it ain't what you make, it's what you keep...
when i present data on wealth or income inequality, students often jump to "the stock market" as the key explanatory factor. looking at my 3rd quarter report on the minnversity retirement portfolio, i'd have to disagree. i don't know much about economics, beyond my freshman 101 course (which, it should be noted, may have been the most personally and professionally useful course i took as an undergrad at the wisversity). having taken said course during the reagan administration, i know that equity markets don't necessarily favor elites during political regimes that should be friendly to their interests. with the rise of 401k and 403b plans, a larger percentage of americans are now participating in these markets than ever before -- and few working stiffs are amassing great fortunes. although a handful of sectors have outperformed during the bush II administration, such as energy (guess why!), the overall trend in u.s. equities has been flat over the past two years, as shown by the Dow and S&P indices below. moreover, few investors have made real money in the market over the first five bush I years, particularly when compared against the long bull run of the clinton years.
of course, the rich are getting richer these days, just as they have in the past. how? mostly through favorable tax policies. these generally take the form of cuts to those in the top brackets (including the treatment of dividends, capital gains, and institutions) rather than the sort of economic stimulus or growth that would lift all boats but threaten to erode wealth via inflation. so, while george w. bush's pitch to build a "wealth society" through broad-scale market participation is appealing on some levels, it seems unlikely to dent inequality or improve the life chances of the working or middle classes. instead, shifts in tax policy regarding businesses and individuals are where the action is. if i had taken econ 102 i might be able to divine the implications of proposed tax reforms for inequality.
nevertheless, i tend to side with john edwards and others who think a "working society" may put more money in the pockets of most americans in the long run. as edwards put it, "to be true to our values, our country must build a working society, an america where everyone who works hard finally has the rewards to show for it." i don't favor the protectionist policies that edwards advocated during the 2004 campaign, but i tend to agree that we need a credible societal promise that working hard will result in doing well.