Bush economic "recovery"

[Mavdog]

Today’s WSJ has a very interesting front page article describing the current economic situation of Americans, and specifically how the Bush economic “recovery” has affected the different classes of incomes. It is not a very pretty picture that is painted, and actually quite a disturbing trend is manifesting itself in American society.

The data is not good for the vast majority of American families. It seems that the recovery has benefited the top two quartiles disproportionately, and the lowest quartile has seen no recovery at all. “To date the [recovery’s] primary beneficiaries have been the upper income households” concludes Dean Maki, JPMorgan Chase (and a former Federal Reserve economist). “Two of the main factors supporting [consumer] spending over the past year, tax cuts and increases in [stock] wealth, have sharply benefited upper income households relative to others.” Mr. Maki estimates that in terms of dollars saved, the top 20% of households by income got 77% of the benefit of the 2003 tax cuts.

The affluent also benefit more from stock dividends, on which the federal income tax rate was cut last year retroactive to 2003. Total dividend payments have risen 11% to $3 Billion since the end of 2002, as the level of corporate profits has risen 42%. Wage and salary income is up only 6.3% in the same time. Average hourly earnings have risen at just a 1.9% annual rate since a year ago, while the CPI has risen 3.3% in the same time period. The result: average worker’s purchasing power has declined. The middle to lower income households have actually gone backwards economically during this timeframe.

Weekly earnings for production workers and non-supervisors, adjusted for inflation, were down 2.6% in the year from June, 2002, the largest decline since 1991.

The workers are getting squeezed as health care costs rise and companies seek to shift the burden to workers in a soft job market. From 2000 to 2003, employees’ average annual out of pocket expenses for family medical premiums rose 49% according to a survey by Kaiser Family Foundation.

One statement that is accurate is that GWBush’s economic policies have truly benefited some Americans, but only those who have the highest incomes and who own stocks. The rest, the vast majority of Americans, have seen their economic situation decline and their actual earnings in adjusted dollars decrease.

Can America afford to have this trend continue for four more years, with more division between the income classes, and the middle and lower income households sliding lower in economic terms as the result? I think not.

[FishForLunch]

If only there was some form of income re-distribution, most likely if the Dems were in power

[reeds]

"To date the [recovery’s] primary beneficiaries have been the upper income households” concludes Dean Maki, JPMorgan Chase (and a former Federal Reserve economist). “Two of the main factors supporting [consumer] spending over the past year, tax cuts and increases in [stock] wealth, have sharply benefited upper income households relative to others.” Mr. Maki estimates that in terms of dollars saved, the top 20% of households by income got 77% of the benefit of the 2003 tax cuts."


Its just so obvious..the Republican party is all about helping the rich- always has been..tax breaks to the rich- to the ones who really dont need it..what a freaking joke...screw the lower income households, as long as the rich get richer....typical Bush BS

[FishForLunch]

I got a Tax break for the past two years and I really needed it. I am one of the middle income households that benefited from the Tax break. So I guess if John Kerry becomes the president he will find a way to screw me out of any tax breaks that I may get if Bush continues to be our president.

[Mavdog]

Originally posted by: FishForLunch
If only there was some form of income re-distribution, most likely if the Dems were in power

no, this is in regard to the distribution of income fish.

[Usually Lurkin]

UPDATE 4-Greenspan says US growth solid,inflation no threat
Tue Jul 20, 2004 06:40 PM ET
(Adds details, updates market reaction)
By Glenn Somerville

WASHINGTON, July 20 (Reuters) - Federal Reserve Chairman Alan Greenspan on Tuesday said the U.S. economy has entered a sustainable expansion that should weather a June slowdown and is under no serious threat from inflation.
. . .
Greenspan's overall message on the economy, with just a few months left before the presidential elections, was upbeat.
"Not only has economic activity quickened, but the expansion has become more broad-based and has produced notable gains in employment," he said.
Text

Alan Greenspan: mouthpiece for a vast, right winged conspiricy. That fasco-capitalist is still trying amidst this current great depression to cover the feeding frenzy that his fat republican friends are having on the poor, downtrodden middle class, who themselves are barely keeping the US afloat with their increased purchases of new cars, home improvement supplies, and overall increased demand for consumer goods.

[reeds]

"I got a Tax break for the past two years and I really needed it. I am one of the middle income households that benefited from the Tax break. So I guess if John Kerry becomes the president he will find a way to screw me out of any tax breaks that I may get if Bush continues to be our president. "

That is the biggest freaking problem right there...you said it perfect FISH..as long as you got your tax break- who gives a damn right? Doesnt really matter if the poor are staying poor or getting poorer..typical republican rubbish

[dude1394]

Originally posted by: Mavdog

And your answer to this problem is???

