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In his weekend radio address, President Obama decried that "over the past three decades, the middle class has lost ground while the wealthiest few have become even wealthier." Although he was trying to leverage the Occupy Wall Street movement, the income gap has been a longstanding concern of his.
During the 2008 campaign, Obama said, "The project of the next president is figuring out how do you create bottom-up economic growth, as opposed to the trickle-down economic growth that George Bush has been so enamored with."
But it turns out that the rich actually got poorer under President Bush, and the income gap has been climbing under Obama.
What's more, the biggest increase in income inequality over the past three decades took place when Democrat Bill Clinton was in the White House.
The wealthiest 5% of U.S. households saw incomes fall 7% after inflation in Bush's eight years in office, according to an IBD analysis of Census Bureau data. A widely used household income inequality measure, the Gini index, was essentially flat over that span. Another inequality gauge, the Theil index, showed a decline.
In contrast, the Gini index rose — slightly — in Obama's first two years. Another Census measure of inequality shows it's climbed 5.7% since he took office.
Meanwhile, during Clinton's eight years, the wealthiest 5% of American households saw their incomes jump 45% vs. 26% under Reagan. The Gini index shot up 6.7% under Clinton, more than any other president since 1980.
To the extent that income inequality is a problem, it's not clear what can be done to resolve it. Among the contributing factors:
Economic growth. Strong economic growth, rising stock prices and household income inequality tend to go hand in hand.
Technology. Tech advances have put a premium on skilled labor, according to a Congressional Budget Office report . Because the pool of skilled workers hasn't grown as much as demand, their wages have climbed faster.
Free trade and immigration. Cheap labor abroad and an influx in low-skilled immigrants can depress wages at the bottom, according to the CBO.
Women in the workforce. As the CBO put it, "an increase in the earnings of women could boost inequality by raising the income of couples relative to that of households headed by single people."
Tax policy changes don't explain the widening income gap. The CBO found that, by one measure, "the federal tax system as a whole is about as progressive in 2007 as it was in 1979."
While Congress has talked a good game about reducing the deficit, it still uses a variety of gimmicks to hide how much it is spending. One such trick is known as "changes in mandatory spending programs." These "Chimps" are inserted into appropriations bills to produce phony budget savings. ...
A fair dose of godliness broke out in Washington yesterday in the true spirit of bipartisan stupidity.
The House of Representatives, whose new Republican management team vowed last winter to forsake any celebratory silliness that didn't involve creating jobs, debated and -- you'll be shocked ...
President Obama has thrown his weight behind the trade complaint made by a coalition of solar panel makers against China, vowing to aggressively probe the case. "We're going to look very carefully at this stuff and potentially bring actions if we find that the basic rules of the road have been ...
Well, it's about time.
The presidential debates are finally scheduled. Not for the primaries. For the real deal. The big game,
With only 336 days to spare, the Commission on Presidential Debates has picked four places and three dates for the Republican Party's nominee to confront ...
Texas Gov. Rick Perry may have slipped badly in recent weeks of polling, but he's doing the best of any Republican presidential candidate attracting political contributions from females.
According to a new study by the Center for Responsive Politics, Perry is receiving a little more than a ...
Posted By: Louie723(225) on 11/4/2011 | 3:16 AM ET
"but the IBD seldom provides a complete analysis of the problem. They politicize everything" Obama has been politicizing the issue all along, with nothing but fact-free sloganeering. And you criticize this editorial as incomplete? Bah.
Posted By: cnptnow(3660) on 11/4/2011 | 12:36 AM ET
The IBD editorial is highly political trying to make it look like the divergence was greater under Clinton and Obama, when in reality the greatest divergence occurred under Bush when removing the effect of the stock market increases and declines from the equation. So, you are right, but the IBD seldom provides a complete analysis of the problem. They politicize everything (except when they borrow left op-eds from other sources).
Posted By: cnptnow(3660) on 11/4/2011 | 12:26 AM ET
czarrboro, I agree with you except: (1) The 2008 stock market crash masks the huge inequality increase during the Bush years 2002-2007 due to divergent executive salary and bonus increases and the Bush tax cuts. (2) Now that the stock market is back to where it was in 2007, the Bush divergence inequality has been restored. Obama was forced to extend the Bush tax cuts by congress due to the recession. That coupled with the stock market gains puts us right back at the 2007 differential (cont)
Posted By: czarrboro(9550) on 11/3/2011 | 9:02 PM ET
Classic cnptnow. Didja wonder why figure 1 ONLY covered 28 years (1979 to 2007) in a "Progressive" study of "30-Year Growth of Income Inequality" or were you just being you're old dishonest EVIL "Progressive" self? Of course IBD's analysis is spot on: 2008 wiped out all the gains in income divergence made during the Bush years and the massive growth in income divergence of the Clinton era began again on pbo's watch. You can read a graph, can't you?
Posted By: concerned(4575) on 11/3/2011 | 7:10 PM ET
Democrats in pandering to peoples' lower instincts are forever blowing bubbles and popping them - both increase income inequality. On the upside, the bubble scam artists make out like bandits, and on the downside, the poor get their wallets cleaned out disproportionately by the bubble's (in the case of the last 20 years, housing) popping. What's so hard to understand about that, Lefties?
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