ozzmdj
Senior Member
RUSH: Now, interesting here, Robert Samuelson -- one of my favorite economists. He's not as favorite of mine as Professor Hazlett. We all know Professor Hazlett. But Robert Samuelson writes a column now for the Washington Post and in Newsweek, and his Newsweek piece in the July 20th issue is entitled, "How the Mighty Have Fallen -- The rich really aren't like you and me--: They're historically recession-proof. But this time they've been hit hard -- and we may all be the poorer for it," he says. That's the theme of his piece. "With secure jobs and ample incomes, the rich and the near rich are supposed to be insulated from economic slumps. Well, not this time. Many feel fearful, threatened, and impoverished. ... Collateral damage is widespread. Sales at luxury chains have fallen sharply; same-store revenues for Saks Fifth Avenue and Neiman Marcus dropped about 25 percent in recent quarters. Many country clubs are struggling to hold members." Yessssssssssss!
"In New York's Hamptons, unsold homes reached a 34-month supply early this year at the prevailing sales pace; buyers had hibernated. Economist Susan Sterne, a specialist in consumer spending, calls it 'the demise of luxury... the people who buy $3,000 Gucci handbags. You see it in the luxury-car market and housing.' ... The stereo-type of the rich living mainly off dividends and interest income is increasingly outdated. Many of the wealthy are owners of small businesses whose well-being is -- to some extent -- hostage to the business cycle. ... The criticism usually presumes that if the rich and near rich get less, someone else will get more." You know, the old zero-sum game. Redistribution achieves a better social balance. Sometimes that happens. But sometimes when the rich get less, no one else gets more. Regardless of how the rich earned their money -- trading bonds, performing surgery, starting new companies, providing legal work -- it's no longer so lucrative.
"The rich get poorer, but no one else gets richer. Society is worse off," and that's what Obama wants. He's nailed it. Without saying it he's nailed what President Obama is out for. "[A] tenth of American families [in 2004] made nearly half of all gifts." That's going to be cut back. Not to mention because of the wealth, but the tax deduction's going to go away for charity. "...George W. Bush's favorable tax changes. But cheering at its eclipse may be premature and misguided. The contradiction is that many of the large gains at the top," rich incomes, "that are routinely deplored also provide the economic fuel for desired spending at the bottom. If the rich -- however defined -- remain stuck in neutral, the overall economy may not do much better." Robert Samuelson. Now, he doesn't say so but this is exactly what the Obama people have in mind. He makes a brilliant point. Everybody thinks if you raise taxes on the rich, somehow that money is going to end up back in the pie and the middle class is going to get richer. That's not going to happen. That's not how it happens. This money is being taken out of the economy. It's being spent ten years down the line. Money that has not even been earned or printed yet, is being spent.
The Rich Are No Longer Recession-Proof | Newsweek Business | Newsweek.com
"In New York's Hamptons, unsold homes reached a 34-month supply early this year at the prevailing sales pace; buyers had hibernated. Economist Susan Sterne, a specialist in consumer spending, calls it 'the demise of luxury... the people who buy $3,000 Gucci handbags. You see it in the luxury-car market and housing.' ... The stereo-type of the rich living mainly off dividends and interest income is increasingly outdated. Many of the wealthy are owners of small businesses whose well-being is -- to some extent -- hostage to the business cycle. ... The criticism usually presumes that if the rich and near rich get less, someone else will get more." You know, the old zero-sum game. Redistribution achieves a better social balance. Sometimes that happens. But sometimes when the rich get less, no one else gets more. Regardless of how the rich earned their money -- trading bonds, performing surgery, starting new companies, providing legal work -- it's no longer so lucrative.
"The rich get poorer, but no one else gets richer. Society is worse off," and that's what Obama wants. He's nailed it. Without saying it he's nailed what President Obama is out for. "[A] tenth of American families [in 2004] made nearly half of all gifts." That's going to be cut back. Not to mention because of the wealth, but the tax deduction's going to go away for charity. "...George W. Bush's favorable tax changes. But cheering at its eclipse may be premature and misguided. The contradiction is that many of the large gains at the top," rich incomes, "that are routinely deplored also provide the economic fuel for desired spending at the bottom. If the rich -- however defined -- remain stuck in neutral, the overall economy may not do much better." Robert Samuelson. Now, he doesn't say so but this is exactly what the Obama people have in mind. He makes a brilliant point. Everybody thinks if you raise taxes on the rich, somehow that money is going to end up back in the pie and the middle class is going to get richer. That's not going to happen. That's not how it happens. This money is being taken out of the economy. It's being spent ten years down the line. Money that has not even been earned or printed yet, is being spent.
The Rich Are No Longer Recession-Proof | Newsweek Business | Newsweek.com