Lower growth, more unemployment?
Higher taxes?
Free health care to all, mri's for none?

Lower growth ala europe?
I'm waiting?

[FishForLunch]

So now you democrats (sorry socialists) think the middle class is also greedy because we dont sacrifice more for the downtrodden and poor.

[Mavdog]

Originally posted by: dude1394

And your answer to this problem is???

Lower growth, more unemployment?
Higher taxes?
Free health care to all, mri's for none?

Lower growth ala europe?
I'm waiting?

and you think this is not a problem?
Do we want a "barbell" social dichotomy?
should workers see their real wage decrease?
don't we all want lower unempolyment?
Aren't health care costs rising mnay times greater than CPI?
Did anyone call for higher taxes?
Is it a question of growth?
are you still waiting?
Is it a question of government policy?

[LRB]

Originally posted by: Mavdog

and you think this is not a problem?
Do we want a "barbell" social dichotomy?
should workers see their real wage decrease?
don't we all want lower unempolyment?
Aren't health care costs rising mnay times greater than CPI?
Did anyone call for higher taxes?
Is it a question of growth?
are you still waiting?
Is it a question of government policy?

Nice dodge BTW on answering the original questions. Have you considered running for office. [img]i/expressions/face-icon-small-wink.gif[/img]

[Mavdog]

Originally posted by: LRB
Nice dodge BTW on answering the original questions. Have you considered running for office. [img]i/expressions/face-icon-small-wink.gif[/img]

It seems that dude was playing jeopardy. you know, it must be in the form of a question....[img]i/expressions/face-icon-small-wink.gif[/img]

The answer is that the structure of the tax cuts have produced more wealth for those that have it. The dividend tax cuts for example are benefitting few, and it's not the middle or lower classes.

Employment over the last 12 months have been positive in growth, but the data shows at lower adjusted wages. These workers are getting squeezed, they are the ones who need help.

The situation with health insurance is hitting the hourly wage earners hard, this is an issue that has not been addressed by the current administration and the longer we do not solve the problem the greater the negative affect on lower income workers.

[madape]

The tax cuts have generated wealth for everyone, poor and rich alike. The Democrats would like to play class warfare and tell you that the rich are getting richer and the poor are getting poorer. That's not the case. The rich are getting richer AND the poor are getting richer. Maybe the poor aren't getting as rich as the rich people, but when all is said and done, there will be better off than they were before the cuts. There will be more production. There will be more employement. There will be a higher standard of living for every American.

If we want all of our citizens to own a home, a car, health care, and an XBOX.. we need to encourage them to go out and earn the car, the home, the health care, and the XBOX. If we give it all to them for free, no one will need to actually work hard to be as rich as the guys who DO work hard, and it won't be long before there are no more rich people to pay for the home, the car, the health care, and the XBOX.

The more we allow individual Americans to pursue their OWN happiness through hard work, the harder they will work to pursue their own happiness. The more we give away for free through state sponsored entitlement programs sponsored by the rich, the LESS hard people will actually work becuase there is less incentive to BE rich. The benefits of working hard and developing marketable skills will be LESS desirable becuase there is less of a difference between the lifestyles of those of working hard and the lifestyles of those who choose the path of laziness.

In other words, if you want the poor to get richer, vote republican. If you don't think it matters how poor the poor actually is, just as long as they aren't THAT much poorer than the rich, vote democrat.

[Chiwas]

madape´s statement sounds very democratic, but the truth is, the corporate and financial sectors have kidnapped politics and government in some important way. That does not allow people to climb the american dream ladder as easy as in the past.

[LRB]

Originally posted by: Chiwas
madape´s statement sounds very democratic, but the truth is, the corporate and financial sectors have kidnapped politics and government in some important way. That does not allow people to climb the american dream ladder as easy as in the past.

Chiwas I don't know of any other time in the past where it was easier to move up the ladder of success here in America except possibly during the .COM craze where fools were throwing millions at any thing ending in .COM. However that has nothing to do with the current political administration. People usually do eventually learn from their mistakes.

[Usually Lurkin]

Originally posted by: Chiwas
madape´s statement sounds very democratic, but the truth is, the corporate and financial sectors have kidnapped politics and government in some important way. That does not allow people to climb the american dream ladder as easy as in the past.

Truth is, corporate and financial sectors always dominate politics. The benefit of an open capitalism is that people can choose their own place in the corporate/financial system. Work hard enough, and earn your way into anything.

