Posts Tagged ‘income gap’

Partisanship Is Breaking Both Parties — Full Text

September 29, 2017

Republicans fail again on health care, while Democrats refuse to get serious about taxes.

Republicans announce their tax-reform plan, Sept. 27.
Republicans announce their tax-reform plan, Sept. 27. PHOTO: © BILL CLARK/CONGRESSIONAL QUARTERLY/NEWSCOM VIA ZUMA PRESS

By Peggy Noonan
The Wall Street Journal

The subject is realism. It involves seeing clearly your moment in time and where you are within it. We have a heck of a time with this. Our dreams, hungers and illusions get in the way.

But I’ve never seen such a lack of reality among our two great political parties in Congress.

Their own survival as parties requires bipartisanship—concrete achievements and progress. They have to work together and produce! Nobody likes them. The biggest “party” in America is those who call themselves independent. Gallup has the Democrats’ and Republicans’ favorability each at about 40%. Both parties are internally riven, warring and ideologically divided. Neither is as sure as it’s been in the past of its philosophical reason for being. Both have to prove they have a purpose. Otherwise they will in time go down, and it may not take that long.

Both parties go forward as if they are operating in a pre-2016 reality. But the election, now almost a year ago, should have changed so many assumptions. For instance, when the Republican nominee promised not to cut entitlements, his crowds—Republicans, Democrats and independents—cheered.

Health-care reform this week went down, again. The Republicans did not have the votes in the Senate, again. How they tried to get the bills through suggests they are living in a dream. The dream was that once they held the House, the Senate and the White House, they would be able to call the shots, crush the foe, bully their way through. They thought they would finally be able to do what the Democrats did when President Obama and the Democratic Congress bullied through Obamacare.

That was a mistake. What the Democrats did shouldn’t be emulated.

Sen. John McCain, who basically killed the two Republican bills, did it based on a central insight as to the facts of the moment and the issue: The path to a new health-care law runs through the Democrats. The path to a bill better than ObamaCare—and it would have to be bad indeed to be worse than ObamaCare—runs through the Democrats. Changing one-sixth of the American economy cannot be successfully done without them. The American people will never accept a health-care law that is not backed by both parties. That means regular order—hearings, debate, negotiations—as Mr. McCain has said.

The Republicans failed because they tried to do what Mr. Obama, Speaker Nancy Pelosi and Majority Leader Harry Reid did, passing ObamaCare on a party-line vote. But bills that make great changes in how Americans live, such as Social Security and Medicare, must always have broad, two-party support. The Democrats pushed ObamaCare without fully understanding what the bill even contained. “We have to pass the bill so that you can find out what is in it,” said Mrs. Pelosi, mindlessly and in a way accurately: They were content to let regulators and administrators figure out the implications of everything.

But fierce pushback followed—the tea party uprising grew; the Democrats lost the House in 2010. Then came the failure in 2013 of the website on which the entire program depended, the admission by one of its architects that it was marketed to take advantage of “the stupidity of the American voter,” and the revelation that the central promise—“If you like your doctor you can keep your doctor”—was a lie.

The bill failed on its own terms, and it is still the law of the land. When Republicans tried to replace it, they tried to do just what the Democrats did—hold party-line votes on bills that few in the electorate fully understood. The difference is the electorate had previously been scalded. They’re not in a trusting mood.

Health care is experienced now as a fully national issue, and there are signs America is tilting left on it. (A bipartisan health-care bill might help blunt the coming movement for single payer.)

Democrats have to be part of fixing ObamaCare. And though they should be in a weak position, having lost the congressional majorities and the White House, they’re holding strong cards. The Republicans have crashed and burned twice, and there’s no reason to think they’ll magically succeed next time.

Health-care reform will have to come from both parties or it will not be accepted by America. It will have to be a compromise that comes from both parties or it will not pass the Kimmel test, the nonsensical but powerful showbiz bar such a bill must now clear. That means it will be more liberal than the Republicans want, and more expensive.

The Democrats will be hellish in negotiations. They will not call it “repeal and replace”; they’ll call it “repair and reinforce.” They’ll be demanding. And this is unjust. They caused the problem in the first place! They should be feeling chastened; they should be desperate to create a fix. Instead they’ve been amusing themselves watching the hapless Republicans blow it again. They should amuse themselves less.

