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Growth of Income Inequality Is Worse Under Obama than Bush

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Matt Stoller is a fellow at the Roosevelt Institute.  You can follow him on twitter at http://www.twitter.com/matthewstoller

Yesterday, the President gave a speech in which he demanded that Congress raise taxes on millionaires, as a way to somewhat recalibrate the nation’s wealth distribution.  His advisors, like Gene Sperling, are giving speeches talking about the need for manufacturing.  A common question in DC is whether this populist pose will help him win the election.  Perhaps it will.  Perhaps not.  Romney is a weak candidate, cartoonishly wealthy and from what I’ve seen, pretty inept.  But on policy, there’s a more interesting question.

A better puzzle to wrestle with is why President Obama is able to continue to speak as if his administration has not presided over a significant expansion of income redistribution upward.  The data on inequality shows that his policies are not incrementally better than those of his predecessor, or that we’re making progress too slowly, as liberal Democrats like to argue.  It doesn’t even show that the outcome is the same as Bush’s.  No, look at this table, from Emmanuel Saez (h/t Ian Welsh).  Check out those two red circles I added.

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.

The data set is excellent, it’s from the IRS and it’s extremely detailed.  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.

Income concentrations are relatively rare, but when they happen, sharp policy moves can retain a strong measure of equality.  It’s well-known at this point that President Obama did not want to make such moves.  TARP, cramdown, and the foreclosure fraud settlement suggest that his interests lie in preserving the capital structure of the large banks.  What about other policy priorities?

Despite his recent speech, President Obama knows that his income tax proposal is going nowhere.  So let’s look at three recent policy choices that are going somewhere.

1) President Obama is on the verge of approving a Free Trade deal with Colombia, despite the murder of union organizers in that country.  Not content with establishing similar deals with Panama (which has to do with enlarging tax havens) and South Korea, the administration is now embarking on a much vaster Trans-Pacific Partnership deal with countries all over Asia.  And it’s being negotiated entirely in secret, with corporate and government officials the only ones allow to be in the room.  Trade is a significant driver of lower wages.

2) President Obama just pushed for and signed the JOBS Act, which is a substantial relaxation of regulations and accounting requirements on corporations seeking to go public.  Bill Black has many four letter words to describe this bill, but it’s basically a license for Wall Street to commit fraud in the equity markets.  The SEC is beginning to promulgate instructions on how this will work.

3) President Obama just refused to issue an executive order forcing campaign spending disclosure by government contractors.  President Obama actually criticized the Supreme Court’s decision in Citizens United at a State of the Union address, but as with yesterday’s speech on raising taxes on millionaires, there was actually no there there.

There are many other policy fights, and the President has engaged constructively in some areas and negatively in others.  He has been undermined as well as aided by his staff.  And he’s just one man, heading up a franchise of thousands of other political actors.  It’s been clear, though, since before he took office, that his is a consistent policy architecture on the core questions of power and wealth.  In the orbit of this President, power and wealth flow upward.

It’s important not to overstate the conclusion.  It’s not obvious that Obama’s policy framework is worse than Bush’s, only that the outcome is.  After all, the losses suffered by the wealthy during 2007-2009 recession were less severe than those it suffered in the 2000-2002 recession, and most of the Great Recession happened under Bush (with a Democratic Congress).  It’s possible that the Obama policy framework is a bit less bad, but he has been more successful at implementation because unlike Bush, he han’t face any pressure from Democrats.  In other words, perhaps Obama’s policy thrust has just been implemented more fully, because the traditional opposition to plutocratic rule, the left, has been silenced.  Perhaps it’s a competence issue.  Or maybe you can chalk it all up to structural factors, though I suspect the JOBS Act and trade deals imply otherwise.  Maybe he really is as conservative as these policy choices suggest.  It’s hard to say.

Mitt Romney might be easy to jeer at for his wealth and arrogance, but Saez’s data suggests that Barack Obama is just as much the candidate of inequality.

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89 comments

  1. W.C. Varones

    Well, of course. Obama has Zimbabwe Ben blowing asset bubbles and enriching all the bankers and developers and related industries like lawyers, while the median household is living paycheck-to-paycheck and struggling with the price of gas and food.

    Monetary policy is far more influential on the income gap than tax policy.

