Old news, "new opinion" published....

http://news.yahoo.com/s/csm/20050614/ts_csm/ataxing_1


Rich-poor gap gaining attention
By Peter Grier, Staff writer of The Christian Science Monitor (but posted to Yahoo!News for some reason)
Tue Jun 14, 4:00 AM ET (I don't know what is up with the time stamp on this one either.... sorry).

WASHINGTON - The income gap between the rich and the rest of the US population has become so wide, and is growing so fast, that it might eventually threaten the stability of democratic capitalism itself.

Is that a liberal's talking point? Sure. But it's also a line from the recent public testimony of a champion of the free market: Federal Reserve Chairman Alan Greenspan.

America's powerful central banker hasn't suddenly lurched to the left of Democratic National Committee chief Howard Dean. His solution is better education today to create a flexible workforce for tomorrow - not confiscation of plutocrats' yachts.

But the fact that Mr. Greenspan speaks about this topic at all may show how much the growing concentration of national wealth at the top, combined with the uncertainties of increased globalization, worries economic policymakers as they peer into the future.

"He is the conventional wisdom," says Jared Bernstein, senior economist at the Economic Policy Institute, a liberal think tank. "When I'm arguing with people, I say, 'Even Alan Greenspan....' "

Greenspan's comments at a Joint Economic Committee hearing last week were typical, for him. Asked a leading question by Sen. Jack Reed (news, bio, voting record) (D) of Rhode Island, he agreed that over the past two quarters hourly wages have shown few signs of accelerating. Overall employee compensation has gone up - but mostly due to a surge in bonuses and stock-option exercises.

The Fed chief than added that the 80 percent of the workforce represented by nonsupervisory workers has recently seen little, if any, income growth at all. The top 20 percent of supervisory, salaried, and other workers has.

The result of this, said Greenspan, is that the US now has a significant divergence in the fortunes of different groups in its labor market. "As I've often said, this is not the type of thing which a democratic society - a capitalist democratic society - can really accept without addressing," Greenspan told the congressional hearing.

The cause of this problem? Education, according to Greenspan. Specifically, high school education. US children test above world average levels at the 4th grade level, he noted. By the 12th grade, they do not. "We have to do something to prevent that from happening," said Greenspan.

So are liberals overjoyed by these words from a man who is the high priest of capitalism? Not really, or at least not entirely.

For one thing, some liberal analysts prefer to focus on the very tip of the income scale, not the top 20 percent. Recent Congressional Budget Office data show that the top 1 percent of the population received 11.4 percent of national after-tax income in 2002, points out Isaac Shapiro of the Center on Budget and Policy Priorities in a new study. That's up from a 7.5 percent share in 1979.

By contrast, the middle fifth of the population saw its share of national after-tax income fall over that same period of time, from 16.5 to 15.8. "Income is now more concentrated at the very top of the income spectrum than in all but six years since the mid-1930s," asserts Mr. Shapiro in his report.

For another, some Democratic analysts believe that Greenspan's emphasis on education as a cure ignores other causal factors of inequity. Data show an income gap widening among college graduates, says Mr. Bernstein. The quality of US high schools has nothing to do with that, he says. Instead it's partly a function of overall monetary and fiscal policies. "Greenspan takes a very long term view of the situation," says Bernstein.

On the other hand, some conservatives label the whole inequality debate a myth. The media's recent focus on the subject stems from its liberal bias and clever press management by Democrats, they say.

Inequality studies often ignore the wealth created by rising house prices, for instance - and homes represent the most substantial investment by many, if not most, Americans.

Nor do US workers necessarily perceive themselves on the losing end of a rigged capitalist game. A recent New York Times survey found that while 44 percent of respondents said they had a working-class childhood, only 35 percent said they were working class today, points out Bruce Bartlett, a senior fellow at the National Center for Policy Analysis. Eighteen percent said they grew up lower class, while only 7 percent said they remained in that societal segment.

