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A few well-written words can convey a wealth of information, particularly when there is no lag time between when they are written and when they are read. The IPS blog gives you an opportunity to hear directly from IPS scholars and staff on ideas large and small and for us to hear back from you.

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Entries since September 2010

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$400,000 Annual Household Income and Still Struggling?

September 29, 2010 ·

Todd Henderson, a corporate law professor at the University of Chicago, claims that he is struggling during these tough economic times--despite the fact that he has an annual household income of $400,000.

According to Fox News:

“A quick look at our family budget, which I will gladly share with the White House, will show him that, like many Americans, we are just getting by despite seeming to be rich. We aren’t,” Henderson wrote.

[Henderson] said he and his wife, a doctor, paid $100,000 in federal and state taxes last year and $15,000 in property taxes. He wrote that they have a mortgage on a house they own a short distance from President Obama’s home, and they are paying off $250,000 in student loans. With an annual income of more than $250,000, he wrote, he and his wife are  far from super-rich.

Although many people on the Right are using this story to advocate for a full-on extension of the Bush Tax Cuts, and to reject any proposals that would tax the "super rich," these numbers are incredibly misleading and ill-informed.

Like what Professor Bradford Delong of University of California at Berkeley had observed, Henderson doesn't acknowledge the fact that he is among the select few in this country. The only reason why he has so much cash output is because he has the capability to buy and pay for a nice house in a bougie neighborhood (only a short distance away from the Obamas!), and to send his kids to expensive, quality private schools. These are privileges that only the super-rich enjoy.

With our unemployment rate currently at 9.6%, and with so many people out there struggling to pay for the necessities to keep themselves alive, I wouldn't consider Henderson's situation bad at all. 

Nobody says it better than IPS's own Sanho Tree when he heard the story: "Half the planet lives on less than $2/day. It gives new meaning to the expression, 'Eat the rich!'"

So maybe Henderson should have thought twice before he decided to complain about his $400,000 annual household income.

Split This Rock Poem of the Week: Jeff Gundy

September 29, 2010 ·

Split This Rock Poem of the Week:  Jeff Gundy

A Day at the Pond Without Geese
 

A good day for late wildflowers--daisies and burrs
leaned out into the path for a better view, brilliant

blue somethings with tiny blooms on tall stalks.
A good day for a young dog's yapping, the splish

of a muskrat, thin gold of poplar leaves screening
the low sun. At the end of a lush summer, not much

has changed. The latest suicide bomber was nearly
done with law school. The enemy shot her brother.

Afterwards her head was found on the floor
of the restaurant in Haifa, black hair still flowing.

Like most men in such times, I want to give advice.
The pond is pretty in its small way, trees still green,

a bank of cattails, water echoing blurry greens and sky,
for once no geese to harry and complicate things.

Two quiet wrens, that dog yelping stupidly,
and a crow way off to the east. Like most men,

I think I'm smarter than most men. I dream of women
even when I'm awake. If I sit long enough, the trees

or the water will surely tell me something. A woman
passes, explaining to her cell phone as she walks.

As far as I can see, everything is calm as Eden.
Her black hair, flowing like the night.

- Jeff Gundy

From Spoken among the Trees (Akron, 2007).
Used by permission.

Jeff Gundy's eight books of poetry and prose include Spoken among the Trees (Akron, 2007), Deerflies (WordTech Editions, 2004), and Scattering Point: The World in a Mennonite Eye (SUNY, 2003). He teaches at Bluffton University, and was a 2008 Fulbright lecturer in American Studies at the University of Salzburg.

Gundy appeared on the panel "The Peace Shelves: Essential Books and Poems for the 21st Century" during Split This Rock Poetry Festival: Poems of Provocation & Witness 2010.

Please feel free to forward Split This Rock Poem of the Week widely. We just ask you to include all of the information in this email, including this request. Thanks!

One Decade Down, One Decade Wasted

September 28, 2010 ·

The U.S. Census Bureau last week closed the book on the first decade of the 21st century. We now know, after Thursday’s release of Census survey data for 2009, exactly how Americans fared over the decade that began on January 1, 2000.

