Wednesday, February 01, 2006

Why we all feel like we're short of money when Bush thinks we're rich

Today I’m going to be a tad snarky. It is, after all, the day after the George W’s State of the Union speech, and I am never a happy camper when the president speaks.

I won’t lie. I ignored his speech last night in favor of communing with some of my favorite DVDs. However, driving to work this morning, I was struck by one quote reported on NPR. Our president told us that “our economy is healthy and vigorous.”

I’m glad he cleared that up. I’m not certain that folks around here in Kansas would agree.

I hoped over to The New York Times where they posted a nifty annotated transcript of the speech and dug up these quotes:

Even in the face of higher energy prices and natural disasters, the American people have turned in an economic performance that is the envy of the world.
And later:

In the last five years, the tax relief you passed has left $880 billion in the hands of American workers, investors, small businesses and families. And they have used it to help produce more than four years of uninterrupted economic growth.

I suspect that it’s probably true that the American people have turned in an envious economic performance. We’ve worked hard. The problem, though, is that the majority of the American people seem to be neither reaping the profits from that performance nor gaining the benefits from the alleged “four years of uninterrupted” growth.

The Economic Policy Institute has some interesting information on why we all feel stretched in the wallet. They report that:

* “Recent job gains lag far behind historical norms.”

* The unemployment rate doesn’t tell us what’s happening because many people have stopped looking for work and, thus, aren’t counted in the statistic.

* The “slack in the labor market” is holding down pay gains.

* Federal spending, largely in defense, and not tax cuts is responsible for the jobs that have been created.

* Data on employers wage and benefit costs show that over the last year, wage and salary income per hour rose by 2.3%, the slowest year-over-year rate on record.

The problem isn't whether Americans are working hard and making money. The problem is who’s getting the reward for all that work. It’s hard to ignore the announcement this week of Exxon Mobil’s record $36 billion profit, a profit they nicely made off the rest of us who were paying record gasoline prices.

George W. thinks we’re doing well. Could that be because he and his friends are rolling in money, while the rest of us struggle?

Other interesting reports up on the Economic Policy Institute site include:

The Wage Squeeze and Higher Health Care Costs

Real Compensation Down as Wage Squeeze Continues

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