Musings of the Great Eric

Inequality and the Presidency

with one comment

Via Dani Rodrik, this graph:

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In a nutshell, under Republican Administrations, the richest see their incomes grow the fastest, and the poorest see it grow the slowest – inequality increases. Under Democrats, every income group gets richer faster, with the poorest seeing their incomes rise the fastest – five times faster than under Republicans. Wow.

The graph comes from Princeton political scientist Larry Bartels’ new book, soon to be released. Now quoting Rodrik:

Bartels shows in his book that this difference is not a statistical artifact or a fluke.  It is not the result of Democrats coming to power during better economic times, or of Republicans reining in the unsustainable excesses of Democratic administrations they replace. (It turns out that the same pattern prevails even when a Republican president is succeeded by another Republican.) These numbers are real and they are the outcome of partisan differences in policy. So if you are one of those who have bought the story that income distribution is the result of pure market forces and technological changes, with politics playing no role–think again.

I haven’t read the book, so for the moment I’m just taking the data at face value, and assuming that Bartels did his homework and controlled for all other variables. But the idea here isn’t new; Paul Krugman has argued often and convincingly that inequality is tied to public policy, especially under the Bush Administration.

The idea that the President has such an influence on policy, which in turn has such an influence on the economy and income distribution is a pretty profound one with some pretty disturbing implications – that’s an insane amount of power vested in one individual. But to be honest, I don’t have the faintest clue what might be done about that and consequently won’t say any more on it.

A more direct and obvious question though (which Rodrik asks) is why the hell do people vote Republican? Like, ever?

There have been a multitude of theories put out there. Thomas Frank put forward the most compelling theory in What’s the Matter with Kansas?, arguing that Republicans use social issues (like abortion and gay marriage) to get people to vote against their own economic interests. Krugman argued in Conscience of a Liberal that it comes down to good old fashioned racism. In my view there’s no silver bullet explanation – politics and voting behavior are complex beasts.

Given that the Republican party isn’t even able to significantly improve the economic outlook for the very wealthy compared to Democrats, it does beg the question of why even that group supports them, given economic history. They’ve got to be fooling themselves before they get around to fooling the lower classes that vote Republican – and that’s damn interesting.

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Written by Eric

April 1, 2008 at 6:54 pm

Posted in Economics, Politics

One Response

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  1. The trouble with you Nanny State people is that you have to drag the darn truth into the argument.

    Boooooo.

    Ad hominem rules!

    Truth is bias!

    Long live ignorance!?

    (Kidding.)

    I’m adding you to my blogroll.

    benafia

    April 1, 2008 at 7:18 pm


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