Public Employee Press

2006 Political Action
BUSHONOMICS

"Things are good for American workers."
—President George W. Bush,
September 2006

Plutocracy: A form of government where the power is centralized in an affluent social class. Economic inequality is high while social mobility is low. The word is derived from the ancient Greek plutos, meaning wealth. — Wikipedia

By GREGORY N. HEIRES

If you’re a typical worker, you can thank George Bush for the loss of $1,700 of your income after inflation since he became president six years ago.

As the wealthy enjoy huge tax breaks, workers are running in place and even falling behind as the fruits of their labor are used to boost corporate profits rather than wages.

“If you look at what’s happening in the economy, the key question to ask is whether it has benefited a majority of Americans,” said Professor of Economics Gerald Epstein, co-director of the Political Economic Research Institution at the University of Massachusetts. “The answer is it hasn’t. Workers have been getting almost no share of productivity.”

In the 1950s, which many economists call the “golden age” of American capitalism, a bargain was struck between workers and business. “Workers were supposed to get their fair share. That’s no longer true,” Epstein said.

That bargain started to fall apart in the 1970s, and workers’ real pay — taking rising costs into account — has stagnated and declined ever since.

“The president’s economic policies have favored wealth over work,” and worsened our highly unequal distribution of economic resources, said Tom Schlesinger, executive director of a non-profit research center in Virginia. Under Bush, instead of a democracy with a prosperous and expanding middle class, our society increasingly resembles a plutocracy, and the economic divide has widened dramatically.

• From 2001 to 2010, the average tax cut for the top 1 percent will total $483,000, an average of $48,300 a year, according to Citizens for Tax Justice. For middle-income families, the cut will amount to $659 a year. The total cost of the Bush tax cuts is estimated at $2.4 trillion by Citizens for Tax Justice.
  
  
• While productivity has gone up 16.5 percent, the real, inflation-adjusted income of the typical family has fallen 2.9 percent since 2000.

The share of income going to wages and salaries is the lowest since the Great Depression began in 1929, according to the Center on Budget and Policy Priorities. By contrast, the share going to profits is at its highest level since 1950. The investment bank UBS describes the current period as a “golden era of profitability.”

Rising class inequity

• In 2004, the richest 1 percent of wealth holders had an average of $15 million each, 190 times the wealth of a typical household. The middle fifth of households had an average of $82,000, said the Economic Policy Institute.
  
  
• Today, the wealthiest one percent of Americans own half of the country’s private assets. Altogether, 150 million Americans own less than 3 percent.

And the rising class inequity is only a part of the Bush administration’s economic war on workers.
Under the administration’s watch, employers have dramatically shifted health care costs to workers.
Between 2000 and 2004, the percentage of employees who received health insurance through their employers fell from 59 percent to 56 percent as the number of uninsured hit a record 47 million.

Jobs have continued to move abroad as the manufacturing sector gets walloped. Co-director Mark Weisbrot of the Center for Economic and Policy Research (CEPR) argues that “managed globalization” policies favor those with higher income. Doctors, lawyers, executives and other professionals have been largely protected while lower-paid workers have seen their jobs shipped abroad.

War is not the answer
While the U.S. economy is in its fifth year of expansion, job creation has been poor by historic standards. In September, Business Week reported that the 1.7 million new jobs added to the health care sector since 2001 largely account for the job growth. The number of other private sector jobs hasn't grown.

The federal minimum wage has plummeted to its lowest point, compared with the cost of living, in a half century. Household debt is at record levels as middle-class homeowners use their credit cards and home equity loans to make up for their falling real income.

Meanwhile, workers are paying dearly for the administration’s war in Iraq. Spending there is running at $244 million a day, according to the National Priorities Project. CEPR Co-director Dean Baker said the war costs divert resources away from investments that would expand jobs at home.

The overwhelming majority of the 2,700 U.S. soldiers killed and the 20,000 injured are from working families. As ordinary Americans pay the ultimate price, the 34 CEOs of the top military contractors earn an average of $7.7 million a year, compared with the average Army private’s $25,000, according to “Executive Excess,” a report from the Institute of Policy Studies and the United for a Fair Economy group.