The rise comes as some policymakers continue to criticize a perceived income disparity between middle class and wealthy Americans. President Barack Obama has been outspoken on income inequality during his time in office, while Vermont Sen. Bernie Sanders has made reducing the wealth gap a centerpiece of his presidential campaign….(read more)
‘The First Rule of Economic Fight Club is…’ Stephen Moore, Paul Krugman Meet for ‘Economic Fight Club’ at Freedom FestPosted: July 10, 2015
I was fortunate to catch the majority of this debate live, via Periscope, watching it live on my phone’s screen (mostly just listening to the audio) and I agree with this description: “All in all this was a very interesting discussion. Of course I was not convinced by anything Krugman had to say but I did think it was a good-faith conversation on a variety of topics.” I’ve not found the video online yet, but stay tuned, when we find it, we’ll post it. In the meantime, enjoy a sample of this account by PJ Tatler‘s Liz Sheld,
“I have to give some props to Krugman for showing up, as he had to know this was going to be a tough crowd. And this panel was one of the best I’ve seen at a conference — it was thoughtful and did not get hostile at all, while both Moore and Krugman addressed each other’s points.”
Liz Sheld writes:
One of the big spectacles at Freedom Fest was the showdown between Stephen Moore and Paul Krugman that took place this morning. Moore founded the Club for Growth and was formerly on the editorial board of the Wall Street Journal. The former chief economist at the Heritage Foundation was billed as the “supply-sider.” On the other side of the debate was Krugman – New York Times columnist, professor of economics at Princeton, and Nobel prize winner. He was billed as the “Keynesian.”
The topic was “What happened to the American Dream?” or “How can we best restore the American Dream?”
“I wish we had more of this and less grandstanding at our center-right conclaves.”
I have to give some props to Krugman for showing up, as he had to know this was going to be a tough crowd. And this panel was one of the best I’ve seen at a conference — it was thoughtful and did not get hostile at all, while both Moore and Krugman addressed each other’s points. I wish we had more of this and less grandstanding at our center-right conclaves.
Since this was an hour-long debate, I’ll sum up some of the most interesting exchanges between the two economists. It didn’t take long before each was urging the moderator to pull up one of their charts. Charts really add some gravitas to the discussion. As they say on the streets, sh!t got real when the charts started coming out.
Moore pointed out that everything done by the Obama administration has thwarted recovery from the economic disaster of 2007-8. But to be fair, he included Bush along with examples of Obama’s mistakes: cash for clunkers, stimulus, bailouts, and tax increases, for starters. He said that Reagan also inherited a bad economy but did the right things for a much faster turnaround. Moore said that we have 8 million fewer jobs under Obama than we would have had if Obama had taken Reagan-esque action.
Read the rest of this entry »
A new poll shows that America is prejudiced against few candidates. The vast majority of American voters are ready for a female president. The fewest will vote for a socialist. Does this mean Sen. Bernie Sanders should abandon his presidential ambitions? Find out.
Incomes fell for most families in past three years, while top 10 percent prospered
For the Washington Times, Jennifer Pompi reports: Under President Obama, the richest 10 percent were the only income group of Americans to see their median incomes rise, according to a survey released this week by the Federal Reserve.
“The wealth share of the top 3 percent climbed from 44.8 percent in 1989 to 51.8 percent in 2007 and 54.4 percent in 2013. … The share of wealth held by the bottom 90 percent fell from 33.2 percent in 1989 to24.7 percent in 2013.”
The Fed data covered the years 2010-2013, during which period Mr. Obama constantly campaigned against income inequality and won re-election by painting his Republican rival as a tool of Wall Street plutocrats.
“One of our biggest concerns is who is the candidate’s economic team, because if the present economic team doesn’t change, you are going get the same results.”
— AFL-CIO President Richard Trumka
“Data from the 2013 [Survey of Consumer Finances] confirm that the shares of income and wealth held by affluent families are at modern historically high levels,” the report said in noting that the median income fell for every 10-percent grouping except the most affluent 10 percent.
“The 2013 SCF reveals substantial disparities in the evolution of income and net worth since the previous time the survey was conducted, in 2010,” the report stated. The SCF is conducted by the Federal reserve triennially and compiles information about family incomes, credit use, net worth and finances. Read the rest of this entry »
Polling Data and Dem Think-Tank Messaging Tells Obama ‘Class Warfare’ Rhetoric Needs to be Replaced With ‘Gender Gap’ RhetoricPosted: July 6, 2014
All Politics All The Time
From Today’s Washington Post:
“…The shift also underscores the ongoing dispute between the Democratic Party’s liberal and moderate wings over how to address inequality issues. Whereas the left takes a more combative tone, seeking to focus on the income gap and what it views as the harmful influence of big business and Wall Street, more centrist forces in the party favor an emphasis on less-divisive issues.