    1. CLARENCE SWINNEY

      TAX FACTS
      1.Govt collected less in taxes in 2010 as percent of GDP than in over three generations
      Tax rates are at historic lows
      2.Bush tax cut added 1700B to Debt 2001-2008.
      3.Corp taxes totaled about 1% of GDP in 2011 or lower than 40 years ago
      4. GE had 5B in profits and paid zero taxes. Exxon Mobile most profitable corp in history paid Zero tax in 2009
      5. We tax wealth less than work Middle income taxed at 25% and wealth income from cap gains at 15%.
      6. 3 0f every 100 small business owners pay taxes at highest rate
      7. A Wall Street transaction tax of only 0.50% on short term speculation could raise up to 170B annually.
      8. Upper income households save an average of $5500 thanks to mortgage interest tax deduction
      9. In 2010 top 50% got 87% of individual Income and paid 12.5% tax rate
      10. 70,000,000 got 13% of that income
      11. Only four OECD nations collect less revenue as a percentage of GDP than USA. Chile-Korea-Mexico, Turkey
      12. From 1945 to 1980 each percentile gained almost evenly, percentage, in wealth due to hi tax on upper incomes. From 1980 to 2009, we cut taxes for rich and borrowed 12,000B while
      13. We let 10% own 73% of Net Wealth and 83% of financial wealth and take 50% of individual income while 70,000,000 got 13% that created stagnated incomes
      Opinions ignored. Present facts + numbers
      clarence swinney

      1. CLARENCE SWINNEY

        14,000B Total Income
        3800B Budget
        Borrow 1300B
        Cut Spend 10%=380
        Increase tax revenue 10%=1400B
        total=1780B enough to pay down debt

        10% own 73% Net Wealth–83% Financial Wealth-get 50% individual income.
        Yet! Huge tax breaks

  2. Systemic Disorder

    The rule of capital continues smoothly, regardless of White House occupant. I don’t think these results suggest much of anything about Obama (despite his pro-Wall Street and pro-”free trade” policies); rather the results reflect the logical outcome of capitalist development in the absence of any significant social movement. As long as we are in thrall to ideology, the party in government makes little difference: http://wp.me/p2cpPS-5

    1. Ignacio

      I mostly agree with your comment. It is not just Obama but the continuity of previous politics. Two key issues here are 1)the tax breaks enacted during Bush presidency which were extended by Obama (too centrist I guess) and 2) the sluggish and slow recovery after the debt crisis and the high unemployment make it more difficult for the 99% to capture a bigger share.

      I would put most of the blame in the tax cuts and their extension. That’s the shame for Obama.

    2. readerOfTeaLeaves

      The logic of capitalism, particularly financial capitalism, is to concentrate wealth. This is also a symptom of the externalities now operating in our pricing, market, and legal systems, which appear to be accelerating the concentration.

      1. CLARENCE SWINNEY

        1945-1980 each percentile increased almost evenly, percnetage , in wealth. Hi Tax on Wealth
        Reagan cut top rate by 60%
        10 Billionaires in 1980 and 51 in 1989. Hundreds now

        Reagan increased spending by 80% and Debt by 180%
        Bush II spending by 92% and Debt by 112%
        Both gave top 10% huge tax cuts.
        10% own 73% net wealth–83% financial wealth and get 50% of income.
        R fight to keep tax cut for top 2%
        2% own 30% net wealth and get 30% of income

    3. scraping_by

      History isn’t a natural phenomenon, falling from the sky or thrown off from the gears of the universe, it’s the result of the actions of people.

      When you say “we” are in thrall to ideology, who’s “we”? Asking large groups of Americans show a nation far more progressive than the elites and their loud mouthed flunkies. If their votes counted, which is debatable, there would be a lot less inequality.

      The ideology of free this and global that is just the sales patter of the lackeys of the rich.

  3. Conscience of a conservative

    Fed moves in my opinion have a great deal to do with the increased “inequality”. By bidding up risk assets(stocks) which are disproportionately owned by the wealthier citizens and punishing savings rates which is the utilized by more working class and those on fixed incomes. Add to that Fed rate cuts on mortgages which the rich are more able to benefit from having higher credit scors, savings accounts and can even do a cash-in refi to fix the negative equity on their home, something those less fortunate cannot do.

    I also consider the difference between the Fed & Treasury a difference without a distinction, so Obama bears some of the responsiblity here. Speeces on raising taxes not withstanding.

  4. Kevin Egan

    Seems like more evidence that progressives need to work hard to elect Romney: if we don’t take the smiley face of Obama off these upward redistribution policies, there is no hope of a movement for change.

    This is even more true in the area of the surveillance state and the war on whistleblowers.

    Romney for President!

    1. rich

      2 evils never made anything right…

      Why GOP Mega-Donor Sheldon Adelson Is Mad, Bad and a Danger to the Republic

      Richard Nixon liked to describe the influence a powerful person held
      over other powerful people as that person’s “stroke.” Sheldon Adelson
      knows stroke. In another illuminating deposition, former LVS president
      Bill Weidner described Adelson on the phone asking Republican House
      whip Tom DeLay to kill a human rights bill that might get in the way
      of Beijing’s bid for the 2008 Olympics. “I’m standing here with the
      mayor of Beijing,” he said, which was true. The bill was withdrawn,
      though not, DeLay insists, for any reason having to do with Adelson.
      In any event, the scene is awfully suggestive of how a veteran
      political greaser operates: You earn stroke with someone powerful by
      making a credible case that you’ve been instrumental in their getting,
      and maintaining, power.

