A rising tide that lifts only yachts ( Liberal Whining On the Economy Alert)

LA TImes ^ | 05/05/2006 | Ezra Klein

[SirLinksalot]

A rising tide that lifts only yachts

By Ezra Klein

LAST WEEK WAS a good one for economists, as the normally dour practitioners of the dismal science got to use decidedly non-dismal, even exhilarating, words such as "surging" and "momentum" to describe the new quarterly growth numbers.

And they had cause for such enthusiasm. From January through March, the economy shot forward, growing by 4.8% — the largest increase in nearly three years and a stunningly rapid recovery after the previous quarter's Katrina-dampened 1.7%.

Economists, though, aren't the only ones excited. Floundering amid chaos in Iraq and corruption in Congress, Republicans are grasping at the good economic news of the last few years, seeing in it hints of electoral salvation.

Incoming White House Chief of Staff Josh Bolten has promised "more happy talk about the economy" as part of his five-point plan for righting the president's poll numbers. And President Bush himself has been bragging that "thanks to tax relief, and spending restraint, and pro-growth economic policies, this economy is strong, businesses are booming and the people in this country are working."

Strangely, though, the public doesn't seem to be listening. Americans are more than twice as likely to give pollsters a negative assessment of the economy as a positive one — 64% disapprove of Bush's handling of the economy. It's strange. The macroeconomic numbers are decidedly robust, but the public remains determinedly glum.

If you dig a bit deeper than the base growth statistics, though, the picture clarifies considerably. Our economy has grown so starkly unequal that the statistician's view now says surprisingly little about the average American's experience. Last quarter may have seen 4.8% growth, but hidden in those numbers was a depressing factoid: Wages had only grown 0.7% — slower than housing, health or gasoline costs.

[Just mythoughts]

This has got to be about a no living wage increase and the million upon millions of illegals who are living on slave wages.

Wonder which liberal (rhino) will start that electioneering drum beat, sure has worked in the past.

[GSlob]

Well, what's being taken, is gone. I'm seeing it as the "is it possible to replenish and compensate for it, maybe even more than compensate?" question. Capital gains are taxed at 15% only, and [as an example - past performance is no guarantee of future results] index mutual funds have minimal mandatory year-end distributions. So far it has worked for me.