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BU SOC 100B - SOC100B-7

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SOC100B(Course Readings Notes) Rich People Create Jobs and Other MythsMyth 1: the stimulus failedThe stimulus worked in 1933 and in 2009; things would have been a lot worse without the stimulus. It increased economic growth, reduced unemployment, and put millions of people back to work. It just wasn’t big enough or long-lasting enough.Myth 2: the deficit is our biggest problem right nowInterest rates have actually gone down. Financial markets think we are a pretty good risk. Only an idiot turns down free money. The government could inject $1 trillion by borrowing only $400 billionMyth 3: lower taxes are the best way to grow the economyNo one likes paying higher taxes. Bill Clinton raised tax rates in 1993, and Republicans insisted it would cripple the economy. Instead, the economy boomed. High tax rates don’t hinder growth, and low tax rates don’t stimulate it. For ordinary wage earners, participation in the job force and total hours worked barely responded to taxes at all. Tax rates effect on business investment is nil.Myth 4: regulatory uncertainty is clogging the economyOur economy’s biggest problem right now isn’t regulatory economy. It’s economicuncertainty.Myth 5: Obama is debasing the dollarThe dollar lost value under Reagan and Bush 1, gained value under Clinton, lost value under Bush II, and has stayed steady under Obama.Myth 6: if you unshackle the rich, they will rev up the economyAmerica’s economic policies have been based on the notion that catering to corporations and the wealthy is the way to stimulate the economy. Rich people don’t create jobs when we hand them big windfalls. They create jobs when the economy is growing and they have customers for their businesses. The key to solving the problem is to focus on more stimulus, easier money, higher inflation, and a weaker currency.The Making of the American 99% and the Collapse of the Middle ClassThe top 1% rich people (the super-rich) keep most of the wealth in their own hands, expecting to keep profiting from the middle class, which is struggling to get by. Race and ethnicity is a factor. African-Americans and Latinos have disproportionately lost home, jobs, etc. The liberal elite are well-to-do middle class people, who are still part of the 99% that poorer people may confuse with the actual elite (1%). Liberal elites- are professionals and can be overbearing and condescending, but it is the actual elite that took your house away.As a result of funding drying up, college tuitions increased dramatically and college graduates came out with tons of student loans. Americans are particularly vulnerable to economic dislocation. - The 99% has a growing sense of unity, managing to create self-governing communities. - On the upper hand, the encampments engendered unpredictable convergences: people from comfortable backgrounds learning about street survival from the homeless, a distinguished professor of political science discussing horizontal versus vertical decision making with a postal worker, military men in dress uniforms showing up to defend the occupiers from the police. Conclusion- the 99% can be a force to change the world.Wealth Gaps Rise to Record Highs Between Whites, Blacks, HispanicsThe typical black household had just $5677 in wealth (assets minus debts) in 2009; the typical Hispanic household has $6325 in wealth, and the typical white household has $113,149.Hispanics and blacks are the nation’s two largest minority groups, making up 16% and 12% of the U.S. population respectively. From 2005 to 2009, the median level of home equity held by Hispanic homeowners declined by half- from $99983 to $49145. In 2009, the median wealth ratios of white to black is 19:1 and from white to hispanic is 15:1. White homeowners declined from $115364 in 2005 to $95000 in 2009.Black homeowners declined from $76910 to $59000. Hispanics: Net worth of households decreased from $18359 (2005) to $6325 (2009)- 66% percentage dropBlacks: Net worth of households decreased from $12124 (2005) to $5677 (2009)- 53% percentage dropWhites: Net worth of households decreased from $134992 (2005) to $113149 (2009)- 16% percentage dropAsians: Net worth of households decreased from $168103 (2005) to $78066 (2009)- 54% percentage dropWealth disparities increased not only between racial and ethnic groups, they alsorose within each group. The top 10% of Hispanic wealth contributed 56% in 2005 to 72% in 2009. The top 10% of White wealth contributed 46% in 2005 to 51% in 2009.Inequality for All (Notes from Film)Big companies giving more jobs to foreign lands than they do to America itselfInequality and tax rates (on the wealthy) are inversely relatedState funds for education decreased, so tuition rates increased to compensatePolitical polarization increases along with income inequalityNot a zero-sum game because the rich actually do better in a faster growing economyStrong middle class→ where wealth is shared among a greater number of peopleDiversity and its adopted “importance” may have hurt


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