Thursday, May 4, 2017

Income Inequality and Democratic Control of Congress

Making America Great and Democratic Again!

Graph of Income Inequality 1913-2012

Figure 1 (click on link above)
The share of U.S. wealth owned by the top 0.1. percent of families, 1913-2012
Emmanuel Saez and Gabriel Zucman, October 20, 2014

From 1913 until 1933 between 15-25% of U.S. wealth was owned by the top 0.1%
From 1933 until 1947 that was reduced from 25% to 10% (mostly during FDR's terms)
From 1947 until 1990 the percentage remained constant at around 10%
From 1990 until 2013 the percentage increased steadily until it was about 23%

The Rise and Fall of Middle Class Wealth

Figure 2 (click on link above)
The share of total US wealth owned by the bottom 90 percent of families, 1913-2012
Emmanuel Saez and Gabriel Zucman, October 20, 2014

From 1913 until 1933 wealth owned by the bottom 90% declined from above 20% to about 15%
From 1933 until 1985 wealth owned by the bottom 90% grew from15% to 36%
Form 1985 until 2012 wealth owned by the bottom 90% declined to 23% were it was in 1940

Wikimedia: Control of US Congress & White House 1855-2017

Click on link above
From 1919 until 1933 Republicans had control of both Houses of Congress for the 14 years
From 1933 until 1982 Democrats had control of both houses for all but 4 years
From 1982 until the present control of both has either alternated or been split.

Harry Truman said "if you want to live like a Republican vote for a Democrat"

The case for this has also been made for the stock market.

Of course correlation does not necessarily mean causation.

The most important point is to recognize that when Trump is pointing to a great American past many working class and middle class American have shared that past. We might have made a lot of technological advances since the 50's, 60's and 70's however economically the American working and middle classes were in better shape then.

Democrats ought to lay claim to that past by making a reduction in income inequality and a greater share of wealth for the lower 90% their main goals.

Only a very few wealthy families have benefited from income inequality.

Only the upper 0.1% have increased their share.
Those in the upper 1% not the 0.1% did not increase their share.
Those in the upper 10% but not in the upper 1% actually decreased their share.
Of course every one in the lower 90% decreased their share.


  1. Jack, As you aid on your Sullivan post, the Ds need to reclaim their working class roots. Oddly, it was their working class president who sealed them into the polo shirt and chinos party with his triangulations. As Harry Truman also said, when Ds run like Republicans, the voters will choose the real Republican every time. Crystal won't like me saying this, but Hillary's defense of women's bodies,women's lives sounded like the angst of the white-gloves-and-tea set to the working women who lost their retail jobs while she was talking about their right to abort.

  2. I think you have a point,Tom. I believed Hillary was sincere about abortion but soft or insincere about reigning in neoliberalism. Has a study ever been done about how relatively important young working class women actually find abortion abortion rights, at least in their perceptions? Most people believe in climate change but not enough to care. At some point, it will cause financial collapse and probably gigadeath, but is still perceived as remote. Regardless of its morality or practicality, is it an actual consideration for enough voters. Is there an it-won't-happen-to-me mindset?

  3. I meant "do enough female voters think I-could-get-pregnant-and-need-an-abodtion" to make it a political gain?

  4. Tom, I think you are wrong about Hillary. She kind of reminds me of Melinda Gates. Both are very wealthy and both are very committed to helping women less fortunate. I think they are both sincere and I think that not just because of what they say but because of what they have actually done to help people.

    All I ever hear about is the working class. I'm not worried about the working class or the middle class. I aspire to have that much money and security. What I care about, being on the poverty line, is people in poverty, people on Medicaid, people with disabilities .... 70% of people who are visually impaired like me are unemployed. And there is no party but the Democratic party that gives a damn about us.

  5. I think all "classes" should put it on the table and figure out what kind of civilization we want? I'm willing to pay more taxes for a humane civilization but enough people seem to desire a dog-eat-dog (How often do dogs eat dogs?) Victorian Dickensian nightmare? Is there a way to build a better way on a smaller scale within the civilization? The Amish have a separate culture. Can Catholics do the same?

  6. We all should care about the working class and middle class because they are the vast majority of the people. Without their prosperity we are going to sink into a depression nationally and increased warfare through out the world.

    That was exactly what happened the last time (the 20's) when all the wealth was sinking into the hands of the upper 1%.

    Piketty's CAPITAL IN THE TWENTIETH CENTURY(2014) makes the case that without government taxation of the wealthiest people money will sink into their hands (what I call the black hole of the billionaires). He advocates a one or two percent annual tax on the net wealth of these individuals.

  7. The Democrats need to base the party on economic issues which affect everyone rather than attempt to create a coalition around minority issues.

    Most people still think of climate change as something in the future. They are satisfied with their health care so they do not care about pre-existing conditions. Their ancestors were immigrants but they are not.

    We have to create a secure economy before we can deal with these other issues. Americans are generous especially when they are not threatened.

  8. I would do more than 1-2%. I'd cap wealth. Anything over some amount goes 100% to the state. I'd make that amount $50M

    1. We should have some incentives for people to become wealthy in ways that benefit society. For example I think that there should be tax credits for intellectual property wealth. But I would also limit intellectual property rights more than they are today because they inhibit some creative extensions.

      A lot of current wealth is really just exploitive money transfer from the poor to rich. I would tax capital gains just like labor.

  9. I don't see any difference between the faith that Trump will cares about the economy (that is will make America great again) and the faith the Gates and Clintons care about certain issues. They are both illusions. Trump at least recognizes the economy is in bad shape; the Gates and Clintons think it only needs a little tinkering. Which is why Trump won.

  10. Jack, I think you sell the Gateses and Clintons a little short. Hillary surely has a lot of Wesleyan do-gooderness in her heart, and the Gateses seem, to me, to feel that they made a heck of a lot of money while Bill was having a good time finding things to do on a computer and ought to give some back. Problem is, they have been propelled by events (and sycophants) so far away from real people they don't see what and where the needs are and assume their money substitutes for hands-on experience. The Gates Foundation has done almost as much damage to public education in America as the Kochs, but that is real (their) money they spend on what superficially looked like a good idea.

    The assumption that money substitutes for experience is a widespread American heresy. Most of Trump's fans believe it. He, on the other hand, is all in for Trump and cares about other people only to the extent that they honor and adore him.

  11. I don't believe you can separate social issues from economics. I've read a bit about what Melinda Gates (a Catholic) has been working on in developing countries to help women become economically independent, and that is inextricably connected to their ability to control if and when they have children.

    - From US Catholic about Gates at the London Family Planning Summit a few years ago ... Catholic for contraceptives: Melinda Gates wants birth control for 120 million poor women