Man Without Qualities

Thursday, July 29, 2004

Disproportionate Impact

 John Kerry's prepared remarks are reported to paint a portrait of a nation suffering economically after four years of Republican rule: 

"Wages are falling, health care costs are rising and our great middle class is shrinking. People are working weekends; they're working two jobs, three jobs and they're still not getting ahead."

Perhaps this New York Times report explain why Senator Kerry seems to feel the pain of those who lost income during the Bush term:

While the recession that hit the economy in 2001 in the wake of the market plunge was considered relatively mild, the new information shows that its effect on Americans' incomes, particularly those at the upper end of the spectrum, was much more severe.  ... The unprecedented back-to-back declines in reported incomes was caused primarily by the combination of the big fall in the stock market and the erosion of jobs and wages in well-paying industries in the early years of the decade. ... "Risks used to be confined largely to executives and business owners with large incomes,'' said Edward N. Wolff, an economist at New York University who studies wealth and income. "But now for many people with more modest incomes their earnings are more volatile,'' Mr. Wolff added ... ... Falling incomes, rather than tax cuts, appear to count for the greatest share of the decline in income taxes paid. That is because the higher one stood on the income ladder the greater the impact was likely to be from the stock market crunch. At the same time many of those whose incomes fell the most - those reporting $200,000 to $10 million in income - paid at the highest rates, which meant that the drain on revenues was even greater when their incomes shrank. More than 352,000 taxpayers, one of every eight who had worked their way above $200,000 of income in 2000, fell below that figure in 2002. At the very top the ranks thinned by more than half. The number of taxpayers reporting adjusted gross income of $10 million or more fell to 5,280 from 11,215.  The combined income of this rich and thin slice of Americans plummeted 63 percent ...

My goodness! The "Bush Recession" disproportionately hurt the rich! The increase in the federal deficit was mostly caused by rich people making less money! How can that be? Why didn't Herr Doktorprofessor Paul Von Krugman warn us? And what about that risk-reward kicker? Is the Times admitting that people who make good but not great money do it increasingly by taking more risks?! What happened to the no-risk, hi-income, silver-spoon crowd?

No wonder John Kerry feels this pain so intensely. With a wife worth something like One Billion Dollars and a social circle to match, we're not talking here about pain he feels in the abstract. We're talking about the kind of pain he and she hear about every day at their country club and at the best restaurants!

MORE: Good things from Steve Antler.

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