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Republicans, Democrats, and Inequality

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One of the most controversial findings in Unequal Democracy is that the incomes of middle-class and working poor families have grown much less robustly under Republican presidents than when Democrats are in the White House. The Census Bureau's Historical Income Tables show that, since 1948, middle-class incomes have grown more than twice as fast under Democrats, while the incomes of working poor families (at the 20th percentile of the income distribution) have grown six times as fast under Democrats as they have under Republicans. Only families near the top of the income distribution have done about equally well under both parties. Skeptics have suggested a variety of reasons to doubt these figures. Here are a few - and the reasons why they are not compelling.

1. The pattern simply reflects the fact that Democrats held the White House for most of the high-growth period before the mid-1970s, while Republicans have mostly been in charge in the more recent slow-growth era. While it is true that income growth has slowed considerably, especially for middle- and low-income families, the partisan differences in income growth appear in both periods considered separately. Allowing for shifts in income growth patterns unrelated to partisan control, oil price shocks, changing levels of labor force participation, and other potentially important economic and social conditions leaves the partisan differences in income growth patterns virtually unchanged.

2. The pattern simply reflects anomalous income growth under Reagan (or Clinton, or LBJ, or Eisenhower). Omitting any of these presidents from the tabulation still leaves a considerable gap in income growth performance between Republicans and Democrats. Indeed, with the striking exception of Jimmy Carter, who presided over a major recession in 1980-81, every Democratic president in the post-war era has produced annual real income growth for working poor families in excess of 2%. Only one Republican, Eisenhower, has matched that growth rate; indeed, none of the other five Republican presidents of the post-war era has done even half that well for working poor people.

3. Income growth is lower under Republican presidents because they have to correct the unsustainable policies of their Democratic predecessors. This argument founders on the fact that partisan differences in income growth are even larger in second and third terms than when Republicans succeed Democrats or vice versa. In particular, average real income growth for low- and middle-income families has been even more meager in second and third Republican terms than under first-term Republican presidents. Clearly, these results cannot be attributable to short-term corrections of misguided Democratic policies. Conversely, Democratic presidents have presided over even higher growth rates in second terms than they have in first terms, suggesting that they do not need any help from prudent Republican predecessors to produce robust income growth.

4. Doesn't Congress make economic policy? Skillful presidents can do a great deal to shape policy to their ideological ends, even when they lack working majorities in Congress. That is especially true of Republican presidents, whose ideological ends often demand inaction rather than action from Congress. Nevertheless, the partisan composition of Congress probably has some additional effect on patterns of income growth. However, it is very hard to tell because Democrats had virtually uninterrupted control of the House until 1995 and Republicans thereafter; thus, any effect of variation in the partisan composition of Congress is confounded with the effects of broader economic trends.

5. Perhaps Republican election victories are effects rather than causes of slow income growth for middle-class and poor people. Republicans are no more likely to win when income growth is slow. Rather, voters seem happy to punish Democratic and Republican incumbents alike for bad economic times. In any case, it is hard to see how differences in income growth in the second year of each administration - which is when the biggest differences in income growth patterns between Republicans and Democrats are evident - could affect elections two years earlier. Nor is there any evidence that these differences affect subsequent election outcomes two years later. Instead, voters focus mostly on economic conditions in the year of the election, ignoring the massive partisan differences in income growth produced by Republican and Democratic presidents earlier in their administrations. That is a striking and consequential failure of political accountability.


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I knew it!

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There is a bitter irony hiding inside the numbers---conservatives like to say things like "with democracy the working classes will simply vote themselves a pay increase", but in fact they do it for themselves.

It seems that in periods of tax cuts, Congress has also been loose with spending limits. In times of tax increases, Congress has also been budget-conscious. Typically, conservatives have voted financial reward for themselves more directly and transparently than liberals.

As noted above there is a systematic imbalance, in that if conservative policies require executive inaction, Congress has no direct power to compel action (only impeachment). Conversely, if a liberal administration lacks authorizing legislation, it cannot use the purse, or legally enforce non-existent laws.

The imbalance is emphasized in the "unitary executive" goal, since that would bring even the independent agencies under total executive control, meaning they can be shut down, or cronies installed. The whole purpose of that hogwash is to undo legislative intent regarding regulation of business.

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This is an insightful statement. In times of tax increases, Congress has also been budget-conscious. Typically, conservatives have voted financial reward for themselves more directly and transparently than liberals. But is there really a party that we can all love and stand by? All of us rush into a flirting fling with a party that we love and eventually we're felt right where we started off.

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A Rising Tide Lifts All Boats

Isn't the answer kind of simple? Democratic Presidents have been in office during booms and Republican Presidents during busts. And booms help low and middle wage earners more than busts hurt upper income earners.

Now, if anyone -- maybe even someone like a respected economist -- could show that Presidential policies affect the business cycle, then, we'd have something to talk about.

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Larry,
According to published and freely available government data, taxes from business accounted for approximately 49% of government revenues in 1950. Today that number stands around 16%. I don't know precisely how to evaluate that. It states there has been a serious restructuring of the U.S. economic unit. The question it poses for me is how has the indicated taxation differential been redistributed across income groups?

In 1950 and up to perhaps 1960 the typical American famly had a single wage earner and it seemed to have been enough to get by. That is all but impossible today. Not being an economist I don't know why this is or why it has occurred. I am inclined though to draw a relationship between the first and second parts of my comment. There is a strong argument to be made for the purchasing power of our dollars having significantly declined without a comensurate adjustment in wages to offset that decline.

For the last eight years I sense this income deterioration for working class Americans is accelerating. I am also inclined to make what I feel is a logical connection to the general consolidation of finacial and business interests within the U.S. economy.

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For the last eight years I sense this income deterioration for working class Americans is accelerating. I am also inclined to make what I feel is a logical connection to the general consolidation of finacial and business interests within the U.S. economy. Forex Currency Trading

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Larry,
According to published and freely available government data, taxes from business accounted for approximately 49% of government revenues in 1950. Today that number stands around 16%. I don't know precisely how to evaluate that. It states there has been a serious restructuring of the U.S. economic unit. The question it poses for me is köpek resimleri how has the indicated taxation differential reklam ajansları been redistributed across income groups?
In 1950 and up to perhaps 1960 the typical American köpek resimleri had a single reklam ajansları wage earner and it seemed to have been enough köpek resimleri to get by. That is all but impossible today. Not being an economist I don't köpek resimleri know reklam ajansları why this is or why it has occurred. I am inclined though to draw a relationship between the first and second parts of my comment. reklam ajansları There is a strong argument reklam ajansları to be made for the purchasing köpek resimleri power of our dollars having reklam ajansları significantly declined without a comensurate adjustment in wages to offset that decline.

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What you're going to see in 24 months is a repeat of '94. But without the civility of Newt Gingrich. Like the zoo review in the reconstruction south, this crap ain't gonna last long. Sexy Lingerie

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Analysts have to sit down and actually wonedr what is going on in politics during the boom and the times of bust. It's usually biased so we can't really say who's better or worse, the republicans or the democrats. What I would love is to see someone flirt with danger and tell us which is the accurate move and what would actually be beneficial to us in the long run.

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Democratic Presidents have been in office during booms and Republican Presidents during busts. And booms help low and middle wage earners more than busts hurt upper income earners. Now, if anyone could show that Presidential policies affect the business cycle, we'd use Browsergames kostenlos.

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