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Thu Apr 12, 2012, 09:57 AM

Growth of Income Inequality Is Worse Under Obama than Bush

Growth of Income Inequality Is Worse Under Obama than Bush

Matt Stoller is a fellow at the Roosevelt Institute. You can follow him on twitter at http://www.twitter.com/matthewstoller

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. His advisors, like Gene Sperling, are giving speeches talking about the need for manufacturing. A common question in DC is whether this populist pose will help him win the election. Perhaps it will. Perhaps not. Romney is a weak candidate, cartoonishly wealthy and from what I’ve seen, pretty inept. But on policy, there’s a more interesting question.

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 table, from Emmanuel Saez (h/t Ian Welsh). Check out those two red circles I added.



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.

The data set is excellent, it’s from the IRS and it’s extremely detailed. This yawing gap of inequality isn’t an accident, and it’s not just because of Republicans. It’s a set of policy choices, as Saez makes clear in his paper.

- more -

http://www.nakedcapitalism.com/2012/04/growth-of-income-inequality-is-worse-under-obama-than-bush.html

Does anyone doubt that Matt Stoller is a hack simply working toward tearing down Democrats in order to help the RW case (http://www.democraticunderground.com/100287685)

I mean, Bush causes the worst economic crisis in more than 70 years, and the effects of that crisis are Obama's fault.

Who does Stoller believe are the millions who lost jobs during the crisis, the top one percent?

Bush claims credibility on taxes, economic policy
http://www.democraticunderground.com/1002542319

Stoller likely agrees with Bush.


37 replies, 4362 views

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Arrow 37 replies Author Time Post
Reply Growth of Income Inequality Is Worse Under Obama than Bush (Original post)
ProSense Apr 2012 OP
TBF Apr 2012 #1
SammyWinstonJack Apr 2012 #17
TBF Apr 2012 #20
Justice4allofus Apr 2012 #2
ProSense Apr 2012 #3
Karmadillo Apr 2012 #21
whatchamacallit Apr 2012 #4
bluestate10 Apr 2012 #24
Karmadillo Apr 2012 #5
LineLineReply K
Gold Metal Flake Apr 2012 #7
ProSense Apr 2012 #8
Karmadillo Apr 2012 #9
stevenleser Apr 2012 #10
Karmadillo Apr 2012 #11
stevenleser Apr 2012 #12
Karmadillo Apr 2012 #13
stevenleser Apr 2012 #16
Karmadillo Apr 2012 #19
bluestate10 Apr 2012 #26
ProSense Apr 2012 #35
bluestate10 Apr 2012 #25
Karmadillo Apr 2012 #36
uponit7771 Apr 2012 #6
BlueIris Apr 2012 #18
Egalitarian Thug Apr 2012 #14
LineLineNew Reply .
ProSense Apr 2012 #29
begin_within Apr 2012 #15
paulk Apr 2012 #22
bluestate10 Apr 2012 #27
ProSense Apr 2012 #30
paulk Apr 2012 #32
ProSense Apr 2012 #33
bluestate10 Apr 2012 #23
RainDog Apr 2012 #28
sabrina 1 Apr 2012 #31
ProSense Apr 2012 #34
Zax2me Apr 2012 #37

Response to ProSense (Original post)

Thu Apr 12, 2012, 10:03 AM

1. It is capitalism -

the way we fix this is regulating and taxing. Remove the cuts on capital gains taxes that have been enacted over the past 30 years, remove loopholes for corporations (or a minimum tax on them - something), and no more free bailouts. Any bank or energy company that is "too big to fail" needs to be nationalized if tax payers are picking up the tab.

My preference would be to transition to some sort of socialism, but at the very least we need to be willing to regulate and tax if we don't want to end up looking like a 3rd world country.

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Response to TBF (Reply #1)

Fri Apr 13, 2012, 11:28 AM

17. Sadly, I have absolutely NO faith in any of that happening, EVER!

I just don't see it.