Now the Republicans turn to tax reform. Again they move from a weakened position. They’re going forward without the momentum of victory, without the confidence of recently demonstrated skill. As he unveiled the plan this week, Speaker Paul Ryan wore a weirdly triumphant smile. “Today,” he said, “we are taking the next step to liberate Americans from our broken tax code.” He compared this moment to 1986, when Ronald Reagan won tax reform. But that was another world—a broadly popular president, both parties strong, each working, however reluctantly, with the other.

As strange as Mr. Ryan’s enacting of a happy warrior’s joy was the Democrats’ response. They reverted to their own antique playbook, taking potshots, being unserious. The Republican plan is “a massive windfall for the wealthiest Americans,” said Minority Leader Chuck Schumer. “It seems that President Trump and Republicans have designed their plan to be cheered in the country clubs and the corporate boardrooms.” It should be called “wealth-fare.” Sen. Bernie Sanders said the plan is “morally repugnant and bad economic policy.”

But the tax code is too big and too complicated, as Mr. Ryan said. It would do the country good to see it improved.

Both parties are breaking and broken. They both need a win. They could recover some of their standing with a bipartisan victory. It would show America the two-party system itself can win and produce something needed. This would reinforce the position of both parties. It would suggest they’re needed!

If they can’t produce something big together, more Americans will become certain they are not.

Meanwhile, thousands of K Street tax lobbyists will be crawling the halls trying to affect the shape of the bill for their clients.

Everyone is acting as if they don’t know what time it is, or what position they themselves are in.

America is in trouble, with huge problems. The people need improvements in health care, in the tax code. They’re desperate for is a sense that improvement is actually possible.

This is no time for Democrats to be small, tatty and cheap, to do the old class warfare, to issue one-liners instead of thoughts. They should wake up and get serious.

It’s weird to see everyone going through the old motions, dream-like.

Political Divisions in U.S. Are Widening, Long-Lasting, Poll Shows


How Donald Trump Filled the Dignity Deficit — Hope and Change With More Chance of Going To Work — All must contend with the central reality he has unearthed

November 10, 2016

Over the past half century, the percentage of working-age men outside the workforce doubled.

Election night in New York City.
Election night in New York City. PHOTO: ZUMA PRESS

Updated Nov. 9, 2016 6:34 p.m. ET

Tuesday’s election results stunned pollsters and pundits. But to observers who have been watching deeper trends across America, the outcome was hardly incomprehensible. It didn’t register in every survey, but an acute crisis has been rolling through working-class America. Neither the conventional left nor the conventional right has fully grasped it.

For decades, progressives have emphasized the “income gap” separating rich and poor. Their cries have only grown louder since the financial crisis. They contended that income inequality would ignite a new class struggle, causing unprecedented political turmoil.

This was half right. There is indeed a gap in this country, and it has now led to a political revolution, a significant realignment in American politics. But the relevant gap wasn’t income. It was dignity.

Too many Americans have lost pride in themselves. We sense dignity by creating value with our lives, through families, communities, and especially work. That is why American leaders so frequently talk about dignity in the context of labor. As Martin Luther King Jr. taught, “All labor that uplifts humanity has dignity and importance and should be undertaken with painstaking excellence.” Conversely, nothing destroys dignity more than idleness and a sense of superfluousness—the feeling that one is simply not needed.

That is the circumstance in which millions of Americans find themselves today. Best-selling books over the past few years such as Charles Murray’s “Coming Apart” and J.D. Vance’s “Hillbilly Elegy” tell the story. The U.S. is bifurcating into a nation of economic winners and losers, and this distinction is seeping into American culture. The dignity gap grows every time those who lose out start hearing, “We don’t need you anymore.”

Who falls on the wrong side of this dignity gap? These days it is working-class men. In his new book “Men Without Work,” my colleague Nick Eberstadt shows that between 1965 and 2015 the percentage of working-aged men outside the workforce increased to 22% from 10%. Many millions more are underemployed. The employment-to-population ratio for men aged 25-54 is 6.8% lower today than it was in 1930, in the teeth of the Great Depression.

These secular trends were amplified by the nonrecovery that most Americans experienced after the Great Recession. Only about the top fifth of the economy saw positive income growth for most of the Obama presidency, Census Bureau data show, while most others averaged no growth at all. This stagnation has decimated middle-aged men without a college education, especially in rural areas.

Men without work are much less likely than working men to be married with families, Mr. Eberstadt also shows, further compounding the problem. Does modern society tell many working-class men they are needed and valued as husbands and fathers? This question answers itself.

