What’s Good For Wal-Mart

At one time, long ago, the CEO of GM claimed that what is good for GM is good for the country.  Today’s barometer of economic desirable just may be WalMart.  Wal-Mart exec Cameron Geiger wrote “Where are all the customers? And where’s their money?”  Wal-Mart is facing a scary reality: the ailing finances of its core customers, Brian Sozzi, chief equities analyst at NBG Productions, said. "Wal-Mart shoppers are the barometer of the U.S. consumer. The consumer isn't mentally or physically ready to spend on discretionary inventory and there's no reason to be optimistic. The fundamental health of Wal-Mart's customer is concerning," Sozzi said.  The Wal-Mart executives blamed the hike in payroll taxes and a delay in tax returns for why customers aren't shopping. When a payroll-tax break expired Dec. 31, Americans began  paying 2 percentage points more in Social Security taxes on  their first $113,700 in wages.  For a person making $40,000 a  year, that is about $15 a week.  For the past 30 years, the American economy has sputtered along for all but 10% of the wealthiest Americans.  In many cases economic growth was possible because gullible Americans stripped the equity they had accumulated in their homes in order to satisfy short term desires.  This, alone sustained the economy for a number of the years of trickle-down/supply-side nonsense.  When it came time to pay for the bad decisions to spend equity rather than spend earnings, the money was not there and the economy tanked.  While there is some rebound in the economy today, the growth remains stunted and the Republicans are doing everything they can do to prevent a more robust growth.  Whether their motives are to prevent Obama, a Democrat from getting credit for turning the economy around or whether the Republicans still believe in the supply-side nonsense is not really important.  The fact based upon economic history is that the economy of the United States is only as good as its poorest citizenry.  After thirty years of policies that have resulted in the top 10% enjoying unprecedented economic growth, with corporate profits that have set record levels, and a stock market that is setting new records one might think the overall economy is good.  But, there is still high unemployment, still a decline in the purchasing power of a majority of Americans, and meager economic growth, at best.  The solution should be obvious.  Top down largess has not worked nor is there any economic historical precedent to suggest that it would ever work.  Growth needs to start at the bottom and those at the top need to pay a greater share of the costs of government.  From $0 income to $450,000 a year there are 7 tax brackets ranging from 10% to 39.6% but from $400,000 to as much as $4,000,000,000 there are no additional tax brackets and, to make matters even worse, all unearned income, regardless of the amount is still only taxed at a maximum of 28% which includes the new adjustment for Medicare tax.   It will not be possible to reduce the deficit without additional revenue and the top 10% cannot provide the necessary amount of revenue even if tax rates are raised.  It is imperative that wages and income for the bottom 90% of Americans reverse the current decline and begin to grow again.  Without an increase in numbers of taxpayers, deficit reduction is nothing more than a slogan on a bumper sticker or a lie from a Republican running for national office.