Daniel Gross is smart enough to read Jonathan Chait and re capitulate the arguments, but he finds it necessary for some reason to continue to mouth such platitudes as:

"Given the top-heaviness of the economy, one could make the case—one could, but I'm not—that the continuing upward redistribution of income is good for the economy and good for all of us."

One can only scratch one's head and mumble "come again?" Redistribution upward is "good" for the rest of us? And how could anyone, whether Gross or some imaginary interlocutor, make any such argument? Today's lowering employment figures remind us that a booming "wealth economy" doesn't translate into more jobs for the rest of us.

In fact, what all the latest figures indicate is that the whole idea that there exists this thing called "The Economy" which somehow involves all of us in American Society is just a myth. We're not all in the same boat -- that's a fact. Example: Gross mentions that while domestic car makers are headed down the tubes corporate jets are big. But, domestic small jet makers are suffering from the lack of trained workers and easy private capital; despite being the most innovative companies in their field, American personal-plane makers are going to be squeezed out by foreign companies and our already underpaid workers will be even further out in the cold. How many of those high priced products on the shelves of Tiffany's or Neiman Marcus or Saks are Made in USA anyway?

Truth is the Wealth Economy doesn't need the USA; foreign companies that are better managed and at least partly protected by their governments' mercantilist policies produce luxury stuff that's just as nice, maybe better, maybe cheaper. The global economy is no longer structured by national boundaries, only by class boundaries, or should I say, the one big class boundary that really matters -- the residents of WealthWorld and everybody else.

So, not to get all Lou Downs on you and everything, but no, I don't see any reason to buy into the dim-witted dogma that "consumer spending" somehow does something good for the domestic "Economy" in which we all supposedly participate, by virtue of either (a) increased jobs (which in fact might be created overseas); or (b) increased govt revenue (the spending of which in fact is now ideologically restricted to security providers, Blackwatch et al, who employ some US citizens, but increasingly turn to cheap foreign labor (Chileans, Filipinos) to staff their mercernary operations. Redistribution of wealth upward has few if any benefits to those of stuck in the real, non-mythological economy at all. If Gross had read Chait a little more carefully, I think he would've realized that.

The idea that ordinary citizens have anything to gain from growing the aggregate "Economy" is one of those Arcadian economic narratives which, considering today's political conditions, needs to be exploded.

Hi Mark:

It has been a bit since I have seen you around here. This a nice piece and subjectively explains what I just completed about and explained numerically. At best the rich, or those taxpayers making greater than $500,000 annually, actually owe less than 20% of the annual income of the country. The 2001/2003 taxbreaks, awarded during the slump after the recession ended in Oct 2001, were skewed to them not to stimulate the economy overall, a Keynes theory. >30% of these two tax breaks went to less than 600,00o taxpayers of the ~145 million taxpayers. This is where the economic stimulation theory purported by Bush breaks down. In fact, if the breaks are allowed to sunset in 2010, this group will again begin to pay for the services the other 99% of the population awards them.

You are correct that domestic demand would be better served by the rest of the population enjoying the 2001/2003 tax breaks. I would find them spending more of their tax break gains on domestic product something which the 1% bracket, as Gross implies, would not do. After all, how much of the money gained by this segment of the population goes against the purchase of GM product as opposed to Mercedes, Porsche, or BMW. Those in the lower brackets will buy what makes sense to their livelihood or the GM, Fords, etc. Which leads me to the conclusion:.

The current tax breaks did little for most of the US population. Jobs and job growth as measured by Participation Rate and the numbers of the Non-Institutional Civilian Population in the Civilian Labor Force have never returned to what they were immediately after the 2001 recession and this is still before the babyboomers begin to retire. We have in place a much larger part of the population not working and not generating GDP and Tax Revenue growth. In turn, a larger labor pool does keep wage growth down, hence controling inflation. All of this occurs while median household income is stagnant while the rich continue to snare a larger part of the income pool which suggests the other 99% are losing vast amounts of ground due to tax policies and dollars going outside of the country.

We are struggling.