As the 2008 Election season heats up, many progressive candidates have been running on a populist message, that too much wealth and power is concentrated in the very few. In response, some smug elitist columnists from the New York Times (I'll give you a hint, it rhymes with Pay-vid Crooks) and others have tried to trick us into believing that such inequality does not exist. The New York Times article cites modest increases in real wages, and the fact that the income of the lower brackets has increased since Bush's tax cuts of 2001 and 2003 were implemented. Sometimes, smug economists/political theorists will try and isolate various statistics to make a point that contradicts the truth. The truth can be found through an analysis of what is really happening.

Since 1981, when supply side economics permeated into America's bloodstream, real wages have declined, while productivity has increased. According to an August 2006 article in the New York Times, (not written by the aforementioned author), wages make up the lowest share of GDP since statistics have been measured, while profits make up the highest percent of GDP than at any point in our history.  What does this mean? The money is being made through the great American engine of innovation, but only the very few are reaping the rewards.

Of course, this is more than you need to know. Do you think that the 46 million people who can't afford health insurance, or the 13 million children living in poverty want to read articles telling them that inequality isn't THAT bad? I don't think so. According to the Children's Defense Fund, a vast majority of these children come from working parents, whose wages have remained stagnant. Even with today's raising of the national minimum wage, most low wage workers still live near or below the poverty line. Is it right that people should be suffering, is it right that people should be hungry, is it right that people should be impoverished, when hedge fund and equity owners are reaping record profits? Of course not. No statistician or Westchester County home-owning economist should be able to convince you otherwise.

We are the richest country in the world, our GDP will tell you that. So, the money is there. Where is it going? Rich people. One third of the 2001 tax cut, in which billions of dollars were given back to the wealthiest earners, could have funded universal health care for every child, 100,000 new teachers, and a fully funded head start program. The money is there, we are just not using it correctly.

Finally, I just want to make sure everyone is aware of some of the BS that comes out of these articles. Most of these writers, who have no background in Economics, often say that low wage workers have been gaining income just like the top earners! Wonderful, right? No. They never pay attention to relative wealth. As the rich get exponentially richer, the poor's relative wealth decreases, even if their wages increase. Also, make sure when they tell you that wages are rising, you know that they're usually talking about nominal wages and are not taking into account inflation.