White House officials say the change in the president’s rhetoric was driven by a desire to focus not just on the problem — economic inequality — but also on solutions that could address it. Others close to the White House contend that the move is at least partly driven by Democratic polling that found that talking about income inequality does not register strongly with the American public and risks accusations of class warfare.
“It was clear in 2013 that income inequality was the top narrative for the White House, but they abruptly switched away from it. Income inequality seems like it’s on the back burner now — at least in terms of their rhetoric.”
— Jim Kessler, senior vice president for policy at Third Way, a Democratic think tank
The shift hints at a broader repositioning of Democratic messaging ahead of the midterm elections and, perhaps, the 2016 presidential race….”
According to a recent Rasmussen report, the majority of American believe that the fastest way to close the income gap is to take the government out of the equation.
The national telephone survey found that 69 percent of U.S. residents believe the salary gap is an issue that deserves attention, but 59 percent think that it can best be solved without the government intervening in the economy.
‘The president likes to think of himself as an empiricist, a nonideological believer in what works…’Posted: January 30, 2014
Obamanomics: Missing the Obvious
AVIK ROY: On Inequality, Obama Fails His Own Test.
During President Barack Obama’s 2014 State of the Union address on Tuesday night, one section stood out. “After four years of economic growth,” said the president, “corporate profits and stock prices have rarely been higher, and those at the top have never done better. But average wages have barely budged. Inequality has deepened. Upward mobility has stalled.” But Obama left unstated the most important point of all: Under his watch and thanks to his policies, those at the bottom of the ladder face fewer and fewer opportunities to get ahead. Worse still, most of the policies he proposed during his address would make social and economic mobility even harder.
“Texas ranked 10th nationwide in a measure of states with the lowest costs of living. That is because the state has a predictable and relatively light regulatory regime that drives down the cost of doing business, and thereby the cost of consumer goods and services.”
I just returned from a three-day trip to Austin, Texas. Spend a few days in Austin and you feel as though you are in a different America from the one described by the president.
In the next two years, downtown Austin’s hotel capacity will increase by 57 percent. In the last 20 years, Austin’s population has increased by an astounding 71 percent. The state of Texas hosts four of the 11 largest cities in the country: Houston (4), Dallas-Fort Worth (5), San Antonio (8) and Austin (11). The biggest problem in Austin is not the economy or unemployment — it is the traffic.
In U.S., 65% Dissatisfied With How Government System Works
Justin McCarthy reports: Sixty-five percent of Americans are dissatisfied with the nation’s system of government and how well it works, the highest percentage in Gallup’s trend since 2001. Dissatisfaction is up five points since last year, and has edged above the previous high from 2012 (64%).
One percent owns 35 percent! So what?
John Stossel writes: President Barack Obama says income inequality is “dangerous … the defining challenge of our time.” The pope is upset that capitalism causes inequality. Progressives, facing the failures of Obamacare, are eager to change the subject to America’s “wealth gap.”
It’s true that today, the richest one percent of Americans own a third of America’s wealth. One percent owns 35 percent!
But I say, so what? Progressives in the media claim that the rich get richer at the expense of the poor.
But that’s a lie.
Hollywood sells the greedy-evil-capitalists-cheat-the-poor message with movies like Martin Scorsese’s new film, “The Wolf of Wall Street,” which portrays stock sellers as sex-crazed criminals. Years before, Oliver Stone’s “Wall Street” created a creepy financier, Gordon Gekko, played by Michael Douglas, who smugly gloated, “It’s a zero-sum game. Somebody wins; somebody loses.”
This is how the left sees the market: a zero-sum game. If someone makes money, he took it from everyone else. The more the rich have, the less others have. It’s as if the economy is a pie that’s already on the table, waiting to be carved. The bigger the piece the rich take, the less that’s left for everyone else. The economy is just a fight over who gets how much.
But this is absurd. Bill Gates took a huge slice of pie, but he didn’t take it from me. By starting Microsoft, he baked millions of new pies. He made the rest of the world richer, too. Entrepreneurs create things.
Over the past few decades, the difference in wealth between the rich and poor has grown. This makes people uncomfortable. But why is it a problem if the poor didn’t get poorer?
