Reminder: Income Inequality Got WORSE Under Obama
Early in the State of the Union address, Barack Obama asked, “Will we accept an economy where only a few of us do spectacularly well? Or will we commit ourselves to an economy that generates rising incomes and chances for everyone who makes the effort?”
What he didn’t mention is that income inequality has actually worsened since he has been president. It is not necessarily easier for Rebekah and Ben Erler of Minneapolis to get ahead by working hard and playing by the rules.
Don’t believe me? Let’s consult that notorious spewer of right-wing talking points, The New York Times: “Income inequality in the United States has been growing for decades, but the trend appears to have accelerated during the Obama administration.”
Income inequality may be even worse under Obama than George W. Bush. Emmanuel Saez, a professor at the University of California, Berkeley, memorably found that the average income of the top 1 percent grew by 11.2 percent in real terms since 2009. The bottom 99 percent saw their incomes decrease by 0.4 percent.
That means 121 percent of the income gains from the Obama recovery went to the wealthiest during the period Saez examined. The top 1 percent took in 65 percent of the income gains when the economy was expanding under Bush from 2002-07, only 45 percent during the Clinton economic boom from 1993 to 2000.
It almost makes you wonder: who is the president of the 1 percent? Even Mitt Romney can’t help but notice. “Under President Obama the rich have gotten richer, income inequality has gotten worse and there are more people in poverty in American than ever before,” he told the Republican National Committee.
Median household income was down 4.4 percent from the end of the Great Recession to 2013. By the end of 2012, corporate profits were at an all-time high and wages as a percentage of the economy a record low.
There are lots of reasons for this deepening inequality besides Obama’s policies. The economy is still recovering from a very bad recession, though as the Times points out “recessions typically tend to lessen inequality rather than increase it.” There have been structural changes in the economy, like decline of manufacturing, and the family bigger than any one presidency.
Obama is doing more to forcibly redistribute income, not least through Obamacare, than a Republican president likely would. Saez and Thomas Piketty, the two economists doing the most to call attention to Obama-era income inequality, aren’t exactly fans of the Paul Ryan budget.
There is also an argument that income inequality matters less than absolute living standards improving across the board, provided it doesn’t undermine confidence in the economic system. It’s not clear that much in the president’s “middle-class economics” program are the optimal way to achieve that.
But if Obama was a Republican, he would be more widely criticized for devoting yet another State of the Union to an economic trend he’s watched get worse for six years.
Pharmaceutical companies pushed for Obamacare, which the health care law subsidizes along with insurance companies. It’s becoming a talking point on the left that Obama has prosecuted fewer financial crimes than Reagan or either Bush.
In fact, liberals are starting to notice how poorly non-college-educated whites are doing even as the economy improves. Liberals are begging Elizabeth Warren, who has conspicuously positioned herself to Obama’s left on economics, to run for president. Jim Webb is already inching toward a run. Even Bill Clinton is mounting a defense of his record on income inequality ahead of a likely Hillary campaign.
Some liberals cite the stock market as evidence Obama isn’t a socialist. But others are starting to see the contradictions, much as liberals started to sour on the Clintons’ corporate coziness at the end of his second term. (Enter Ralph Nader.)
They will need look elsewhere for “middle-class economics.”
W. James Antle III is managing editor of The Daily Caller and author of the book Devouring Freedom: Can Big Government Ever Be Stopped? Follow him on Twitter.