Ocnus.Net
News Before It's News
About us | Ocnus? |

Front Page 
Click here for syndicated content
 
 Africa
 
 Analyses
 
 Business
 
 Dark Side
 
 Defence & Arms
 
 Dysfunctions
 
 Editorial
 
 International
 
 Labour
 
 Light Side
 
 Research
Search

Business Last Updated: May 4th, 2007 - 10:39:35


Double Decoupling
By Robert B. Reich, TAP 5/07
May 4, 2007, 10:38

Email this article
 Printer friendly page
I'm spending my spare time these days debating supply-siders who are convinced that the record-breaking Dow proves the correctness of the Bush tax cuts.

Yes, the Dow did reach a record high last week. But the Commerce Department also reported that economic growth slowed to its weakest pace in four years. How can investors do so well while the real economy is doing so poorly? My supply-side friends don't have an answer, but I do.

It's because of two great decouplings that have occurred in recent years. First, the rest of the worlds' major economies have decoupled from the United States economy. China, India, Japan, and Europe are now such large markets they can grow briskly even as America slows.

Second, America's largest corporations have decoupled from the United States. Their overseas subsidiaries are booming even as their American operations stagnate. General Electric expects more than half its revenue this year to come from outside the United States for the first time. More than half of Boeing's new orders are from overseas. Ford is struggling in America but doing well in Europe.

In other words, the president's supply-side tax cuts are great for America's global investors, who have been investing their extra money around the world -- either in foreign companies or in global American-based ones.

But little or nothing is trickling down to average working Americans. Half of U.S. households do own some shares of stock, usually through their IRAs or 401-Ks. But the vast majority own less than $5,000 worth. Their equity is in their homes, whose values have slumped. They're paying far more for health insurance and fuel. And their wages haven't kept up.

Bottom line: The Bush tax cuts have delivered for Wall Street but done zilch for America's Main Streets


Source:Ocnus.net 2007

Top of Page

Business
Latest Headlines
Developing a New Rural Payments System in China
Double Decoupling
Kazakhstan: U.S. Firm Pleads Guilty In Bribery Case
Gangster Economics
Iraqi Warns Companies Against Bypassing Central Govt
Venezuela to Quit IMF, World Bank
Only Double Hull Tankers Now Into EU Ports
The Money Trail (continued)
China Confident in Reining Inflation with Higher Interest Rates
Iraqi Oil Min Warns Companies Against Deals