      Should the United States have been saddled with a President Newton
      Leroy Gingrich, Sheldon Adelson’s stroke would have been pretty
      flippin’ awesome.

      Even so, although the megalomaniacal former Speaker of the House and
      moon-colony aficionado’s campaign is going the way of all flesh,
      Sheldon Adelson is emphatically not going away. On March 22 he hosted
      a dinner at his home chockablock with Mitt Romney supporters,
      including RNC chairman Reince Preibus. This man will have less stroke
      with Mitt Romney should the Mormon become president. But if he gives
      his Super PAC tens of millions of dollars, he may well have just
      enough.

      It’s the kind of thing that makes you fear for our republic.

      Read more: http://www.rollingstone.com/politics/blogs/national-affairs/why-gop-mega-donor-sheldon-adelson-is-mad-bad-and-a-danger-to-the-republic-20120410#ixzz1rkfrlemP

    2. tom allen

      If only there were a third option. A hard-working, intelligent, liberal candidate whose positions are embraced by a majority of Americans and who’s on the ballot on a majority of the states in the Union.

      What’s that? Dr. Jill Stein of the Green Party is running for president? You don’t say. It’s almost like no liberal website, let alone any corporate media site (but I repeat myself) is giving her any attention.

      http://www.jillstein.org/

    3. Nathanael

      Romney is going to be just as busy putting a smiley face on those policies as Obama is. Remember Ronald Reagan, who presided over endless evil policies with a smile and a laugh?

      If you wanted a candidate who would show people the “true face of evil”, you needed to vote for Santorum.

  5. Adrian Swindle

    Prejudice is generally associated with lower intelligence. A simplified world view offered by extremism is the essence of distraction purveryed by the hired influence from corporations. It is far more convenient to suggest believe its causes are not well understood or to degeneratively point a finger at “the Fed.”

    1. Conscience of a conservative

      Because racist people never go to college….
      There are many college educated adults who are extremely intollerant of others not like them.

      1. ScottS

        Usually referred to as “legacies.” Also, they don’t go to public schools — there’s your hint.

        1. Conscience of a Conservative

          It’s inaccurate and downright danerous to believe that higher education erradicates racism. It’s just not correct.

          1. ScottS

            You’re correct. Everyone I meet is racist and should know better. However, it appears that only people born into privilege have the resources and inclination to do something with those feelings.

  6. Doug Terpstra

    Thank you, Matt Stoller, excellent piece. The new SHAFTA deals, beyond Columbia, Panama and Korea, are news, but the secret scheming is not a bit surprising. Secrecy and deceit are now the trademark of this administration.

    That’s my only quibble, how easy you are on Obama in conclusion — the obligatory journalistic ethic, I suppose. Obama’s policy framework is not “a bit less bad” than Bush’s, especially if not limited to “economic” policy. In terms of human rights, constitutional protections, and almost all of his military and foreign policy, he is arguably much worse than Bush. He’s is a thinly-cloaked neoliberal Neocon now, and “fat-cat” Mitt is his perfect straw-man opponent. After his reselection he will almost certainly burst from the closet in all his naked imperial glory.

  7. Eureka Springs

    93 percent! At what point do we declare the (bipartisan/systemic) coup complete? At what point does at least a plurality of Americans admit the coup is taking place?

    1. Nathanael

      When? Timing is infamously hard to guess, but about 20 years after the coup finishes, if I were to guess. Personally I think the coup finished in 2000 when the Supreme Court openly stole the Presidential election, so we might be getting to that point soon enough.

    2. Kate Occupied

      There IS a large group of Americans who know that a coup has taken place.

      Not just a plurality – we are the 99%.

      We have snacks. Come join us. The reports of police brutality have been widely overstated. (Okay, that last part isn’t true. But join us anyway.)

      Remember – If you’re not part of the solution, you’re part of the miasma.

  8. Brett

    Two things: The super rich were hurt more in the 2001 recession because they hold most of the stock in this country, so of course they’d lose the most wealth from a deflating stock bubble. Housing wealth was much more equitably distributed and thus hit everyone, though the rich own more houses than a common man so they would suffer a bit more (and stock prices declined as well due to the panic from the financial crisis).

    Secondly, you could argue that Obama’s tally isn’t in full measure as he did successfully pass a health care reform bill that will open up access to the health care system to 30M people who would otherwise go without. That will significantly improve their standard of living (if it survives the Supreme Court). Since the full bill doesn’t go into effect until 2014, that’s a huge part that is missing from the Obama story (and it may never happen if the Supreme Court kills the mandate).

