When the Wealthy Sneeze, the Economy Catches Cold
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The wealthiest Americans are a changing breed as conservative savers turn into manic spenders. Risk-taking millionaires can find themselves living out of their cars. What does that mean for the rest of us? Can government programs be sustained if they depend on taxing the least stable segment of the consumer economy? Also, the future of the US presence in the Gulf after the Iraq War, and the real story behind the latest Medal of Honor.
Banner image: Sailboats from the local yacht club race as waves break over the breakwater at Santa Barbara Harbor in Santa Barbara, California. Photo by Stephen Dunn/Getty Images
Making News
Future of the US Presence in the Gulf after the Iraq War? ()
In Baghdad today, the US flag was lowered as America's military headquarters was finally closed down. Defense Secretary Leon Panetta presided. Acknowledging the high cost paid by both Americans and Iraqis, he affirmed that their lives were not lost in vain. "They gave birth to an independent free and secure Iraq, and because of the sacrifices made these years of war have now yielded to a new era of opportunity." Julian Barnes is traveling with Panetta for the Wall Street Journal.
Guests:
- Julian Barnes: Wall Street Journal, @julianbarnes
Reporter's Notebook
Marines Embellished Medal of Honor Story ()
At a White House ceremony in September, former Marine corporal Dakota Meyer received America's highest award for valor, the first Medal of Honor for a living Marine since the Vietnam War. He deserved it, but never did all of what President Obama told the audience. The President said that Meyer drove into a savage ambush in Afghanistan against orders, killed insurgents at near point-blank range, leaped from his gun turret to rescue 24 Afghan soldiers and saved the lives of 13 comrades in arms. But Jonathan Landay, a reporter with McClatchy Newspapers, was embedded with Meyer's unit, and says records show it didn't happen that way.
Guests:
- Jonathan Landay: McClatchy Newspapers, @Bluesdriver
Main Topic
When the Wealthy Sneeze, the Economy Catches Cold ()
Democrats have given up on taxing millionaires to finance payroll tax cuts, but just for the moment. President Obama is clearly zeroing in on "the 1 percent." With economic inequality at record levels, there's growing pressure for the wealthy to pay more for government programs. But how much more? It's no longer true that the rich necessarily get richer. What was the most stable segment of the economy now feels booms and busts more than anyone else. Nobody's sympathizing with people who've lost their yachts and mansions, but what happens to government if it has to depend on them?
Guests:
- Robert Frank: Wall Street Journal
- Brad Williams: California Legislative Analyst's Office (formerly)
- Jacob Hacker: Yale University
- James Pethokoukis: American Enterprise Institute, @jimpethokoukis
Links:
- Frank on impact of the income fluctuation of America's most wealthy
- Frank's 'The High-Beta Rich: How the Manic Wealthy Will Take Us to the Next Boom, Bubble, and Bust'
- Hacker on American financial insecurity at highest in 25 years
- Hacker on labor volatility, economic insecurity
- Hacker's 'Winner-Take-All Politics: How Washington Made the Rich Richer--and Turned Its Back on the Middle Class'
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