Good article in the Times

I was reading the New York Times' sunday business section (as is my wont) and found a very nice piece explaining why all the economic statistics in the world wont make the Bush's approval ratings go up. You should be able to read it here (free registration, perhaps, required). It's fairly short and to the point.

(read it now!)

Okay, you're not going to read it. So suffice it to say that despite the economy's signs of growth the majority of people are not benefitting. And yet the Bushies are able to quote statistics that seem to suggest that the entire population has seen an improvement in earnings and net-worth. In fact, according to the article, while the average family's net-worth increased by 6.3% between 2001 and 2004, the bottom 40% of families (by income) saw a decrease in net-worth during that period. You'll hear a lot of that first part from the White House. Not so much about the second part.

Bush's economic policies are working exactly as they're designed to. His tax cutting and regulation castrating has really helped America's fabulously wealthy become... er... fabulously wealthier. The problem is the theory behind the formulation of those policies isn't actually working. The rich are getting richer, the gap between the rich and the poor is getting wider and the fluctuations of the national economy are increasingly disconnected from the lives of the majority of this country's citizens.

Supply-side/trickle-down doesn't work because rich people don't spend money locally; they spend money globally. And they don't spend their earnings; they invest earnings and live off their dividends. Our economy is mature/stagnant; everyone knows that the big profits are overseas in "emerging markets". So smart money flows out of the country and the economy flounders because there's no money being spent here.

I think it's fairly clear that federal government (when not abused) is not a weight on the economy. Whatever they take in from taxes they send out in the form of public works, employee payroll, military contracts, etc... Taxes are immediately pumped back into the national economy.

Which is why the current administration is borrowing recklessly; the uber-rich just aren't coming through. Surprise, surprise!