Amid many 'bright signs,' consumers on the cusp still have to wonder: Where am I in this economy?
Month-to-month bankruptcy filings are down, but Senator Hatch's remarks leave Main Street consumers wondering who's supposed to be helped in this debt showdown in Congress
Recent data point upward
Retail sales are up, bankruptcy filings down and it looks like June saw growth in jobs. A couple of major banks have been initiating mortgage loan modifications, and the whole group of major mortgage lenders in settlement talks with the states' Attorneys General appear to be ready to ditch their charade, to the tune of ponying up about $20 billion--without, of course, conceding any wrongdoing.
However, in individual actions, J.P. Morgan Chase and Co. recently settled SEC charges of defrauding mortgage investors by agreeing to pay more than $150 million, and several employees--including both the former CEO and its chairman--of what was once among the largest mortgage lenders were convicted of fraud.
Debt-ceiling talks hint at poor outcome for the poor & cash-strapped
But before we go gooey, giddy or gaga, we need to remember that the pending debt-ceiling negotiations are unlikely to be resolved without some heinous compromise at the cost of Americans least likely to afford them--or to even have a voice in the debate. Even as President Obama was remarking optimistically about liking the prospects for the upcoming Sunday-meeting debt-together (and factions left and right were drawing lines in the sand), Democrats were lashing back at Sen. Orrin Hatch (R-Utah) for comments he made during talks for a symbolic Senate action calling for the rich to shoulder its share of the debt-reduction pain.
You decide: Was Senator Orrin Hatch actually, factually calling for lower-income classes to make up the difference that the rich seems to ignore?
According to a July 7 piece at HuffingtonPost, the senator "voted against beginning debate on a measure that would have the Senate declare the rich should share the pain of debt reduction Thursday, a day after arguing that it's the poor and middle class who need to do more.
" 'I hear how they're so caring for the poor and so forth,' Hatch said in remarks on the Senate floor Wednesday, in reference to Democrats. 'The poor need jobs! And they also need to share some of the responsibility.' "
Now, Hatch did leaven his remarks a little, indicating that it's OK to not further burden those who are in actual poverty: "Now we don't want the really poor people who are in poverty to pay income taxes. But 51 percent of all households? And that's going up, by the way, because of our friends down in the White House and his allies."
A good time to catch up on the tax code
The "51 percent" reference comes from another part of Hatch's remarks (see the full text here):
I get a little tired of hearing about the Obama approach of 'shared sacrifice.' Shared sacrifice is something sounds good but I'd prefer the Republican approach to shared prosperity. And that's what I think we're all about.
When you talk about 'shared' think about this it's pretty irrefutable that the bottom 51 percent of all wage earners, of all households, do not pay income taxes. The top 1 percent the so-called 'wealthy' pay 38 percent of all income taxes. The top 10 percent are paying 70 percent of all income taxes. The top 50 percent pay something like 98 percent of all income taxes. Fifty-one percent don't pay anything.
Well, irrefutable may be too strong a strong a term. True, the basic figures are as accurate as needs be for argument's sake, in agreement with both Politifact and the National Taxpayers Union. Problem is, the figures by themselves don't reveal the whole situation.
Past, as prelude
For background, however, let's step back a few years and peek inside the book Bushwhacked: Life in George W. Bush's America (ISBN: 0-375-71311-5), pp. 40-41:
According to the Congressional Budget Office, between 1979 and 1997 the income of those in the middle quintile rose from $41,400 to $45,100, adjusting for inflation. That was a 9 percent increase. The income of families in the top 1 percent rose from $420,200 to $1.016 million, a 140 percent increase. Another way to look at is, in 1979 the richest families were ten times richer than the middle clump of us. By 1997 they were twenty-three as rich and rising fast. In 1998 the top 1 percent had more income than the 100 million in the bottom 40 percent.
In the Eisenhower era, corporations paid an average of 25 percent of the federal tax bill. In 2000, they paid only 10 percent, and by 2001, only 7 percent. In 1960 corporations paid an effective tax rate on corporate income of 47 percent. Today it is 35 percent. As we all know, many, many, corporations have paid zero in income taxes for years, despite hefty balance sheets, a la Enron, and have indeed worked themselves into a position where the U.S. government owes these flagrant tax-cheaters money.
So when Sen. Hatch starts the call about why the poorest people in America are not shouldering more of the problem, isn't it appropriate to respond, "Well, why aren't the most well-off among us stepping up to the plate?"
Regarding that particular call-and-response, it certainly seems as though any reasonable person could make the connection to the license of the wealthy, capitalized and landed acting as a virtual stem-cell-rich, umbilical-cord to being politically connected, which in turn reconnects to capital, wealth, and insider privilege.
Will the circle be unbroken?
This is not the old circle, the land-based, agrarian-rooted circle that mysteriously blended the various religions and traditions of Old World ethnicities and new, uniquely American ways of thinking and perceiving. No, this is the new circle, the capital-based, cybernarian, Matrix-vs-person system of displacing those who still believe in the old model of being responsible to a neighborhood and taking care of your community, regardless of your differences.
It's a tough time to be considering bankruptcy: If you're on the cusp, you can interpret some data as indicating a time to hold off, hang on and see what happens. If you realize you're past the cusp, you may be thinking: "Nothing's going to happen soon to change my situation."
Next time: More specifics about recent data and a look at other, recent news.
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