Silk Purse - meet Sow's Ear

Lots of intriguing economic issues bubbling around the press today, much of it summed up rather nicely in the leading Times editorial this morning, Another Mission Accomplished. Following his trip to Chicago, Bush will today wax euphoric over a slightly lower than expected budget deficit of$300bn. If you see some lipstick in the President's pocket, it might well be the beginning of a concerted campaign to pretty up his pig of an economic record.

Yesterday, the President spun the line a little further in remarks at the swearing in of Treasury Secretary Paulson. He put the best possible gloss on the latest job creation and unemployment figures, before concluding that all of this was "leading to higher wages and a higher standard of living for our people."

Luckily for us, the lie of this pig-polishing exercise on these three claims - the economy is doing well, $300bn isn't actually a bad federal deficit, and living standards are rising for "our people" - was nicely disproved before the lipstick was dry, in three excellent papers by the Center on Budget and Policy Priorities.

First, they point out that the current recovery is much weaker than the average for comparable recoveries since the Second World War, with the noteable exception of strong growth in the corporate sector. Second, they point out that any reduction in the federal deficit is a combination of expectations management (previous estimates were on the high side) and a strong tax take from (guess who?) the very richest Americans. Even given that - the administrations claim that the current is low by historical standards only works if you count times of war and reagan's fiscal recklessness. Without those, its a whopper. And, finally, they profile new data on income distribution for the last year in which figures are available. It is here that the President's phrase "higher standard of living for our people" comes into sharpest relief. It notes

"an exceptional jump in income concentration in 2004. The share of the pre-tax income in the nation that goes to the top one percent of households increased from 17.5 percent in 2003 to 19.5 percent in 2004. Only five times since 1913 (the first year that this data set covers), and only twice since World War II has the top one percent’s share risen by as much in a single year (in percentage point terms)."

So, there you have it. In as much as the economy is doing well it is doing well for our [wealthiest] people. Despite this a new campaign is clearly underway to gloss up the President's economic record, going into November. No ammount of lipstick should hide the fact that - for the quiet majority of Americans - this is an oinking economic recovery complete with little trotters and a pink twirl-around tail.





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