Sunday, March 15, 2009

Whose policies do people prefer?

So if Democratic policies seem to produce so much better results for the masses than Republican policies, then why don't those Democratic economic policies dominate public opinion?

Actually, in some ways they do. Polling done in 2002 and 2004 suggested that 56% of Americans believe that the rich pay less in taxes than they should, whereas only 13% believe the rich pay too much. In contrast, 8% of Americans believe that the poor pay less in taxes than they should.1 This falls in line with the Democrats’ policy of shifting the tax burden towards those at the top of the economic food chain, and is in opposition to the Republicans’ history of repeatedly lowering taxes on the rich.

At the same time, public support for an increase in the minimum wage has remained above 60% for over 40 years, with many polls showing support as high as 85%.2 Once again, this is in full agreement with consistent Democratic policies and in diametric opposition to the Republican platform.

Unfortunately, voters are not always able to match these goals to actual policy.

While the overriding effects of the Bush tax cuts in 2001 and 2003 were to further reduce the tax burden for those wealthy taxpayers that most people agreed were paying too little, public opinion was generally in favor of the measures. This was likely due to the effort to paint the policies as a tax cut for “everybody”. Unfortunately, this was nowhere near the truth. For example, the average tax cut in 2001 for a person in the top 1% of the income spectrum was 100 times higher than the average break for those in the bottom 60%, and by 2010 over half of the total savings will be going to those in the top 1%.3

Even when low-income voters aren't decieved about legislation, legislators have shown a tepid response to public opinion on that end of the economic scale. Larry Bartels examined the results of voter polls in all 50 states after the Senate elections of 1988, 1990, and 1992, and compared them to the actual voting records of each state’s corresponding Senators from 1989 through 1994.4 He found that when looking at each Democratic senator, the opinions of the lowest 30% of wage-earners in their state (all those who earned less than $30,000/year in 2005 dollars) had no influence at all on the senator's actions. The opinions of the voters in their state in the upper 30% and middle 40% carried approximately equal weight. Republicans senators were even more slanted towards the wealthy, matching the views of the upper 30% of their constituency twice as much as the middle 40%, and once again not being influenced at all by the views of the bottom 30%.

On certain important issues, especially during the Bush administration, the imbalance was even worse. The votes of senators on a proposed minimum wage increase in 1989 perfectly reflected the views of the upper 30% of the voters in their respective states, with no weight at all given to the rest of the voters. On the 1991 proposal to extend and increase civil rights protections, senators gave a very small weight to the voters in the middle 40%, but once again almost perfectly matched the views of the upper 30% of their constituencies. In fact, there was not one significant bill during that first Bush administration in which the views of the richest 30% of the population did not dominate the rest of the population in determining the senators’ votes.

Bartels isn‘t isolated in finding this relationship between the decisions of politicians and the views of their wealthiest constituents. In a broader 2005 study on the policy preferences of U.S. citizens, Martin Gilens found that, “influence over actual policy outcomes appears to be reserved almost exclusively for those at the top of the income distribution.”5 The lack of response to the concerns of the majority of the population caused Gilens to add that, “representational biases of this magnitude call into question the very democratic character of our society.”

So why is this happening, and what do we do? It is true that lower-income Americans tend to vote less than higher-income Americans, but the difference is small enough (about 25%) that it could not account for an almost total focus on the upper classes.6 A somewhat greater gap exists between the rich and the poor in their knowledge of policy decisions and therefore their chances of mounting a response to specific legislation.7 But the most likely explanation is the significantly greater access that the upper classes have to elected officials and other power-brokers, and the enormous historical gap in campaign contributions between the rich and the poor.8 Politicians will not reflect the will of the people if they do not hear the will of the people, and they will most listen to those people who are providing them with the funding to continue their stay in power.

What are we to do? Stand in the gap and advocate for the poor. Speak out about their needs however you can, wherever you can, whenever you can. Let our politicians know what we stand for and where true justice lies. Educate the poor so that they are able to stand up for their own causes. Encourage Christian politicians to follow their faith rather than their sources of money. And never, ever let others use money and the power it brings to cloud our own judgment.