Too much greed and the desire for more more more, leads me to doubt any change for the greater good will occur.


My preference would be to transition to some sort of socialism, ....


I have neighbors all around me who cringe at the thought of any sort of socialism.

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Response to SammyWinstonJack (Reply #17)

Fri Apr 13, 2012, 01:40 PM

20. The propaganda has been thick here -

and it is in the interest of the very wealthy to keep it that way. We don't have to use the word "socialism" though if that scares folks. We just talk about things they know about - housing, medical care, jobs, care for seniors, education. "Too much greed" is a result of the system - I don't think folks are that way by nature - it is the way they are rewarded in this country that trains them to want more, more, more ... YMMV of course.

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Response to ProSense (Original post)

Thu Apr 12, 2012, 10:08 AM

2. Stoller is not very bright

 

Did he even consider the possibility that the policies of one President can carry over to the next term? Did he consider what would have happened if Republicans of today wouldn't have blocked many of Obama's proposals?

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Response to Justice4allofus (Reply #2)

Thu Apr 12, 2012, 10:46 AM

3. Damn

Stoller is less popular than a racist!

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Response to ProSense (Reply #3)

Fri Apr 13, 2012, 08:28 PM

21. Damn

You sure do keep Keyboard Cat busy.

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Response to ProSense (Original post)

Thu Apr 12, 2012, 11:25 AM

4. Yes, get out ahead of it, frame the issue early

and bury it by killing the messenger. Well played. The 1% thank you for your service.

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Response to whatchamacallit (Reply #4)

Fri Apr 13, 2012, 08:56 PM

24. Good idea to attack the messenger when the messenger is a clueless arsonist. nt

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Response to ProSense (Original post)

Thu Apr 12, 2012, 11:53 AM

5. Excellent article. Thanks for posting. Stoller does a good job of analyzing Obama's approach and its

contribution to encouraging the upward flow of wealth and power.

http://www.nakedcapitalism.com/2012/04/growth-of-income-inequality-is-worse-under-obama-than-bush.html

<edit>

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.

There are many other policy fights, and the President has engaged constructively in some areas and negatively in others. He has been undermined as well as aided by his staff. And he’s just one man, heading up a franchise of thousands of other political actors. It’s been clear, though, since before he took office, that his is a consistent policy architecture on the core questions of power and wealth. In the orbit of this President, power and wealth flow upward.

more...

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Response to Karmadillo (Reply #5)

Thu Apr 12, 2012, 02:30 PM

7. K

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Response to Karmadillo (Reply #5)

Thu Apr 12, 2012, 04:35 PM

8. Here:

Banks’ preemptive strike against Dodd-Frank

By Suzy Khimm

When Deutsche Bank reorganized its U.S. operations this week in response to new banking rules, it was the latest manifestation of what both supporters and opponents of the Dodd-Frank regulatory overhaul predicted would happen: The law has pushed big banks to reorganize — to comply with the new rules on Wall Street, as well as to avoid their impact...Deutsche Bank and London-based Barclays have moved their commercial banks from their U.S. subsidiaries into their global firms to avoid new, more stringent capital requirements — even though they don’t go into effect until July 2015.

But that doesn’t necessarily mean that Dodd-Frank has fallen short of what its authors intended. By giving up its status as a U.S. bank holding company, Deutsche Bank is forfeiting its access to the Federal Reserve’s emergency lending window. Doing so effectively cuts itself out of any future government-backed bailout in the event of a crisis. One of the overarching goals of Dodd-Frank was limiting taxpayer exposure to bailing out big firms.

“They’re saying, ‘If this is the price we have to pay, we’re going to shed that protection — we’re not too big to fail,’ ” said University of Maryland law professor Michael Greenberger, a former regulator at the Commodity Futures Trading Commission. Deutsche Bank was the Fed’s second-largest discount-window borrower during the 2008-2009 crisis.