    But the free trade deals, the JOBS Act, the continued expansion of defense spending (which is a huge redistribution of public wealth to private interests) — all this has contributed greatly to inequality. Obama has done nothing for unions in this country, and hasn’t even really tried to increase their power through advocating specific legislation. Obama seems to just want the union campaign money but isn’t willing to spend any political capital working to strengthen unions and reverse the decline in participation (which continues thanks to Republican wars on unions, the passage of anti-union legislation at the state and local levels, and laws like Right-to-Work which encourage people to free ride on union representation without having to pay dues).

    I don’t understand union support of Obama. Yes it’s a choice between two bad options (Romney or Obama), but Obama isn’t doing anything for them. I would invest those millions in state or local elections supporting strong union supporters and let Obama try to win on his own (unless he changes his ways).

  9. Z

    And this scumbag has the audacity to attack ss and carry out the petey petersons of the world’s agenda to cut benefits. What a lowlife.

    Z

  10. Hugh

    Where did the second to the last paragraph come from? What purpose does it serve? It seems it is almost impossible for former Democratic supporters like Stoller just to say that Obama is worse than Bush because not only did Obama embrace all the worst of Bush’s policies, he expanded on them and gave them bipartisan legitimacy.

    I would also note, again, that the data here are about income inequality but the real story is about wealth inequality, that is the cumulative effect of decades of income inequality and other upward transfers as well as declining asset values (houses) and increased debt burden among the 99%.

    1. Rotter

      well, his reason for the last paragraph is stated ….cynical and-or deluded supporters’ # 1 go-to defense strategy is to attack the criticism as “fanatical”,”unfair” or “embittered”..by calling attention back to the empirical argument those responses are somehwat blunted

  11. F. Beard

    Personally, I don’t care about wealth inequality so long as everyone is reasonably well off. But when that wealth inequality is financed with poverty for anyone else then I see red.

    So why are the elites deliberatively poking a hornet’s nest? Why can’t they be content to be rich and not require that others be poor?

    The reason is that their deliberately contrived myth that monetarily sovereign nations must borrow money has trapped them into being SOBs at the worst possible time – during a Depression.

    1. Gerard Pierce

      “Personally, I don’t care about wealth inequality so long as everyone is reasonably well off.”

      I understand what you think you are saying, but I think you miss the point. Everyone is NOT reasonably well off. And an income tax on the “1%” isn’t going to make them well off.

      The distinction between wealth inequality and income inequality is one more of the con games that keep people from understanding the game.

      You can yell ‘tax the rich’ all you want, and you wind up taxing some guy who spent 30 years becoming a neuro-surgeon — plus a few guys who are kinda part of the guys you really wanted to tax. It would be nice if you could decide who really deserves to be heavily taxed. So far we haven’t figured that on out.

      We should probably have a progressive tax system, but hopefully one a little more honest than what we have now.

      What we really need is a heavy “death tax”, and a message to the super-wealthy: “You had a great life as part of this society and due to this society you got to make a whole lot of money. Now that you are safely dead, it’s time to give something back”.

      And of course if there is still a family farm that isn’t already owned by corporate agriculture maybe we need some provisions to keep the heirs from starving in the streets and from sleeping under bridges.

      And since corporations are people, maybe they should be subject to a “statutory death” where every 50 or so years they have to give something back.

      1. jake chase

        The Income Tax (1913) and the Federal Reserve (1914) were the twin cons of the Progressive Era. They have kept the rich safely rich through thick and thin ever since. They have made it all but impossible for working people to accumulate property. They have financed speculation, war, corporate predation for the past one hundred years. Yet, there are still people who think the income tax can be made a tool of reform. What the income tax (and the payroll tax)has done is finance the war of the rich against everyone else.

      2. F. Beard

        Some (much?) wealth redistribution as opposed to income taxes is justified since some (much?) of that wealth was illegitimately acquired.

        However, I suggest that we start with a ban on further credit creation since it is essentially a form of counterfeiting for the benefit of the rich and a universal bailout (including non-debtors) with new “debt-free” fiat (US NOTES) till ALL private debt is paid off. That might be sufficient since the corporations would then have to issue much more common stock to finance themselves to remain competitive.

        However, if the above was not sufficient to greatly reduce wealth disparity within a reasonable amount of time (10 years?) then more drastic measures might be justified.

        But let’s start with what we know is unjust – the counterfeiting cartel and all debt owed to it. Who can reasonably object to that?

    2. Doug Terpstra

      For the sociopaths we now suffer, power is their true aim, and power demands inequality. Without inequality you don’t have sufficient leverage to overwhelm democracy, to own politicians and change laws to exempt your crimes; to dominate others and force them to die in your wars for profit; to counterfeit your way to wealth; to torture, imprison and kill with impunity, and so on. Highest aggregate wealth and synergistic prosperity in a dynamic society is decidedly not the aim of those seeking a banana-republican plantation economy.

