http://www.preamble.org/columns/weisbrot/a_winning_issue_that_nobody_want.htm
only with a WSJ spin.
Sort of reminds me of Doug and the Bob.
Dean Baker had a good story in Dollars and Sense(June/July) about the stock market; anybody got a postable copy?
Tom Lehman
Doug Henwood wrote:
> Wall Street Journal - September 13, 1999
>
> The Outlook
>
> WASHINGTON
>
> America's prosperity in the late 1990s has, by many measures, been
> more generous to more people than any U.S. boom in two decades.
> Unemployment and poverty rates are falling. Wages for those at the
> bottom of the pay scale are accelerating. Yet, the gap in wealth --
> which includes investments, in addition to paychecks -- between the
> richest Americans and everyone else has continued to widen. By some
> estimates the gulf approaches that of the Gilded Age.
>
> That begs an intriguing question: If the rising tide is indeed
> lifting nearly all boats, is there anything wrong -- politically or
> economically -- if most crafts are hoisted a few inches, while some
> rise a couple feet?
>
> The current levels of consumer satisfaction and the virtually
> nonexistent dialogue about inequality and redistribution would seem
> to suggest the answer is "no." But tensions remain beneath the
> surface, ready for stoking during the 2000 campaign or should the
> economy falter. Consider the mounting bipartisan political fury over
> moves by big companies to slash pensions. Any sign workers are being
> sacrificed for higher stock prices still strikes a nerve.
>
> When inequality widened through the 1970s and the 1980s, the major
> culprits were high joblessness, stagnant wages, and the rewards given
> to the best-skilled workers in the new technology age. The
> ultra-tight labor market of the last three years has slowed that
> trend. Now it's the soaring stock market that's driving the wedge.
>
> For all the talk of mutual funds and 401(k)s for the masses, of
> barbers and shoeshine boys giving investment tips, the stock market
> has remained the privilege of a relatively elite group.
>
> Only 43.3% of all households owned any stock in 1997, the most recent
> year for which data are available, according to New York University
> economist Edward Wolff. Of those, many portfolios were relatively
> small. Nearly 90% of all shares were held by the wealthiest 10% of
> households. The bottom line: That top 10% held 73.2% of the country's
> net worth in 1997, up from 68.2% in 1983.
>
> Stock options have pushed the ratio of executive pay to
> factory-worker pay to 419 to 1 in 1998, from 42 to 1 in 1980.
>
> Yet outrage has been largely limited to a few left-leaning think
> tanks -- such as the Institute for Policy Studies and United for a
> Fair Economy, which generated the executive-pay figure. Just 17% of
> Democrats now believe government should "redistribute existing
> wealth," says the centrist Democratic Leadership Council. President
> Clinton began his term with a soak-the-rich tax increase yet ends it
> wary of Robin Hood policies. The wealth gap "is a problem," says
> Treasury Secretary Lawrence Summers. "But there is only one right
> solution," he adds. Not attacking the wealthy, but "raising incomes
> of the poor and more generally growing the economy."
>
> Why has the '90s so far eluded the "Decade of Greed" label that hung
> over the '80s? One reason: It was apparently more unseemly for the
> rich to be getting richer when the poor and middle class were getting
> poorer. Much of the haranguing about inequality was really about
> stagnant living standards for most Americans. Those concerns have
> eased.
>
> Another factor: Americans seem to feel that, in the New Economy, the
> opportunities for upward mobility are greater. A recent survey by
> KPMG LLP, the accounting and consulting firm, found that 77% of
> college students expect to become millionaires in their lifetimes.
>
> "Mobility makes people more tolerant of inequality," says Isabel
> Sawhill of the Brookings Institution. "We may tolerate even more
> inequality if it comes with the perception of even more mobility."
>
> Yet some analysts see signs of rising resentment. Class-warfare
> rhetoric permeates this year's Washington budget debate. Nobody may
> be for taking down the rich. But Democrats are successfully combating
> Republican tax cuts by arguing that they'd make the wealth gap even
> bigger.
>
> A growing disparity in affluence can hurt the less well off, even if
> their incomes are also on the rise. In the San Francisco Bay area,
> where stock-driven wealth exploded in the 1990s, a middle-class
> family earns about 33% more than the national average -- but has to
> pay up to four times the national average to buy a home because of
> intensely competitive bidding from freshly minted millionaires,
> according to a recent series published by the San Francisco Chronicle.
>
> Cornell University economist Robert Frank argues that Silicon Valley
> could, as it has in so many other ways, be foreshadowing a national
> trend. From bigger cars to higher tuition for the best schools, the
> richer rich will ratchet up prices for everyone else. "Extra spending
> at the top," he says, "raises the price of admission."
>
> --Jacob M. Schlesinger