Albert Merrick reports: Back from his $4 million Hawaii vacation, President Barack Obama seems poised to sound the populist trumpet in an effort to turn the page on 2013’s disastrous Obamacare rollout.
Many pundits are speculating that Obama, seeing the popularity of liberal populists like New York City Mayor Bill DeBlasio, will use the current debate over unemployment insurance to engage in more divisive rhetoric:
The Obama administration has set the stage for a push that could rekindle cries of class warfare — calling for renewed long-term unemployment benefits, a minimum wage increase and a campaign against what Democrats call “income inequality.”
Ahead of his multi-week, holiday vacation in Hawaii, President Obama pushed Congress to move forward on extending federal unemployment benefits that weren’t included in the budget deal Senate Democrats and House Republicans struck to fund the federal government for the next two years. The White House has scheduled an East Room event on Tuesday in which the president will appear with people who lost that insurance.
On Tuesday, that’s precisely what Obama did, trotting out unemployed people to push for another boost to unemployment benefits, and citing income inequality as the rationale.
John Hawyard writes: One of the most disturbing things about Barack Obama’s reign of lawless executive power is that it has people fantasizing about outright totalitarian dictatorship, and not in a faculty-lounge-B.S. kind of way. We’ve always had to put up with the likes of Thomas Friedman at the New York Times rhapsodizing about the joys of Chinese authoritarianism – provided a duly accredited Democrat gets to be America’s temporary dictator, of course – but now we’ve got Jesse Myerson at Rolling Stone daydreaming about hard-core communism as the solution to America’s ills.
He’s not fooling around, either. He wants the government to guarantee a job and income for every single person, and seize all private property to overthrow capitalism, although he would generously allow the Glorious Peoples’ Republic of America to rent the land back to private individuals… as long as everyone is clear that the dictatorship of the proletariat is the ultimate landlord:
Ever noticed how much landlords blow? They don’t really do anything to earn their money. They just claim ownership of buildings and charge people who actually work for a living the majority of our incomes for the privilege of staying in boxes that these owners often didn’t build and rarely if ever improve. In a few years, my landlord will probably sell my building to another landlord and make off with the appreciated value of the land s/he also claims to own – which won’t even get taxed, as long as s/he ploughs it right back into more real estate.
Think about how stupid that is. The value of the land has nothing to do with my idle, remote landlord; it reflects the nearby parks and subways and shops, which I have access to thanks to the community and the public. So why don’t the community and the public derive the value and put it toward uses that benefit everyone? Because capitalism, is why.
And the wise and loving State will fix all of that because it really cares about the people, man. Politicians are completely devoid of greed or ambition, and their brilliant plans always work perfectly. Just ask the doctor who spent two hours on hold with the ObamaCare commissars on Friday waiting for approval to perform surgery.
People often say that “the rich are getting richer while the poor are getting poorer.” Economics professor Steve Horwitz explains why in the United States, this characterization is largely a myth.
The poor and the middle class are falling behind, and it has nothing to do with the 1 percent
Kevin D. Williamson writes: President Barack Obama gave a very silly speech in which he affirmed that economic inequality is to be the centerpiece of his remaining time in office. He has made similar suggestions about other issues — global warming and gun control, notably — and, President Obama being President Obama, it is very likely the case that his laser-like focus will consist of a series of speeches and very little else. The politics of the moment will determine which issue actually gets his attention, though he could go with his admirers at Washington Monthly, who contend that some of them are the same issue: Mass shootings, Daniel Luzer argues in a particularly batty piece of connect-the-imaginary-dots, has “everything to do with the distribution of wealth in America.”
It is difficult to take President Obama seriously on these issues, but it is difficult to not take seriously Josh Barro and Paul Krugman, both of whom have offered what seem to me to be inconclusive arguments, Mr. Barro under the headline “Sorry, Libertarians, Inequality Does Matter,” Professor Krugman under “Why Inequality Matters.” Strangely, neither of these erudite gentlemen quite manages to establish that inequality matters.