      Inequality is the critical tool of the new aristocracy, what Hugh rightly calls a kleptocracy. Equality is anathema, though all are careful to avoid the truth and sustain the myth. This is what most people, to their credit, can’t seem to conceptualize or identify with. They still credit the 1% with being well-meaning but honestly mistaken, rather than malevolent, and they similarly attribute Obama’s violent, criminal Neocon policies to ineptitude or cowardice rather than malice or messianic delusion. This is why they continue to promote fixes and policy changes to improve an irreparable system, a better way to supply money, better tax policy, troop withdrawals, fair trade, and so on, which invariably fall on deaf and derisive ears. It is the system itself that must be dismantled.

      “It is not enough to succeed. Others must fail.” Gore Vidal

      1. F. Beard

        Yes, there are true assholes, probable not many, but some.

        The solution is to come up with reasonable, peaceful solutions to our problems and which have broad appeal (eg. Steve Keen’s universal bailout). Then what excuse can there be for opposing them?

    3. Nathanael

      “So why are the elites deliberatively poking a hornet’s nest? Why can’t they be content to be rich and not require that others be poor?”

      There are actually multiple reasons for this. You’ve listed one.

      They also “believe their own bullshit” on several other matters in ways which have mentally trapped them, just like many nobles at Versailles actually believed that they deserved their positions.

      Some of them are plainly psychopaths, incapable of long-term thinking. Veblen discusses, though without the benefit of modern psychology, how psychopaths are promoted to the top in a capitalist system.

      In addition, most of those at the top have isolated themselves so they only talk to each other, which allows for groupthink to influence those who are neither psychopaths nor self-deluded. Unlike those of us a bit lower down on the ladder, they never ever talk to people in the working class about their real problems.

      Finally, some judge their wealth differentially, and will only be happy when they are richer than *everyone* and getting richer all the time. This is another psychological pathology.

  12. jjohannson

    That’s it. I’m voting for Romney, and backing Ryan’s budget. Those guys will fix this disparity.

  13. Matt

    I’m reminded of David Axelrod’s clueless statement in the runup to the 2010 elections, where he claimed that progressives would turn out and support the Democrats because “so much is at stake”. Obama gave a lot of speeches in 2008 hinting that he was the progressive messiah. Now the administration seems genuinely surprised that the base actually noticed that he didn’t deliver on stimulus, health care, finance reform, cost of education, or defending social spending. It’s almost as if they expect that if they believe their own propaganda, so will everyone else.

    I don’t think I’ve ever been less enthusiastic about a presidential election. I’m going to pull the lever for someone who reneged on getting out of Afghanistan, failed on the public option, failed on finance reform, covered up for the finance industry’s fraud, covered up for BP’s environmental disaster, tried to sell out Social Security and Medicare, and couldn’t even end the Bush tax cuts for millionaires… despite overwhelming support among Republicans!

    That had to be when I realized the game was over for Barack Obama. He basically failed to get Congress to pass a resolution saying that puppies are cute.

    You know, having just written all of that down, I’m not sure I’m going to vote for Obama. I might just stay home.

    1. lambert strether

      First, on the puppies, who said puppies are cute? Cats, yes, but puppies?

      In the same way that Bush was highly “competent” in implementing what he cared about — tax cuts for the rich, the unilateral executive, warrantless surveillance, war with Iraq — so Obama is not weak but strong on implementing polices that he cares about, the great bulk of which consists of rationalizing and consolidating Bush’s gains.

      See here on Obama and the public option. He’d made a back room deal to kill it in summer 2009, even if savvy career “progressives” ran interference for him on it long after that.

    2. Strangely Enough

      I don’t recall Obama ever mentioning getting out of Afghanistan in ’08. I do recall him promising to escalate- that may be the only campaign promise honored.

      He did try to renege on leaving Iraq, but, fortunately, the Iraqis weren’t so keen on the “get out of jail, in perpetuity” card he was demanding.

      This guy’s the best Republican president since Clinton.

  14. Glen

    The other policy which would go a long ways towards righting the current imbalance is breaking up the TBTF banks, and ending the trillions in backdoor bailouts to Wall St by the Treasury and Fed. Both of these executive position are under Obama’s complete control (although the Fed is supposedly independent since Greenspan it’s been obvious that these guys suck up to the boss and do what they’re told).

  15. Z

    Matt,

    For accuracy’s sake, obama didn’t promise to get us out of afghanastan … but neither did he promise to escalate the war there either.

    Also, obama didn’t FAIL on the public option or on finance reform, he got exactly what he wanted.

    And obama didn’t have “overwhelming support among Republicans” to end the Bush tax cuts for millionaires. They opposed it … and so did obama so it didn’t end. He could have ended all the bush tax cuts … the whole thing … by doing nothing and simply let them do what they were scheduled to do in January 2011: expire. If he did that that would have taken care of $4T of the deficit. Funny that the ratings agencies didn’t threaten to downgrade u.s. debt if $4T wasn’t sliced from the deficit back then …

    Z

  16. Markar

    So a key question at this point is “what does Ron Paul do- fade into the sunset again, or run as an independent?”

