Northwest Indiana Discussion

other changes made life harder for lower-income Americans who form Walmart’s customer base. At the start of 2013, Congress repealed a payroll tax cut that had been in effect for two years, effectively taking about $80 per month from the typical household budget. In November the government cut back on food-stamp benefits, which had also been beefed up during the recession. And effective January 1 of this year, Congress zeroed out enhanced jobless benefits that had been in effect since 2008, leaving less money for 1.3 million unemployed people already struggling to get by.

So who’s doing well enough to pull retail sales numbers up to relatively healthy levels? Mostly high-end merchants such as Nordstrom (JWN) and Michael Kors (KORS), luxury automakers such as BMW and Mercedes, upscale appliance manufacturers including General Electric (GE) and even yacht manufacturers. As the New York Times noted in a recent article, demand is much stronger for GE’s top-of-the-line dishwashers and refrigerators than for cheaper, mass-market models.

CEOs before Reagan made 78 times their minimum wage workers. Today, its almost 3500 times! Without Reagan, America might have had the same income distribution we had in the 1970s, which would mean we would be averaging $120,000 annually--not $40,000.

"Most Americans are on a downward escalator. Median household pay is dropping, adjusted for inflation. A smaller share of working-age Americans are in jobs than at any time in the last three decades.

When 95% of the economic gains go to the top 1%, the middle class and poor don’t have the purchasing power to keep it going.

Yet too many still believe in trickle-down economics — that the wealthy are the job creators, and tax cuts for big corporations and the rich will boost the economy. The real job creators are the vast middle class and the poor — when they have enough money in their pockets. That’s the only way out of the vicious cycle we’re now in."

The emerging “barbell economy” — growing clusters of high- and low-income consumers, with fewer in the middle — has driven many of Walmart’s customers either to higher-end department stores or to deep discounters such as dollar chains.

A cutback in federal subsidies, such as food stamps and extended unemployment benefits, is taking money out of consumers’ pockets and shaving Walmart’s bottom line as well.

The plan would repeal deductions for state and local taxes, medical expenses and moving expenses. Tax credits for child care, adoption services and energy-efficient upgrades to homes would be gone.