Remember Jude Wanniski?
Neither did I, but he’s the economist/journalist who coined the term “supply-side economics” and he died last week, on the same day that the US Census Bureau reported that the poverty rate rose and the median income of Americans fell, even as the economy grew. I don’t know what to call that coincidence…except “supplying the rich.”
In a short NY Times piece yesterday, Daniel Gross reported some numbers that show that twenty years after all the propaganda about “trickle-down economics” there is still no trickle to be found. Government numbers show that for the second straight year pretax real median household income failed to grow and the official poverty rate increased in 2004 (from 12.5% to 12.7%).
Also to be found in yesterday’s Times is a report that illustrates the disappearance of the American “middle class,” particularly in New York City. The analysis conducted by a Queens College prof, Andrew A. Beveridge, showed that in Manhattan the poor make 2 cents for every dollar to the rich.
The top fifth of earners in Manhattan now make 52 times what the lower fifth make ($365,826 compared with $7,047), which is roughly the same income disparity found in Namibia.
Eighty percent of Manhattan’s richest top fifth are white and 76% of the poorest fifth are Black, Latino, or Asian.
A separate study released by the Fiscal Policy Institute this weekend says the tenuous economic recovery of the past two years has been characterized by such weak wage growth that most of New York’s working families have been left treading water.
While the overall New York economy has grown at a modest rate over the past two years, the new report concludes that workers have not been sharing fully in the fruits of this growth. At the national level, corporate profits have increased five times faster than total wages since early 2001. In New York, economic output per worker increased by 6 percent from 2001 to 2004, while average wages increased by only 1.8 percent.
Well, in spite of the evidence, or because of it, Gross reports that “conservative economists” argue that it’s just too soon to reach a definitive conclusion about supply-side economics. “Far from being over, they say, the supply-side revolution is just beginning to work its magic.” Oh boy…
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