Wednesday, August 27, 2008

Thieves in High Places

The Economic Policy Institute has published information revealing the extent to which middle class working families have lost economic ground since the turn of the millenium.

When adjusted for inflation, median salaries have fallen by $2,000, while the average output per hour has increased by 18%. And these figures don't include the skyrocketing inflation numbers for 2008. When 2008 is added on, the line on the chart will look like it has fallen off a cliff.

If trickle down economics makes any sense (and I'm not sure that it does), it only makes sense when the people in charge are honest and conscientious. When crooks and thieves are in charge, the working classes get robbed.

1 comment:

Jeff the Baptist said...

Trickle down economics only makes sense when you realize that the opposite makes absolutely no sense whatsoever. If you tax the rich and corporations more, they will pass as much of that tax increase on as the possibly can. If you drop their taxes or hold them constant, they might pass the savings on. The good thing is that market principles often encourage businesses to pass on their savings because it makes them more price competitive.

The problem with the income graph is that the that sharp knee in 1997 to the peak in 2000 is the dot-com boom. Salaries skyrocketed, but a lot of that was on the backs of unfounded speculative investment. That peak isn't a normal or sustainable income level and we shouldn't hold it up as some sort of ideal. I'm actually surprise that income hasn't drop back to pre-boom levels when adjusted for inflation.