[kaaos]

rich get richer and low income & middle class get screwed under bush



Inflation-Ravaged Wages Fuel Angst at Bush's Economy (Update1)
June 20 (Bloomberg) -- Americans' wage gains are evaporating as inflation accelerates, helping explain why confidence in the economy isn't soaring along with job growth.

Weekly wages adjusted for inflation fell 0.7 percent last month and are down 0.2 percent over the past year, according to a report last week by the Labor Department. Pay has been flat or declined in more than half of the 65 months since January 2001, when President George W. Bush took office.

Those numbers contrast with other government reports showing incomes for all workers staying a step ahead of prices, highlighting a growing disparity between the wealthy and those of more modest means. The difference may explain why the economy's performance isn't translating into greater popularity for Bush, whose poll ratings hover near record lows.

``People at the high end of the income scale are doing a lot better than people in the middle or low end, but there are a lot more people in the middle and low end,'' said Douglas Lee, president of Economics From Washington, a Potomac, Maryland, consulting firm. ``For those people, inflation is eating into their income gains.''

Consumer prices rose 4.2 percent in the last 12 months, more than offsetting a 4 percent increase in weekly wages, according to the Labor Department's inflation report.

Adjusted for inflation, the median income for the top 10 percent of U.S. households rose 2.3 percent between 2001 and 2004, covering much of Bush's first term in office, according to the Federal Reserve's Survey of Consumer Finances, issued in February. For the other 90 percent of households -- which earned less than $184,800 in 2004 -- the median fell 0.5 percent over the same period.

Obscuring the Decline

The increase in income among the top 10 percent was enough to pull the median income for all families up by 1.6 percent, the Fed report shows, obscuring the decline among the other households.

From 1998 to 2001, median family income adjusted for inflation rose 9.5 percent for all households. While the top 10 percent also led the gains then, all income levels showed increases that exceeded 10 percent.

The income disparity is one reason Americans are giving Bush little political credit for the economy's performance, despite the creation of 3.7 million new jobs in the last two years and an unemployment rate that dropped to 4.6 percent last month, the lowest since July 2001. The rate has declined a half percentage point over the last 12 months as the economy grew 3.6 percent, a half percentage point faster than the average over the last two decades.

Wrong Track

Sixty percent of 1,003 adults surveyed in a June 5-7 Associated Press-Ipsos poll said they disapproved of Bush's handling of the economy, while 38 percent approved. Seventy percent said the country was on the wrong track.

``Our job is not simply to tell the American people how good the economy is, but to try to tap into the reasons they don't feel secure about their future,'' Vin Weber, a former Republican congressman and now a lobbyist who consults with the White House, said in an interview.

The University of Michigan's consumer sentiment index registered a preliminary reading of 82.4 in June, according to a report last week. While up from May, the figure is below the index's average of 88.1 since monthly reports began in 1978. It reached a record of 112 in January 2000.

Few Americans hold out the hope that incomes will improve in coming months. The share of consumers expecting their incomes to rise in the next six months dropped to 16.6 percent in May from 18 percent a month earlier, according to a survey by the Conference Board, a New York research group. The reading is approaching the 15.3 percent who looked forward to income gains in March 1993, the lowest since records began in 1967.

``The most important economic indicator is what is going into our pocket and how much and how fast it's going right back out,'' said Ken Goldstein, an economist at the Conference Board in New York. ``In terms of incomes, consumers feel like they've been in a slump and haven't come out.''



To contact the reporter on this story:
Carlos Torres in Washington ctorres2@bloomberg.net

Last Updated: June 20, 2006 09:00 EDT

[LANMaster]

Class envy is the Liberal's most disgusting trait.

[plschwartz]

Originally Posted by LANMaster

Class envy is the Liberal's most disgusting trait.

I am so glad you want to help out GB and CM by paying their tax burdon. I unfortunately haven't benefited much from Herr Bush and feel slighted.
However in lieu of tax relief I will glkadly take a direct subsidy

[iltos]

Originally Posted by kaaos

``People at the high end of the income scale are doing a lot better than people in the middle or low end, but there are a lot more people in the middle and low end,'' said Douglas Lee, president of Economics From Washington, a Potomac, Maryland, consulting firm. ``For those people, inflation is eating into their income gains.''

seems important here to understand where this guy is coming from

Economics from Washington provides macroeconomic research to institutional money managers as well as an understanding of how policy decisions impact financial markets. We provide statistical analysis based on a detailed understanding of how the data is constructed. The service includes weekly, monthly, and quarterly publications along with telephone and in-person consultation with our staff. Prior to founding Economics from Washington, Dr. L. Douglas Lee was Chief Economist for NatWest Securities, HSBC Securities, and Washington Analysis Corporation.

tough to disparage this guy as a liberal, methinks

Originally Posted by kaaos

The income disparity is one reason Americans are giving Bush little political credit for the economy's performance, despite the creation of 3.7 million new jobs in the last two years and an unemployment rate that dropped to 4.6 percent last month, the lowest since July 2001. The rate has declined a half percentage point over the last 12 months as the economy grew 3.6 percent, a half percentage point faster than the average over the last two decades.

