So, across the board (1/2 defense, 1/2 non-defense) federal spending cuts of $1.2T will begin January, 2013 without any tax increases. That's the plan, but there is plenty of time for Congress to derail what strikes some of us as a modicum of progress. Thankfully, President Obama says he'll veto any bill that attempts to overturn the sequester. Republicans or Dems who try to do it to protect whatever it is they purport to be protecting -- will do so at their own peril. This is the 2012 issue to watch.
GOP nomination and a narrowing field
I felt many of the same hopeful moments and (ultimately) profound disappointments from Herman Cain's candidacy as I felt during the Sarah Palin VP run in 2008. My view has less to do with Mr. Cain's alleged personal indiscretions than his performance on the campaign trail which has become as painful to watch as Ms. Palin's was during the 2008 election. Mr. Cain: Though you are ideologically appealing and charming, you are not ready for prime time, Sir. Please leave the race with dignity and promote fiscal conservatism in a new way.
Cameron weighs in on income redistribution
In May of 2010, I began an interesting exchange with my old pal Cameron.
More recently Cameron sent me the CBO report that has garnered so much attention, "Trends in the Distribution of Household Income Between 1979 and 2007. CBO says, "... the population with income in the lowest 20 percent (quintile) in 2007 was not necessarily the same population group in that category in 1979." That point seems lost on some who believe this 20% is the exact same control group tracked during the period of study and thus the one still mired in poverty. There always has been and always will be, a lowest quintile -- with changing occupants. CBO also mentions that this lowest 20 percent quintile, actually experienced income "18 percent higher in 2007 than it had been in 1979." This data point suggests that a rising tide has lifted their boats too, though admittedly, not to the same degree as boats in higher quintiles.
OWS and that "evil" one percent
Debate centers on the top 1% of income earners where the share has increased dramatically in recent years. Why? Because if one looks at the income share by quintile, going back to the late 1960s, one sees that the share percentage of income earned by the top quintile has gone up (and down) in percentages of total income between roughly 43 percent to 50 percent. When I looked back further to the 1940s, the data for this quintile was still bouncing around in the mid 40s share percentage. Thus, the share of total income going to the top quintile, hasn't changed much.
We all look at the part of the statistical puzzle that supports our worldview. Don't want to talk about who pays the income taxes? Just talk about income. Don't want to talk about higher living standards, or increased consumption by all Americans? Just focus on the income. Don't want to talk about anemic economic growth, continuing growth in government employment levels, or food and energy inflation? You got it -- single out income disparity.
What's also troubling, is the class envy and resentment bubbling over on the streets. For additional perspective, check out David Malpass' article in the current issue of Forbes Magazine ("Class Warfare Hurts Growth").