President Barack Obama has turned out to be much better for the top 0.01% than even the policies of his elitist predecessor George W. Bush who flaunted his devotion to protecting the interests of the wealthy.
But the top 0.01% have made out even better under Barack Obama's deferential policies than they did even under George W. Bush's tenure.
Income Inequality Worse Under Obama Than George W. Bush
By Alexander Eichler
In other words, inequality has been even more pronounced under Obama than it was under George W. Bush.
This news may not come as a shock if you're one of the many Americans who lost their job during the recession and couldn't find another that paid as well. It also might not surprise you if you're one of the 46 million people living in poverty -- a record number, as it happens -- or among the millions of Americans who can get by week to week, but would be ruined by a single financial emergency.
You might likewise not be surprised if you already knew that some household-goods companies are catering to this new reality by quietly neglecting their mid-price product lines, focusing instead on their high-end and budget offerings, since wages are diverging so much. Or if you knew that the U.S. ranks closer to China, Serbia and Rwanda than any other country in the developed world when it comes to income inequality.
From Naked Capitalism:
Growth of Income Inequality Is Worse Under Obama than Bush
This yawing gap of inequality isn’t an accident, and it’s not just because of Republicans. It’s a set of policy choices, as Saez makes clear in his paper.
Looking further ahead, based on the US historical record, falls in income concentration due to economic downturns are temporary unless drastic regulation and tax policy changes are implemented and prevent income concentration from bouncing back. Such policy changes took place after the Great Depression during the New Deal and permanently reduced income concentration until the 1970s.
The evidence is mounting that soaring inequality has been been bad economics as well as bad politics.
Income Inequality May Take Toll on Growth
By ANNIE LOWREY
WASHINGTON — Income inequality has soared to the highest levels since the Great Depression, and the recession has done little to reverse the trend, with the top 1 percent of earners taking 93 percent of the income gains in the first full year of the recovery.
“Growth becomes more fragile” in countries with high levels of inequality like the United States, said Jonathan D. Ostry of the International Monetary Fund, whose research suggests that the widening disparity since the 1980s might shorten the nation’s economic expansions by as much as a third.
Reducing inequality and bolstering growth, in the long run, might be “two sides of the same coin,” research published last year by the I.M.F. concluded.
But economists’ thinking has changed sharply in recent years. The Organization for Economic Cooperation and Development this year warned about the “negative consequences” of the country’s high levels of pay inequality, and suggested an aggressive series of changes to tax and spending programs to tackle it.
The I.M.F. has cautioned the United States, too. “Some dismiss inequality and focus instead on overall growth — arguing, in effect, that a rising tide lifts all boats,” a commentary by fund economists said. “When a handful of yachts become ocean liners while the rest remain lowly canoes, something is seriously amiss.”
This 2010 Report by the U.S. Congress Joint Economic Committee also made a strong economic case for more income inequality. From its EXECUTIVE SUMMARY
Income Inequality and the Great Recession pdf
High levels of income inequality may precipitate economic crises. Peaks in income
inequality preceded both the GreatDepression and the Great Recession,suggesting that
high levels ofincome inequalitymay destabilize the economy as a whole.
Income inequality may be part of the root cause of the Great Recession. Stagnant
incomes for all but the wealthiest Americans meant an increased demand for credit,
fueling the growth of an unsustainable credit bubble. Bank deregulation allowed
financial institutions to create new exotic products in which the ever‐richer rich could
invest. The result was a bubble‐based economy that came crashing down in late 2007.
Policymakers have a great deal of leverage in mitigating income inequality in order to
stabilize the macro‐economy. In the decades following the Great Depression, policy
decisions helped keep income inequality low while allowing for continued economic
growth. In contrast, policy decisions made during the economic expansion during the
Bush administration failed to keep income inequality in check, and may have
exacerbated the problem. Policymakers working to rebuild the economy in the wake of
the Great Recession should heed these lessons and pay particular attention to policy
options that mitigate economic inequality
The United States of Inequality
In 1979, the effective tax rate on the top 0.01 percent (i.e., rich people) was 42.9 percent, according to the Congressional Budget Office. By Reagan's last year in office it was 32.2 percent. From 1989 to 2005.
...the effective tax rate on the top 0.01 percent largely held steady; in most years it remained in the low 30s, surging to 41 during Clinton's first term but falling back during his second, where it remained.
Here's how my Father (a life long Republican) explained the Great Depression to me when I was a boy: The Great Depression happened when the wealthy people gained control of of the vast majority of the country's money drastically reducing money circulating through the economy and through other parts of society. President Roosevelt came along and passed new laws forcing the wealthy to release their grip on their vast pool of wealth and get it circulating through the country's economy again, restoring economic vitality and growth.
If my Republican Father got it right why can't today's Democratic Leader?