How to Talk to a Republican #2: The Economy

One of the biggest truths of the Bush regime is that the economy is going well. Before the flame wars begin, let me qualify that. My stock investments are soaring, primarily because I have the majority of them invested overseas. The shrinking dollar is benefitting me so from that point of view, the Bush economy is doing just fine for me.

If you're a CEO or someone in the top 1% of income earners in the country, you're doing well, too. Your income is up - in fact, that top 1% of income earners now earn 21% of the income earned in this country. When the last Democrat was in office, that number was in single digits. Worse, the top 0.1% of income earners now earn 7% of all income earned in the country. That means the ultra-rich are getting ultra-richer and have been since Reagan invented "supply-side economics", otherwise known as trickle-down. Here's how that works. The ultra-rich shield a lot of their income in tax shelters known as corporations. Because they "own" these legal entities, they can deduct a large portion of their income. For example, if they own a rental property in Aspen and they go to Aspen and do anything at all with the property, the travel and part of the trip become tax deductible. Now at the beginning of Reagan's term, the highest marginal tax rate was 70%. Seems like a lot but remember those deductions! The few who reached the marginal tax rate level were making so much the pittance they were paying in taxes was quite insignificant.

But they didn't tell you that part when they sold you this bill of goods. You only heard that the poor rich were getting milked to pay for $400 toilet seats and so forth. Now what has happened since then is a simple miracle, compound interest. That money they're no longer paying in taxes is compounding. So now you have the hyper-rich, self-perpetuating fortunes that lead to aberations like Paris Hilton and George W. Bush.

But the rich invest, create jobs, you say. The entrepreneurial first generation does. Sometimes, if well-trained, the second generation does. But by now, most of the money is in stocks. Creates jobs, you say. Correct, but only if every penny is invested in an Initial Public Offering, or IPO or other investments such as real estate. The only jobs created by this is for stock brokers and real-estate agents. No one is making anything with this money, no company gets any benefit out of it, only the buyers and sellers see anything from it. Few jobs are created in proportion to the first-generation entrepreneurs, subsequent generations only get richer.

Now to your paycheck. Feeling wealthy? I'm not. Real incomes have dropped by about 3% since our Dear Leader took office. Meanwhile, oil has gone from $25 to about $100 per barrel, largely to do with erosion of the value of our currency. Housing prices, the Great American ATM, are seeing their biggest drop since George's daddy was in the White House in 1991. Food is more expensive because, in our thirst for 8MPG SUVs, we're burning it. China owns our currency now. The last time we had a budget surplus, peace, high wages and good health care was under a Democrat. I don't think a blow job negates all that good. Meanwhile Mr. Values Bubble-Boy continues to rule over one of the greatest economic train wrecks in our history. Every day conditions become a little more like 1929.

So tell me again how the Republican parti is the party of the economy?