While politicians in Washington remain unwilling to raise taxes on the wealthiest Americans, or force our largest companies to pay their fair share of income taxes, most of the country falls ever deeper into a losing battle to fight off the downward trajectory of their economic survival.
Consider this incomprehensible and troubling dichotomy: while the luxury market continues to boom, cheaper mass-market brands are shrinking product to offset consumers' dwindling wallets.
Tiffany's first-quarter sales were up 20 percent to $761 million. Last week Louis Vuitton Moet Hennessy (LVMH) reported sales growth in the first half of 2011 of 13 percent to 10.3 billion euros, or $14.9 billion. Last week, PPR, the French multinational holding company that specializes in retail shops and luxury brands including Gucci and Yves Saint Laurent, reported a luxury segment sales gain of 23 percent in the first half of 2011.
The incredible laundry list grows longer: BMW doubled its quarterly profit from a year ago with sales rising 16.5 percent; Porsche's first-half profit rose 59 percent; and Mercedes-Benz 's July sales of its high-end S-Class sedans -- some of which cost more than $200,000 -- jumped almost 14 percent in the United States (Source: Bloomberg).
At the same time, The New York Times reports that: "Wal-Mart is selling smaller packages because some shoppers do not have enough cash on hand to afford multipacks of toilet paper. Retailers from Victoria's Secret to the Children's Place are nudging prices up by just pennies, worried they will lose customers if they do anything more."
I can't repeat these sad facts often enough:
- Just 1% of Americans own 40-50% of the wealth. Annual income for the wealthiest soared from4 million in 1974 to35 million on average in 2007.
- The richest 400 Americans average270 million in income and pay only 18% in federal taxes. In 1955, the country's most affluent made far less money and paid 51 percent of their income in taxes.
- Inequality in America is worse than Egypt, Tunisia or Yemen.
- Tax rates on executive pay, have been cut in half since 1970.
We've just concluded a failed debate on America's future. We have averted a short-term financial disaster by making the long-term outlook grimmer than ever. The so-called agreement to raise the debt ceiling and reduce America's debt over the next ten years is a sham. The numbers just don't add up. With GDP growth falling from a projected 3-4% down to a rate of 1-2%, we'll generate more debt than we originally forecasted, wiping out any reduction before we even start counting.
Our president failed once again to provide the leadership I expected when I voted for him. Leaving the capital for the first time in a month to celebrate his birthday in Chicago, he avoided making his case for a sensible economic policy to the American people and instead wasted weeks locked behind closed doors negotiating with Republicans and his own party, who he already knows are simply unwilling to make responsible decisions.
Barack -- please, start making your case to your own citizens before it's too late for all of us. Stop playing the inside game, hiding in the Beltway instead of standing out in the open. When was your last Town Hall meeting? It's time to have an open conversation about the issues and put sustainable solutions in place before our economy completely crumbles. What are we waiting for?
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