|The Nossiter Net
The net that shall enmesh them all
Edited, Written, and Published by Josh Nossiter
|Poorer? Don't Blame Bush
Monday, August 28th, 2006
|The Nossiter Net is cast to snare some of the riper rascalities of the day. Comments? firstname.lastname@example.org|
|Real wages have declined for three years says todayís New York Times,* even for the 90th percentile of earners. But for the top 1%, these are boom times. Corporate profits are also at record levels. The rich are getting a lot richer, and everybody else, the low and middle wager earner alike, is getting steadily poorer. The Times retails the party line on this phenomenon, blaming workersí lack of bargaining power. Also the high cost of medical benefits, which absorb an ever larger share of pay packages. Henry M. Paulson Jr., our new Secretary of the Treasury, has the last word, neatly summarizing what's sure to be the Fox News view of the growing impoverishment of nine tenths of American households. ďIt is neither fair nor useful to blame any particular political partyĒ he admonishes.
That would be the Republican party Paulson is talking about, but letís ignore his advice and blame it anyway. Which is entirely fair, because the Republicans richly deserve all the censure we can heap on them. Bush administration policies have not only contributed to widening income inequality in this country, theyíve greatly accelerated it. And pace Paulson, itís also highly useful; unless we identify the policies that led us to this pass, we canít undo them. Neither the Timesmen nor their sources bothered to do the analysis that leads inexorably to this conclusion, so letís do it for them. Itís not exactly rocket science.
What happens to real incomes if you pass huge tax cuts whose benefits flow overwhelmingly to the top 1% of wage earners? Their incomes rise, while those of the remaining 99% are relatively unaffected. Thatís exactly what the Bush administration has done, a policy whose effects ought to be obvious even to a Times reporter or a Treasury Secretary. Citizens for Tax Justice** does the math and calculates that from í01 to í06, tax breaks for the top 1% of households averaged $84,482 per family member. For a wealthy family of four, thatís a tidy $337,928, enough for a modest new yacht. For the remaining 99%, tax breaks totaled $2,616 per family member, a modest $10,624 over four years. That might not add up to a stripped down Kia.
What if you invite big accounting firms and corporations to design a cornucopia of tax loopholes for themselves and their friends and clients? Corporate profits go up 26%, while corporate tax payments decline by 21%. Thatís according to the Institute on Taxation and Economic Policy.***
Then thereís the war the Bush administration started in Iraq. It pours hundreds of billions into the coffers of big defense contractors, further fattening corporate profits and swelling the bonuses of their top executives. It also lowers the wages of all the reservists and National Guardsmen pressed into service for the war, by taking them from their higher paying civilian jobs. As a bonus, the instability in the Middle East the Iraq war fosters helps push gasoline prices up. Not a big deal for the wealthy, but hard on working families, a much higher proportion of whose income is spent on energy. Higher oil prices also lead to job losses and wage cuts in industries that are fuel dependant, like the airline business. Record oil company profits suggest just how much wealth has been transferred from workers to the petroleum industry and its bosses thanks to the Bush administrationís foreign policy.
Donít forget about the administrationís labor and anti-trust policies, or lack thereof. They allow companies like WalMart to pay sub-living wages with no benefits and get away with it. They permit huge oil and telecoms company mergers and consequent massive lay-offs, with their instantly depressive effect on workersí wages.
And also the administrationís health policies, or lack thereof. These have encouraged big pharma to raise prescription medicine prices to crippling highs, and let insurance companies charge extortionate medical premiums. Companies that do pay benefits are discouraged from hiring workers because of the cost of their health care. Labor intensive industries are so strangled by the cost of medical benefits that theyíre forced to cut wages or lay workers off.
In fact, practically everything this Republican administration does at home and abroad is calculated to cause the impoverishment of the many for the benefit of the few. For Treasury Secretary Paulson to tell us not to blame the Republicans is a little disingenuous.
Itís as if Secretary of State Rice were to insist that nobody could have imagined airplanes flying into buildings before 9/11, or that the Lebanon fiasco we urged on Israel represented the birth pangs of the new Middle East. Itís as though President Bush patted his FEMA Chief on the back in the middle of the Katrina catastrophe and told him ďheckuva job, Brownie.Ē Itís as absurd as Vice President Cheney assuring the nation that the Iraqi insurgency was in its last throes Ė a year ago.
Oh wait, they all really said all those things. Looks like our new man at Treasury is going to fit right in.
©Joshua C. Nossiter, 2006
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