In an exchange elsewhere, I made the observation that people with incomes above $200k buy a lot of things, and have a key role in stoking the economy. The person I was talking to asked if I would rather have wealthy people driving Mercedes rather than children getting health care. Here is my reply:
I honestly think it is better for companies to provide jobs and healthcare. A few years ago, the Congress slapped a luxury tax on yachts, figuring that the wealthy would not blink at another ten percent added to the cost. It turned out that many people who buy yachts and other large boats are not truly wealthy, and do care about a ten percent surcharge. The yachting industry was devastated, and many people were thrown out of work. Again, a few years ago the Congress eliminated the deduction for the "business lunch", without even a phase- out, figuring that wealthy corporations would not care. It devastated the restaurant industry, throwing many waiters and busboys out of work. You should not sneer at the Mercedes, it is providing people with a living and healthcare.
It used to be that about 5% unemployment was considered normal. It is only because a lot of jobs were created by the bubble, though ephemeral, along with a ripple effect in various communities, that people came to expect 3%. You may as well blame Bush because real estate prices in Silicon Valley are depreciating, instead of realizing that they were artificially inflated in the first place, and are returning to normal......... |
