The Self Made Pundit
Wednesday, September 25, 2002
While the Bush administration has probably been praying for economic news that would divert attention away from the plunging stock market, I don't think yesterday's Census Bureau report on poverty is quite what they were wishing for. Not only did the Bureau find that the poverty rate increased significantly last year, but it also found that middle-class incomes fell for the first time since the last recession ended, in 1991.
Not only is poverty up, however, but the gap between the rich and poor is growing. While the average income of Americans in most income brackets decreased or stayed about the same last year, the average income of the richest five percent of households rose by $1,000 last year, to $260,464. According to the Census Bureau, the richest fifth of Americans received half of total household income last year, up from 45 percent in 1985. The poorest fifth received 3.5 percent of all household income, down from 4 percent in 1985. The middle 60 percent of Americans saw their share of total household income decrease from 51 percent in 1985 to 46.5 percent in 2001. This income inequality will only worsen in future years as the Bush tax cuts are phased in with their inordinate benefits to the richest five percent of Americans.
At least Bush didn't respond to this bad economic news with a Hooveresque statement that prosperity is just around the corner. Or did he? Bush reacted to the report with a sunny comment: "When you combine the productivity of the American people with low interest rates and low inflation, those are the ingredients for growth." Thank goodness -- I was afraid Bush didn't have a plan to address our economic problems. Well, at least he didn't propose cutting the capital gains tax (widely reported to be about the only new economic initiative being contemplated by the Bush administration) as a way of fighting poverty. (We'll have to wait until after the midterm election for that proposal and the push to privatize Social Security.)