the rich get richer....commentary from alaska

[cleofus1]

http://www.adn.com/opinion/guest_columns/story/6921153p-6819335c.html


STEPHEN HAYCOX
COMMENT

(Published: September 2, 2005)
The U.S. Census Bureau released new data on income and poverty this week. They show that the gap between rich and poor in America continues to grow as income is distributed increasingly unevenly. The disparity is not just a matter of economics, for it parallels an information and knowledge gap between rich and poor, a divide exacerbated by the income inequities. Together these represent a national scandal, for they translate into a significant diminution of American opportunity, the category, after freedom, that most Americans regard as the signal meaning of the American nation.

The census report notes that things are not getting better and better in America. Real median income in the United States remained flat last year, but poverty rose for the fourth year in a row, driven by an increase in the number of poor whites. The poverty threshold for a family of four is $19,307. The overall percentage of Americans with incomes below that level rose from 12.5 percent to 12.7 percent last year, from 35.9 million to 37 million. Remarkably, the Midwest saw the most dismal figures. Income there declined 2.8 percent. The poverty rate for non-Hispanic whites rose from 8.2 percent to 8.6 percent.

The reason for these statistics, economists agree, is that the job market has yet to generate the kinds of increases in living standards that will allow families to work their way up. They simply are not paid a living wage. And while this is taking place, national wealth is being concentrated at the upper end of the economic scale.

[cleofus1]

1. snip,

..."Clearly the Laffer curve is not working. Arthur Laffer argued in the 1970s that taxes beyond a certain point become counter-productive, decreasing the incentive to work. A concept central to supply-side economics, it inspired the Kemp-Roth tax cut of 1981, based on the notion that lower tax rates, i.e., tax cuts, generate more revenue as savings are used to create more jobs. David Stockman, President Reagan's budget director, lost his job partly for pointing out that Reagan and others in his administration took the Laffer curve literally, when it was nothing more than a highly problematical theory that gave politicians a campaign issue. "There is no literal Laffer curve," Stockman insisted as he was being shown the door.

He was right, for the extra money enjoyed by the rich is not trickling down. The census report indicates that a few more jobs were created last year but notes that they are low-end jobs; they don't pay a living wage. People at the low end of the pay scale working at Wal-Mart, for example, are eligible for food stamps in many states.

If more people understood the failure of supply-side economics, there would be more outrage when the Census Bureau releases such statistics, when evidence is presented that gives the lie to the carelessly celebrated promise of American life, when we are called once again to face the fact that while many of us in America are blessed with economic well-being, many are not. "...