That's right: $21.6 MILLION, or 1,935 times more than Tamara's earnings.
After Tamara pays for her rent, food, transportation, insurance, clothes, etc. from the $930 she labors for each month, she somehow saves $10 per month at the credit union.
What's her MPC or Marginal Propensity to Consume? 98.9%, or $920 consumed/$930 earned.
If she earns another $1,000 next year, she will spend $989 of it, or likely more, since the climate change induced Great Drought of 2012 will raise the food costs of this already poorly nourished girl.
What's her MPS or Marginal Propensity to Save? 1.1%, or $10 saved/$930 earned.
Tamara and Mitt's household reflect an economic rule: The higher your income the lower your MPC. For each extra (marginal) $10,000 the rich add, the smaller the percentage they will consume and the larger percentage they will save, exponentially adding to their wealth.
Much of the Romney household's savings/wealth, estimated at $300+ millions, sits in lobbyist created tax sheltered offshore accounts created only for the rich that are neither helping drive the economy nor investing in American workers' creativity.
Tamara, conversely, throws everything she earns, except for that 1.1% emergency fund, back into those American streets, workers, and economy. The $200 per month she spends at Joe's Grocery Store helps Joe earn $50,000, of which he consumes 40,000 (MPC = 80%) on his business and family needs, leaving $10,000 as savings for his kids' college (MPS = 20%).
Tamara wasn't born into a family that casually pays for a Harvard MBA and all it is supposed to teach one about economics. She does, however, remember learning that Henry Ford paid his workers fairly, so that they could afford to buy his product and, in the process, grow American industry and its independent class of workers who would grow America's Demand Side Economy.
Each precious dollar Tamara spends at her 98.9% rate is recycled by the next recipient at his or her MPC and MPS rate. Tamara's spending drives demand.
When she, Joe the Grocer, and about 120 million households combine their MPC decisions, rational economists conclude that our economy is, roughly, a 70% Demand Driven Economy.
The economy grows, adapts, and expands its middle class based on the collective MPC and MPS decisions of its workers. Give a larger percentage of your nation the opportunity to choose healthy MPS and MPC allocations and you build a strong economy. Henry Ford proved that by paying his workers enough to buy his product, and save too. Ford's economic philosophy pushed his competitors and other industrialists to give more Americans healthy MPC and MPSs. Such sensible economics -- not "Voo-Doo" Trickle Down Economics, as George H. Bush honestly called Supply Side Economics -- built the world's once strongest middle class.
Weaken more and more American households' healthy MPCs and MPSs and you weaken the country.
Since the 1980's, income and wealth concentration in the US has skyrocketed to match that existing prior to the Great 1929 Crash. In the 50's, when the Middle Class was growing, CEO's earned about 20x's as much as the average worker (36% unionized). Today CEO's earn about 300x's as much and the uber-sized CEO's never seem to have their salary, pensions, perks, or golden parachutes cut while too many pad their financials with investments in lobbyists, financial chicanery, and offshore hideouts.
For four decades workers' productivity has soared, while their earnings haven't and their MPS collapsed. Meanwhile big bankers, financers, hedge funders' wealth and income has soared, while more average workers' (6.9% unionized) MPCs spiked, and they became poor.
In 2004 Thomas Franks wrote What's the Matter with Kansas? Much of the world retitled it as What's the Matter with America?
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