Average Americans, the new annual Census data make plain, didn’t fare particularly well — even before the Great Recession.

The middle fifth of America's households opened the decade averaging $52,547, after adjusting for inflation. In 2007, just before America’s economic meltdown, this middle fifth of households averaged $51,691. Last year, after two years of Great Recession, that middle class average stood at just $49,534.

Our new century has begun, as Harvard economist Lawrence Katz noted after the new Census figures appeared, with a “decade of decline.”

Income Gap GraphAnd this decade of decline comes after a generation of income stagnation. America's average incomes rose consistently in the decades right after World War II. But those crisp increases ended in the 1970s. Between 1969 and 1999, the Census data show, incomes of households in America’s middle fifth increased by an average of only $315 a year, less than 1 percent annually after inflation.

Incomes at the top have fared considerably better. America’s most affluent 5 percent, the new Census data document, have seen their incomes rise by 81 percent after inflation since 1969.

These official Census numbers actually understate just how well America’s most affluent have been doing — and significantly so.

Reason one: The Census income totals include all the revenue streams that flow into average American households, everything from paycheck earnings and pension income to disability benefits and Social Security. But the Census doesn’t tally any income that households make from selling stocks and other assets.

These capital gains, according to analyses of IRS data, made up 14 percent of top 5 percent income in 2008, the latest year with numbers available. At America’s economic summit, capital gains count for even more.

In 2008, these capital gains made up 26 percent of the income that went to America’s most affluent 1 percent, 34 percent of the income for the top tenth of 1 percent, and 45 percent of the income for the top hundredth of 1 percent, taxpayers who averaged $27.3 million. None of this capital gains income shows up in the Census figures released last week.

The second reason why the Census figures understate the income of America's most affluent: Census researchers, to protect privacy, “top code” their data. That is, above certain levels, they stop counting income. Income from an employer carries a $1.1 million Census top code. The income of a CEO who makes $10 million goes down on the Census tally sheet as $1.1 million.

The result? We know from the Census figures how many Americans make between $50,000 and $60,000. But we don't know how many make between $50 million and $60 million.

Census officials, to their credit, do highlight the growing inequality in the data they do collect. They compare, for instance, income at America’s 10th percentile — “the income level at which 10 percent of the households have income below it” — and income at the nation’s 90th percentile.

Between 1967 and 2009, Census analyst David Johnson observed last week, “income at the 90th percentile increased by 63.0 percent, about twice as much as the 32.4 percent increase for income at the 10th percentile.”

And the Census researchers, also to their credit, collect data on more than just raw incomes. The report they released last week gives a sense of how the Great Recession is changing how Americans live. More families, the Census Bureau informs us, are doubling up on their living arrangements.

Over the last two years, the number of households in the United States has grown by only 0.6 percent. The number of households with multiple families in them, by contrast, has jumped by 11.6 percent. And 13.4 percent of adults aged 25 to 34 are now living with their parents.

But the most troubling figure in the massive new Census data flow lies elsewhere: Over 20 percent of America’s children under age 18 now live in poverty.

Split This Rock Poem of the Week: Kenneth Carroll

September 23, 2010 ·

A weekly featured poem of provocation and witness. You can find more poetry and arts news from Blog This Rock.

A People's Historian

-for Howard Zinn

who will come to tell us what we know
that the king's clothes are soiled with
the history of our blood and sweat
 
who memorializes us when we have been vanquished
who recounts our moments of resistance, explicates
our struggles, sings of our sacrifices to those
unable to hear our song
 
who speaks of our triumphs, of how we
altered the course of a raging river of oppression
how we turned our love for each other into a
garrison of righteous rebellion
 
who shows us even in failure, when we
have been less than large, when our own
prejudices have been turned against us like
stolen weapons
 
who walks among us, willing to tell the truth
about the monster of lies, an eclipse that casts
a shadow dark enough to cover centuries 
 
what manner of man, of woman, of truth teller
roots around the muck of history, the word covered
in the mud of denial, the mythology of the conquerors 
 
let them be Zinn, let them sing to the people of history
let their song come slowly, on the periphery of canon
of history departments owned by corporate prevaricators
 
let their song be sung in small circles, furtive meetings
lonely readers, underground and under siege
their song, the seed crushed to earth, and growing
now a tree, with fruit, multiplying truth.