Mr. Barro writes: “Economic growth is not the same thing as well-being. The point of economic growth is that it leads to improvements in standards of living. If the gains from economic growth are not broadly shared, but instead accrue disproportionately to people already at the top of the income distribution, then a lot of economic growth will only generate a little improvement in living standards for most people. For this reason, rising inequality is a problem even if it does not hold back GDP.” This is true in a sense, but it reverses cause and effect: Incomes among the bottom half of earners are not stagnating because of increasing inequality; inequality is increasing because incomes among the bottom half of earners is stagnating. It could have been the case that incomes among the bottom half of earners were stagnating while incomes for the top half were absolutely crashing, in which case you would have a situation in which there was less inequality but everybody was worse off, or at least no better off. Conversely, we could have an economy in which the poor and the middle class see strong gains in their income and their wealth, but the very well off experience twice those gains, which would mean a society of increasing inequality in which everybody is better off. I have encountered progressives who state their preference for the outcome in which we are all poorer but more equal over the outcome in which we are all richer but less equal, which puzzles me.
Jeffrey H. Anderson writes: President Obama has declared his renewed commitment to fighting income inequality. But we now have five years of evidence to draw upon, and it’s clear that Obama’s methods in this regard have failed miserably. In fact, they’ve worked about as well as Obamacare.
Obama’s approach to addressing income inequality, of course, is to funnel ever more money and power to Washington, while promoting a culture of cozy cronyism between Big Government and Big Business (especially Big “Green” Business). When having a well-positioned team of Washington lawyers and lobbyists becomes a necessary prerequisite to getting ahead, that’s hardly conducive to Main St. prosperity.
The utter failure of Obama’s trickle-down-government approach is perhaps best captured by two contrasting stats. When he took office, we were a full year into a major recession. Economically, there was almost nowhere to go but up. And, indeed, that’s what the Dow Jones Industrial Average, which tracks the stock prices of 30 very large companies, has done: gone up. In January 2009, the Dow was at about 8,000. It’s now at about 16,000. It has essentially doubled on Obama’s watch.
Niraj Chokshi writes: The income gap in America has been widening for decades and the modest three-year recovery did little to change that, according to new Census data.
The new data suggest that despite modest recoveries in many states, the middle class has been shrinking while households have been added in the lowest and highest income brackets. In many states and nationally, the highest income brackets saw more growth than the lowest, but households in the middle brackets continued to decline. The state-by-state data compare incomes from a pair of three-year periods: 2007 through 2009, a span that included the Great Recession, and 2010 through 2012, a period that included the ongoing and modest recovery.
For years, the wealthiest 1 percent have amassed income more quickly than the rest. From 1979 through 2007, for example, the top 1 percent of households saw income grow by 275 percent, according to a nonpartisan Congressional Budget Office study. Compare that to the bottom fifth of households, which saw income gains of only 18 percent over that time. Recent Nobel Prize winner for economics Robert Shiller, who is known for creating a closely tracked home-price index, last month called income inequality “the most important problem that we are facing now today.” And just last week, President Obama’s nominee to lead the Federal Reserve, Janet Yellen, called income inequality “an extremely difficult and to my mind very worrisome problem.”
When we measure by consumption, it’s clear people are better off today than they were 30 years ago.
The Census Bureau’s “Income and Poverty” report, released in September, underscored that the economic recovery has largely failed to reach the poor and middle class. However, there is a subtle but substantive difference between stating that inequality is worse today than it was 30 years ago, and that people are worse off today than they were 30 years ago. Rising inequality does not preclude an improvement in standards of living at the bottom of the income distribution.
Stepping back from the traditional debate about income inequality, Kevin Hassett and I recently co-authored a study that focuses on changes in material standards of living over the last 30 years. Consumption of goods and services is often a far better measure of household welfare than is income. What we buy and consume with our income directly adds to our utility and happiness, and it also has a direct impact on our standard of living. Read the rest of this entry »
Why the president’s defenders are wrong when they argue Obama is impotent.
by Ron Fournier
Two New York Times reporters recently posited for President Obama this grim scenario: Low growth, high unemployment, and growing income inequality become “the new normal” in the nation he leads. “Do you worry,” the journalists asked him, “that that could end up being your legacy simply because of the obstruction … and the gridlock that doesn’t seem to end?”
Obama’s reply was telling. “I think if I’m arguing for entirely different policies and Congress ends up pursuing policies that I think don’t make sense and we get a bad result,” he said, “it’s hard to argue that’d be my legacy.”
Actually, it’s hard to argue that it wouldn’t be his legacy. History judges U.S. presidents based upon what they did and did not accomplish. The obstinacy of their rivals and the severity of their circumstances is little mitigation. Great presidents overcome great hurdles.
In Obama’s case, the modern GOP is an obstructionist, rudderless party often held hostage by extremists. So … get over it. His response to The New York Times is another illustration that Obama and his liberal allies have a limited—and limiting—definition of presidential leadership.
I call it the White Flag Syndrome.