Not-so-new Gilded Age

Mickey Kaus Columnist
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Not so new Gilded Age: There’s no doubt income inequality has increased since the mid-70s. But Robert Pear’s story–describing what the NYT calls “The New Gilded” age–is  … strategically incomplete. Pear reports on a new CBO study this way:

The share of after-tax household income for the top 1 percent of the population more than doubled, climbing to 17 percent in 2007 from nearly 8 percent in 1979.

OK. But inequality buffs know the rich have been getting richer at a rapid pace–a mere doubling of share at the top in 28 years actually seems mild. And, sure enough, it turns out that the top 1% had more or less already doubled their share by 2000, having gotten dramatically richer in the Clinton boom years. They’ve been down and up since then, and topped their 2000 share in 2007. But they’ve probably since fallen back below the Clinton-era peak, thanks to the recession. … The relevant chart is Figure 3 here. …

I assume Tim Noah’s right when he predicts their share will go up again: This seems to be an organic development in our capitalism. Inequality is growing before taxes as well as after taxes (see pages 4-19). It’s growing on Wall Street and off Wall Street. Pear just makes it seem as if it’s a more recent phenomenon than it is.

Comes-at-a-time graf: Pear’s report comes at a time when protesters around the country rail against disparities in income and editors of the NYT would like to point a finger at Republicans.

P.S.: In other respects, the CBO figures are unexpectedly non-alarming. After tax incomes of the poorest fifth grew 18 % over the period? The middle three quintiles grew almost 40%? I’d thought it was much worse than that. You mean the economy’s been working for everyone? It doesn’t seem that way, perhaps because there’s a nasty meritocratic bias to the selection of economic winners, with unskilled workers losing out to brainier, skilled types. This is happening in the bottom 99%, whatever’s been happening at the top. It seems a much more important factor than the share/gap/Gini numbers Washington Dems and academics traditionally obsess about. It’s why, for example, policies that hurt unskilled American workers, the meritocracy’s DNFs–policies that encourage illegal immigrant competition for low-wage jobs, say–seem especially toxic to both social equality and the sense that things are getting better for everyone, rather than worse. …

Mickey Kaus