prolly some truth to this, but i personally attribute it more to the effects of globalization than anything, and feel that every president from here on is gonna be faced with addressing it or suffering for it, 'til we all get a grip, and are willing to face up to it ourselves.....wake up folks...the "golden era" is winding down

Originally Posted by kaaos

Adjusted for inflation, the median income for the top 10 percent of U.S. households rose 2.3 percent between 2001 and 2004, covering much of Bush's first term in office, according to the Federal Reserve's Survey of Consumer Finances, issued in February. For the other 90 percent of households -- which earned less than $184,800 in 2004 -- the median fell 0.5 percent over the same period.

seems like a logical "next step" in this would be a study that tells us what the figures would have been without the tax cuts...better for the median group (less discrepancy)? worse?
i dunno....but it sorta makes or breaks the arguement, don'tcha think?....or at least might give us an answer.....as it is, they're just numbers that tell us that the rich money has gotten richer, and median money has suffered

by themselves, they mean nothing (unless you agree with LAN's rhetoric )....they have to have a relationship to policy to tell us anything important.

[linskyjack]

Watch Mulder spin this one----I am waiting for what has become a Pavlovian response.

[Mulderator]

Actually, its easy to spin because the analysis is the typical liberal garbage where they take a look at one aspect of financial well being. If you add the tax breaks into what those households made, the overall effective is more disposable income--why would anyone care that inflation was higher than their raise if overall they had more spendable income?

Second, I like most people in the country who own a home (and most middle class people do and a good percentage of lower income do) had huge gains in home value which is the single most significant factor in inflation.

Overall, most Americans have more disposable income. You Moore-Ons won't understand this, of course.

[bassetman]

Originally Posted by linskyjack

Watch Mulder spin this one----I am waiting for what has become a Pavlovian response.

You didn't have to wait long!

[Littlefield]

Basic economics ,he is right.

[grandpaw7]

withdrawn

[linskyjack]

Originally Posted by Mulder

Actually, its easy to spin because the analysis is the typical liberal garbage where they take a look at one aspect of financial well being. If you add the tax breaks into what those households made, the overall effective is more disposable income--why would anyone care that inflation was higher than their raise if overall they had more spendable income?

Second, I like most people in the country who own a home (and most middle class people do and a good percentage of lower income do) had huge gains in home value which is the single most significant factor in inflation.

Overall, most Americans have more disposable income. You Moore-Ons won't understand this, of course.

Emmmmm, this is the first time someone has claimed that Bloomberg Financial News is liberal----You learn something new every day. Interesting thing is that 60% of American adults don't think Bush is doing a good job with the economy.........now go figure.

[LANMaster]

Linsky probably believes that Lou Dobbs is a Republican.

[coderitr]

Every time I try to understand basic economics all I get is a headache. Here's what I (think I) know:

Inflation = things I buy cost more

I think that it also means that a house is worth more today than it was yesterday (for most people. In my case it would be worth more as a smoldering pile of rubble but that's another discussion) and that a car is worth less today than it was yesterday.

I know how much I bring home in my paycheck and how much (too much) the government takes for social security that I'll never benefit from and federal and state taxes.

My question is how much of what we call inflation is attributable to the fact that the price of gasoline, heating oil, diesl fuel, kerosene, natural gas, etc has doubled in the past ten months?

[Littlefield]

Gasoline has more to do with market demand I think.I agree economics is confusing.

[Mulderator]

Originally Posted by linskyjack

Emmmmm, this is the first time someone has claimed that Bloomberg Financial News is liberal----You learn something new every day. Interesting thing is that 60% of American adults don't think Bush is doing a good job with the economy.........now go figure.

I didn't say the Bloomberg Financial News was liberal, its this starter of this thread with the usual "Rich get richer and low income & mildde class get screwed by Bush" argument that has been debunked a 1000 times. It is not my problem that most people don't have either the IQ or the education to look at everything and draw the proper conclusions.

The funny thing is the rich got much richer during the Clinton Administration, and every Administration before back to Reagan (and even before that, although to not the same degree). We can only hope it continues because while the rich got richer,t he poor and milddle class did much better too over the past 25 years since Reagan first cut taxes dramatically and standard of living skyrocketed for most of us.

[kaaos]

Originally Posted by Mulder

Actually, its easy to spin because the analysis is the typical liberal garbage where they take a look at one aspect of financial well being. If you add the tax breaks into what those households made, the overall effective is more disposable income--why would anyone care that inflation was higher than their raise if overall they had more spendable income?

Second, I like most people in the country who own a home (and most middle class people do and a good percentage of lower income do) had huge gains in home value which is the single most significant factor in inflation.

Overall, most Americans have more disposable income. You Moore-Ons won't understand this, of course.

first of all this was from the well respected BLOOMBERG media source.

and overall americans have less diposable income according to every economic pice i read .from sources like JP Morgam, Goldman Sacs, Bear Stearns..ect.