The more economics we force through the government, the more we turn the corporate/financial sectors into a government monopoly. If you don't like the power of Microsoft - imagine if Microsoft controlled your sewage, your election systems, your taxes, your schools, etc., etc. The more control we give the government over our lives, the less control we can retain over our lives.

and madape's right. In the US we have some of the richest poor people in the world.

[Chiwas]

This seems to not be in accordance with the last two posts:

"The affluent also benefit more from stock dividends, on which the federal income tax rate was cut last year retroactive to 2003. Total dividend payments have risen 11% to $3 Billion since the end of 2002, as the level of corporate profits has risen 42%. Wage and salary income is up only 6.3% in the same time. Average hourly earnings have risen at just a 1.9% annual rate since a year ago, while the CPI has risen 3.3% in the same time period. The result: average worker’s purchasing power has declined. The middle to lower income households have actually gone backwards economically during this timeframe.

Weekly earnings for production workers and non-supervisors, adjusted for inflation, were down 2.6% in the year from June, 2002, the largest decline since 1991.

The workers are getting squeezed as health care costs rise and companies seek to shift the burden to workers in a soft job market. From 2000 to 2003, employees’ average annual out of pocket expenses for family medical premiums rose 49% according to a survey by Kaiser Family Foundation."

The least it shows is that the opportunities for individuals are way different than for companies, and the money does not necessarily goes for the hardest workers.

[madape]

Originally posted by: Chiwas
madape´s statement sounds very democratic, but the truth is, the corporate and financial sectors have kidnapped politics and government in some important way. That does not allow people to climb the american dream ladder as easy as in the past.

Boy, I sure would like you to back up that insane statement. What the hell are you talking about?

[LRB]

The least it shows is that the opportunities for individuals are way different than for companies, and the money does not necessarily goes for the hardest workers.

Nor should it necessarily. Some guy could work all week digging a ditch by hand, while another guy coudl do it in a few hours with a shovel. Why should the 1st guy get paid more for working harder, but being stupid in how he did it and taking longer to do the job. The big bucks should always go to those who use brains to accomplish more with less. There is only so much that you can improve on by working harder. However, the possibilities are endless on improvements from working smarter.

[Chiwas]

Originally posted by: madape

Boy, I sure would like you to back up that insane statement. What the hell are you talking about?

The same feeling that I had reading yours, a former good theory of economics with time -and the per capita income- not already backing it up.

However, the possibilities are endless on improvements from working smarter.

Agree. The issue has turned from hard working to smart working, which is compatible with capitalism but not very fair with society as a whole.

How many entrepreneurs a country -or society- can have in the end? The limit is a number based in the quantity of workers left.

[Chiwas]

I made a search in the US census bureu. There are too many statistics there but I think this one can help, although it only has data till 1998:

Income Inequality (1947-1998)

It shows periods where the inequality grows and periods where decreases. It seems the overall inequality has decreased which does not support my point. However, it lacks the present figures.

Time to get on topic, the Bush "recovery", I think.

[Mavdog]

The interconnection of business and government is not a favorable situation for the individual in our country. The near term results have shown that when corporations have the ear of policymakers, those corporations profit while the best interests of the public are ignored.

From the supervision (or lack of) in meatpacking/slauterhouses to the "voluntary" reductions (which weren't redued) in pollutants by industry to the incredibly high costs of prescription drugs to the abnormal high cost of electricty, the american public has been fleeced.

When businesses have consolidated, which has been a trend for the last 40 years, their ability to influence government policy has increased. The old maxim "what's good for business is good for America" has not been proven to be accurate. Yes, good business conditions are critical to a healthy economy and society. Yet when we witness businesses dictating policy to our government, and there being nothing to prevent that influence, the market is distorted and abnormal business conditions result. Very unheathy for everybody but the business leaders who were able to have their goals be incorporated in public policy. Remember Enron?

America is truly the best economy in the world for an individual to work and improve their economic status. The perverbial "rags to riches" is possible, yet with the seperation of corporations and government becoming blurry this legacy is in danger. It is with the government enforcing a level playing field that this upward mobility for all is preserved.

[Chiwas]

I found another source that uses the same data from the US census bureau but makes a distinction between economical clases:

Recent Trends in Inequality
The period from the end of World War II until the early 1970s was, as noted, a time of balanced income growth in the United States. In the ensuing years, however, the pattern of income growth has been dramatically different. Families in the bottom 20 percent of the income distribution saw their real incomes actually decline by more than 4 percent from 1978 to 1998 (see Table 1). The real incomes of families in the middle quintile grew by less than 10 percent during the same 20-year period (a growth rate of less than one-half of one percent per year). But while the real incomes of middle-class and poor families were stagnant or declining, families with the highest earnings experienced much bigger gains than in the immediate post-war decades. Thus real incomes jumped more than 40 percent for families in the top quintile between 1978 and 1998, while those for families in the top 5 percent jumped by more than 68 percent.