    1. Kate Occupied

      I don’t really care. He’s got my vote whether he wants it or not. I’m writing him in for president if I can’t select him on the ballot. I refuse to cast a vote for either of the other two soulless, profiteering, war-mongering liars.

      Ron Paul for President.

    1. RanDomino

      Off topic- did you see this e-mail from MoveOn titled “HUGE”? It gives their game away: “Which means we need to make fair taxes an issue every day between now and December, make sure the election is a referendum on taxing the 1%—and that it goes our direction.”

      1. Helen Mounds

        MoveOn is remarkably deceptive, no more than any other front group, but insidious enough to fool more people. Send no money!

        1. ambrit

          Mz Mounds;
          Hows about all us near foreclosed on, predated by banks homeowners send MoveOn a copy of our outstanding ‘loan’ balances? Ask them to send us some money!

  17. my candidate is in my pants

    Or don’t waste your time voting at all. That’s divide-and-rule manipulation designed to send you running back to the “impartial mediation” of the state. Instead, get ready to supersede this mafiya state, http://www.iopsociety.org/about

    Why play by rigged rules in a game you can’t win? Why let yourself be sorted into one of two hostile factions, and fight it out with other powerless people while the state keeps fcking you all? You could fight your designated enemies as the state keeps rolling back rights and rule of law, whoever wins; or you could insist on rights and rule of law. The IRA didn’t fight the Unionists, they fought the illegitimate state.

    1. RanDomino

      ah yes Parecon… for liberals who realize that their ideology is bankrupt, but just can’t bring themselves to admit the superiority of Amarchism.

    2. Nathanael

      Voting doesn’t take long. Do it. Even if you’re voting a protest vote or third party.

      And if they DENY you the right to vote, then you have an issue to take to the media to prove that the government is illegitimate. Just do it.

  18. ScottS

    Okay, I’m sold that Obama is worse than Bush. What can we do about it? I’m put off on voting — look where that got us. The current POTUS swept in on a landslide based on a campaign of “I’m not Bush” and doubled-down on everything Bush did.

    If voting is ineffective, then what? Boycotts? Lobbying? Letter-writing? Muckracking? Starting the Occupy Party and running candidates against the mainstream parties? I like the things that Occupy The SEC have been doing in public comments and Congressional testimony. We should take it a step further and create a shadow government — or propose legislation that has an ethical bent.

    I feel like greed at the top of corporations is the common root of inequality and graft. If we can squeeze greed out of the apex of the power pyramid, we can balance equality and starve corrupt politicians out. How to accomplish that, though? Can we restrict corporations to non-profit enterprises? That seems to be a tall order. Should we simply start our own ethical enterprises? Is “ethical enterprise” a contradiction in terms? Can an ethical enterprise survive in shark-infested waters?

    1. tom allen

      “Boycotts? Lobbying? Letter-writing? Muckracking? Starting the Occupy Party and running candidates against the mainstream parties?”

      Ding ding ding! We have a winner! Maybe even protesting in the streets. Hey, it worked for me and the rest of the LGBT rights movement in the ’90s. Of course you’d have to be willing to look like a fool and get arrested, maybe throw away your entire career. You know, like I did. But what did it get us?

      Oh yeah, civil rights. Marriage. Equality. Funny, that.

      Though the Green Party and the Socialist Party already have the groundwork laid for the coming election, so we might want to build on that. I mean, if you want to be all establishment about it. :-P

      1. ScottS

        @tom allen
        Interesting example. But was it any of the things I listed that got the LGBT community civil rights? I think more than any of those techniques, it was changing people’s attitudes that made those techniques effective. Once there was a critical mass of people who came off the fence and supported LGBT rights, then it was a matter of time before the laws changed.

        So let’s call this “change their hearts, and the laws will follow.”

        How do we “change their hearts” on the topic of income equality? Using the LGBT rights crusade as an example, I can think of:
        Parades as protests — much more colorful, much more fun than marching and carrying signs (let’s not even get into the Black Bloc). Also, see how many people come out to support you, even if some are just gawking.

        Ambassadors — Ellen is a great ambassador for the LGBT community in that she’s funny, friendly, open, confident, accepting.

        Visualizing interaction with “regular” people — Call this the “Queer Eye For The Straight Guy” effect. As offensive as that show was, it allows people outside the community to conceptualize how people inside the community can interact together. What things are okay and not okay to talk about with community members, show that community members are a diverse group with a common trait, they are not threatening, can help with your problems, etc.

        Banding together — the acronym “LGBT” says it all. It’s four different, distinct communities that came together to fight for equality. Strength in numbers, but focus on the issue, don’t dilute your message.

