Income Inequality Worse Under Obama Than George W. Bush

Income Inequality Worse Under Obama Than George W. Bush

President Obama may talk a big game about economic fairness, but his record on the issue doesn't quite match up.

There are lots of reasons to think so -- and we'll touch on several in just a minute -- but the most recent comes from Matt Stoller, blogging at Naked Capitalism, who points us toward a recent bit of number-crunching from Emmanuel Saez, a professor at the University of California, Berkeley.

Saez, who's known for his work on the income gap, has highlighted a surprising and discouraging fact: during the post-recession period of 2009 and 2010, the rich snagged a greater share of total income growth than they did during the boom years of 2002 to 2007.

In other words, inequality has been even more pronounced under Obama than it was under George W. Bush.

This news may not come as a shock if you're one of the many Americans who lost their job during the recession and couldn't find another that paid as well. It also might not surprise you if you're one of the 46 million people living in poverty -- a record number, as it happens -- or among the millions of Americans who can get by week to week, but would be ruined by a single financial emergency.

You might likewise not be surprised if you already knew that some household-goods companies are catering to this new reality by quietly neglecting their mid-price product lines, focusing instead on their high-end and budget offerings, since wages are diverging so much. Or if you knew that the U.S. ranks closer to China, Serbia and Rwanda than any other country in the developed world when it comes to income inequality.

On the other hand, if you've been listening to Obama decry the wealth gap on the campaign trail, and talk about the need to impose higher tax rates on millionaires, well, then you might be a little surprised.

It was only a few months ago that the Congressional Budget Office released a report illustrating how the very richest Americans have pulled away from the rest of society in the past 30 years.

But that report used data that was only complete through 2007. Saez's calculations go through 2010, suggesting that White House rhetoric or no, the trends of the past three decades haven't started to reverse themselves.

Here's how Saez's math breaks down, for the curious: In the 2009-2010 period, a time of modest economic growth, the top 1 percent of U.S. earners captured 93 percent of all the income growth in the country.

Got that? Now compare it to how the mega-rich made out during the Bush upswing years of 2002 to 2007. During that time, the top 1 percent of earners captured just 65 percent of all the income growth.

That means the rising tide has lifted fewer boats during the Obama years -- and the ones it's lifted have been mostly yachts.

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