Life without dignity can produce shocking results. In a 2015 paper, Princeton economistsAnne Case and Angus Deaton showed that the mortality rates of middle-aged American whites have actually increased since 1999. They are the only demographic group for whom this is true. The main reasons? Cirrhosis of the liver (up 50% since 1999 among this group), suicide (up 78%), and poisonings due to drugs and alcohol (up 323%). These trends are mostly driven by those with less education.

Many of these Americans didn’t bother voting in the past. Others threw their lot in with President Obama or his traditional opponents. But they were ready for an outsider who promised to blow up the old ways of doing business. When he appeared, they didn’t hesitate to embrace him.

Many people from all walks of life voted for Donald Trump, but the demographic core of his support matches the vulnerable group that Mr. Eberstadt, Ms. Case, and Mr. Deaton identify. Exit polls show Mr. Trump expanded significantly on Mitt Romney’s advantage with white men, without forsaking the limited support that Mr. Romney received from African-American and Hispanic men. These new voters were key to flipping the 230-plus counties that went blue in 2012 but landed in Mr. Trump’s column on Tuesday.

What precisely did Mr. Trump offer these voters? Snake oil, say critics. Most economists predicted that policies built on Mr. Trump’s anti-immigration and antitrade rhetoric would hardly help unemployed, working-class people in places like Kentucky and West Virginia. But where these experts heard incoherent specifics, many voters heard a consistent deeper theme: A promise to work hard at restoring left-behind Americans’ dignity by bringing back jobs and striking back at the cultural elites who disdain them.

This story is not merely crucial for understanding this extraordinary election. It is also the lodestar for cultural renewal and better politics, no matter one’s place on the ideological spectrum. Leaders on both sides will likely take issue with some parts of Mr. Trump’s agenda. But all must contend with the central reality he has unearthed—the hunger for dignity in communities where it is most absent.

Mr. Brooks is the president of the American Enterprise Institute.


Hillary Clinton Advisor Karen Finney Unable To Handle Easy Sunday Talk Show Questions

June 14, 2015


Chris Wallace Hammers Karen Finney over Clinton’s Income Rhetoric Hypocrisy

Washington Free Beacon
June 14, 2015 9:44 am

Fox News Sunday Chris Wallace aggressively questioned Hillary Clinton spokeswoman Karen Finney Sunday over her boss’ hypocrisy on income inequality, asking how she can condemn big money and corporations while pocketing upwards of $250,000 for one-hour speeches.

“She talked about the fact that the 25 top hedge fund managers make more money than all of the kindergarten teachers in the country combined,” he said. “What about the fact that, until recently, she was making $250,000 for a one-hour speech when the average American makes $45,000 for working for a year.”

Finney decided to ignore the premise entirely, launching into a speech about Clinton’s mother’s “humble beginnings.”

“People want to know who you are, what influenced you, what motivates you, not just where you stand on issues but what is in your heart, and what in your life that led you to believe in things that you believe,” she said. “I hear what you’re saying in terms of, you know how much she made for speeches, but what’s important is this is a person who has always fought for people who need to have a champion.”

Wallace cut her off, saying time was limited, but Finney still pressed on with her dodge.

“There’s nothing — she’s making money and believing in the importance of closing the income gap,” Finney said.

“I know!” Wallace said. “Maybe the hedge fund managers believe in it too, so I just wonder why she’s saying it’s somehow wrong for the hedge fund managers to make so much money but it’s okay for her to make $250,000 an hour.”

“It’s about what you do with that money,” Finney said. “It’s about CEOs making the money and then not sharing those profits with their workers.”

Wallace asked her if Clinton was sharing that money with her, and Finney just laughed.

Includes video:


Here’s the real question: What did Bill and Hillary Clinton share of their multi-million dollar speaking fees? I didn’t get my share…..

Hint to Team Clinton: America deserves answers and truth. Nobody cares about your sainted Mom. We already know you didn’t follow in her footsteps on integrity….


Jake Tapper Exasperated by Hillary Spokeswoman TPP Non-Answer Shuffle

Hong Kong Falling Behind: From AIIB to CES, Hong Kong needs to be more competitive

April 5, 2015


The city’s lead in finance and technology is no longer assured as regional competition mounts

By George Chen
South China Morning Post

Hong Kong has more often been cited by international media outlets in recent years for its political struggles and growing income gap. Photo: Bloomberg

The official job title of Hong Kong’s government leader since the 1997 handover has always been chief executive, which sounds more business friendly than political.

