12% of U.S. residents currently live in poverty, going into the COVID-19 crisis, so sheltering in place, in their rented apartment is certainly not even an option.
In the last 60 years, the wealth in the U.S. (GDP) has doubled, and American's productivity has increased by 7 times. Yet, according to economist Joseph Stiglitz, when adjusted for inflation, wages remain, "roughly at the same level they were sixty years ago." That means that more than twice the money has been earned by businesses in the U.S., as a result of 7 times the productivity of their employees, with no corresponding increases in wages.
During the same time that GDP in the U.S. doubled, the rate of taxes for top wage earners in the U.S. dropped from 70% in 1980 to %25 in 2017. By the way, in 1960, the tax rate for these top wage earners was 91%, down from a high of 94% in the 1940s! All this means is that a lot more of the money acquired by corporate executives and shareholders has remained in their pockets. The idea, promoted by Milton Friedman and implemented by Ronald Reagan was to provide tax welfare benefits to those accumulating the most wealth so it would "trickle down" to the rest of us. This tax welfare has instead resulted in huge federal deficits, and an economy poorly positioned to manage a crisis like COVID-19, unlike other countries like South Korea, Bangkok, Taiwan, Singapore and Hong Kong.
It is sadly ironic that the country with the highest per capita healthcare spending, is to date, one of the countries struggling to provide the very basics during this crisis--personal protective gear, like masks, gloves, and gowns to healthcare workers, and is unable to ramp up widespread testing because of chronic supply shortages. At the same time, countries with much lower per capita healthcare costs in single-payer systems, like Canada, Germany, Taiwan, etc.
So, there have been some huge beneficiaries of the tax welfare the U.S. has provided to corporations and business moguls like David Geffen who tweet to the rest of us from the yachts they purchased with the money they made by not increasing our wages and benefits at a time we increased their productivity by 7 times and doubled their profits, while decreasing their tax burdens by 50%! While corporate executives "shelter in place" on their yachts, it will be left up to the real American heroes, like the ones I saw at the local grocery store this morning, to clean up the mess, and do with much less, while the recipients of this lavish welfare share photos of the spoils they have defrauded hard-working Americans out of.
