http://news.yahoo.com/brian-rogel-tells-occupy-wall-street-wealth-inequality-183900601.html


Brian Rogel isn't a household name but his analysis of wealth inequality could become household reading. Rogel says he got sick of hearing that Occupy Wall Street didn't have clear goals and decided to write "an in-depth unbiased article using facts and statistics to clarify how the unequal distribution of wealth is crippling the economy." He sent Occupy Wall Street his analysis. The full article is available on his website

http://www.brianrogel.com/the-100-percent-solution-for-the-99-percent.

Here's a summary of what Rogel says about wealth inequality and how it relates to current economic conditions:

* The top 40 Americans average $3.4 billion in wealth each, contrasted with $6,840 for the bottom 184 million Americans.

* The top 1 percent own more net wealth and double the net financial assets than the bottom 90 percent combined.

* The divide is growing.

* High income inequality is one of the major problems causing the current recession. Rogel charted income inequality over time and concluded that two spikes indicated the start of the Great Depression and the current prolonged recession.

* Large drops in the top marginal tax rates contributed to these spikes. The top marginal tax rate, currently 35 percent, is the tax amount nominally applied to earnings above a certain threshold, currently $379,150 for a single filer. The top marginal tax rate dropped below 20 percent twice in history, in one case leading to the Great Depression and, in the other, the current recession.

* With deductions, loopholes, and low capital gains tax rates, the wealthiest Americans often pay far less than the top marginal tax rate on their income. The second wealthiest American, Warren Buffet, reportedly paid only 17.4 percent in taxes last year.

* The ability to write off earnings as capital gains allows the wealthy to pay 15 percent rather than 35 percent on earnings. The capital gains rate is the lowest it's been since the Great Depression.


*There's a link between that low rate and the housing and financial industry crises, Rogel wrote. He explained how a reduction in capital gains tax increases investments (disproportionately held by the top one percent), thus directing the gain from the tax cut disproportionately to them. Bubbles occur in specific areas where they invest, only to burst when they lay claim to profits under the lowered tax rates.

* Rogel also attacks the "job creator myth," the notion that making the wealthy pay higher taxes will put a crimp in hiring. Taxing the wealthy does not link to job losses, Rogel said. With respect to corporations, the income tax paid by the executives has no bearing on the corporations' revenues and it's corporate revenues, not executive taxes, that underlie hiring decisions. When it comes to small business owners, only 1.9 percent earn enough to be affected by marginal tax rate changes. There's no historical evidence of any link between increases in marginal tax rates and decreases in hiring.

two Factors a Statistic don't make!

This analysis is totally irrelevant to what crashed and is continuing to hamper the economy.

Everyone was paying higher taxes during the Clinton years and the DOTCOM bubble still burst.

Trillions were lost in the markets.

The difference between then and 2008 was the amount of household debt.


This is from a July article..


Here are the facts:

The household balance sheet is in worse condition than at any other point in history since the Great Depression. From 2001 to 2007, debt for U.S. households increased to $14 trillion from $7 trillion, and the ratio of household debt to gross domestic product was higher in 2007 than at any time since 1929 (and we know how that turned out).

The rise in home values during the boom disguised the over-levered household sector; the subsequent decline in house prices revealed just how bad the debt binge was. Mortgage defaults and foreclosures reached levels that were unprecedented in the past 30 years, as far back as the data go.

Weakness in household balance sheets has hammered the economy. Atif Mian of the University of California, Berkeley, and I have shown that the recession began as early as the end of 2006 in areas of the country with elevated levels of household debt. Further, employment, auto sales, and residential patterns in these highly levered areas remained mired in a severe recessionary environment through the first quarter of 2011. California, Arizona, Nevada, and Florida account for 30 percent of the employment losses during the downturn, even though they accounted for only 20 percent of jobs before the recession.

By contrast, areas of the country that avoided the housing boom and the resulting sharp increases in household debt experienced a very short recession — one that started in the fourth quarter of 2008 and was over by the second quarter of 2009. The recovery in these areas is in full swing.

http://www.bloomberg.com/news/2011-07-08/household-debt-is-at-heart-of-weak-u-s-economy-business-class.html#