Sadly, the truth is Hong Kong has been losing businesses on all fronts in recent years to highly competitive cities in the region, including Singapore and Shanghai.

Last week, the organiser of the Consumer Electronics Show (CES), one of the world’s most closely watched technology and innovation events, held every year in Las Vegas, announced the next CES would take place in Shanghai in late May as CES Asia. It will be the first CES held outside the United States.

Why Shanghai? “Time and time again we kept being pointed back to Shanghai, that is where we felt the need really existed,” John Kelley, CES Asia’s director, said last week, referring to the fast developing technology-related business opportunities on the mainland.

For the past decade Shanghai and Hong Kong have been competing to be recognised as global financial centres.

As Shanghai has won more global news headlines for its ambitious Shanghai 2020 plan, aimed at putting it on a par with New York and London in the next four to five years, Hong Kong has more often been cited by international media outlets in recent years for its political struggles and growing income gap.

To be fair, it was not entirely Leung Chun-ying’s fault, but he might have focused too much on what he called “internal diplomacy” with Beijing, while neglecting the need to maintain the confidence of international investors and business leaders in Hong Kong’s future.

Hong Kong has also apparently lost out in one of the most important global financial industry developments recently – the launch of the China-led Asian Infrastructure Investment Bank (AIIB).

AIIB is widely considered to be China’s biggest diplomatic victory in recent years, especially in the global power game with the United States.

Shortly after President Xi Jinping mentioned the AIIB for the first time as a rough idea in 2013 during a meeting with the Indonesian president, some industry watchers and scholars suggested to Xi and other senior leaders that Beijing should consider choosing Hong Kong as the location of the AIIB’s headquarters.

Other cities including Hong Kong’s neighbor Shenzhen and long-time competitor Shanghai began to lobby Beijing for the AIIB headquarters role, while Hong Kong stayed silent.

The AIIB and CES cases show how the Hong Kong government has recently lost out in both its long-standing role as a financial services centre and on the relatively new front of technology and innovation.

If these failures are not taken as clear lessons for Hong Kong, I do not know what else the city is waiting for.


George Chen is managing editor of international edition. For more Mr Shangkong columns: or follow @george_chen on Twitter

Hong Kong and Singapore: Similar Problems, Different Solutions

February 25, 2015


By Josh Noble in Hong Kong
Financial Times (FT)

Hong Kong and Singapore have revealed differing plans for how to combat rising prices, ageing populations and slowing global growth, setting Asia’s financial centre rivals on divergent economic paths.

The two former British territories have long been known for their low taxes, rising incomes and booming financial services sectors. The World Bank has ranked them as two of the top three places in the world to do business since 2010.

But both have more recently faced the challenges of increased living costs and shifting demographics. This week leaders in the two cities announced their budgets for the coming year, highlighting alternative views on how to tackle those problems.

Hong Kong on Wednesday chose to use its HK$63.8bn (US$8.2bn) budget surplus to help fund a one-off salary and profits tax rebate for all residents, confirming its longstanding commitment to a low-tax, laissez-faire style of government.

The benefits are likely to be felt only by the middle and high-income households in Hong Kong, said KPMG’s Charles Kinsley, because many poorer workers do not earn enough to pay salaries tax in the first place.

“I am aware that many of our citizens are expecting relief measures from government to allay their burdens,” said John Tsang, Hong Kong financial secretary. However, the government must allocate funds in a “prudent manner” because of worries over short-term economic growth. Hong Kong’s economy grew 2.3 per cent in 2014, while Singapore’s expanded 2.9 per cent.

An elderly woman collects cardboard boxes in Hong Kong. Photographer: Jerome Favre/Bloomberg

Mr Tsang announced fee waivers for restaurants, hotels and travel agents to boost the flagging tourism industry, which he said had suffered as a result of last year’s pro-democracy protests.

Retail sales in Hong Kong slipped 0.2 per cent in 2014, although many analysts attribute the weakness to China’s crackdown on corruption, which has dented demand for luxury goods. Overall consumer spending rose during the protest months, largely thanks to the launch of Apple’s iPhone 6.

Hong Kong also earmarked funds for some short-term relief measures and extra cash for poorer retirees, but stopped short of introducing a universal pension. Instead, the government will encourage older people to return to work.

In contrast, Singapore on Monday moved to redistribute wealth by raising taxes on its wealthiest residents to pay for increased spending on social welfare, particularly healthcare.

