Monday, July 12, 2004

Economics of two Americas

Class warfare is being waged in the current elections, again.

Wal-Mart vs. Neiman Marcus illuminates with more analysis showing how economic growth is benefiting the wealthy and fast disappearing for the poor.
...the University of Michigan and the Conference Board both publish monthly gauges of consumer confidence...Both measures—produced by nonpartisan economists—find that Americans, on the whole, are confident—more optimistic, in fact, than they have been in two years. But they also found that while those with incomes above $50,000 have become more confident and optimistic, those with incomes below $50,000 have become less so.

The Conference Board shows the same split. In its most recent month, May, the index for over-$50,000 demographic was 112.1, the highest it's been since June 2002. But for those making under $50,000, confidence not only remains below its levels of July 2002, it has been falling in 2004. (Since January 2004, the confidence for the under $15,000 subset has fallen from 69.1 to 65.6; for the $15,000-$24,999 subset, from 85.2 to 69.3; for the $25,000-$34,999 subset, from 92.9 to 82.9; and for the $35,000 to $49,999 subset, from 95.2 to 93.6.)

...If the economy were undergoing a broad-based expansion, if a rising tide were lifting all boats equally, you might expect that trend to continue. But the views of the rich and poor are moving in opposite directions. The split results—the growing pessimism of the poor and the growing optimism of the rich—suggest the economy's improvement isn't helping everyone. That is bad news for a lot of Americans, but it may be good news for the Kerry-Edwards ticket.