Average Joe Will Stir Up Class Envy

Class Warfare: President-elect Obama finally has a job for Vice President-elect Biden — czar of Obama's "middle-class task force." So what will that involve? Stirring up class envy and resentment is our guess.

Here's Biden on his job: "We'll look at everything from college affordability to after-school programs, the things that affect people's daily lives," he told ABC's "This Week."

We're not sure Biden could even tell us what the middle class is — in terms of income, wealth, education or any other meaningful measure. But we are sure one thing is certain to come out of this: A greater resentment between economic classes, stirred up intentionally as part of a divide-and-conquer strategy ultimately intended to impose punitive taxes on those deemed "wealthy."

The media and the left, which are often indistinguishable, have spent the last eight years telling those in the middle class that they're "losing ground" or will be the "first generation to have less than their parents did."

It's all nonsense, of course, but it seems to be effective. Obama's pledge to " rebuild the middle class" by giving tax breaks to "95% of workers and their families" no doubt won him a lot of votes.

But guess what? The middle class did get a tax break — a big one, it turns out — under President Bush. As Congressional Budget Office data show, the effective tax rate on the middle fifth of households fell from an average of about 17.1% under President Clinton to 14.4% under Bush. That's a 16% tax cut for the middle class.

Another oft-heard claim is that middle-class incomes are stagnant or shrinking. But a study last year by the Minneapolis Fed concluded that "incomes of most types of middle American households have increased substantially over the past three decades."

Class warriors such as Biden like to cite median household income as evidence of stagnation. And on the surface, it seems convincing: Real household income did grow just 18% over the past 30 years.

But after correcting for distortions in the data, Terry Fitzgerald, a Fed senior economist, found something else: "Median household income for most household types . . . increased by 44% to 62% from 1976 to 2006." And per-person income surged 80%.

Rather than stagnating, income has grown at an extraordinary pace. Yet that story never quite gets told.

Instead, we hear about another myth: "growing inequality." But according to the accepted measure, the Census Bureau's Gini ratio, there was virtually no change in inequality from 2000 to 2007.

Yes, many Americans are suffering in this recession, including the middle class. But the last thing we need is another general in a phony class war telling people how bad they have it.