Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: American Spirit who wrote (20700)	6/19/2003 11:49:37 PM
From: stockman_scott	Respond to of 89467

Bush Tax Policy Makes Inequality a Way of Life ______________________________ By Steven Rattner Editorial Newsday June 19, 2003 [Steven Rattner is managing principal of Quadrangle Group LLC, a private investment firm based in New York. This is from The Washington Post.] Americans have become familiar with the headline-grabbing escalation of CEO pay packages. But after a frisson of worrying in the mid-'90s, we seem to have become inured to the record disparity of income across nearly all professions and income levels. The huge gap in income among Americans is the widest of any major country, and it's not getting noticeably better. According to a Federal Reserve study this year, pretax family incomes of the top 10 percent grew by 19.3 percent between 1998 and 2001 after inflation, compared with 11.9 percent for the rest of Americans. Last fall the Census Bureau found that by any of five sophisticated measures, the gap in incomes has continued to widen. Most discussions of income inequality properly center on pretax statistics, in search of a true measure of how the labor markets and the economy are functioning. Considering pretax income is also proper because we should not legislate or redistribute our way to income equality. But neither should tax policy worsen the disparity between rich and poor. Widening that gap is what we've just done. According to an analysis by the Tax Policy Center of the Brookings Institution and the Urban Institute, the new tax provisions will raise the after-tax income of Americans making more than $1 million by 4.4 percent while raising the average American's income by only 1.8 percent. More than 70 percent of households will receive $500 or less. That's because the bulk of the cut will be used to reduce capital gains and dividend taxes, and even though ownership of stocks has broadened in the past decade, the highest-income Americans still have a disproportionate share of the wealth. In fact, distribution of wealth is even more unequal than the distribution of income. In 1998, 47.3 percent of households' "net financial assets" resided with the top 1 percent of Americans, according to an analysis of consumer finance data by Edward Wolff of New York University. Proponents of the tax bill decry such talk as class warfare. But is it class warfare to talk about fairness? And if fairness isn't enough, how about the social tensions and economic inefficiencies that can result from such an enormous rich-poor divide? This year, BusinessWeek labeled economists who worry about income inequality "declinists," meaning they believe the American economy isn't going to grow much so we should focus on how to divide the pie rather than how to grow it. That's disingenuous. Of course we shouldn't hold back economic growth just to keep the rich from getting richer. And many of us believe that our economy remains the most efficient and competitive in the world, fully capable of resuming very satisfying growth after the indigestion of the late '90s passes. But achieving that growth potential and lessening income inequality are not inconsistent. For example, investing in education and training - a concept given short shrift by the Bush administration - improves the quality of our workforce, which leads to higher productivity, which leads to more economic growth. Along the way, labor market economics work in our favor by shifting the supply of workers from unskilled to skilled. The massive tax cuts of the past two years mean no money for these kinds of initiatives or for other kinds of public investments. Indeed, the Bush administration has repeatedly proposed cuts in a variety of antipoverty programs. We shouldn't dismiss all tax cuts simply because they benefit the wealthy. Double taxation of dividends is a source of economic inefficiency, and eliminating it would be a laudable goal. But we need balance, not a tax bill whose benefits are sharply tilted in one direction. Policies that promote income inequality might also be tolerable if they represented the best way to encourage economic growth. But this tax cut hardly addresses today's need for more spending. It is aimed primarily at the wealthiest Americans, who are already spending all they want to, rather than putting money in the pockets of the Americans most likely to spend it. With interest rates at record lows, a lack of incentives is hardly what's holding back business investment; it's anemic demand. In 1971 the top 5 percent of Americans made about 6.3 times what the bottom 20 percent made. In 2001, after 30 years of relentless widening, that same group made 8.4 times what the bottom 20 percent did. Income inequality in the United States is now not only at a record level and not only the greatest since we began measuring it - it is also on a par with that of a Third World country. Is that the American dream? Copyright © 2003, Newsday, Inc. newsday.com

To: American Spirit who wrote (20700)	6/20/2003 2:41:08 AM
From: portage	Read Replies (2) \| Respond to of 89467

>>The Iraq War was timed to steal the November elections. In July prior to that Bush was plummeting in the polls amidst media stories focusing on the crummy economy and Enron type scandals. Karl Rove said OK, let's start a war. Dick Morris said "shed Iraqi blood now". Bush obeyed his advisors and right-wing experts. Nothing like a war to eclipse an election debate. >> That's pretty much what happened. Don't forget the Fed pumping in the October market rally either. Isn't it about time for history to rhyme on this one again ? : Step back with me to the curtain-raiser, the founding convention of the People's Party – better known as the Populists – in 1892. The members were mainly cotton and wheat farmers from the recently reconstructed South and the newly settled Great Plains, and they had come on hard, hard times, driven to the wall by falling prices for their crops on one hand and racking interest rates, freight charges and supply costs on the other. This in the midst of a booming and growing industrial America. They were angry, and their platform – issued deliberately on the 4th of July – pulled no punches. "We meet," it said, "in the midst of a nation brought to the verge of moral, political and material ruin....Corruption dominates the ballot box, the [state] legislatures and the Congress and touches even the bench.....The newspapers are largely subsidized or muzzled, public opinion silenced....The fruits of the toil of millions are boldly stolen to build up colossal fortunes for a few." Anybody else besides me getting ready for the rerun ?