Quintile 1978 1988 1998
Bottom 20 percent $13,103 $12,256 $12,526
Second 20 percent 28,415 28,541 29,482
Middle 20 percent 42,667 44,414 46,662
Fourth 20 percent 58,786 63,785 68,430
Top 20 percent 99,754 117,035 140,846
Top 5 percent 146,178 182,863 246,520


Table 1. Mean Income Received by Families in Each Income Quintile and by the Top 5 Percent of Families, 1978 to 1998 (1998 dollars)


It shows a different story. The poorest are poorer and the richest are way richer. (1978-1998)

Does Growing Inequality Harm the Middle Class?

[Chiwas]

(Sorry, didn't see your post. I'll repeat it: )


Originally posted by: Mavdog

The interconnection of business and government is not a favorable situation for the individual in our country. The near term results have shown that when corporations have the ear of policymakers, those corporations profit while the best interests of the public are ignored.

From the supervision (or lack of) in meatpacking/slauterhouses to the "voluntary" reductions (which weren't redued) in pollutants by industry to the incredibly high costs of prescription drugs to the abnormal high cost of electricty, the american public has been fleeced.

When businesses have consolidated, which has been a trend for the last 40 years, their ability to influence government policy has increased. The old maxim "what's good for business is good for America" has not been proven to be accurate. Yes, good business conditions are critical to a healthy economy and society. Yet when we witness businesses dictating policy to our government, and there being nothing to prevent that influence, the market is distorted and abnormal business conditions result. Very unheathy for everybody but the business leaders who were able to have their goals be incorporated in public policy. Remember Enron?

America is truly the best economy in the world for an individual to work and improve their economic status. The perverbial "rags to riches" is possible, yet with the seperation of corporations and government becoming blurry this legacy is in danger. It is with the government enforcing a level playing field that this upward mobility for all is preserved.

[dude1394]

Originally posted by: Chiwas
madape´s statement sounds very democratic, but the truth is, the corporate and financial sectors have kidnapped politics and government in some important way. That does not allow people to climb the american dream ladder as easy as in the past.

Actually this is really not true chiwas. Upward mobility (especially amoung hispanics) is very high.

[dude1394]

Originally posted by: Chiwas

The same feeling that I had reading yours, a former good theory of economics with time -and the per capita income- not already backing it up.

Agree. The issue has turned from hard working to smart working, which is compatible with capitalism but not very fair with society as a whole.

How many entrepreneurs a country -or society- can have in the end? The limit is a number based in the quantity of workers left.

I would imagine that many,many millionaires in this country own fast food restaurants, gas stations and many other small businesses. Those people also probably learned their trade working in those businesses as well.

I cannot find the data, but I remember reading from Thomas Sowell that many of our lowest percentile earners (are usually first newly arrived immigrants I believe) but then through hard work they quickly move up the ladder of success.

[Mavdog]

A lower or lowest income household can never meet the financial requirements of a fast food franchise such as McD, wendy's or Jack. They require at the least $200K in liquidity.

The findings are that the best predictor of children's economic attainment is their parents economic status. From The Urban Institute Study Improving the Mobility of Lower Income Workers (1998):

The findings indicate that from the turn of the century to the early 1970s, the majority of individuals who followed the "rules" associated with the American dream (e.g., hard work, prudence, ambition, industry, and optimism), were rewarded with social and economic mobility into the middle class and rising standards of living. During the last quarter of the century, however, the dream was realized by fewer Americans and access to higher standards of living varied along ethnic, gender, educational, and industrial lines. The labor market of the 1990s is characterized by dual income households, record high labor force participation rates and employment-to-population rates for women, rising hours of work, falling wages, and growing earnings inequality. Some groups, including older workers, persons of color, and workers in the non-goods producing sectors of the economy, lost their jobs at higher rates in the 1990s than in the 1980s.

As we near the close of the 20th century, the US economy is generating large numbers of jobs, but not enough wage growth. The result is increasing proportions of individuals working to maintain their desired living standard. Out of a total civilian, noninstitutionalized adult population of 196.8 million in 1994, over 131 million were in the labor force (Council of Economic Advisors 1995). The current labor force participation rate of 66.6 percent is well-above that of 55.7 percent in 1940. Since the 1940s, the labor force participation of women has risen steadily from 32 percent to almost 59 percent, while the rate for men has fallen from 87 percent to 75 percent. Most dramatic and steady has been the rise of married women's labor force participation from 20 percent in the 1940s to 60 percent by the 1990s. It took the majority of wives to work for married couple families to reach the median income of $43,000 in 1993.

