It’s not just a proverb, it’s not just a Johnny Rotten lyric, it’s the undeniable truth.
At the beginning of the week, Forbes was proud to announce that the 400 richest Americans got 10% richer over the last year. Indeed, each of the 25 richest Americans saw an increase in net worth. These people are all Billionaires with a B.
Meanwhile on the other end of the economic spectrum, an authority no less credible than the United States Census Bureau reported at the end of the week that not only are there more people living in poverty this year than last year, not only is the median American income declining, but it is the second year in a row that poverty has increased and wages have decreased. The income gap between the highest and lowest paid Americans is also growing. Now, 12.1% of Americans earned less than the poverty level. That’s just short of one in every 8 Americans. About 13 million of them are your neighbors in suburbia — about 8.9%. These aren’t those people living under the bridge downtown; they are regular people like you. The change in suburban poverty is the lion’s share of the national increase. More than 1 in 4 single mothers and 1 in every 20 married couple live in poverty. Over 16% of American children live in poverty. There’s something to think about next time you drive past a public school.
It is oh so easy to blame the President, his tax cuts, and his economic “plan” for this divergence. He is the obvious target, the low hanging fruit. After all, it happened on his watch. There are also sound arguments to support the kneejerk reaction. Jackson Thoreau has written an excellent discussion of the ways Bush Administration policies have contributed to the poor getting poorer. It is worth a read, and although there is an insult to Kelsey Grammer, he does not resort to mindless Bush-bashing. Some members of Congress are not so circumspect, accusing the administration of “burying” the data by quietly releasing it on a Friday morning, a time when few people expect new economic data. The administration blames the increasing poverty on the economic slowdown — you remember, the one that supposedly ended almost 2 years ago.
There are more voices speaking about why the rich are getting richer. Forbes points out that much of the change is due to tech stocks rising. This does not explain Warren Buffett. Buffett, number 2 on Forbes’s list, has been against the repeal of the estate tax despite the fact that his heirs would greatly benefit. Furthermore, he called Bush’s dividend tax break “voodoo.” Although Mr. Buffett has not commented on today’s news, it is a pretty good bet that he would ascribe some blame to the Bush tax agenda. Others have come out and said so.* Another man who stood to gain a lot from Bush tax cuts, a man with more money than I am ever likely to have, Jim Cramer,* suggests that it is not the dividend tax cut that was the problem, but coupling it with a capital gains cut.
When the rich claim they are not paying enough taxes, you know something is wrong.
*Please forgive the links to abstracts. They were the only free way to present you with the relevant information.