Obamanomics GREAT For The 1% HORRIBLE For Everyone Else
Obama Calls
Income Gap ‘Wrong’ — After Widening It
Obamanomics: The
president has been decrying the growing gap between rich and poor in the
U.S. to help sell his retread tax-and-spend proposals. But those policies
have already produced record levels of income inequality.
In his speech in
Illinois last week, and at events since, Obama described income inequality
in the starkest terms. “This growing inequality is morally wrong,” he
said, and “undermines the very essence of America.”
To be sure, income
inequality is a standard trope for liberals, who always use it to advocate
more wealth redistribution.
And Obama’s latest
focus neatly coincides with his plans to push for more federal spending
and taxes on the “rich” in coming budget battles.
But what Obama
conveniently leaves out of his sermons is that income inequality has grown
faster on his watch than any time in the past two decades, at
least.
Research by
University of California economist Emmanuel Saez shows that since the
Obama recovery started in June 2009, the average income of the top 1% grew
11.2% in real terms through 2011.The bottom 99%, in contrast, saw their incomes shrink by 0.4%.
As a result, 121% of
the gains in real income during Obama’s recovery have gone to the top 1%.
By comparison, the top 1% captured 65% of income gains during the Bush
expansion of 2002-07, and 45% of the gains under Clinton’s expansion in
the 1990s.
The Census Bureau’s
official measure of income inequality — called the Gini index — shows
similar results. During the Bush years, the index was flat overall —
finishing in 2008 exactly where it started in 2001.
It’s gone up each
year since Obama has been president and now stands at all-time
highs.
It’s worth
underscoring that the growing income gap under Obama isn’t the result of
the rich getting fabulously richer. Nor is it any sort of indictment of
“trickle down” economics.
Instead, it is the
direct result of Obama’s historically weak economic recovery, which has
left the rest of the country falling behind while the wealthy have managed
to make gains.
Census data show, for
example, that the poorest 20% of families saw their real average income
continue to fall each year from 2009 to 2011 — the last year for which the
Census has data — while the top 20% recouped losses suffered in the
recession.
The evidence of
decline among the nation’s most vulnerable shows up elsewhere. There are
2.7 million more people in poverty than there were in 2009. And 14
million more are on food stamps today than in 2009. And after four years
of economic recovery, there are still 4.3 million long-term
unemployed.
Meanwhile,
researchers have found that high-paying jobs lost during the recession are
being replaced, if at all, largely by low-paying jobs in the Obama
recovery.
All this is in stark
contrast to previous economic recoveries, which generally saw at least
some income gains across the Census Bureau’s income
groupings.
Despite this record,
Obama’s answer is simply to increase the dose of the very same treatments
— more government spending, more taxes, more intrusions into the
marketplace in the name of “shared prosperity” — that hobbled the recovery
and produced the very misery he now claims he can
fix.
In other words, Obama
is selling snake oil. And that’s what’s morally
wrong.
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