<...>

The Volcker Rule, which is scheduled to take effect in July, also prohibits banks from providing more than 3 percent of capital in private-equity or hedge funds, prompting banks to spin off those operations as well. Other Dodd-Frank rules recently prompted insurance giant MetLife to sell its FDIC-insured banking unit, which would have subjected the firm to greater regulation and scrutiny by the Federal Reserve.

- more -

http://www.washingtonpost.com/business/economy/banks-preemptive-strike-against-dodd-frank/2012/03/23/gIQATnUmWS_story.html


Regulators Move Closer to Oversight of Nonbanks

By ANNIE LOWREY

WASHINGTON — The Financial Stability Oversight Council, the country’s top financial regulatory body, moved closer on Tuesday to increasing its oversight of nonbank financial institutions, like hedge funds, private equity firms and insurers.

The 10-member council, headed by the Treasury secretary, Timothy F. Geithner, voted unanimously to adopt a rule that will designate some of those firms as “systemically important financial institutions,” and put them under stronger regulatory supervision.

The rule “is an important tool provided in Dodd-Frank for extending the perimeter of transparency, oversight and prudential supervision over parts of the financial system that can be a particularly important source of credit to the economy and potentially important source of risk,” Mr. Geithner said during the 10-minute meeting.

The oversight council will now begin a three-part process of determining which firms are subject to additional scrutiny from regulators. The Dodd-Frank financial regulatory reform law, which passed in the summer of 2010, automatically put banks with more than $50 billion in assets under stricter standards.

- more -

http://www.nytimes.com/2012/04/04/business/economy/regulators-move-closer-to-scrutinizing-nonbanks.html


SEC Begins Big Dig Into Hedge Fund Data

By JULIET CHUNG

The top U.S. securities regulator has started to sift through a trove of new data on the nation's largest hedge funds and other private money managers to help identify firms whose behavior might pose the greatest risks to their investors.

<...>

About 1,400 new firms, including Moore Capital Management and Tiger Global Management, disclosed new details on their funds, investors, brokers and other facts ahead of a March 30 deadline.

The Dodd-Frank financial overhaul included a provision requiring hedge-fund, private-equity and other private-fund advisers of a certain size to register with the SEC, in a bid to bring more transparency to one of the more secretive corners of Wall Street. The SEC is using the new disclosures to beef up the data it streams through its analytics to look for signs of trouble.

<...>

While many of the most high-profile hedge-fund advisers have long registered voluntarily with the SEC, in part to attract money from institutional investors, others historically had relied on an exemption for advisers with fewer than 15 clients, or funds. Dodd-Frank did away with the 15-client exemption.

http://online.wsj.com/article/SB10001424052702304587704577335821710184722.html?mod=googlenews_wsj

More than 200 reasons to re-elect President Obama
http://www.democraticunderground.com/1002548774

In case you missed it: Good moves by the Obama administration
http://www.democraticunderground.com/1002540300

16 million: number of Americans who become eligible for Medicaid under the health care law
http://www.democraticunderground.com/1002531684

Why Progressives Should Support Obama (Review of "The Obama Question")
http://www.democraticunderground.com/1002546093

Barack Obama Had a Pretty Damn Good Presidency
http://www.democraticunderground.com/1002546093

Good stuff!

You're welcome!

Obama 2012!

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Response to ProSense (Reply #8)

Fri Apr 13, 2012, 10:37 AM

9. Thank you for the linkorrhea instead of an attempt to respond to Stoller's balanced criticism

of Obama. It would have been painful to watch and we're much better off without it.

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Response to Karmadillo (Reply #9)

Fri Apr 13, 2012, 10:44 AM

10. This is something you see in any serious economic downturn.

If you had a net worth of 40K, it can be wiped out to zero. If you had a net worth of 50 million and it goes down to 30 million, your percentage of the pie is infinitely higher than the middle class person whose net worth is zero.

It's basic mathematics.

Large swaths of the poor and middle class are completely wiped out in a major recession or depression. Since the rich are invariably hurt but not wiped out, it skews the ratios of which group has what percentage of wealth.

