The president's supply-side tax cuts are great for America's global investors, who have been investing their extra money around the world ~ either in foreign companies or in global American-based ones But little or nothing is trickling down to average working Americans: Robert Reich
Are you wondering, as I have, why the Stock market can be making new historic highs while average Americans, like you and I, are trying to make ends meet .
Wonder no more, Bush's supply-side tax cuts were never meant to trickle down to the average American ~ they were meant, along with lucrative tax benefits, for the major corporations who have gone overseas to reap significant profits ~ along with a tumbling dollar working to their advantage.
This should not surprise anyone ~ for the Cheney/Bush administration sold its collective soul to major corporations many years ago ~ and, as Robert Reich explains, could care less about what happens on main street.
Allen L Roland
Double Decoupling
The rest of the world's major economies no longer depend on America's. Neither do America's own largest corporations.
By Robert B. Reich
Web Exclusive: 05.02.07 / American Prospect
I'm spending my spare time these days debating supply-siders who are convinced that the record-breaking Dow proves the correctness of the Bush tax cuts.
Yes, the Dow did reach a record high last week. But the Commerce Department also reported that economic growth slowed to its weakest pace in four years.
How can investors do so well while the real economy is doing so poorly? My supply-side friends don't have an answer, but I do.
It's because of two great decouplings that have occurred in recent years.
First, the rest of the worlds' major economies have decoupled from the United States economy. China, India, Japan, and Europe are now such large markets they can grow briskly even as America slows.
Second, America's largest corporations have decoupled from the United States. Their overseas subsidiaries are booming even as their American operations stagnate. General Electric expects more than half its revenue this year to come from outside the United States for the first time. More than half of Boeing's new orders are from overseas. Ford is struggling in America but doing well in Europe.
In other words, the president's supply-side tax cuts are great for America's global investors, who have been investing their extra money around the world -- either in foreign companies or in global American-based ones.
But little or nothing is trickling down to average working Americans.
Half of U.S. households do own some shares of stock, usually through their IRAs or 401-Ks. But the vast majority own less than $5,000 worth. Their equity is in their homes, whose values have slumped. They're paying far more for health insurance and fuel. And their wages haven't kept up.
Bottom line: The Bush tax cuts have delivered for Wall Street but done zilch for America's Main Streets.
Robert Reich is a Prospect co-founder. This column is adapted from Professor Reich's weekly commentary on American Public Radio's Marketplace. His website can be found here and his blog can be found here.
Allen L Roland is a practicing psychotherapist, author and lecturer who also shares a daily political and social commentary on his weblog and website allenroland.com He also guest hosts a monthly national radio show TRUTHTALK on CONSCIOUS TALK RADIO 
