September 17, 2007


IMPEACH BUSH


IMPEACH CHENEY

CHANGEABLE GREENSPAN

Back when George W. Bush first stole the presidency and big tax cuts were being floated Alan Greenspan wasn't criticizing Bush's irresponsibility. It was obvious even then that this was Trickle Down Economics II. Bush was copying Ronald Reagan and going even further. Now Mr. Greenspan is critical of the fiscal madness we've seen the past six years. Paul Krugman takes a look in this column at www.welcome-to-pottersville.com:

When President Bush first took office, it seemed unlikely that he would succeed in getting his proposed tax cuts enacted. The questionable nature of his installation in the White House seemed to leave him in a weak political position, while the Senate was evenly balanced between the parties. It was hard to see how a huge, controversial tax cut, which delivered most of its benefits to a wealthy elite, could get through Congress.

Then Alan Greenspan, the chairman of the Federal Reserve, testified before the Senate Budget Committee.

Until then Mr. Greenspan had presented himself as the voice of fiscal responsibility, warning the Clinton administration not to endanger its hard-won budget surpluses. But now Republicans held the White House, and the Greenspan who appeared before the Budget Committee was a very different man.

Suddenly, his greatest concern — the “emerging key fiscal policy need,” he told Congress — was to avert the threat that the federal government might actually pay off all its debt. To avoid this awful outcome, he advocated tax cuts. And the floodgates were opened.

THE GREAT ECONOMIC DIVIDE

More Americans now see an economic divide between the "haves" and "have-nots." What's surprises me is that so many Americans, as recently as 1988, saw themselves among the "haves." Our system, for a very long time, has been tilted toward the very rich. A great book on the subject is Ferdinand Lundberg's The Rich and the Super-Rich. The insights Lundberg provides are probably even more relevant now than when he wrote the book. There's nothing wrong, in my view, with a system that creates rich people. There is something very wrong, however, in a system that increasingly rewards the wealthy and leaves everyone else behind. This article by Jodie T. Allen is at pewresearch.org:

The share of Americans who see the country as divided along economic lines has also continued to tick upward, though at a somewhat slower rate in recent years (Have/have-not perceptions rose by 18 points over the 13 years between 1988 and 2001 compared with a rise of four points over the last six years).

The increased prevalence of both views -- that the country is increasingly divided along economic lines and that a given individual is on the wrong side of that divide -- finds support in national economic data. As numerous studies have demonstrated in recent years, income gains over the last few decades have been heavily concentrated at the very top of the income distribution. For example, in an update of their earlier study of long-term U.S. income trends,1 economists Piketty and Saez compute that the share of income going to families in the top 1% of the income scale has doubled from 8% in 1980 to 16% in 2004 even excluding capital gains.2 (For a review of other recent studies see an earlier Pew commentary, "Pinched Pocketbooks: Do Average Americans Spot Something That Most Economists Miss?"3)