When Democrats today raise the inequality flag, they are simply trying to attack President Bush's tax cuts, albeit indirectly, says Mr. Bartlett. "A lot of this is driven by the estate-tax debate," he says.

And as Greenspan himself points out, by many measures the economy is doing well. Unemployment is down, GDP is up. Inflation still slumbers. Current standards of living are unmatched.

"So you can look at the system and say it's got a lot of problems to it, and sure it does. It always has," Greenspan told the JEC last week. "But you can't get around the fact that this is the most extraordinarily successful economy in history."

--xx--

So, does a Capitalist economy in a Democratic society naturally evolved in to Socialism?



I know, its been discussed to death. fyi. Discuss if you wish.

c-

If you can't make a million dollars in this country then someone please tell me where you are going to make $$$. All it takes is some common sense savings and investing and everyone can retire later in life. Now that Greenspan is on his way out I love his little political comments.

Since we've got two different discussions going, I'm going to do some construction on this thread.

It's all Ara's fault. He asked me to merge these two topics together yesterday, and tehy had no business being together.

Alright, I just put all the minimum wage posts in the master thread kthodos started a while ago. There's more discussion that everyone can read there, too:

http://www.theskyiscrape.com/phpBB2/viewtopic.php?t=4625

And the Congress discussion is over here:

http://www.theskyiscrape.com/phpBB2/viewtopic.php?t=18177

Sorry that I pretty much gutted your thread, cltaylor.

No worries, I prefer consolidated threads actually. Thanks for the links!

c-

Some form of it yes... especially for "Western" capitalist democracies. We feel an extraordinary amount of guilt for our colonial/racist/sexist pasts and try to make up for it through social programs.

We end up caring more about equal outcomes and "hurt feelings" than about actual equality and rewarding behaviors that help society as whole. We all want to go to college, get a house, and retire without burdening our kids. We are so scared of not achieving this, we create safety nets to catch us should we slip up. Over time the nets have gotten so big that no one really even tries anymore. These safety nets are like Ritalin (perhaps more like Soma), they calm us down to focus on the status quo. Once people become complacent, socialism can take over. People will sign away more and more of their responsibilities so that they don't have to worry.

Don’t want to save money for a doctors visit? Just implement nationalized healthcare. That way we don't worry and become more dependant on Uncle Sam (and less likely to disagree when he does things like go to war).

Don't want to save for retirement? Just implement social security. What, me worry? Doubt my government and it’s leaders? That’s impossible. Our course the glorious leaders want to help me, they take all my worries away.

It's also how our society views minimum or low wage jobs as undesirable. We should be saying that living off of the government is the most undesirable state, but in our culture flipping burgers or mopping floors is perceived as "worse" than living on dependant programs.

"Is emptying bed pans in a hospital menial work? What would happen if bed pans didn't get emptied? Let people stop emptying bed pans for a month and there would be bigger problems than if sociologists stopped working for a year" -Sowell on class in modern America

Socialism is the result of jealousy and misplaced priorities. It's definately where modern America is going.

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!

When presented with your overwhelming arguement, i most concede. I would only say that with population shifts away from the WASP standard that has dominated Americas past, support for government run healthcare at an all time high, a lack of investment from the baby boomers and a mountain of greed from our grandparents generation regarding retirement, unstoppable imigration from Mexico/Latin America things are definetly moving towards the "third way". Not a classical Marixst socialism, as no alive today is dumb enough to think that works, but a socialism similar to Germany.

Even Lord Bu$h himself started talking about "taxing the wealthy" more for SS. Someday soon, the masses are gonna wake up and realize they can vote to take from the wealthy the money/property they feel they are entitled too. This day will be here sooner than you think.

I wish.

uheahuaeuheaauaeuaeuaeu

Just for my own curiousity, what country would you like the "new" US system modelled after?

Seriously, stop being a dick.

maybe practice what you preach?

What'd I do now?