Thursday, April 12, 2012

Inequality: A Double-Edged Sword

James Pethokoukis is trumpeting a study that purports to show that income inequality has not increased (at least according to Pethokoukis's interpretation).  Personally, I have some doubts about what the study cited by Pethokoukis really shows.  But let's put those doubts aside for a moment and turn to another issue.

By the standard that shows growing income inequality since 1980 (the standard of economist Emmanuel Saez and others, which looks at income), Obama's administration has been worse for income inequality than Bush's, as Matt Stoller notes:
Yup, under Bush, the 1% captured a disproportionate share of the income gains from the Bush boom of 2002-2007.  They got 65 cents of every dollar created in that boom, up 20 cents from when Clinton was President.  Under Obama, the 1% got 93 cents of every dollar created in that boom.  That’s not only more than under Bush, up 28 cents.  In the transition from Bush to Obama, inequality got worse, faster, than under the transition from Clinton to Bush.  Obama accelerated the growth of inequality.
Over at Breitbart, Ben Shapiro grasped this dynamic a few days ago:
In other words, the Obama “recovery” hasn’t leveled the playing field – it’s tilted it more. That makes sense, since most of Obama’s measures have been aimed not at providing jobs for working class people, but at subsidizing friends, allies, and union bosses. The rich continue to get richer – and much faster – under Obama, even as he claims the mantle of class warrior.

Republicans don't need to run from the inequality fight.  Obama's big-government approach seems to have only exacerbated inequality, as a wealthy few have the ability and influence to manipulate government to benefit themselves.  There's a reason why GE's corporate tax bill is smaller than the sales tax on a Big Mac in New York City.

Some on the left seem to be waking up to the fact that, for all his talking points, Obama's administration might not be the biggest friend of the little guy.  The stagnation of the Obama economy has been felt the most by the working (or at least would-be working) and middle classes.  Republicans can argue for both economic dynamism and egalitarianism.

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