Morning Joe | February 20, 2013
>>> he will have a failed presidency unless he deals honestly with the entitlements programs without cutting, you know, the poor and the wretched and all the rest and all this stuff and getting solvency for social security , then the scorecard in years to come was he failed.
>> that was alan simpson , of course, who along with erskine bowles rolled out a new proposal to reduce the deficit by $2.4 trillion over a decade. it would save $600 billion through changes to health care programs and another $600 billion from tax reform . $1.2 trillion would come from cutting discretionary spending. our own economic guru, steve rattner, is here with some more of his charts this morning on income. steve , what are you looking at?
>> swiching gears to incomes, let's look at numbers that came out recently based on tax returns that show some pretty amazing things happening with incomes for both the bottom 99%, the top 1%. some of you may remember that almost exactly a year ago, i showed up here and told you that 93% of all the income gains in 2010 went to the top 1%. and 37% went to the top .01%, which is about 16,000 households. those numbers have now been revised. and in fact, 103% of all the income gains in 2010 went to the top 1%, meaning that the other 99% on an inflation-adjusted basis actually saw their incomes go down.
>> and then if you put that together across a number of years, what you see with the revisions is that over the 2010 to 2011 period, that should be 2011 at the bottom, 121% of all the income gains went to the top 1%, meaning, again, the bottom 99% went down. and you can see back over the last 20 years what percent of those income gains went to the top 1%, you can see at 121%. it is almost double what it has been in any other period of recovery.
>> leave that up for just a second, t.j., if you would. so is that jump even just from 2009 up to this period from 2010 to current, is that the stock market ? why are the gains so pronounced?
>> it is a combination of certainly the stock market and just the fact that high-valued ceos and high-paid executives get paid more and have the so-called knowledge economy are able to get more. and then this relentless -- and this is the point, we talk a lot about jobs, we don't talk enough about incomes -- this relentless downward pressure on the average worker competing across the globe, not being able to get wage increases. what's happening with unions. we're now talking about the minimum wage and so forth. and so what's also interesting, if you look at the 2011 numbers which came out, you see something -- a slightly different pattern, which is the bottom 99% still going down, down minus 1.3%. they lost another $150 on their average income . but to your point, willie, the top has actually went down a little bit in that year as well. 0.6% for the top 1%, 6.7% for the top 1%. nobody is going to take up a collection for these guys. they have $23 million of average income . but this is probably a function of the fact that the stock market did not have a great year in 2011 .
>> those charts, those two combined charts, that is a prescription for social dynamite. i mean, the fuse is burning.
>> and the fuse is burning, and when we sit here a year from now and look at the next set of numbers, the stock market was up 16% last year. you're going to see those top income brackets surge in my opinion.
>> the same pressure that's pressing downward on the middle class is lifting --
>> -- it's lifting the top.
>> that's exactly the point.
>> what do you do from a government point of view? what's the first thing, if it comes from the government?
>> well, the president's trying to do stuff. it's at the margin, the minimum wage , training and so on. what you've got to do over time is readdress the balance. raising the capital gains rate which we raised a little bit, but in my opinion, not enough. i'm not here to redistribute everybody's income, but government can play more of a role in trying to bring the two ends together than what it's doing.
>> steve , thanks. tomorrow on " morning joe ," democratic political guru james carville will join us. also congressman steny hoyer and actor don cheadle . we'll have more " morning joe " when we come