Zelizer's Book Corner: Larry Bartels' Unequal Democracy

The current financial crisis has caused American voters to think hard about which party can best deal with the current economic downturn, a decline which has the potential to become a global depression.

Traditionally, voters have tended to trust Democrats more than Republicans when faced with difficult economic times. One of the world's great comedy writers recently told me that Democrats should just broadcast one advertisement, showing the years 1929, 1987, and 2008, the worst weeks in the history of the Stock Market, and ask what all three had in common: a Republican was in the White House.

The polls from the past two weeks suggest that voters continue to lean toward Democrats as pocketbook politics become more salient. Senator John McCain has failed to reverse his downward slide in the polls since he temporarily "halted" his campaign when the news about the Wall Street meltdown first shook the nation.

But we must not lose sight of another long-term economic challenge that confronts the next occupant of the White House: rising inequality in income and wages. The last thirty years, not just the last three weeks, have been devastating for many Americans even as some sectors of the economy have thrived.

According to a recent Congressional Budget Office report, skewed economic growth (with the top 1 percent of households enjoying an average $180,000 increase in after-tax income in 2005 compared to a mere $400 for middle class households, and $200 for lower-income households) has produced the worst inequality since 1979 and the greatest concentration of wealth since 1929.

During the conservative era in American politics, the distribution of income and wages has become more unequal here than in other comparable countries, with the levels of inequality deteriorating under united Republican government between 2002 and 2006.

Some political problems are very confusing, leaving voters unclear about which party will actually make a difference. We are sometimes told that regardless of who has control of government, the new boss is the same as the old boss and conditions will remain the same.

But with some problems, in turns out, it matters very much which party controls the White House and Congress. This is the reason that every voter should read the new book by my colleague here at Princeton, Professor Larry Bartels. His book, Unequal Democracy: The Political Economy of the New Gilded Age, provides readers with stunning statistical data about the close connection between partisanship, policy, and economic inequality. The book demonstrates that it will make a huge difference which party will be in power after November.

According to Bartels, the skewed distribution of income is not simply a result of "natural" market forces but is a direct result of public policy and partisan choices. In one of the most powerful sections of his book, Bartels makes a straightforward and compelling argument: Americans in all income brackets do better financially when Democrats inhabit the White House while the macroeconomic policies of Republican presidents disproportionately benefit the wealthy. As a historical example, he points out that both parties have pushed for tax cuts but when President Kennedy did so, his experts emphasized that the beneficiaries in the "lower brackets, would promptly spend a large part of the proceeds on goods and services, thereby stimulating production, employment and income." When Reagan pushed for a tax cut, his team emphasized that to have an effect, tax cuts "could not be given to the middle class or even the poor. In order to be successful, tax cuts had to be directed primarily toward the wealthy because of their larger role in savings and investing...."

The pattern is clear and consistent. The core argument in the Bartels book should be at the forefront of voter's minds in November. As Mark Twain once wrote about the past, "history doesn't repeat itself, but it rhymes." The patterns presented by Bartels are very compelling and, given that Senator McCain has not hinted at any major break with GOP economic policies, the choice for voters is clear. If Bartels is right, and there is ample evidence to suggest that he is, voters would greatly improve the chances for policymakers to mitigate income inequality if they vote for Obama. If they vote for McCain, inequality is likely to increase.

Bartels offers many other interesting arguments that are relevant in this campaign. In contrast to Thomas Frank's assertion that working class voters have been tricked by cultural values arguments, Bartels shows that most lower income Americans have in fact voted according to pocketbook politics, rationally, and have generally supported Democratic candidates. Blue collar voters have stayed with Democrats, while wealthier Americans fled to the GOP. Republicans have depended on stronger economic conditions during elections, Bartels says, to win the votes of so-called Reagan Democrats, given that voters operate based on short-term considerations.

It is rare for a social scientist, employing the most rigorous techniques of the discipline, to provide such cogent arguments about the biggest contemporary questions of the day. Bartels captures the choice voters face when he writes that income inequality has "increased under each of the six Republican presidents in this period--Eisenhower, Nixon, Ford, Reagan, George H.W. Bush, and George W. Bush. In contrast four of five Democratic presidents--all except Jimmy Carter--presided over declines in income inequality. If this is a coincidence, it is a very powerful one. Even in the highly inegalitarian economic climate of the 1990s, Bill Clinton managed to produce slightly stronger income growth for families at the 20th percentile than at the 80th percentile, though families at the very top of the income distribution did even better."

With the shallow debates that we have seen in the past few months which party stands a better chance to capture the hearts and minds of working and middle class Americans, Unequal Democracy makes the choice voters face clear: Democratic policies spread the wealth and Republican policies protect the wealthy.

More soon from the academy....

Julian E. Zelizer is the editor of "Zelizer's Book Corner" and a professor of history and public affairs at Princeton University's Woodrow Wilson School. He is the co-editor of "Rightward Bound: Making America Conservative in the 1970s" (Harvard University Press) and is completing a book on the history of national security politics since World War II that will be published by Basic Books.

Comments

[jmpurser]

I haven't read Bartells book yet but Krugman's "The Conscience of a Liberal" makes similar points. Buffett was right. There is a class war and his "side" is winning. And America is losing.

[Overd0g]

I'm unclear where the constitution authorizes the government to modify the wage distribution to a curve it finds appealing.

