New York Times, April 27, 2008: Inequalities
By LARRY M. BARTELS
The past three decades have seen a momentous shift: The rich became vastly richer while working-class wages stagnated. Economists say 80 percent of net income gains since 1980 went to people in the top 1 percent of the income distribution, boosting their share of total income to levels unseen since before the Great Depression.
Despite the historic magnitude of this shift, inequality has thus far had little traction as a political issue. Many Americans seem to accept the conservative view that escalating inequality reflects “free market” forces immune to amelioration through public policy. As Treasury Secretary Henry Paulson put it, perhaps a bit defensively, the growing income gap “is simply an economic reality, and it is neither fair nor useful to blame any political party.” Paulson۪s assertion, however, is strongly contradicted by the historical record. While technology, demographic trends and globalization are clearly important, purely economic accounts ignore what may be the most important influence on changing U.S. income distribution the contrasting policy choices of Republican and Democratic presidents.
The Census Bureau has tracked the economic fortunes of affluent, middle-class and poor American families for six decades. According to my analysis, these tabulations reveal a wide partisan disparity in income growth. The real incomes of middle-class families grew more than twice as fast under Democratic presidents as they did under Republican presidents. Even more remarkable, the real incomes of working-poor families (at the 20th percentile of the income distribution) grew six times as fast when Democrats held the White House. Only the incomes of affluent families were relatively impervious to partisan politics, growing robustly under Democrats and Republicans alike.
The cumulative effect of these partisan differences is enormous. If the pattern of income growth under postwar Republican presidents had matched the pattern under Democrats, incomes would be more equal now than they were in 1950 a far cry from the contemporary reality of what some observers are calling a New Gilded Age.
It might be tempting to suppose that these partisan differences in income growth are a coincidence of timing, merely reflecting the fact that Republicans held the White House through most of the past three decades of slow, unequal growth. The partisan pattern, however, is remarkably consistent throughout the postwar period. Every Republican president since Dwight Eisenhower presided over increasing economic inequality, while only one Democrat Jimmy Carter did so. (I allow one year for each president۪s economic policies to take effect, so the recession of 2001 is counted against Clinton, not Bush.)
If middle-class and poor people do so much better under Democratic presidents than under Republican presidents, why do so many of them vote for Republicans? One popular answer, advanced by Thomas Frank and others, is that they are alienated by Democratic liberalism on cultural issues like abortion, gay marriage and gender roles. This does not appear to be the case. In recent presidential elections, affluent voters, who tend to be liberal on cultural matters, are about twice as likely as middle-class and poor voters to make their decisions on the basis of their cultural concerns.
A better explanation for Republican electoral successes may be that while most voters, rich and poor alike, do vote with their economic interests in mind, they construe those interests in a curiously myopic way. Their choices at the polls are strongly influenced by election-year income growth but only weakly related to economic performance earlier in the president۪s term. And while Republicans have presided over dismal income growth for middle-class and poor families in most years, they have, remarkably enough, produced robust growth in election years.
Why have Republican administrations typically presided over strong election-year growth? The pattern probably reflects the fact that presidents have more clout early in their terms than at election time. Republicans have often used that clout to rein in inflation and social spending, producing or prolonging economic contractions that then wear off by the time of the next election. New or newly re-elected Democrats, for their part, have frequently stimulated the economy and expanded employment, producing economic booms that raise all boats in their second and third years but trail off as the next election approaches. As a result, even working-poor families have experienced stronger income growth under Republicans (1.8 percent) than under Democrats (1 percent) in election years.
This year looks unusual in this respect, with slow growth likely despite the infusion of substantial tax rebates from an election-year stimulus plan. If that slow growth produces a Republican defeat in November, it will be a rare instance of economic accountability for a party with a long history of delivering meager income gains for most American families.
Larry M. Bartels, a professor of politics at Princeton, is the author of “Unequal Democracy: The Political Economy of the New Gilded Age.”