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Andrew Tobias
Andrew Tobias

Money and Other Subjects

Your Slice of the Pie

July 17, 2006March 4, 2017

AH, THE PRESCIENCE

These quotes in Paul Krugman’s current column could make you cry:

Regime change in Iraq would bring about a number of benefits for the region. …Extremists in the region would have to rethink their strategy of jihad. Moderates throughout the region would take heart, and our ability to advance the Israeli-Palestinian peace process would be enhanced.

— Vice President Dick Cheney, Aug. 26, 2002

Peacekeeping requirements in Iraq might be much lower than historical experience in the Balkans suggests. There’s been none of the record in Iraq of ethnic militias fighting one another that produced so much bloodshed and permanent scars in Bosnia.

— Paul Wolfowitz, then deputy secretary of defense Feb. 27, 2003.

A GRAND TIME

But it was his previous New York Times column I wanted to highlight.

(What? You still don’t subscribe to the Times on-line?)

Left Behind Economics
By PAUL KRUGMAN
Published: July 14, 2006

. . . Here’s what happened in 2004 [the latest year for which data is available]. The U.S. economy grew 4.2 percent, a very good number. Yet last August the Census Bureau reported that real median family income – the purchasing power of the typical family – actually fell. Meanwhile, poverty increased, as did the number of Americans without health insurance. So where did the growth go?

. . . even if you exclude capital gains from a rising stock market, in 2004 the real income of the richest 1 percent of Americans surged by almost 12.5 percent. Meanwhile, the average real income of the bottom 99 percent of the population rose only 1.5 percent. In other words, a relative handful of people received most of the benefits of growth.

. . . Even people at the 95th percentile of the income distribution – that is, people richer than 19 out of 20 Americans – gained only modestly. The big increases went only to people who were already in the economic stratosphere.

. . . the real earnings of the typical college graduate actually fell in 2004.

In short, it’s a great economy if you’re a high-level corporate executive or someone who owns a lot of stock. For most other Americans, economic growth is a spectator sport.

LITTLE OLD LADIES

Bob: ‘You write: ‘Those clipping services employed little old ladies (one assumes).’ Just for the record, I recently finished reading A Tree Grows in Brooklyn. Author Betty Smith was hired by a clipping service at age 14 (she told them she was 16). She says her fellow employees were relatively young because their eyes would eventually go bad from the constant reading.’

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