This is the Generic Structure, which is a combination of two reinforcing feedback loops. Once one entity (person, product, organization, company, or country) gets ahead, it's easier to get even further ahead because better performance provides more resources and a greater ability to improve performance. A "figure 8" path through this structure is also a reinforcing loop.

Example for "good student" performance over "bad student" performance. Once a student gets ahead, the student tends to get more attention, which allows faster progress. This is experienced relative to employees in organizations as the "halo effect."

Example for how monopolies grow from increased market share. The end result is to reduce competition overall as experienced by anyone who has played the game, Monopoly.

This file has been modified to also contain:
The Sons Also Rise By PAUL KRUGMAN, The New York Times, November 22, 2002
The Apple Falls Close to the Tree By ALAN B. KRUEGER, The New York Times, November 14, 2002

For Richer By Paul Krugman

Related to this dynamic, Paul Krugman wrote an article, For Richer, for the NY Times Magazine (10/20/02, 8094 words) on how "the growing concentration of wealth has reshaped our political system: it is at the root both of a general shift to the right and of an extreme polarization of our politics." Toward the end, he describes “… the possibility of a self-reinforcing process” where “economic policy increasingly caters to the interests of the elite …” This is the same dynamic as the "growth machine" described in The Tangle of Growth. 

Relative to what he describes, appended are brief explanations of:

• - The Rules of the Game: An excerpt from the textbook, Business Dynamics, Systems Thinking for a Complex World, by John Sterman of MIT. The excerpt describes this self-reinforcing feedback process.
• - The Growth Machine: The reinforcing process that occurs and promotes urban growth.

The Tax-Cut Con By Paul Krugman 

September 14, 2003, NY Times Sunday MAGAZINE DESK
Cutting taxes doesn't benefit the middle class, it doesn't create jobs or growth and it doesn't give Americans the country they want. Counting the cost of a 25-year crusade. 7242 words

Data on Income & Tax Distributions - Appended 7/17/09

Here are charts from Congressional Budget Office data that show how effectively income has flowed to the top (you can get the Excel file and reproduce these graphs for yourself).

This is relevant to the proposal to tax the Top 1% to 7% to pay for public option health insurance. From 1979 to 2006, real income of the lowest quintile (Bottom 20%) increased by 11%. The income of the Top 1% grew by 256% ... and they already made 23X as much in 1979 ... in 2006 it's 73X.

This has NOT happened by accident. Government and Federal Reserve policies have all fed the "poor get poorer and the rich get richer" dynamic. These policies have put the path dependence dynamic on steroids. Here are some of them:

• Reductions in income tax rates for the wealthy
• Capital gains taxes at 15% with the top income tax rate at 35% to penalize work compared to investment
• Tax breaks that let corporations largely avoid taxes
• National policy by the Federal Reserve that assures more people than jobs to depress wages ... note the Fed is a private corporation owned and run by banks, not government
• Offshoring of jobs (low-wage, low-tech, & high-tech) that put Americans in competition with extremely low-wage & slave labor, which drives down wages at the bottom, but provides obscene rewards to the executives that destroy (rather than create) jobs.
• Higher "fees" for many public services that disproportionately affect those with lower incomes.
• Higher local and state sales taxes that also disproportionately affect those with lower incomes.

No wonder our economy is collapsing from depressed demand.

This chart shows that the top 20% have done pretty darn well compared to everyone else.

Real Average After-Tax Inome for all Quintiles

"Conservatives" are apoplectic at the thought of raising taxes on those with adjusted gross income exceeding $280,000 a year for an individual and $350,000 for a couple filing a joint return. The household income chart below indicates that would be about the top 6% or 7% that have done about twice as well as the Top 20% and really well compared to the Bottom 80% of households.

Real Average After-Tax Inome for all Quintiles plus Top 10%, 5%, & 1%

The charts just above and below clearly illustrate that the further to the top, the better households have fared.

Real Average After-Tax Inome as a Percent of 1979 Income for all Quintiles, adding Top 10%, Top 5% and Top 1%

Note that those in the bottom four quintiles actually experienced income reductions during the Reagan years.

Here's a summary of how these income groups gained from 1979 to 2006:

Income Group      Gain      Factor better than lowest Quintile
Lowest Quintile     111%       1.0
Second Quintile     118%       1.6
Middle Quintile      121%        2.0
Fourth Quintile      132%        2.9
Highest Quintile     186%        8.1
  
All Quintiles           150%        4.7
  
Top 10%               212%      10.4
Top 5%                 243%      13.3
Top 1%                 356%      23.8

So the Top 1% did 24 times as well as the Lowest Quintile.

The chart below contains two of the series above to show how the Top 1% has made out really well even compared to the top 20%. This is well-described in Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill) by David Cay Johnston, 2007.

Real After-Tax Income of Top 20% and Top 1%

Compensation has not kept pace with productivity. In 2004 compensation would have been 68% higher had compensation growth kept up with productivity growth. 

Productivity Up, Compensation Lagging. Analysis by Jared Bernstein of U.S. Bureau of Labor Statistics and U.S. Bureau of Economic Analysis data. Compensation of the bottom 80 percent of the U.S. workforce has lagged productivity since the mid-1970’s.

It's not that those with lower incomes are overtaxed; it's that they're underpaid due to all of the factors noted above. This is consistent with "conservative" philosophy as described below. The idea is to keep those with lower incomes in poverty to enlist them in the war the wealthy wage against taxes.