[twofish]

Maybe it's that part about providing for the common defense, promoting the general welfare.

[Overd0g]

Nope. Clearly that wasn't the intended interpretation. I'm sure that's the excuse for the abuse of power though. That or the interstate commerce clause.

[OpheliaOpine]

Julian, you must be comfortable in green felt and tights, particularly when skipping through the forest robbing from the rich to give to the poor. "...mitiga­te income inequality" Parsed into common language the "folks" can understand, it sounds like the horrific malady you are referring to is the condition in a capitalistic society in which some citizens have more money than others. Gosh, maybe it's all the lite beer I've been guzzling while clinging to my guns and religion, but I didn't realize economic stratification was such a serious threat. Know what really chills my blood? Hordes of well-educated, highly intelligent (dare I say, Clean and Articulate?) people clamoring to embrace the basic tenets of socialist dogma. Where in the world is the perfect, shining model of socialist triumph that you are suggesting we emulate? If capitalism is so inherently flawed and ugly, why are so many other countries scrabbling to get a piece of it? I will not argue that the Haves should not share with the Have Nots...but I will bitterly defend the idea that it should be their choice, not a Federal mandate. Screwed up as we may be, we are still the most coveted, imitated and feared nation in the world. That is not to say we don't have a lot of room for elevation and evolution. But step back, just for a moment, to regard the forest, rather than the trees. What, exactly, is the success we are trying to achieve?

[peter777]

In answer to your last question, in Government we should be trying to have success through laws and policies that give a more balanced distribution of the proceeds of labor and capital. The government extensively sets these rules. That is the reason the IRS code occupies a very large room- to outline all the loopholes that are granted to the rich and to corporations. Who is to say what is fair. The people, and they need to choose representives that develops policies that reverses the trend of consolidating wealth among a smaller and smaller percentage of Americans. You might say that it is not the government's money, etc., but I submit that as long as you live here and take advantage of the opportunities, you have obligations, and the public will set through it representatives what those are. That is what a civil society does.

[OpheliaOpine]

So, if a citizen who rises from poverty to cultivate an idea that brings him or her sufficient wealth to be considered rich, a civilized, successful society would deem that we redistribute some of these "proceeds of labor and capital" to other citizens of poverty who have not endeavored to change their economic predicament?

Wow. Power to the philistines!

[nobozos]

If you're too ignorant of the process to believe the rich don't write the rules in order to increase their wealth and power, you must be on a parallel planet.

[Snowball]

I've said it before, I'll say it again:

Wealth percolates up, it does not trickle down.

[Overd0g]

So by stealing from the rich and giving to the poor, you're just going to make the rich richer.

[Snowball]

It would seem so, except it isn't stealing. The rich get a pretty awesome bargain from the deal. Not only do they get to stay rich and have more opportunities to make more money, they get safe streets, sanitary communities and a cleaner environment for their children and most of all, they don't have to worry about angry mobs of the disposed crashing down the gates of their gated communities to string them up from the nearest tree.

Who could argue with that deal?

[anniegirl9]

The most telling data is how Bartles breaks down each four year term into measurable and predictable patterns, thus negating the arguments of spill over from previous administrations or simple coincidence. It also explains very clearly why Republicans do better in elections. When Ragan asked "Are you better off today.." the answer should have been "yes."

Here is how it works. The first year of the administration is the honeymoon year - a time when the president can get through the most of his agenda. The second year is the most telling for how those policy changes stack up. Under a Dem - the second year sees positive gains in the economic welfare of the country, but it is not sustainable, so the 3rd and 4th year show modest declines. The Republican chart is a mirror image of the Dem chart with the second year showing great declines in the welfare of the people, but picking back up slightly in the third and especially fouth year when the Rep's have been known to inject tons of money into the economy to look good in time for election.

The result is a net gain for Dems and a net loss for Reps, but voters have a much shorter memory when it comes to voting. They compair this year to last - not to four years ago, so we feel better under the Reps when we have actually lost.

[cordyc]

I like to "shock" Republicans acquaintances by stating that the US economy does better under Democrats than Republican. I like Professor Bartels data from 1948 to 2007 real gross national product grew 1.64 percent under Republican while the Democratic years resulted in 2.78 percent. Over 8 years this rate results in a yield of 9.33 percent more income per person.

The Stock market also has done better with Democrats. Ned Davis Research has done an extensive study of the actual results and is often quoted. The site below has a nifty chart to show the results of the parties and stock gains from 1901 to 2006.

http://bigpicture.typepad.com/comments/2006/10/market_gains_by_1.html

[egal]

Ah, but don't forget to exxtrapolate the obvious--that, by protecting the wealthy, the Republicans have systematically dismantled everything that enables the lower and middle classes to prosper, and the decline of those classes maes the rich suffer for all the protectionism they'e received from the Republicans.

The Republicans' concentration of the wealth at the top ensures that EVERYBODY, including the wealthy, suffers tremendously. It just takes longer for the layers of wealth to be penetrated so those at the top feel the crisis their selfish greed and nepotism has created, while the rest of us suffer for such policies all along until our destitution finally reverberates through the whole system and it all comes crashing down.

[shawshank]

Great read.

[Danny]

Thank you, Professor. You confirm my personal experience in this country, having voted first for Jimmy Carter (St. Jimmy, in my house), and having experienced the ups and downs of the middle class, including my own, under REPUBLICAN administrations, just as you describe.

Obama/Biden '08