The outlook for workers over the next decade is hopeful for workers with high skills but mixed for other types of workers. According to Bureau of Labor Statistics projections, the demand for workers is rising more rapidly than the growth in the labor force. The BLS projects that annual employment growth will average 1.5 percent through 2005, whereas labor force growth will average only 1.3 percent per year. The return of modest productivity growth and the continuing demand for higher skills raise the prospects for higher wage growth and new opportunities, but these forces can also be disruptive for some workers, especially those with limited or obsolete skills. Taking advantage of the future will require improvements in the educational and systems as well as hard work by students and workers. However, employers can also play an important and constructive role, especially if organizations increase responsibility and widen the scope of line workers, develop job ladders and provide extensive and continuing training.

While it is possible, and is in fact true for some. to be able to improve one's economic status, too many of the lower and lowest income population do not have the same opportunities for education and job training that are needed to acheive class mobility. Coupled with the lack of sex education and access to family planning, these economic classes find themselves in a structural clamp to their lifestyles.

Yes, we can act like social darwinians and ignore these lower income earners, leaving them and their offspring to their plight. This will not be a positive decision for our country as it results in a cycle of poverty for the lower classes. Unfortunately that appears to be the course of inaction the current administration is focused on.

We can attempt to remedy the situation by providing for these people of need; to have the government provide job training programs to help them obtain more skilled jobs, to provide them with a better education in order to get an entry job which will allow for advancement, to enact legislation that gives the businesses incentives to provide in house job training, and to provide no cost family planning services to avoid the major cause of persistent poverty, too large of a family.

[dude1394]

Yes, we can act like social darwinians and ignore these lower income earners, leaving them and their offspring to their plight. This will not be a positive decision for our country as it results in a cycle of poverty for the lower classes. Unfortunately that appears to be the course of inaction the current administration is focused on.

We can attempt to remedy the situation by providing for these people of need; to have the government provide job training programs to help them obtain more skilled jobs, to provide them with a better education in order to get an entry job which will allow for advancement, to enact legislation that gives the businesses incentives to provide in house job training, and to provide no cost family planning services to avoid the major cause of persistent poverty, too large of a family.

I think you are correct mavdog. I think policies like:

- No child left behind that refuses to accept the bigotry of teachers unions and lack of results oriented teaching.
- Vouchers to enable these students to attend a school that has to compete for dollars.
- Faith based initiatives that provide people not only help but dignity, honor and promote self-reliance as well as morality.
- Promote more and more community colleges. Which have shown to be very effective in work-training.

I think you may become a conservative yet. Teaching people in need to fish for themselves. Giving them the dignity of being self-sufficient.

I don't know about no cost family plannig, I actually thought that was pretty freely avaiable. I know it was in college, at planned parenthood locations.. I don't know about medicare/medicaid if that is what you are talking about.

But I'm sure that the NOW, Planned Parenthood and other liberal organizations could easily support that.

[Mavdog]

Originally posted by: dude1394

I think you are correct mavdog. I think policies like:

- No child left behind that refuses to accept the bigotry of teachers unions and lack of results oriented teaching.

too bad that it wasn't funded adequately to get results. "bigotry of teachers unions"? hogwash.

- Vouchers to enable these students to attend a school that has to compete for dollars.

vouchers cannot guarantee a better education, just as all busineses do not efficiently operate and are successful, private schooling thru vouchers will have the same results. Some will do well, some will not. Just like the current public schools do..

- Faith based initiatives that provide people not only help but dignity, honor and promote self-reliance as well as morality.

Absolute BS. "Faith based" organizations have some of the highest levels of child abuse and embezzlement of money. That's some morality there...

- Promote more and more community colleges. Which have shown to be very effective in work-training.

That we can agree on.

I think you may become a conservative yet. Teaching people in need to fish for themselves. Giving them the dignity of being self-sufficient.

nobody is proposing give aways. We're talking about helping people improve themselves, but they need assistance. That belief is not exclusive to conservatives.

I don't know about no cost family plannig, I actually thought that was pretty freely avaiable. I know it was in college, at planned parenthood locations.. I don't know about medicare/medicaid if that is what you are talking about.

But I'm sure that the NOW, Planned Parenthood and other liberal organizations could easily support that.

Family planning is critical to upward mobility. not important, critical.

The current administration has gone to the extreme in denying any public monies to any organization which says the A word. That's not abstinence BTW, if they provide ANY materials with the word abortion they are cut off. It takes a lot of $ to run a free clinic...even with the staff working gratis.