Tuesday, September 23, 2008

Make a Mental Note

Daniel Gross has a story on Slate regarding how we will pay for the $700 billion bailout. But I think the most important piece of his story is this:

Think about everything Wall Street has been given since the late 1990s: cuts in the capital-gains tax, dividend tax, and estate tax; cuts in marginal income tax rates; free-trade agreements; low interest rates; light regulation. The promise was that doing the bidding of the financial-services industry would deliver solid growth and boost incomes for everyone. It didn't. This business cycle, in which job growth was generally anemic, ended with median incomes about where they were at the end of the last business cycle. The S&P 500 is basically where it was 10 years ago. Sure, we got cheap mortgages, all the credit we could eat, and some higher corporate income-tax payments for a few years. But now Wall Street wants it all back in the form of bailouts.
This point is crucial because the line we have been expected to buy over the last several years is that handing over our country to the wealthy is necessary for the rest of us to make any progress.

The three decades in between the mid-forties and mid-seventies had already proved this was untrue. In that time, equality grew, living standards were increased, and the economy grew. In the thirty years since, the economy has grown at the expense of equality and with less regard to improved living standards for all Americans.

The last 10 years, however, are the crystallization of why we can't sacrifice attempts at equality for the sake of total growth. The growth hasn't helped most Americans at all, and it may turn out not to have been real for those it did. Moving forward, let's not allow ourselves to be convinced that we can't strive for both.

1 comment:

Brian Rules the World said...

Seriously, how many times are we gonna try this little experiment before people get it through their heads that trickle down economics doesn't work? It didn't work under Reagan, it's not working under Bush II, but hey, maybe third time's the charm...


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