"We can have a democratic society or we can have great concentrated wealth in the hands of a few. We cannot have both."
- Louis Brandeis9


"What differentiates oligarchy and democracy is wealth or the lack of it. The essential point is that where the possession of political power is due to the possession of economic power or wealth, whether the number of persons be large or small, that is oligarchy, and when the unpropertied class have power, that is democracy."
- Aristotle10



"In a political system where nearly every adult may vote but where knowledge, wealth, social position, access to officials, and other resources are unequally distributed, who actually governs?"
- Robert Dahl11



"Unless formally restrained, the richest citizens [in the Italian republics] tended to use their privilege to molest fellow citizens with impunity and direct the workings of government toward their own benefit rather than toward that of the general citizenry...If a popular government or republic is not to veer dangerously toward an unaccountable oligarchy, natural or not, institutional affirmative action for common citizens is necessary."
- John McCormick12



All material in this post is inspired by Larry Bartels's book Unequal Democracy

[1] 2002 and 2004 National Election Study survey
[2] Roper Center‘s iPOLL archive
[3] "Year-by-Year Analysis of the Bush Tax Cuts Shows Growing Tilt to the Very Rich,” Citizens for Tax Justice, June 12, 2002, www.ctj.org
[4] Bartels, Larry M. 2002 “Economic Inequality and Political Representation.” Paper presented at the annual meeting of the American Political Science Association, Boston.
[5] Gilens, Martin. 2005 "Inequality and Democratic Responsiveness." Public Opinion Quarterly 69: 778-796.
[6] Senate Election Study. Conducted by the National Election Studies research team. http://www.umich.edu/~nes
[7] Bartels, Larry M. 2008 Unequal Democracy: The Political Economy of the New Gilded Age. Princeton, NJ: Princeton University Press, pg 277.
[8] Verba, Sidney, Kay Lehman Schlozman, and Henry E. Brady. 1995. Voice and Equality: Civic Voluntarism in American Politics. Cambridge, MA: Harvad University Press, pgs 194, 565.
[9] Phillips, Kevin. 2002. Wealth and Democracy: A Political History of the American Rich. New York: Broadway Books, pg 418.
[10] Aristotle. Politics, T.A. Sinclair, trans. (Harmondsworth: Penguin Books, 1962), books II and III, 117.
[11] Dahl, Robert. 1961. Who Governs? Democracy and Power in an American City. New Haven, CT: Yale University Press, pg 1.
[12] McCormick, John P. 2006 "Contain the Wealthy and Patrol the Magistrates: Restoring Elite Accountability to Popular Government." American Political Science Review 100: pgs 147, 161.

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Thursday, March 05, 2009

Democrats or Republicans: Who is better for the economy?

Ever since Reagan, there has been a serious conversation in this country about whether its economic policies should focus on helping everyone, or whether we should focus on the largest wealth-generators at the top of the income brackets. This used to be a debate in my head too – I honestly believed that making the rich prosperous could possibly be the best step towards making the poor prosperous. But I believe that I've seen enough evidence now that I can say this very clearly:

The policy of looking out for everyone has worked out much better for everybody than the policy of looking out for the rich. All available data points in favor of this conclusion.

Here are some of the simpler numbers:

Unemployment under Democratic presidents since WWII: 4.6%
Unemployment under Republican presidents since WWII: 6.3%1

Real income growth under Democratic presidents since WWII: 2.8%
Real income growth under Republican presidents since WWII: 1.6%2


If you like data, there’s a lot more where that came from.



Here are Larry Bartels’s breakdowns that show what effect differing policies have had on those at different income levels.

Between 1948 to 2005, 26 years of Democratic presidencies showed the following real income gains (lagging impact by 1 year after the president took office):3*

20th percentile: 2.6±0.8%
40th percentile: 2.5±0.6%
60th percentile: 2.5±0.5%
80th percentile: 2.4±0.5%
95th percentile: 2.1±0.7%


In that same time frame, the 32 years of Republican presidencies showed the following results (with the same 1 year impact lag):

20th percentile: 0.4±0.6%
40th percentile: 0.8±0.5%
60th percentile: 1.1±0.4%
80th percentile: 1.4±0.4%
95th percentile: 1.9±0.5%

* According to Bartels, the 1-year impact lag is consistent with macroeconomic evidence regarding the timing of economic responses to monetary and fiscal policy changes, and results in a 4-5% better fit to the data than 0, 2, 3, 4, or 5-year lags.