        Can these techniques build a critical mass necessary to drive the economic equality movement?

      2. reslez

        Oh, you guys got marriage equality? So much for all the states that passed constitutional amendments against it.

        I think there’s more work to do there.

      3. ambrit

        Friends;
        Funny, but no one here mentioned the Stonewall Riots. That action started the ball rolling by informing the power elites that the LGBT community wasn’t going to put up with business as usual any more. “Just a, short, sharp, shock. Dig it?”

      4. Nathanael

        “How do we “change their hearts” on the topic of income equality?”

        Occupy, by being filled with people who “played by the rules” and ended up screwed, actually made a damned good start at this.

    2. F. Beard

      What can we do about it? ScottS

      Do you know anyone who would not welcome “restitution checks” from the government IF they would not cause price inflation?

      That’s something that would have almost universal appeal, wouldn’t it?

      And it would greatly reduce wealth disparity, not by making the rich poorer but by making the non-rich richer. Who would dare oppose that?

    3. Nathanael

      Political parties in most countries actually have shadow governments.

      It wouldn’t be a crazy idea.

  19. ArkansasAngie

    Neither a Republican nor Democrat be.

    I will not vote for either. I will vote. At this second it will be Paul.

    Some how … some way … we must throw both parties out. Put aside your wedge issues. We can debate them later. At this second it is a question of both parties are bankrupt and need to be put out of our misery.

  20. JerryDenim

     ”It’s hard to say”

    Really?

    I thought Matt made a pretty good case for the “Obama is a lying, double-talking shitbag” camp and I would have just left it there and allowed the facts and deeds of this administration speak for themselves.

    Nice reality check though. The CAFTA push plus photo ops in Ohio with yellow hard hats touting job creation is especially hard to stomach.

  21. mac

    Obama has no ideas, he says and does as his support group designs.
    Romney at least has ideas of his own and can articulate them. Obama reads speeches.
    He is a “suit” and proof to the many that they are not prejudiced.

  22. Paul Tioxon

    Okay Matt, I’m going to take a wild stab at being a totally enthralled apologists for the trojan horse of neo-liberalism, aka Obamacare Drone-acista. But, could the extraordinary high level of unemployment completely skew any comparison of wealth going to the 99%? The fact that there are 10s of millions of people not earning a penny, even losing investment IRAs and now, many have run out of even safety net unemployment insurance would explain why the middle class is getting so much less than under Bush. I mean, if you can’t even draw a paycheck, how can you capture some of the income from the recovery? Just asking the questions. And of course, if you lose your home to foreclosure or jingle mail, strategic default due to being under water, you also lose net wealth, if you had any to mention to begin with.

    1. Nathanael

      Well, sure, but y’know, Obama could have actually tried to do something which would cut the high level of unemployment, and he didn’t. Christy Romer tried to tell him what was needed, but he listened to Larry “career of wrongness” Summers.

  23. Steve Jones

    No progressive is supporting Obamacare. This piece of sh$t was crafted through stooges like Baucus – by the insurance lobby and the medical-industrial complex to pad their profits. Also included is a nice cheap shot at Medicare. The US system is the world’s most outrageously expensive and the Barack Junta works overtime to ensure multiple private entities get a piece of the action while 10s of thousands die due to lack. Doncha think Bushie was a lil’worse? Jury’s out on that one Nixon.

  24. Ed

    There is a big problem with the chart.

    The 2009-10 years are labelled a “recovery” and compared to the earlier (and frankly fairly dubious) “Bush” and “Clinton” recoveries. The chart shows an 11% gain by the top, significantly lower than what they hauled in during the earlier periods, and no gain at all for everyone else. This is really showing stagnation -or even a pause before another decline- not a recovery!

    And actually it appears that the 1%, who have always owned most of the stocks, have their wealth increase or decrease disproportionately during stock market booms and busts. Recently we have seen more booms and busts. Even using IRS data is not great since the wealthy have every incentive to exaggerate their losses when declaring their taxes when they can, during busts. Median wage data is probably better for what Matt Stoller is trying to do.

    The chart seems to show that Obama inherited a crappy economy and it remains crappy, so for the left its probably not so much pitchfork time as time to sit on the sidelines, which his next post indicates people are doing.

    Incidentally, the chart also captures that inequality has been easing in the U.S. during recessions, since the wealthy are more exposed to the effects of popping asset bubbles. This helps the people in the middle and the bottom more than their own small wealth declines would indicate -they are not outbid as much for assets (including politicians)! If you are in the middle or on the bottom, it appears from the chart that you should root for a recession.

    1. snowedin

      Ed: excellent observation, and Matt – you need to relook at the entire income distribution topic.

      The top 1% make about 20% of their income on capital gains, while the rest earn about 2% of their income on capital gains. And the top 400 income earners rely on capital gains for about 65% of their income. The S&P500 has jumped about 35% since 2008, so it is plain to see why “new” income redistribution is in favor of those who rely mostly on capital gains.

