Wreckonomics

Vol. 2 No. 67 June 22, 2007

The Bogus Economist
Wreckonomics

One of my prime ambitions ever since I was a little bogus economist was to coin a word. The idea of having my very own word, which people could quote with the preface, ”As the Bogus Economist called it...,” stoked my ambition.

I first tried my hand at coinage when I observed a politician who kept changing positions was indulging in “flippage.” My friends kindly mocked me and suggested I send the word to International House of Pancakes. My second attempt was the “bubble-up” method of wealth distribution, which substituted the “trickle down” philosophy of giving lots more money to the rich (so that it would eventually reach the poor) with a system of letting the poor and middle class keep more money, which would eventually reach the rich. Derision.

In 2000, I wrote a paper describing a government where large multi-national companies were the “citizens” and laws were made to further their interests and protect their rights. This government I called “corpocracy,” which I thought was a superb word and which I really thought would immortalize my contribution to the language. Alas, no. Professor Charles Derber of Boston College beat me to it. A Google search lately turned up 37,000 hits – hardly a unique contribution.

My latest effort doesn't seem to be going anywhere, either. After looking at the shambles that passes as our economic policy, with its nine trillion dollar debt and incredible gap between the top and bottom brackets, I dubbed it “wreckonomics.” Not bad, I thought. Google struck again – 1330 hits.

Was there no new word for me to coin? The Oregonian didn't help me one bit. In a front page article, I learned that Oregon's corporate tax has remained the same since 1931. Further, the share of the tax burden paid by corporations has gone from eleven percent in the 1980's to five percent today. No fewer than twenty-six corporations with Oregon profits of one million dollars or more paid just ten dollars in taxes, according to the big “O.” I went back to “wreckonomics.”

If a corporation could make a million and only pay ten bucks, how about me? All I had to do was get a job that paid that much. The Help Wanted section of the Oregonian had no jobs paying anywhere near a million and neither did the News-Times. I even asked others (who made up my “support group”) whether they knew of any openings. Nada. So, since I couldn't get a million-dollar job, I had to find out how the ratio of ten bucks to one million worked out when it came to everyday incomes.

Well, if people paid the same rate as some corporations, Harry and Madge Upchuck, making $50,000 a year , would have an Oregon tax burden of fifty cents. Most of us could dredge this up without taking out a bank loan. A person we shall name Charlie, earning Oregon's minimum wage of $7.80 an hour, would make $16,224 a year and pay a whopping sixteen cents or so in taxes. But that's not the way it works.

Oregon taxes actually would take nine percent of the Upchucks' taxable income. Even if this were only half their gross income, they'd pay $2,250. Using the same formula, the twenty-six corporations mentioned by the Oregonian would each owe $45,000 to Aunt Salem. As I compute it, the tax code – which has been unchanged since 1931, you'll recall – has been shortchanging our aunt about $44,990 per corporation yearly. Poor old Charlie would have to allow around $730 bucks (using the same formula) to pay his taxes, about 4500 times the corporate rate. Some of this money would be used to help pay their taxes.

So back to wreckonomics. After Reagan, Bush I, Clinton and Bush II, it might seem “trickle down” isn't quite trickling down to where it's supposed to trickle (down). The Internal Revenue Service shows the top one percent of Americans, with incomes of more than $348,000, received (in 2005) their largest share of national income since 1928; the top 10 percent, roughly those earning more than $100,000, also reached record levels of income share. While total reported income in US increased almost nine percent in 2005, average “real” incomes for those in bottom ninety percent dipped slightly compared with 2004, dropping $172, or 0.6 percent. Gains went largely to the top one percent, whose incomes rose to average of more than $1.1 million each with an increase of more than $139,000, or about 14 percent.

Sorry to make your eyes glaze over, but that's what economists are supposed to do. Being bogus, I can shorten it: the system stinks. It's not that there's anything wrong with getting rich and having lots of money to buy condos which, in the words of the advertisement, “start at an affordable $2,500,000.” It's the stacking of the deck I object to. The swiss cheese tax code carefully engineered in federal and state legislatures by those who have the most to gain has to stop and the way to stop it is to decide you're mad as hell and aren't going to take it anymore. Take your pen in hand and demand change.

You can coin any words you'd like. Or just use the old ones.
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The Bogus Economist © 2007