Occupy is Right, Stop the Skepticism and Apathy

I've been unexpectedly alone among my friends in my support for the OWS movement and it's bothering me quite a bit. I'm convinced that most people are completely unaware of just how one sided our society is. Further, all the critiques I've heard of OWS is the same utter crap that the news media (see: owned by rich white conservative men) spouts. Here are the three main gripes I hear about the Occupy Movement:

1- "They don't have a clear message."

Yes they do. OWS is fighting against economic and political inequality. They want everyone to pay their fair share. And they're right. The system is broken and unfair.

2- "There's a bunch of weirdos at their protests."

There always is. In the 1960's there were a lot of LSD dropping and free-sex having protestors, but out of it came the civil rights movement, women's rights, and anti-war protests. Does that invalidate them?

3- "They're just bitching. They/we don't have it that bad. Plus, nothing is going to change."

That's utter apathy and it misses the point. Sure, a lot of us live quite well in the bottom 99%, but even as our country has grown richer in the last 30 plus years our share has not increased. Study after study shows that wealth inequality is bad for just about everything in a society from crime rates to levels of happiness. Even the richest are better off in a more fair society.

Evidence:

First, here's the past 100 years or so of income distribution in the US as given by the New York Times:

Currently the top tax rate is 35% for any income made over $379,150 and that doesn't include capital gains (money made on stocks, interest, etc.) which is currently taxed at 15% (really low). It is common to hear people saying that high taxes are bad for an economy. Yet, during America's greatest economic growth, post WWII to somewhere in the 1980's, the top marginal income tax rate was between 70-94% and included capital gains. So no, high taxes are not bad for an economy (see: Northern Europe).

It has come to my attention that the chart that was once here contained some incorrect information. I will repost this when they release the new data (hat tip: Joe). The chart showed varying effective tax rates among similar income earning groups compared with various levels of income earners. The point was that a percentage of the very wealthy pay a very small effective tax rate.

Income Inequality is bad for EVERYONE.



The more a country taxes the rich the happier its people. It's really just a small part of that video from above.

Also, the top 1% is misleading. It's more like top 0.1% (both of these graphs are taken from Krugman's analysis of CBO data):

The top 20% of income earners haven't gained any income share since the late 1970's while the top 1%'s share has grown from about 8% to about 17% - or more than doubled.

The top 1% minus the top 0.1% share of income has grown from about 5% to 8% - a 60% increase - not bad, but the top 0.1% of earners went from 2.6% to about 8% - about a 300% increase. It truly is the super wealthy who are making all the income gains.

Solutions:

There was a study done a little over a year ago that I wrote about before where people of all ages and political affiliations were asked who had the wealth in America.

Of course, everyone was totally wrong. Reality was far more unfair than they had realized. In fact, when asked what the division of wealth should be, people overwhelmingly responded that it should be more fair than what they thought it was - which was to generous to begin with.

So how do we fix our system?

Simple, see that bottom line in the graph? That's what people want. That's the society Americans say they want to live in. To accomplish this first we have to elect people who will represent our interests - fairness. Now the fun part, Congress will set goals as to what percentage of the total national income any group is allowed to keep as income. Say the top 0.1% gets 5% of earnings, top 1% gets 5%, etc. Whatever we choose. Next, the IRS and CBO changes the marginal rates (which now include capital gains taxes) of those income tax brackets every year to bring the targeted goals to within range. It'll take a few years to settle out, but eventually the tax brackets will stabilize. If you think that's too socialist or whatever then simple... just lower your targets and let the rich get richer. This is already what we do, we just don't set goals. We just set arbitrary numbers that mean nothing.

My guess is that the vast majority of people would pay less in taxes, more income brackets would be created near the top end, and those really high end brackets rates would be close to 70 plus percent.

Parting Thoughts:

The top 400 wealthiest people in America have more than the bottom 50% (about 155 million people). That means one person has as much as 390,000 people. That's like getting rid of Chicago and replacing it with 7 people.

"No country, however rich, can afford the waste of its human resources.  Demoralization caused by vast unemployment is our greatest extravagance. Morally, it is the greatest menace to our social order." -FDR

Piracy Bill Misses the Point

Congress is pushing through a bill that would require domain hosting companies (people who register web addresses) to block US users from pirating sites. If the sites are located overseas then the bill would force ISPs to block access to the sites.