The package of improved benefits included more generous support for retirees and low-income families, and extra funding for high-skills training. The combined measures will take government spending up to 19-19.5 per cent of gross domestic product by 2020 from the current 18.5 per cent, according to CIMB.

“We have set new directions for the future,” said Singapore finance minister Tharman Shanmugaratnam in his budget address. “We are making fundamental policy shifts to give Singaporeans greater assurance at each stage of life, more opportunities, and a better home for all.”

Singaporeans are due to go to the polls any time between now and 2017, leading some analysts to bill the budget as a pre-election vote-winner.

Living costs in both Hong Kong and Singapore have risen sharply since the financial crisis, heightening concerns about inequality. The Economist Intelligent Unit now ranks Singapore as the world’s most expensive city, while Hong Kong has its highest home prices, according to Savills.

The cost of living was one of the frustrations aired by protesters during the Hong Kong protests, which shut down major roads in three commercial districts for almost three months.

Universal suffrage is due to be introduced to Hong Kong in 2017 but critics say the plan for a strictly controlled system for nominating candidates falls short of genuine democracy.


Budget envy in Hong Kong as Singapore helps its middle class

February 25, 2015


Rich will pay more, with rebates and childcare subsidies for less well-off, but experts disagree on whether Hong Kong could follow suit

By Kristine Kwok
South China Morning Post

Singapore's financial district. The budget unveiled by the government in Singapore on Monday raise taxed for richer members of society. Photo: AFP

Singapore’s middle classes have good reason to rejoice with the announcement of a “Robin Hood-style” election budget – while their Hong Kong counterparts can be forgiven for looking on with envy.

The budget unveiled by the government in Singapore on Monday aims to raise taxes for the richer members of society, and distribute a slew of goodies to the less well-off.

Hongkongers will find out about their own budget today.

Some observers see Singapore’s budget as a possible model that could address similar issues here, such as a widening income gap and an ageing population.

Others argue, however, that the two cities are not comparable, and Hong Kong faces a very different set of problems, like declining government revenues and “spoilt” people.

Amid talk of a general election before January 2017, Singaporean Finance Minister Tharman Shanmugaratnam’s new budget contains a wide range of incentives that appear to address Singaporeans’ concerns about rising living costs, income inequality, and a perceived lack of government support to help people cater for their retirement.

READ MORE: For all the latest budget news and analysis, click here

The city state’s 1.5 million middle-income earners will receive a 50 per cent tax rebate of up to S$1,000 (HK$5,670) while enjoying an expansion in a childcare subsidy scheme and waivers for national examination fees.

The 1.4 million lower-income earners will receive an additional S$50 in cash payouts a year under the Goods and Services Tax Voucher Scheme. The bottom 20 per cent of the poorest people aged 65 and older will receive an average of S$600 in cash every three months starting next year.

The income tax rate will rise for those in the top tier – residents earning a chargeable income over S$320,000 – from 20 per cent to 22 per cent starting next year.

This budget, Tharman said, was focused on building Singapore’s future. “We must ensure a society that is fair and just, where everyone has a chance to move up and do well regardless of where they start.”

In the wake of last year’s Occupy movement in Hong Kong, complaints about a widening income gap and declining upward social mobility have been put under the spotlight again.

Professor Paul Yip Siu-fai, an expert in demographics at the University of Hong Kong, said the government could draw inspiration from Singapore’s tax rises on top income earners and the expansion in childcare subsidies.

Meagre government support on the issue of childcare, Yip said, was hampering efforts by the female workforce to contribute to the economy, with less than 1 per cent of new parents enjoying facilities provided by the Social Welfare Department.

“It [increasing childcare support] is a commitment to show that the government is caring for family households,” Yip said.

But Dr Tan Khee Giap, associate professor and co-director of the Asia Competitiveness Institute at the Lee Kuan Yew School of Public Policy, National University of Singapore, said Hong Kong’s declining government revenues posed a different set of problems.

“We have an ageing society but we have enough money … and because we make enough surpluses every year, we are able to use it to subsidise, to be a more inclusive society,” Tan said.

Citing the Occupy movement and recent protests against mainland tourists as examples, Tan described Hong Kong’s citizens as “spoilt kids” who did not appreciate mainland China’s economic importance.

“Giving a sweetener is not a long-term solution; sweeteners can only be for kids, especially for spoilt kids. Hong Kong people,” Tan said.