When the Rich Get Richer
Everyone suffers

After stuffing myself with stuffing, I was not going to post today but hit on the intriguing article Sometimes, a Tax Cut for the Wealthy Can Hurt the Wealthy in the NYT. I encourage you to read this article and am only going to give you the "teaser":

WHEN market forces cause income inequality to grow, public policy in most countries tends to push in the opposite direction. In the United States, however, we enact tax cuts for the wealthy and cut public services for the needy. Cynics explain this curious inversion by saying that the wealthy have captured the political process in Washington and are exploiting it to their own advantage.

This explanation makes sense, however, only if those in power have an extremely naïve understanding of their own interests. A careful reading of the evidence suggests that even the wealthy have been made worse off, on balance, by recent tax cuts. The private benefits of these cuts have been much smaller, and their indirect costs much larger, than many recipients appear to have anticipated.

Although the article doesn't mention it, with the layoff at GM, I wondered once again who will be left to buy cars if globilization reduces wages here while barely raising wages in under-developed nations. Short term profits can rise with layoffs and increased production, creating stock market gains. However, if (as has been happening in recent years) real wages don't keep up with increased energy and medical costs, the consumer base has got to shrink, after all available credit has been used. Poverty is not only immoral in this rich land, it is detrimental to everyone in the long-term.