Tuesday, April 15, 2008

It’s the leadership, stupid

Most of the money concentrated in the hands of the few is not a good thing. Is the richest 1 percent expected to support the entire economy?
The consumer spending slump and tightening credit markets are unleashing a widening wave of bankruptcies in American retailing, prompting thousands of store closings that are expected to remake suburban malls and downtown shopping districts across the country.

Since last fall, eight mostly midsize chains — as diverse as the furniture store Levitz and the electronics seller Sharper Image — have filed for bankruptcy protection as they staggered under mounting debt and declining sales.

But the troubles are quickly spreading to bigger national companies, like Linens ‘n Things, the bedding and furniture retailer with 500 stores in 47 states. It may file for bankruptcy as early as this week, according to people briefed on the matter.

Even retailers that can avoid bankruptcy are shutting down stores to preserve cash through what could be a long economic downturn. Over the next year, Foot Locker said it would close 140 stores, Ann Taylor will start to shutter 117, and the jeweler Zales will close 100.

The surging cost of necessities has led to a national belt-tightening among consumers. Figures released on Monday showed that spending on food and gasoline is crowding out other purchases, leaving people with less to spend on furniture, clothing and electronics. Consequently, chains specializing in those goods are proving vulnerable.
I wonder if this has anything to do with that.
Using Census Bureau data, the study by EPI and the Center on Budget and Policy Priorities (CBPP), another Washington think tank, examined the situation in individual states. In 37 states, from the late 1980s to the middle of the current decade, the richest fifth of families got an average $36,300 boost in their annual income while the poorest fifth got just $1,600. In terms of purchasing power, the annual income of the poorest families increased only $93 by the end of the period (To see the study, visit www.cbpp.org.)

Another study, by the Congressional Budget Office, using tax data, calculates that the share of national after-tax income going to the top 1 percent of households more than doubled, from 7.5 percent in 1979 to 15.6 percent in 2005. In 2005 alone, the $180,000 average income gain for these rich households was more than three times the average middle-income household's total income.

An academic look at increasing income polarization, written by economists Emmanuel Saez of the University of California, Berkeley, and Thomas Piketty of the Paris School of Economics, found that average incomes of the highest-earning 1 percent grew 11 percent year-over-year between 2002 and 2006. The bottom 99 percent saw their incomes grow on average just 0.9 percent annually.
And I wonder if this has anything to do with that.
The richest 1 percent of Americans received about $491 billion in tax breaks between 2001 and 2008. That's nearly the same amount as U.S. debt held by China -- $493 billion -- in the form of Treasury securities.

Thanks to tax cuts, it's now common for the nation's richest bosses to pay taxes at a lower rate than workers. The 400 richest taxpayers paid only 18 percent of their income in federal individual income taxes in 2005 --- down from 30 percent in 1995.

"The drop in effective tax rates for the top 400 filers," the Center on Budget and Policy Priorities reports, "worked out to a tax reduction of $25 million per filer in 2005." It would take 673 average workers earning $37,149 a year to reach $25 million today.
Guess which presidential candidate wants to continue making the rich richer with Bush-style tax cuts and has no intention of ever addressing the federal deficit or national debt? Here’s a hint: His name rhymes with “John McCain.”
Mr. McCain, who made no mention of his previous pledge to balance the budget by the end of his first term, outlined a long list of tax cuts he favored in the speech, which was delivered on the deadline for filing taxes. He called once again for making the Bush tax cuts, which he voted against, permanent, and for cutting corporate taxes, phasing out the alternative minimum tax and doubling the value of exemptions for each dependent to $7,000 from $3,500. He also proposed giving people the option of using a simpler, shorter tax form.
He wants to make permanent tax cuts that he voted against. How low will he stoop in his kowtow to conservatives? He just wants to be president so, so badly. But, as a friend of mine once pointed out, two kinds of people run for office: those who want to be something, and those who want to do something. Beware the former.

And who do you think will benefit the most from McCain’s tax proposal? According to a Center for American Progress report, “the McCain plan would predominantly benefit the most fortunate taxpayers, offering two new massive tax cuts for corporations and delivering 58 percent of its benefits to the top 1 percent of taxpayers. The Bush tax cuts provide 31 percent of their benefits to the top 1 percent of taxpayers.” That would be the same 1 percent that will support the entire economy while the rest of us fight over the crumbs that trickle down from their table.

Oh, by the way: Why does McCain hate the troops? OK, maybe it isn’t that he hates the troops. Maybe he just realizes that with his tax plan in place, there won’t be any money for veterans education benefits. That must be the kind of discretionary spending he wants to freeze.

So, if you think things are great now, if you support tax breaks for the people who need them least, if you like seeing troops used as props for political stagecraft while simultaneously being fucked over by the people posing with them, if you like an open-ended commitment in Iraq with no end in sight, if you like leadership that talks about “winning” in Iraq without defining what the fuck that means, if you like an ignorant, ham-handed approach to foreign policy and the economy, and if you like seeing issues like the environment, healthcare, homelessness, poverty, education, the trade imbalance and the deficit all but ignored, then by all means vote for John “Third Term” McCain.

UPDATE: Meanwhile, in the other America,
Jenna Bush will wear a "simple and elegant" wedding gown designed by Oscar de la Renta at her May 10 wedding: organza with embroidery, matte beading and a small train -- and yet "still casual." But don't expect any pictures beforehand: Fiance and "major traditionalist" Henry Hager doesn't want to see the dress until she walks down the aisle.

In an interview in the upcoming issue of Vogue we obtained, Jenna reveals that 200 friends and family will attend the informal ceremony at the family's Crawford ranch. The festivities kick off outside at 7:30 p.m. (to beat the heat), followed by dinner and dancing underneath a tent. "I was raised in Texas and it just felt right," she said. "It means a lot to Henry and me to be outdoors. We wanted something organic and low key." She said she considered a White House wedding but decided against it: "That's not really my personality. There's a glamour to it, I know, but Henry and I are far less glamorous than the White House."
Besides, she probably wants her father to attend the wedding, and he’s not usually at the White House on weekends.

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