Different from a Republican how? Part 4

Growth of Income Inequality Is Worse Under Obama than Bush

Matt Stoller, Naked Capitalism

Wednesday, April 11, 2012

Yesterday, the President gave a speech in which he demanded that Congress raise taxes on millionaires, as a way to somewhat recalibrate the nation’s wealth distribution.  …  A common question in DC is whether this populist pose will help him win the election.

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A better puzzle to wrestle with is why President Obama is able to continue to speak as if his administration has not presided over a significant expansion of income redistribution upward.  The data on inequality shows that his policies are not incrementally better than those of his predecessor, or that we’re making progress too slowly, as liberal Democrats like to argue.  It doesn’t even show that the outcome is the same as Bush’s.  No, look at this…

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Yup, under Bush, the 1% captured a disproportionate share of the income gains from the Bush boom of 2002-2007.  They got 65 cents of every dollar created in that boom, up 20 cents from when Clinton was President.  Under Obama, the 1% got 93 cents of every dollar created in that boom.  That’s not only more than under Bush, up 28 cents.  In the transition from Bush to Obama, inequality got worse, faster, than under the transition from Clinton to Bush.  Obama accelerated the growth of inequality.

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Despite his recent speech, President Obama knows that his income tax proposal is going nowhere.  So let’s look at three recent policy choices that are going somewhere.

1. President Obama is on the verge of approving a Free Trade deal with Colombia, despite the murder of union organizers in that country.  Not content with establishing similar deals with Panama (which has to do with enlarging tax havens) and South Korea, the administration is now embarking on a much vaster Trans-Pacific Partnership deal with countries all over Asia.  And it’s being negotiated entirely in secret, with corporate and government officials the only ones allow to be in the room.  Trade is a significant driver of lower wages.
2. President Obama just pushed for and signed the JOBS Act, which is a substantial relaxation of regulations and accounting requirements on corporations seeking to go public.  Bill Black has many four letter words to describe this bill, but it’s basically a license for Wall Street to commit fraud in the equity markets.  The SEC is beginning to promulgate instructions on how this will work.
3. President Obama just refused to issue an executive order forcing campaign spending disclosure by government contractors.  President Obama actually criticized the Supreme Court’s decision in Citizens United at a State of the Union address, but as with yesterday’s speech on raising taxes on millionaires, there was actually no there there.

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Mitt Romney might be easy to jeer at for his wealth and arrogance, but Saez’s data suggests that Barack Obama is just as much the candidate of inequality.