Tocqueville’s observations no longer ring true. America is no longer a land of equality, and it’s largely because our democratic system no longer promotes “the welfare of the greatest possible number.” And that’s because many citizens are only too eager to support policies that are “opposed to their own advantage,” like the then-popular (and apparently still-popular) Bush tax cuts, which shifted the relative tax burden from the rich onto the middle class… What Tocqueville underestimated was the power of money in modern politics and the marketing genius of modern politicians, which have freed democratic politics from the constraints of the actual interests of the majority.

via Democracy in America « The Baseline Scenario.

The important question is whether growth is fast enough to bring down sky-high unemployment. We need about 2.5 percent growth just to keep unemployment from rising, and much faster growth to bring it significantly down. Yet growth is currently running somewhere between 1 and 2 percent, with a good chance that it will slow even further in the months ahead. Will the economy actually enter a double dip, with G.D.P. shrinking? Who cares? If unemployment rises for the rest of this year, which seems likely, it won’t matter whether the G.D.P. numbers are slightly positive or slightly negative.

via Op-Ed Columnist – This Is Not a Recovery – NYTimes.com.

Tax policy is one of the best tools we have to help offset the troubling trend of growing inequality. Unfortunately, the Bush tax cuts have had the opposite effect, providing much larger benefits — both in dollar terms and as a percentage of income — to people at the very top than to middle- and lower-income people. People making more than $1 million get an average of about $124,000 each year in tax cuts, according to the Urban-Brookings Tax Policy Center. The main reason, of course, is the large tax cuts targeted specifically at high-income households.

So this fall, when policymakers decide whether to extend the high-end tax cuts, they should keep in mind just how unequal incomes in the United States have become. As former Federal Reserve Vice Chairman Alan Blinder wrote recently in the Washington Post, is the rationale for extending these tax cuts “that America needs more income inequality? Seems to me we have enough.” To me, too.

via Economist’s View: “Inequality and the High-End Bush Tax Cuts”.