Clinton and Inequality
Hillary Clinton campaigned this week under the banner "Rebuilding the Road to the Middle Class," an effort to draw a distinction with the Republican Party and President Bush, who, to hear Hillary tell it, care only about Rebuilding the Road to the Upper Class, and who believe the road should be heavily lined with moats, barbed wire, pit bulls and Blackwater guards to keep out the rabble.
Bill Clinton won the White House in 1992 by talking endlessly about the ailing economy. The Democrats over the decades have mastered the rhetoric of economic woe. But the dramatic fact of recent decades has been the resilience of the American economy. It's a wealth-creation machine. The Bull Market has passed the 5-year-mark. Unemployment is below 5 percent. This good news mixes with the bad: skyrocketing health care and college tuition, trillions of dollars in unfunded long-term entitlement spending, a hideous trade deficit, and a declining dollar.
Also there's my own own harrowing white-knuckle death-spiral toward professional obsolescence and socioeconomic oblivion, but I have to remember that this "Trail" blog isn't about me. (I already have a blog for that!)
Here's the broader point: Any Democrat hoping to take the White House will have to make an adjustment to that 1992 economic message. The internal campaign slogan could be: "It's the Inequality, Stupid."
Hillary Clinton is trying to make that issue her own. She's been tooling around in a bus named the Middle Class Express. She has spoken against "massive" inherited wealth and said she'd use the Estate Tax to bring in $400 billion in revenue over 10 years (I'd like to see the footnotes on that).
"We have the greatest income inequality that we've had since the Great Depression," she said Wednesday at the overcrowded little opera house in Derry. "If we stay the way we're going, we're going to have a huge jump in inequality."
At Plymouth State University on Thursday she hit a similar note: "I like an America where people all the way up and down the income scale are going to have a chance to live up to their dreams."
But is Sen. Clinton an entirely plausible advocate for egalitarianism. I vaguely remember the 1990s: Wasn't that a time of conspicuous consumption and instant dot.com billionaires? Didn't President Clinton push through NAFTA, which even Hillary admits helped Wall Street more than ordinary Americans?
We need some data here. Using the incredible power of Google and the wireless connection in this hotel room I'm going to go peek at some actual numbers, in honor of Sen. Clinton's statement in Derry that she intends to "get back to evidence-based decision making."
Let's look at "Historical Income Inequality Tables" from the U.S. Census Bureau.
There's something called the Gini index of income inequality. Named after the lady who invented it, no doubt. It shows a steady upticking in inequality since 1974, and the Clinton White House years were no exception. The index stood at 0.433 in 1992, jumped to 0.454 in 1993 during Bill Clinton's first year in office (perhaps the fault of his predecessor, but who knows), and sat at 0.462 in 2000. What does it measure, exactly? Here's one abbreviated definition I just found online: "The Gini index measures the area between the Lorenz curve and a hypothetical line of absolute equality."
So that's now perfectly clear.
Another measure, easier for me to grasp: The ratio of the 90th percentile to the 10th percentile of income. It may surprise you to learn that in the Nixon/Ford years, inequality lessened slightly, bottoming out at 8.53 in 1975. That ratio increased almost every year during the Carter and Reagan eras, dipping slightly at the end of Reagan's second term, then climbing steadily again during the elder Bush's presidency. During the Clinton years the ratio fluctuated, but appears to have more or less leveled off, sitting at 10.68 as of the year 2000. The Bush tax cuts seem to have bumped the ratio rather quickly to 11.22 by 2003. It stood at 11.17 in 2005, the last year listed.
It's in the measure of real income that the current Bush era looks bleakest: According to the census data, every income group except the richest 5 percent of Americans saw an erosion of income in real dollars from 2000 to 2005. The numbers support Sen. Clinton's claim on the stump that the average American household lost a thousand dollars in income in the last six years.
During the Clinton years, however, every income group showed real income growth.
But the rich got much richer. It was a good time, the 1990s, to already have a million dollars.
The bottom line (based on, admittedly, a limited amount of hotel-room research) is that Hillary Clinton can plausibly claim that the 1990s were more egalitarian than the Bush years -- but the numbers are not exactly overwhelming. Inequality didn't actually lessen during the Clinton era as far as I can tell, it just didn't get worse.
Bill Clinton is also a champion free-trader and thus and advocate of the globalization that has zapped a lot of working-class people
"A nation that does not manufacture is a nation that cannot remain strong," said the spouse of the president whose NAFTA trade deal helped implode factories across America.
She said "Small businesses are the engine of economic growth in our country." Question for someone much smarter than me: Do small business owners typically vote Democratic? Or do they tend to object to Democratic policies on regulation, liability, the minimum wage and taxes?
And how will small business owners, not to mention the Democratic base, feel about Sen. Clinton's service in the late 1980s on the board of directors of Wal-Mart?
But here's one final data point that's indisputable: Both George H. W. Bush and President Clinton raised taxes on the wealthiest Americans, and George W. Bush cut them.
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