In fact, the Average Income of the Top 20% has come to exceed the Total of the Average Incomes of the Bottom 80%.

Real After-Tax Income for Top 20% and Total of Average of After-Tax Incomes of the Bottom 80%

Both these pale compared to how well the Top 1% have done. The CBO doesn't show the data, but the Top 0.1% have even done much better than the Top 1%.

Real After-Tax Income for Top 20% & Top 1% and Total of Average of After-Tax Incomes of the Bottom 80%

These graphs are striking, but the real situation is even more disproportionate.

• The graphs are adjusted for inflation, but the government, controlled by the economic "right", has tampered with the inflation numbers to make them only a fraction of what's the real case. Think for yourself over the last year ... the inflation numbers haven't been all that bad ... but the prices of much of what we buy have gone up enormously.
   
• Much income at the top, especially that of the top 1%, is hidden offshore.

But you'll hear that the Top incomes pay the lion share of the taxes ... and disproportionately so. Sob, sob ... Oh! ... the unfairness of it all! 

And it is true. The graphs below show the ratios of the Share of Federal Tax Liability to After-Tax Income Share. They show that the ratio has declined for all income quintiles, except for the top quintile, which has come back to about where it was in 1979. (The Share of Federal Tax Liability data is available at the same CBO link as above.)

Ratio of Share of Federal Tax Liability to Share of After-Tax Income for all Quintiles

But there have been declines in the ratio for the Top 5% and especially for the top 1%.

Ratio of Share of Federal Tax Liability to Share of After-Tax Income for Top 10%, Top 5% and Top 1%

So though it's true that taxes are proportionately higher on the wealthy, it's reasonable for at least four reasons:

1. You can't get blood out of a turnip. Increased taxes on the wages of those with lower incomes, incomes that have been depressed for decades (see the productivity and compensation chart above), won't yield much.
    
2. As noted above, much individual and corporate wealth has been hidden offshore.
    
3. These show "Federal Tax Liability" ... state and local tax liabilities, as well as fees for public services, have increased dramatically and had major impact on those with lower incomes 
    
4. Without progressive taxation, income and wealth will continue to flow to the top. This is what happens because of the "natural law" of path dependence, which is why conservatives have elevated the fact that this happens to be the "hand of God" in action.
    
   See quotes at The Conservative Mind ... for example that Poverty is part of the "eternal order of things ... which never can be removed by legislation." This is the exact same 16th century thinking of Niccolo Machiavelli.

Reflections on a statement by Dr. Adrian Rogers

I received a statement in e-mail, by a Dr. Adrian Rogers, that illustrates the thinking and profound ignorance of the "conservative" mind. The title, Dr., must be from a degree in theology, perhaps honorary (?) as I cannot find a reference to the accomplishment on Wikipedia or his website. Here's the page with the quote (absent the last sentence) on his website where you can also listen to the audio. Contents of the e-mail:

What a profound short little paragraph that says it all

"You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it."
~~~~ Dr. Adrian Rogers, 1931    [... this should be: 1931-2005]

This little paragraph doesn't "say it all" at all. The issue isn't legislating "the poor into freedom" or "the wealthy out of freedom". In fact, "conservatives" have a profoundly limited concept of "freedom".

The wealthy have very effectively influenced government to "legislate vast numbers into poverty" and themselves into wealth by the policies outlined above. This is America; if you want to know why something is as it is ... follow the money.

Dr. Rodgers' statement is entirely consistent with the beliefs of Jeremy Bentham, a conservative philosopher who asserted that human actions are guided purely by pleasure and pain, and nothing else. From Greenspan's Fraud by Ravi Batra, p. 51:

"The practical outcome of this doctrine," assert economists Hunt and Sherman, "was the widespread belief at the time that laborers were incurably lazy. Thus only a large reward or the fear of starvation and deprivation could force them to work." In economics jargon, peasure became utility and pain became disutility. The economists came to believe that everyone tries to  maximize utility and minimize disutility.

But the creed that laborers would offer little labor unless goaded by hunger led the latter-day classical economists to oppose labor unions and minimum wage laws. This is because if government or union actions raise wages above the subsistence level, workers would withhold their labor, so output and profit would decline.

Therefore, classical economists believed that wages should be kept as low as possible. This, they argued, would also keep workers fully employed, because low wages induce companies to hire more workers, ensuring a high-employment economy. ...

This underlies "conservative" beliefs to this day. It ignores, of course, that employment is governed by Federal Reserve policies; see why at There's no 'free market' for Labor and What determines unemployment anyway? Fed policy that promotes worker insecurity.

Dr. Rogers was a conservative, an author, and three-term president of the Southern Baptist Convention. According to Wikipedia:

He was first elected to this post on a platform of biblical inerrancy, and under his leadership, the denomination shifted sharply rightward, firing liberal and moderate seminary professors, as well as requiring all employees of the denomination's seminaries and the national office to affirm their adherence to the Baptist Faith and Message, a document which Rogers later (when he was no longer president) succeeded in significantly revising. ...

Imposing loyalty oaths helps suppress tendencies toward Heresy. Damn those "liberal and moderate professors" anyway.

By the way, I was raised Southern Baptist and have personal experience with their dysfunctional beliefs.