This year’s election is finally coming to an end, and as expected I didn’t watch any of the debates. Did I miss anything?
Data from the U.S. Census Bureau’s American Community Survey (ACS) data was released a couple of weeks ago, and I’m surprised how little coverage of its findings there has been in the media. Most of what I have read, moreover, compared 2015 with 2014, or with 2010, and finds that the economy is getting much better for many Americans.
That, however, is not a meaningful comparison if one is looking to the long term, or trying to explain why so many Americans feel so much worse off. One would expect that people would become better off in the recovery from a deep recession, or worse off in the aftermath of the peak of a bubble. Politicians, seeking to make points for their sides, often base their talking points on data from such non-comparable years, but that is disingenuous. As it happens, there are enough economic similarities between the first year of American Community Survey data, in 2005, and the latest year, 2015, to make a comparison between them meaningful. What follows is a discussion, with 26 charts, of the economic trends I found most interesting from that comparison – for the United States, New York City, and New York State, New Jersey and Connecticut. Let’s take a break from the fantasy and deception of politics and look at some reality.
For most of its history, the Staten Island Expressway had six lanes, with three in each direction, and service roads that were interrupted rather than continuous. For much of the past decade it has been under construction with the publicly announced purpose of adding mass transit – a busway down the center. With “auxiliary lanes” added in the vicinity of Todt Hill, according to the announced plan.
“A design approval document was prepared in support of the CE determination. A review of the project indicates that the project will have no significant environmental impact. It does not individually nor cumulatively have a significant environmental impact, and is excluded from the requirement to prepare an Environmental Impact Statement (EIS) or an Environmental Assessment (EA).”
During construction the traffic lanes were shifted first to one side of the road, and then to the other. Including all the lanes used at one time or another, the whole thing seemed to be 12 lanes wide. So what would the final product look like? Last Saturday, on a trip to New Jersey, I found out. It is a 10-lane road with two – one in each direction — in theory restricted to high occupancy vehicles (3+ people), but with limited compliance with that rule and no enforcement. The two additional general traffic “auxiliary lanes” extend from the Verrazano Bridge nearly to Victory Boulevard, almost the entire length of the island. Surprise!
Who will you be voting against this November? That’s really what it comes down to, doesn’t it? The fact is, however, that this poor choice has been a long time coming. All you have to do is look down a level, or two levels, or three levels in politics to see that there is no there there, and the rot has now reached the top of the ticket. You see the same rot at the state and local level, in business, in the non-profit sector. It is the rot of a self-serving generation or two, now running the show in its own interest. And the United States is facing a Presidential campaign that will likely be a rehash of the social issues of Generation Greed’s youth, rather than an honest discussion of the diminished realities it is leaving to those coming after. In public policy, in the economy, even in many families. Scapegoating is likely to be the only discussion of this reality anyone hears about. The candidates will likely prefer to talk about something, anything else otherwise.
For decades my rule of thumb has been don’t vote for any Republicans at the federal level, on generational equity grounds, as since 1980 the Republican Party has been waging a financial war on everyone born after 1957. Don’t vote for any Democrats at the local level, because they are controlled by the producers of public services – the public employee unions and contractors – whom they have continually enriched at the expense of increasingly less well off consumers of public services. And don’t vote any incumbents of either party holding office in the State of New York, which is the worst of the worst. Is there any reason to change?
I don’t usually comment on other people’s reporting, but I couldn’t let a Bloomberg News report of a 1970s deal with Saudi Arabia, a deal to mortgage America to ensure cheap gasoline, pass without stating how nauseating it is.
The basic framework was strikingly simple. The U.S. would buy oil from Saudi Arabia and provide the kingdom military aid and equipment. In return, the Saudis would plow billions of their petrodollar revenue back into Treasuries and finance America’s spending. It took several discreet follow-up meetings to iron out all the details…But at the end of months of negotiations, there remained one small, yet crucial, catch: King Faisal bin Abdulaziz Al Saud demanded the country’s Treasury purchases stay “strictly secret.”
And so it has been until today. The Saudis may have asked for secrecy, but secrecy suited American politicians and Generation Greed in general as well. They didn’t want to face just how much of America’s future they were selling off so Americans could have cheap gasoline in the past. It was just too embarrassing. This shows the reality of the values of a generation if nothing else does. What a disgrace!
Here is food for thought. In 1978 I earned the minimum wage: $2.65 per hour. Adjusted for inflation that is $9.68. The current minimum wage of $7.25 is therefore about 25 percent lower. So have those earning the minimum wage become that much worse off relative to most Americans? After thinking about it, perhaps not. Perhaps that 25 percent decrease is just about typical. In fact, it suddenly hit me that I had seen something like a 25 percent decrease in well being elsewhere, in other contexts.
The past 35 years or so have seen a persistent history with regard to federal tax revenues. Republicans, who have dominated the federal government for most of that time, have cut the taxes that fall more heavily on businesses and the wealthy, the personal and corporate income tax. And then following a fiscal disaster and soaring deficits, Democrats increased those same taxes. In the end the personal income tax ended up, as a percent of GDP, about where it was – at 8.1% of GDP in FY 2014 compared with 7.9% of GDP in FY 1978. While the corporate income tax ended up lower, at 1.9% of GDP compared with 2.6%. This is true even though profits account for a higher share of GDP today than they did in 1978, and work earnings at the top account for a much higher share of total earnings, factors that should have increased personal and corporate income tax revenues as a percent of GDP even with the exact same rules.
Payroll taxes, meanwhile, were substantially increased by the Republicans and never reduced, save for a special exemption in the Great Recession. These taxes fall exclusively on work income in the United States, and more heavily on the working and middle classes. The wealthy pay less, as a percent of their income, the retired do not pay at all and, with regard to international trade, work done in the United States is subject to the tax whereas goods imported from abroad are tax-free. The payroll tax burden increased from 5.3% of GDP in FY 1978 to 6.5% in FY 2001. Before falling to 5.9% in FY 2014, after the share of Americans working and average work income plunged in the Great Recession. Other federal revenues, such as excise taxes, estate taxes, and customs duties totaled 1.7% of GDP in FY 1978 and 1.6% of GDP in FY 2014, although the composition of this category has changed. These trends are discussed in more detail below.