Thursday, October 07, 2010

Rush Needlessly Panicked

On Wednesday, Rush Limbaugh was exorcised about President Obama's intention to allow tax cuts for the wealthy to expire, to rise to the level President Bush and his Republican Congress intended. Doing so, Limbaugh argued, would be both unfair and futile and he commented

The thing that they don't get is how industrious and clever, creative, and entrepreneurish, productive Americans can be, particularly in coming up with legal tax avoidance plans.

I don't want to leave this tax cut, tax increase business alone. I want to reiterate, nobody is talking about tax cuts for anybody and what Obama is counting on is class envy.

Limbaugh is doing what he can to stoke, if not class envy, class worship. He was not describing the middle class or even the modestly wealthy but instead "talking about the wealthy here, folks. We're not talking on the $250,000 or $500,000 a year people." These are

the really brilliant, creative people (who) are gonna focus on holding onto what they've got....

During the Carter Administration, Rush opined,

everybody shut down. The productive class, the entrepreneur class shut down.

Give Rush credit. Unlike most Republicans, who claim a concern for the middle class- which earns, they figure, $200,00 and up- Limbaugh here is pimping for the really rich, "the really brilliant, creative people, the productive class."

One wishes that his listeners understood that their hero is glorifying the very wealthy at their expense. Alas, not going to happen, because of the obligatory I started out poor and became great and you can, too tale:

Now, I don't want you to think ill of these people and think that they're spoiled rotten because they didn't start out at $250. They at one point were at $50, maybe less. I can remember my first job as an adult was for $12,000 a year. We're all like this. So the people at this $250,000 range, they at one time were less than that.

This dream is often cited as a primary reason many middle- and working- class Americans support lower taxes for the wealthy, burdening middle class taxpayers with deficits they themselves eventually will have to shoulder. Unfortunately, this part of the American dream is largely a myth.

In a 2006 report, the Center for American Progress (linking to its report, in PDF) found

Children from low-income families have only a 1 percent chance of reaching the top 5 percent of the income distribution, versus children of the rich who have about a 22 percent chance

Children born to the middle quintile of parental family income ($42,000 to $54,300) had about the same chance of ending up in a lower quintile than their parents (39.5 percent) as they did of moving to a higher quintile (36.5 percent). Their chances of attaining the top five percentiles of the income distribution were just 1.8 percent.

By international standards, the United States has an unusually low level of intergenerational mobility: our parents’ income is highly predictive of our incomes as adults. Intergenerational mobility in the United States is lower than in France, Germany, Sweden, Canada, Finland, Norway and Denmark. Among high-income countries for which comparable estimates are available, only the United Kingdom had a lower rate of mobility than the United States.

Given the deep recession we endured, it's hardly likely that mobility improved in the years since the study. The comparison drawn to Europe (France, Germany, Sweden, Finland, Norway, Denmark, United Kingdom) is particularly striking given Limbaugh's remark

You explore every option you can, including leaving the country, if it gets really bad, which some people are doing. That's why there are little acres over there in New Zealand that look good, except global warming is creaming these people. They've had a blizzard over there wiping out livestock, at the end of winter, but that's another matter. I'm keeping track of what's going on in New Zealand, Australia, and Singapore. Europe's lost. UK is gone. They may as well have erased their borders 20 years ago. They're finished. You don't want to go there. Some of the former Soviet bloc, eastern bloc, some of the new democracies over there, they show some promise, but Putin's got them targeted. Cuba, interesting, might be a place, but I don't know if that will happen soon enough. But regardless, yes, lots of places being examined.

Europe's lost. It is, apparently, for the super-duper wealthy Rush is fretting about. They are so much more patriotic than the "socialist, Marxist gang (which) is running your country" that they plan to flee if their marginal tax returns to a rate lower than that during seven of the eight years of the Reagan presidency.

But there is no need for that group- of which Rush, not coincidentally, is a member- to leave the country. The share of the nation's income gains going to the top one percent is at its highest level since the 1920s (chart, from Center for Budget and Policy Priorities, below). That group has garered a 281% gain in after-tax income since 1979 while the middle fifth of the population has gained only 95% in after-tax income since 1979 (graph, from CBPP via, way below), leaving the elite with 17.1% of the nation's after-tax income, more than twice its 1979 share of 7.5% (pie chart, from CBPP via word, way below, ).

No need to flee, guys, with Rush Limbaugh and his party in lockstep to complete its act, commonly referred to in sexual terms, upon the middle class.

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