No surprise, really, given the policies of a two-term failed Republican administration:

NEW YORK (CNNMoney.com) — Poor and middle-class families are entering the recession in a precarious situation due in part to declining or stagnant income growth, a study released Wednesday has found.

Incomes, on average, have declined by 2.5% among the bottom fifth of families since the late 1990s, while inching up by just 1.3% for those in the middle fifth of households, according to an analysis by the Center on Budget and Policy Priorities and the Economic Policy Institute, two liberal think tanks.

The wealthiest slice of Americans, however, saw their incomes rise by 9%.

Why do so many on the right deny that Bush policies enable the rich to get richer and the poor to get poorer? This looks like redistribution to me – from poor to rich. Economic policy should have the goal of benefitting everyone equally. Tough to do, but that should be the goal. I guess that’s what people get for “voting their values”. The sad part is that with the economy in the shape it’s in, things will only get harder for middle and lower income families. Hold on tight everyone. Help is on the way!

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  • Matt N.

    Such studies and comparisons are not accurate as the definition of a “typical” family has changed:

    http://online.wsj.com/article/SB120511125873823431.html

    Plus, instead of looking at income and bank accounts after inflation, you need to look at purchasing power and quality of life. The so-called “poor” today are better off than once was once considered middle class. And, a close study of the American economy will show that real flesh and blood people, over time, who were in the bottom 20% in per capita INDIVIDUAL wages in 1996 had their incomes increase by 91% in 10 years. And people at the top, had their incomes decrease by more than 25%.

    Talking about “gaps” between rich and poor is to pretend that America’s economic is a fixed pie where individuals cannot improve themselves without government. I understand that the platform of your candidates and of Progress Ohio are predicated upon such economic fallacies, but that doesn’t mean such opinions are correct.

    “Economic policy should have the goal of benefitting everyone equally. Tough to do, but that should be the goal.” Wow, you should be hired as a policy adviser for Robert Mugabe.

  • @1: Yes. This was caught by spam. Probably because it’s BS. Good spam filter! I deleted the duplicate. Do you have a citation for the study you reference? I’d be really surprised if it actually showed the bottom 20% had their income increase by 91% after inflation.

    Your article author even recognizes that there is “some substance to these fears of widening inequality and middle-class stagnation”, but nice try.

    Of course people can improve themselves. Happens all the time. The object is to not stack the deck so incredibly against them that the numbers are too few to matter. Even if everything is up in relative terms doesn’t mean we shouldn’t mind the gap.

    You gotta love how Schiller blames “teh Mexicuns” for depressing the “average household income”. Genius, right there! Not to mention the “Hey! People can afford iPhones so all MUST be well”. Bizzy tried that on me once even.

    Did some quick checking. Sounds to me like you are more like Mugabe than I: “Mugabe has waged a violent campaign against homosexuals, arguing that prior to colonisation Zimbabweans did not engage in homosexual acts”. Maybe you can head up his Office of Faith-Based Initiatives?

  • More required reading:

    http://www.cato-unbound.org/2007/02/11/mark-a-thoma/yes-virginia-income-inequality-is-still-rising/

    As I said at the start, I would be very pleased to find out that growing inequality is not a problem. However, despite the attempts of Alan Reynolds and a few others to argue otherwise, the preponderance of evidence and of professional opinion clearly indicates that inequality has been rising since 1988, and that the trend toward widening inequality has been present for much longer than that. The question is what, if anything, to do about it. If we can get past the attempts to cloud the issue, perhaps we can proceed to more important discussions.

    (CATO even!)

  • I’d also point out (from the article in the above comment):

    As conservative economist Bruce Bartlett says:

    Even accounting for the factors Reynolds cites, there are too many different sources all showing a rise in income inequality… No matter how you slice it, the distribution of income has become more unequal over the last 20 years or so.

  • Matt N.

    Hardly! My tyrant of choice is, of course, Pinochet. He saved far more many lives than he took.

    I can’t find the study online, but it was discussed in the Wall Street Journal about 4 months ago, and reviewed income tax returns on the marco level. It was about how the different quintiles of income levels were extremely fluid and mobile, with the lowest income earners having the most dramatic increases in income over a decade, while the top 1% were very likely to not remain there. These numbers were adjusted for inflation.

    Instead of looking at just income, you have to look at quality of life which, even for the “poorest” of the so-called “poor”, has increased over time, and in dramatic fashion just during the lifetime of our parents. In fact, with the likely hood of those under the US poverty line to be overfed and have cable TVs and at least a 1 car garage, I would argue that there are no truly poor people in America… or if there are, they are only that way simply because they refuse to work.

    The deck isn’t “stacked” against anyone when government gets in the way. What “stacks the deck” are high taxes, unstable currency, and corrupt & overbearing government institutions. While you are trusting the highmindedness of Kensianism and using the blunt hand of government and the printing more fiat money to improve our lives, I trust individual actors in a economy to act rational and entrepreneurial fashion… as that is the true source of wealth, prosperity, and jobs.

    As Lao Tzu put it, “Therefore the Sage says: I take no action yet the people transform themselves, I favor quiescence and the people right themselves, I take no action and the people enrich themselves.” In other words, if government wants to make sure that all people have the chance to improve themselves and increase their wealth, our elected leaders should adopt the platform of: “Don’t just do something, stand there!” Sadly, it is hard to win over stupid voters with that attitude.

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