Rising income inequality poses “a fundamental threat to the American dream, our way of life and what we stand for around the globe,” President Barack Obama said Dec. 4. He pledged to make reducing it the focus of the rest of his presidency.But where DID Jack get those numbers? Looks like it this paper by Berkeley economics professor (and MacArthur grant winner) Emanuel Saez.
During his first term, the incomes of the top 1 percent grew by 31.4 percent, the incomes of everyone else by just 0.4 percent. On Mr. Obama’s watch, 95 percent of income gains have gone to the top 1 percent. When George W. Bush was president, only 61.8 percent did.
(Note to Jack: What are you doing quoting a French econominst who won a genius award for studying later economic impact of public school kindergarten teachers? One that says it's worth $320,000 over the long haul? Where's your commitment to small government? To stifling the income of public school employees?)
Anyway, here's what Saez says in the paper Jack dutifully quotes:
From 2009 to 2012, average real income per family grew modestly by 6.0%. Most of the gains happened in the last year when average incomes grew by 4.6% from 2011 to 2012.Pretty good match. However, he traces the unevenness of things back a bit further than what I'd think Jack would want his audience to see:
However, the gains were very uneven. 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.
Overall, the se results suggest that the Great Recession has only depressed top income shares temporarily and will not undo any of the dramatic increase in top income shares that has taken place since the 1 970s. Indeed, the top decile income share in 2012 is equal to 50.4%, the highest ever since 1917 when the series start.Take a look. What Jack was using as a criticism of the Obama administration is actually a criticism of the expanded and expanding income inequality that's taken place since the 70s (Reagan Administration anyone?).
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. In contrast, recent downturns, such as the 2001 recession, lead to only very temporary drops in income concentration.
Note: Edited to clarify a reading error on my part.
Yea, Jack needs to do his homework better.