The truth is much simpler than what Stoller or anyone else with an agenda can write.

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Response to stevenleser (Reply #10)

Fri Apr 13, 2012, 10:51 AM

11. It's especially simple if you don't address the point Stoller is making in the article.

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Response to Karmadillo (Reply #11)

Fri Apr 13, 2012, 11:08 AM

12. None of his points contradict mine. nt

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Response to stevenleser (Reply #12)

Fri Apr 13, 2012, 11:16 AM

13. None of your points address his.

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Response to Karmadillo (Reply #13)

Fri Apr 13, 2012, 11:20 AM

16. Its not necessary. Mine supercede his by taking into account why this happens in the first place. nt

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Response to stevenleser (Reply #16)

Fri Apr 13, 2012, 01:12 PM

19. LOL

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Response to stevenleser (Reply #10)

Fri Apr 13, 2012, 09:10 PM

26. Exactly. The old saying, the rich get richer, holds.

So does the highly skilled in demand fields. The issue is not why wealth gaps get larger during economic downturns but how can downturns be eliminated. The issue is how the skill gap among classes of americans can be reduced or eliminated. Anyone that follow Sirens like Stoller are lost.

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Response to Karmadillo (Reply #9)

Fri Apr 13, 2012, 10:51 PM

35. Oops

"Thank you for the linkorrhea..."

...forgot one:

Obama’s new Wall Street foes
http://www.democraticunderground.com/1002557535

"...Stoller's balanced criticism"



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Response to Karmadillo (Reply #5)

Fri Apr 13, 2012, 09:01 PM

25. The OP was ripping Stoller.

Was the intent to rip President Obama so strong that the intent of the OP got missed?

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Response to bluestate10 (Reply #25)

Sun Apr 15, 2012, 11:46 AM

36. Duh. Unless the rules have changed, I'm not required to accept the bizarro framing of the OP.

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Response to ProSense (Original post)

Thu Apr 12, 2012, 12:42 PM

6. FUDr porn

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Response to uponit7771 (Reply #6)

Fri Apr 13, 2012, 12:23 PM

18. FUDr? (Not a flame.)

I just need to be reminded what that means.

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Response to ProSense (Original post)

Fri Apr 13, 2012, 11:16 AM

14. Narrative not working out? Attack the messenger.

 


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Response to Egalitarian Thug (Reply #14)

Fri Apr 13, 2012, 09:55 PM

29. .

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Response to ProSense (Original post)

Fri Apr 13, 2012, 11:20 AM

15. But... you do know... nothing bad may be pinned on Obama!

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Response to ProSense (Original post)

Fri Apr 13, 2012, 08:39 PM

22. Roosavelt Institute is a progressive organization

I would say that character assassination is below you, except that it is one of the major tools in your propaganda arsenal.

Instead of trashing Stoller you could argue that Obama had at least pulled us back from the brink, etc. But, no - you've got to take the low road - as usual.

Obama seems to have at last woken up to this income inequality thing - let's all hope it isn't just more campaign rhetoric. In the meantime we can thank articles like this for bringing it to his attention - or at least getting enough people pissed off about it that it's HAD to come to his attention.

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Response to paulk (Reply #22)

Fri Apr 13, 2012, 09:25 PM

27. Income gaps become larger during severe downturns.

Some of the same people pointing to the gap now thought nothing of voting for Nader in 2000, costing the nation dearly with their clouded reasoning. The question that I have is will the same people cost the nation even more by making it possible for an empty suit like Romney to get elected?

The issue isn't that income and wealth gaps increase during the downturns. That correlation is well established. The deeper the downturn, the bigger the disparity. It is easy enough to point and cry about the gap. But the more courageous, practical and effective path is to work toward a society where economic gaps are minimized or eliminated. President Obama has and is working on societal changes that will stabalize the nation's energy supply and upskill poor and middle class americans. President Obama is being attacked and stalled bya an out of control republican majority in the House and a rightwing controlled Supreme Court. Instead of providing Mitt Romney political talking points, however inaccurate they are, people like Stoller and his adherents can be out fighting their asses off to elect more democrats to take back the House and increase control of the Senate, and take back control of more state houses.