-Kenneth Carroll
Used by permission.

Kenneth Carroll is a native Washingtonian. His poetry, short stories, essays, and plays have appeared in Black Literature ForumIn Search Of Color Everywhere, Bum Rush The Page, and American Poetry: The Next Generation. His book of poetry, So What: For The White Dude Who Said This Ain't Poetry, was published in 1997 by Bunny & The Crocodile Press. He is executive director of DC WritersCorps and past president of the African American Writers Guild. He received a 2005 Literary Fellowship from the DC Commission on the Arts and Humanities, was nominated for a 2004 Pushcart Prize for Poetry, and received the Mayor's Arts Award for Service to the Arts. He was named one of WETA's Hometown Heroes in 2004.

Carroll was a featured poet at the inaugural Split This Rock Poetry Festival in March, 2008.

Please feel free to forward Split This Rock Poem of the Week widely. We just ask you to include all of the information in this email, including this request. Thanks!

Both California Senate Candidates Use IPS Reports to Slam Each Other

September 21, 2010 ·

In an election year in which voters are concerned with the record high unemployment numbers and the lack of a robust economic recovery, candidates around the country are using all they can to taint their opposing candidates’ economic records.

In California’s heated Senate race, both incumbent Senator Barbara Boxer (D) and Republican challenger Carly Fiorina have used Executive Excess reports to attack one another. The Institute for Policy Studies has published these annual reports on CEO pay for 17 years.

Friends of Barbara Boxer has cited our Executive Excess 2003 report in the attack ad below:

As the advertisement points out, we found that Fiorina laid off 25,700 workers in 2001, and then saw her pay jump 231 percent, from $1.2 million in 2001 to $4.1 million in 2002. Whereas previous HP heads had strived to avoid layoffs, IPS pay analyst Sarah Anderson described Fiorina as “like the Annie Oakley of the corporate world, coming in with her guns blazing.” Whether the layoffs directly led to her salary jump is unclear. However, it is obvious that Fiorina was a CEO that has put her own interests before her employees’ wellbeing, whether she would continue that management style if she becomes an U.S. Senator is something that no one can say for sure.

Fiorina, on the other hand, has cited our 2010 Executive Excess Report, CEOs and the Great Recession, on her website. She makes the claim that Senator Boxer has received thousands of dollars in campaign contributions from Bank of America, Verizon, Pfizer, Johnson & Johnson, Boeing and Microsoft—companies that have outsourced jobs and laid off workers since the beginning of our current economic recession.

Assuming that the website has correctly cited The Center for Responsive Politics, it is true that these companies that are funding Boxer’s campaign are among the top 50 “layoff leaders” in this recession. From this, you could argue that Boxer supports and is being supported by corporations that have laid off workers and have shipped workers overseas.

But unlike Fiorina during her axe-wielding days at HP, Boxer wasn’t the one directly responsible for mass layoffs.  Moreover, if you look at Boxer’s legislative record, the claim that she doesn’t support “Made in America” jobs creation is dubious. For one thing, she did support the $787 billion Recovery Act that has significantly helped lower the unemployment rate in the United States. So is Senator Boxer really a candidate that doesn’t believe in domestic job creation? It is hard to say…what do you think?

One thing we do know for sure is this: Job creation and reining in corporate executive excess are two very important issues that voters care about, which is evident from the heavy circulation and citation of our Executive Excess reports in one of the most heated electoral battles during the 2010 midterms. We are glad that both senatorial candidates are concerned with these issues. We just hope that whoever wins the election will take a look at our legislative score card at the end of our 2010 report (it starts on page 13) and actually start championing some of the legislative proposals that would rein in executive corporate excess.

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