I don't necessarily advocate piracy outright, but when government reps are making statements like this:

“But it’s also become a tool for online thieves to sell counterfeit and pirated goods, making hundreds of millions of dollars off of stolen American intellectual property." - Sen. Orin Hatch (R-Utah) (Taken from the Wired article above)

... you know progress is about to get stifled. Piracy just isn't a black and white issue, and the numbers they quote are often ridiculous. I thought Republicans supported the free market? No pun intended.

Is piracy stealing... kind of. If you steal a tangible object the seller literally has less, but this isn't true of a digital copy. The price for one is the same as the price for infinity. You only deprive the creator of income if you would have paid for the content otherwise. How many times have you downloaded a piece of software or music because it was free that you otherwise would not have? In these cases where you have stumbled upon something you never knew you liked you have opened up a discourse with the producer of the content under which they could potentially profit from you in the future. Think of how broad most younger peoples taste in music is compared to their parents.

My broad taste in music means that I go to a lot of concerts, but I don't buy records. What does this mean for the band? They make more money and have broader appeal. Their pirated online albums serve as event flyers. Another example is the plethora of super out of reach expensive software for architecture school that I need to study and learn but can't afford. I learn these programs and when it's time for me to go to a firm they have to buy it. A copy of just plain AutoCAD costs $4,000 and every firm in the world has that. Why? It's not really the best drafting software necessarily but Autodesk does allow free downloads to students... is it any wonder that Google's Sketchup - a clearly inferior program - is now gaining traction because it's free?

There is a cost to users for pirating - that is - buggy software, older versions, no updates, and the time and knowledge to crack and obtain such things. Basically, people at the lower end of the economic spectrum engage in it - people that wouldn't have access to it otherwise. It's simple opportunity cost for the pirater. The real problem is with the pricing and distribution of media and software. I could bore you with this but I won't. Distribution must become intangible and prices must be cut drastically. A dollar a song and $600 for Photoshop CS5 is ridiculous. Content providers need to seriously consider ways of extracting higher amounts of consumer surplus (the amount that a buyer is willing to pay in addition to the asked for price) after dropping prices. Take for example ipods. Apple charges a base price for the unit with say 4 gigs, then so much more for 8 gigs, and so on. More people buy the product this way while at the same time Apple is able to get people who are willing to pay more to spend more. Look at what Microsoft is doing with Windows 7: Home, Home Premium, etc.

Of course there are problems with pirating but I think that often the benefits outweigh the costs. Pirating has changed the way we consume media and information. Bittorrents, a byproduct of pirating, is almost unarguably the best way to download anything. In some odd way it's almost tragic that a different generation (see, old white affluent men) feels the need to deprive us of something they do not and possibly cannot understand. There always seems to be debate in Washington about topics that my generation considers a moot point, but I suppose it's always this way. One day my generation will mold the world in the defunct image of their youth to the detriment of that times generation.

Debunking Yesterdays Facts

Do you really think the US Postal Service is terrible? Then why would US Health Care be the same? While I'm at it here's a super brief definitive guide to health care reform. It's a must read. Here it is:

"The essence is really quite simple: regulation of insurers, so that they can’t cherry-pick only the healthy, and subsidies, so that all Americans can afford insurance.

Everything else is about making that core work. Individual mandates are a way to prevent gaming of the system by people who don’t sign up until they’re sick; employer mandates a way to hold down the on-budget costs by preventing a rush by employers to drop insurance; the public option a way to create effective competition and hold costs down further.

But what it means for the individual will be that insurers can’t reject you, and if your income is relatively low, the government will help pay your premiums.

That’s it."

The cost of living has actually gone down (2.2% in Chicago).

Your spleen is in fact quite essential to your health. It holds all your monocytes (the bad-asses of your white blood cells) in reserve. I'm not sure if the same can be said of their analogy - a large standing army is vital to the health of a nation.... hm.

America has fewer small businesses than Europe, so no, we're not so individual.

Obama isn't an American citizen according to 75% of the South. I'm speechless... Dear South, stop being racist. That shit was never cool and now it's not even acceptable. On a side note - one does have to wonder - the Civil War was fought because the South succeeded; not slavery. Why did they succeed? Because not a single southern state's electoral college had voted for Lincoln. They felt as if they had no voice so they formed their own country. Kind of makes you wonder...