Friday 8 December 2006

Paul Krugman and Rising Inequality in the US

Hello everyone,

I'm not entirely sure how many people are actually reading this, so if your out there give me a shout in the comments box!

I thought people might find this article interesting by Paul Krugman, professor of Economics and International Affairs at Princeton University, entitled
'The Great Wealth Transfer', talking about the devastating economic and social effects of the disgustingly regressive tax cuts that the Bush administration pushed through.

Essentially, the Bush administration, run by and for rich dynasties, decided to give itself a nice little tax break:


"once the Bush tax cuts have taken full effect, more than a third of the cash will go to people making more than $500,000 a year -- a mere 0.8 percent of the population."


It really is shocking to see how social mobility and opportunity have been replaced by corporate greed and what, to my mind at least, can really only be described as
Robber Baron political corruption.

Here's some choice statistics to consider:


"To picture who gained the most, imagine the son of a very wealthy man, who expects to inherit $50 million in stock and live off the dividends. Before the Bush tax cuts, our lucky heir-to-be would have paid about $27 million in estate taxes and contributed 39.6 percent of his dividend income in taxes. Once Bush's cuts go into effect, he could inherit the whole estate tax-free and pay a tax rate of only fifteen percent on his stock earnings."


Krugman's final thoughts are pretty sobering:


"Today, we're completely out of line with other advanced countries. The share of income received by the top 0.1 percent of Americans is twice the share received by the corresponding group in Britain, and three times the share in France. These days, to find societies as unequal as the United States you have to look beyond the advanced world, to Latin America. And if that comparison doesn't frighten you, it should."


Is it me, or has Bush managed to destroy pretty much all the good work and legacy of 8 years of Clinton and Gore? Is there anything left?

I mean, maybe this is a bit harsh, but aren't Americans ashamed of this state of affairs? Where's the outrage?

If your reading this and have some views, I'd like to hear them, so man up!

2 comments:

Anonymous said...

hear hear! an absolute disgrace - if only more people raised these questions and were actually heard -how does he get away with it? if some average dude robs a bank, his face is blazoned on the news, he does his time in prison etc etc - how can a man rob a whole nation, hoodwink the whole world, and not only still be at large, but actually ruling a country? please explaaaain?! (for all you aussies reading this!)

Anonymous said...

Stu,

Krugman is awesome, and is book the accidental theorist is great. He's high up on the list for a Nobel Prize I reckon.


The following might sound a bit geektastic.
Things that trouble me include the fact that if one focuses on the median income rather than the mean then the average american's income has hardly increased in the last 15 years or so. (I forget the specifics).

This being the case, and the well documented swing right of Clinton post the '94 midterms I wouldn't give the guy too much credit.

I'd be curious to study the entire income distribution of the US compared to the EU states (France is impressively unequal on some measures, but all measures fail to describe inequality accurately). What is notable is that recent evidence suggests that the "American Dream" of social mobility is very, very, dead. I can't remember the citations, but, essentially social mobility is lower in the US than in most of the EU due to the poor state of public schools in poor areas and the importance of attending a good uni.

Any how, hope all is well, and am tres jealous.

BJ