The end of supply-side

The governing theory of supply-side economics is that slashing taxes on capital gains and income would jolt the economy into life, benefiting people at every level, raising income and ultimately unleashing a gusher of revenue. And in recent years, Washington has engaged in something of a supply-side experiment, as President Bush and Congress have enacted tax cuts on capital gains, corporate dividends and income taxes.

But job and income growth haven't materialized so far. On Tuesday, the government released data showing that for the second straight year pretax real median household income failed to grow. Meanwhile, the official poverty rate rose from 12.5 percent in 2003 to 12.7 percent in 2004. And on Friday, the Bureau of Labor Statistics reported that the economy added 169,000 jobs in August: not bad, but nothing to write home about.