If you need further evidence, according to Saez’s study, the Obama Administration’s “economic recovery” has accomplished the following:
“Top 1% incomes grew by 31.4% while bottom 99% incomes grew only by 0.4% from 2009 to 2012. Hence, the top 1% captured 95% of the income gains in the first three years of the recovery. From 2009 to 2010, top 1% grew fast and then stagnated from 2010 to 2011. Bottom 99% stagnated both from 2009 to 2010 and from 2010 to 2011. In 2012, top 1% incomes increased sharply by 19.6% while bottom 99% incomes grew only by 1.0%. In sum, top 1% incomes are close to full recovery while bottom 99% incomes have hardly started to recover.”
This was accomplished by an Administration that held the Presidency as well as majorities in both Legislative Branches its first two years; a time during which it managed to exceed the profligate spending of the prior Bush Administration. It accomplished this while having access to $475 billion in TARP funds, $860 billion in the “shovel ready” Economic Stimulus funds, a $600 per capita tax rebate in 2008, the “Cash for Clunkers” Program, the Fannie Mae and Freddie Mac bailouts and additional mortgage relief subsidies. It ale had the Federal Reserve’s various “Quantitative Easings” and Maiden Lane Transactions that propped-up certain banks and other businesses that were deemed “Too Big to Fail” but not “too poorly run to preclude executive bonuses” (you see, the rich donate to Democratic campaigns as well).
Where was the “recovery” for poor and middle class individuals?
As emotionally appealing as the “Robin Hood Strategy” may be, taking money from the rich only closes the income gap if you give it to the poor. When you spend it on ineffective programs, it does nothing to solve the problem. The reality is that the Democratic Party needs issues of “inequality” to remain intact. They are critical to its ability to manipulate and control the political dependencies and votes of minorities and women.
For the rest of us, the “gap” demands a reasonable solution. As Saez did in his research, let’s begin with a definitional understanding.
“Income inequality” is a misnomer. It implies that income equality is a laudable goal while that may not be the case (i.e., consider the importance of a meritocracy from a behavioral perspective). Conversely, “income disparity” is a legitimate issue with wide-spread social impact.
If the more pathological proponents of the Republican and Democratic Parties could recognize the difference between the two terms, we might be able make progress toward addressing the issue. Rather than hold our breath until that happens, perhaps we should examine the issue and determine how we might resolve it without Government intervention.
If we segment our economy into two principle sectors, Public and Private, we can begin to make headway.
We can begin to control the Public Sector if we ever learn to embrace our responsibility to become informed citizens and to cast informed votes. If we elect individuals on a basis of merit rather than personality or the amount of money they can raise and spend to procure our votes, positive change can occur.