Wednesday, July 21

Econ 101

Atrios has been watching testimony from Fed chair Alan Greenspan
Interesting. Greenspan just stated that he believes there is
"significant residual discrimination" against African-Americans in the labor market.
and another:
Also, Uncle Alan said that he did not know if increases in expenditures related to terrorism and the wars in Afghanistan and Iraq were, as Bush has asserted, theprimary cause of the ballooning deficit. Right.
Meanwhile, over at the Whiskey Bar Billmon takes a look at a recent Wall Street Journal editorial, discussing just who is benefitting from the sterling economic recovery.
The story goes on to describe the disparity between sales of
high-end designer jewelry, luxury cars and lakeside hotel suites
(booming) and the kind of stuff that most of us buy at Wal-Mart or
Target (stagnant). And it quotes an economist from J.P. Morgan Chase -
another notoriously left-leaning, Bush-hating institution - in support
of its "Two Americas" thesis:

"To date, the [recovery's] primary beneficiaries have been upper-income
households," concludes Dean Maki, a J.P. Morgan Chase (and former
Federal Reserve) economist who has studied the ways that changes in
wealth affect spending. In research he sent to clients this month, Mr.
Maki said, "Two of the main factors supporting spending over the past
year, tax cuts and increases in [stock] wealth, have sharply benefited
upper income households relative to others."

Clearly, what we have here is a rampant outbreak of liberal class
warfare - a vicious smear (no doubt inspired by Michael Moore) aimed at
convincing the American people the Bush-Cheney administration cares more
about fattening the already-obese bank accounts of the ultra-wealthy
than it does about reversing the downward trend in the purchasing power
of the vast American middle class.
I have wondered recently about the sustainablility of this continued bleeding of the american middle class.
I have watched for 20 years, economic policies which are
at their sinister core, intended to redistribute wealth from from middleclass
pockets to numbered Swiss bank accounts. Oh the vapors, heaven forfend, please
stop this talk of class warfare. That is what it is get over it. Just because the
Corporate media continues to pretend that "class warfare" is a communist canard and
therefore "that which must not be spoken" its been a battle in the background. Payroll Tax
Let's refresh our memories. In 1982, Greenspan co-chaired
(along with the late Senator Daniel Patrick Moynihan of New York) a
bipartisan commission to improve the future solvency of Social Security.
The commission called for stiff increases in the nation's payroll tax,
along with increases in the retirement age and some reductions in the
rate of benefits growth over time. The commission's recommendations were
largely implemented, passed by Congress and signed by President Reagan
into law. They remain in effect today.

The payroll tax increases imposed a sizable burden on lower-to-middle
income workers. But their purpose was to fund a surplus in the Social
Security Trust Fund that would be used to help pay for the enormous
costs that the retirement system will incur when "baby boomers", those
born between 1946 and 1964, begin retiring in a few years from
Way back in '82 Greenspan supported an increase in the payroll tax. The
nifty thing is that the payroll tax is one of those taxes that, well,
lets just say isn't really spoken about that much and because it is
capped at $87,000,
it is regressive and has a much more dramatic impact on the middle
class. I have fond memories of the early eighties, and was still in highschool
when these schenanigans were going on. I just remember how much I loved the Grandpa in chief, how he made everything seem simple, especially how evil the russians were (a demon infested hive of hellmanity-I imagined), and that I didn't need to feel bad for poor people-'cause they were too busy driving Cadillacs to the bank to cash their welfare checks.
It's about time to recognise what is and has been going on, because this fleecing
of the middle class will destroy it. watch out Lower Upper Class, 'cause Cashzilla is coming after you next.