Wealth does not trickle down from the rich to the poor. Period.
That's not Senator Elizabeth Warren talking. That's the latest conclusion of new research from the International Monetary Fund.
In fact, researchers found that when the top earners in society make more money, it actually slows down economic growth. On the other hand, when poorer people earn more, society as a whole benefits.
The researchers calculated that when the richest 20% of society increase their income by one percentage point, the annual rate of growth shrinks by nearly 0.1% within five years.
This shows that "the benefits do not trickle down," the researchers wrote in their report, which analyzed over 150 countries.
By contrast, when the lowest 20% of earners see their income grow by one percentage point, the rate of growth increases by nearly 0.4% over the same period.
The new report called widening inequality "the defining challenge of our time," echoing earlier comments from President Obama.
The authors explain that high levels of income inequality drag down growth because poor people struggle to pay for health care and education, which hurts society as a whole.
"For instance, it can lead to under-investment in education as poor children end up in lower-quality schools and are less able to go on to college," the report says. "As a result, labor productivity could be lower than it would have been in a more equitable world."
The report builds upon research from other international organizations and Joseph Stiglitz, the Nobel laureate who has been campaigning against rising inequality.
The Sunlight Foundation recently launched a free mobile app to help voters better know who is buying political ads this election year. Ad Hawk available for iPhone and Android, listens to campaign, super PAC and issue ads on the TV or radio and then lists information about who placed the ads, their campaign finance profile and other information.
Ad Hawk is simple to use: just listen, identify and learn. When you see a political ad on TV or hear one on the radio, open the app to have Ad Hawk start listening to the ad. In less than 30 seconds, Ad Hawk will create an audio fingerprint using open-source technology and start searching our database of thousands of ads for a match. We identify new ads by monitoring media reports and the YouTube channels of political groups and campaigns. When Ad Hawk finds a match, users will get information on their phone about how much money the ad's sponsor received or spent, where the ad is on the air and media reports about the candidate or political group.
Former Secretary of Labor, Robert Reich’s latest book, Aftershock: The Next Economy and America’s Future can, more or less, be summed up in a single sentence: Until we deal with the preposterous wealth disparity in this country, America’s fucked and it’s going to stay that way. (I couldn’t agree more, btw and loved the book). The following excerpt from his February 17th blog post, “The Republican Strategy,” lays the issue pretty nakedly on the table, I think you’ll agree:
Republicans would rather go after teachers and other public employees than have us look at the pay of Wall Street traders, private-equity managers, and heads of hedge funds – many of whom wouldn’t have their jobs today were it not for the giant taxpayer-supported bailout, and most of whose lending and investing practices were the proximate cause of the Great Depression to begin with.
Last year, America’s top thirteen hedge-fund managers earned an average of $1 billion each. One of them took home $5 billion. Much of their income is taxed as capital gains – at 15 percent – due to a tax loophole that Republican members of Congress have steadfastly guarded.
If the earnings of those thirteen hedge-fund managers were taxed as ordinary income, the revenues generated would pay the salaries and benefits of 300,000 teachers. Who is more valuable to our society – thirteen hedge-fund managers or 300,000 teachers? Let’s make the question even simpler. Who is more valuable: One hedge fund manager or one teacher?
Suck on that logic, Teabaggers and rightwing dickheads… take a good long toke!