      Is this Obama’s “fault”?
      In a way, with the TBTF bank bailout programs (debt, but that’s a besides) enabled the banks to reinvest our public money into the markets which has benefited anyone who looks for capital gains, obviously more so to those more reliant on capital gains.

      But last I looked so did all the pension, state, and other funds, many of whom have members strongly allied to the Democrats. It’s just that the members make proportionally less of their income via investments (for obvious reasons).

      Therefore, one could argue, that in order to “redistribute” income, there ought to be generous incentives (e.g. tax) for lower income groups to better enjoy the benefits of the bank bailouts.

      Or, one could dis-incent the wealthy and raise the CG tax. This wouldn’t “redistribute” anything. It would simply raise more taxes to slow down the increase in borrowing/spending. Not necessarily a bad thing, but not relevant to income redistribution.

  25. Everyone not in the 1%

    Doesnt the Bush “lets give ourselves trillions of dollars in bailouts to save us form our own bad advice and investments” money from TARP account for the reason the top 1% has gained? Seems the naked capitalism page doesn’t want to look at the actual causes and simply wants to blame for political reasons.

    1. Charles Yaker

      Are you kidding? That’s only part of the smoke and mirrors to fool e 99% into thinking there is a difference.

  26. Very Serious Sam

    From my German centrist point of view, all US political ‘elite’ people are located somewhere between right wing finance industry friends (Clinton, Obama) and ultra right wing enemy of the state types (Romney, Ryan).

    There won’t be a change, no matter whom you elect. Because the whole system is indepth corrupted by Wall Street & Friends to serve their needs. What the US need is not another more or less minor overhaul of the existing system but a disruptive quantum leap which brings justice and fairness to everyone.

    (the same need for a systemic quantum leap applies to Germany, the UK, France… of course)

  27. Charles Yaker

    Based on what the Obamanistas at the Roosevelt Institute did to Marshal Auerbach I guess Matt Stoler’s Fellowship will be allowed to expire also.

  28. good2go

    Ummmm, I agree with just about everything you’re saying here, but laying growing inequality at Obama’s feet is more than a stretch.

    Your criticisms are all valid, but trying to link these policy decisions with causality just doesn’t work. However, one can certainly show that Obama is doing nothing to reverse a trend that was well underway when he entered the White House. Way before, in fact.

  29. Christina Marlowe

    I now know beyond any doubt whatsoever that, as Balzac wrote, “Behind every great fortune, there is CRIME.”

    These cretinous billionaire “people” should be tarred, feathered, paraded around in dunce caps and handcuffs, and then summarily and unceremoniously EXECUTED, preferably HANGED, in a public square. They are, each and every one of these CRIMINALS, the true dregs of society; They offer nothing at all of value; Rather they suck away at society and everyone that crosses their vile, reprehensible paths.

    As for Obama, I say to him: Listen up, MAN…If you don’t hold the criminals accountable for their CRIMES, your precious “Legacy” will be pilloried by the FACT that YOU, SIR, are a LYING DEMON, cut from the very same cloth as your buddies in the Banks and on Wall Street that bankroll you.

    Furthermore, you are, without any doubt, to quote Cornell West now,
    “A black mascot of Wall Street oligarchs and a black puppet of corporate plutocrats.”

    To further quote West on Obama, “And now he has become head of the American killing machine and is proud of it.”

    What a Disgraceful TRAVESTY.

  30. jim davis

    Agh… I’d like to agree with the piece but I don’t. I think the piece falls into the same flaw in logic that is true of the rich who whine that “the rich people pay most of the taxes in this country”. Yes, they do pay most of the taxes, but that’s because they’ve already got all the money. 30% of 90% of the money made in the country, is a lot more than 30% of 10% of the money made in the country.

    Similarly with this piece. Yes, most of the gains in the bounceback accrued to the 1%, but that’s because they already had all the money going into the game. So if everyone’s tide lifted by 30%, of course the 1% who have 90% of that money got most of the benefit.

    I’m simplifying of course. But I think this piece isn’t fair to Obama.

    I should say, I am as appalled by income inequality as anyone in our camp (I consider myself pretty left leaning, somewhere around the Bernie Sanders point on the spectrum). And Obama sure hasn’t been everything I’d hoped for. But this piece is wrong to give left-leaners the impression that Obama’s policies are making things even worse than they were under Bush. Or that we should all just feel duped and not care whether Romney wins. It does matter. Romney’s intentions and policies would be far worse on this point than Obama’s.

  31. Steven Gaylord

    Both political parties love power more than freedom. Both parties have used (as example) the Commerce Clause in the Constitution to stretch the power of the federal government far beyond its constitutionally ordained boundaries and well beyond the plain meaning of words.

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