Not all boats lifted

October 09, 2006

So, the Dow Jones industrial average finally returned to its 2000 peak last week, then proceeded to hit record-high stock values for two more days in a row. Woo-hoo! Plus, gas prices are down, and the week ended with word of another monthly boost in the creation of jobs.

Such was the frenzy of celebration Friday at the White House, absent only was a rousing chorus of "Happy Days Are Here Again"- no doubt off limits because Democrats long ago claimed it as a party theme song.

But this economic news wasn't nearly so good as the White House made it sound. And for most Americans, the news wasn't good at all. In fact, jubilation over the stock market only underscores the growing gap in this country between the rich and everyone else.

Let's start with a major correction: The Dow is not really at an all-time high. It closed Wednesday at a higher point average than ever. But when totals are adjusted for inflation, the Dow is 17 percent below its Jan. 14, 2000, high, according to the Center on Budget and Policy Priorities. The stock average will have to climb another 2,378 points to exceed its inflation-adjusted peak.

Nonetheless, even when inflation is considered, the Dow has risen an average of 6 percent annually, and that's good news for everyone with money in the market and for what it signals about investor confidence.

But most of the wealth being created is going to corporate profits, while wages of workers whose productivity generates those profits aren't even keeping pace with the rising costs of basic household needs, says the Economic Policy Institute, a labor-oriented think tank. Tax records suggest the richest 1 percent of Americans have real cause to celebrate, the next 24 percent less so, and the typical working family - making $50,000 a year - is falling further behind.

Lower gasoline prices help, but those are set by speculators in the global market, and could rise again at any time.

Job creation figures also have a downside. The 51,000 jobs added in September represent the lowest total since last fall, and a growth rate not nearly as robust as expected. That helped send the Dow down a bit Friday.

News truly worth celebrating would be that the middle class, which is the foundation of any healthy economy, is growing and thriving. The White House can't make that claim as long as happy days are here again only for a precious few.

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