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Response to paulk (Reply #22)

Fri Apr 13, 2012, 09:55 PM

30. Your comment

I would say that character assassination is below you, except that it is one of the major tools in your propaganda arsenal.

Instead of trashing Stoller you could argue that Obama had at least pulled us back from the brink, etc. But, no - you've got to take the low road - as usual.

Obama seems to have at last woken up to this income inequality thing - let's all hope it isn't just more campaign rhetoric. In the meantime we can thank articles like this for bringing it to his attention - or at least getting enough people pissed off about it that it's HAD to come to his attention.

...makes no sense whatsoever.

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Response to ProSense (Reply #30)

Fri Apr 13, 2012, 10:21 PM

32. LOL!

of course you would say that!

deflect and denigrate.

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Response to paulk (Reply #32)

Fri Apr 13, 2012, 10:26 PM

33. No

It really doesn't make sense. You should rethink the premise.

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Response to ProSense (Original post)

Fri Apr 13, 2012, 08:52 PM

23. You are on target.

Comparisons like the kind that the author made are disengenious, if not outright lies. Sadly, some on DU that incessantly attack President Obama use similar tactics, distrorting any information that would contradict their claims while attacking anyone that shine the truth on their distrotions. The fact is President Obama inheritedan economy that had fallen off a cliff. Bush II inherited an economy that was running surpluses. The tech bubble burst that Bush II faced is peanuts when compared to the widespread system meltdown that President Obama inherited and had to work to reverse.

It is lost on many here that call themselves progressives on DU, but in bad economies, people that are wealthier to begin with, or are highly educated and have in demand skills do better than people that don't have those advantages. Those people are wealthier even at the start of downturns. It is logical that given their incoming advantages and advantages during downturns, people that have advantages will open gaps on those that don't have those advantages. The situation is not indicative of what President Obama has done and to imply it is smacks of bald faced lying. President Obama has consistently worked on the one area that can close economic disparities, education, both academic and trade education. The issue that progressives and democrats in general must square up to is will they fight to reelect President Obama and continue progress toward a stable future where the middle class and poor can improve their lot, or will they assist a person like Romney, a man who won't disclose his policies until after elected, or his 2011 income taxes until just before or after the election.

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Response to ProSense (Original post)

Fri Apr 13, 2012, 09:32 PM

28. Real issue: the govt needs to respond to the crisis among the middle & working classes

what policies need to be implemented to help people move beyond the financial crash of 2007/2008?

not neo-liberal ones, as we also know from the outcome of Clinton policies that were too much like Republican policies.

we have such a nutcase class of Republicans now, however, I don't know how our govt can deal with this issue. It's horrible to see a legislature that spends its time creating laws to limit women's health care options, as though that's their version of a jobs program.

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Response to ProSense (Original post)

Fri Apr 13, 2012, 10:07 PM

31. Do you know anything about Matt Stoller?

Lol, I never liked him actually. If we had had this discussion a few years ago I think you would have been a Matt Stoller supporter.

He IS a political hack, a DLCer, a self-described 'pragmatist'.

I never saw why anyone ever paid any attention to anything he had to say, but the Dem Party seemed to like him.

Like all political operatives they are best ignored, even when they seem to agree with you, imo.

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Response to sabrina 1 (Reply #31)

Fri Apr 13, 2012, 10:44 PM

34. LOL!

"Lol, I never liked him actually. If we had had this discussion a few years ago I think you would have been a Matt Stoller supporter."

No!

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Response to ProSense (Original post)

Sun Apr 15, 2012, 11:49 AM

37. Oh, poppy cock.

 

Not a shred of truth in this.
Additionally, Obama is trying to turn around 40 years of injustice in private wealth.

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