The devil’s advocate in me would want to play the middle, say that those Democratic gains are only possible because of what the Republicans did before them. In the short-term, however, that is certainly not true. Whenever you have consecutive Democratic administrations, the economic strength was emphasized. Whenever you have consecutive Republican administrations, the economic disparity got worse.

Looking only at the 14 years of Democratic terms that followed Democratic terms:

20th percentile: 3.0±1.2%
40th percentile: 2.8±0.9%
60th percentile: 2.9±0.8%
80th percentile: 2.6±0.8%
95th percentile: 2.3±1.1%


Now, looking only at the 16 years of Republican terms that followed Republican terms:

20th percentile: 0.2±0.6%
40th percentile: 0.5±0.6%
60th percentile: 1.0±0.6%
80th percentile: 1.3±0.6%
95th percentile: 2.0±0.7%


The longer that Democrats stay in office, the better the situation gets for the majority. The longer that Republicans stay in office, the more the difference between the rich and the poor grows.

When Bartels did this study (found in Unequal Democracy), he tried to see whether a few outliers could explain the results. Yet he found that:

significant partisan differences continue to show even when any 1 or 2 administrations are omitted, if years on both ends of the spectrum are ignored, or if election years and/or transition years are ignored.


What does this all have to do with today? Right now we are experiencing the consequences of having Republican presidents for 20 of the last 28 years. The discrepancy between the rich and the poor has now grown the to highest levels since before the Great Depression. Over 80% of the income growth since 1980 has gone to the top 1% of income-earners, who now control 22% of all income (and half of that is controlled by the top 0.1%).4 The average real income of the top 0.1% has more than tripled since 1980, from $400,000 to $1.4 million in 2005 dollars, and the average real income of the top 0.01% has gone up by a factor of five, from $1.2 million to $6.1 million, whereas the average real income of the middle class and the working poor has remained virtually unchanged.

Why hasn’t the growth in the upper sectors helped the average American? It’s all about priorities. In the 16 years between 1989 and 2005, sales growth in the luxury retail industry averaged over 10%/year.5 At the same time, the living standards of poor children in American ranked 12th out of 13 rich democracies, approximately 20% below Canada and France and 35% below Norway, despite the fact that America had greater overall wealth than any country on that list.6

Continuing to play Reaganomics, cutting the taxes of the rich, promoting business at the expense of the average citizen, and relaxing regulations in order to increase their ability to make wealth, did not help the poor. Cutting government spending and removing the support networks for the poor did not help the poor. The focus on keeping inflation down over striving for full employment did not help the poor. Doubling the wages of CEO’s over the course of ten years while the real value of the minimum wage continuously dropped did not help the poor.

When I used to listen to conservative talk radio and almost trust them (I’m talking Praeger and Medved and Hewitt, not the total crazies), the economic arguments were believable. I could imagine a world where free competition created the most prosperity for all. I could imagine how a low minimum wage and minimal workers’ rights might enable businesses to create more jobs. I could imagine how low taxes on the rich might create greater investment power that trickled down to the poor. I could even imagine that now. But the facts show that that’s not the world we live in. Eight years of Reagan and twelve years of Bushes have given us a much different picture. During George W. Bush’s first term alone, real incomes of middle-class taxpayers decreased 1% and real incomes of the working poor decreased 3%. Yet the 99th percentile saw a 7% increase in real income, and among the 99.99th percentile it was 18%!7 Every president redistributes wealth to some degree. The complaint Republicans have right now is with who it’s being distributed too.

It’s long past time that the pendulum swung back to the 99% on the bottom.


[1]Piketty, Thomas, and Emmanuel Saez. 2003. "Income Inequality in the United States, 1913-1998." Quarterly Journal of Economics 118: table A4. Updated data listed here can be found on Saez's website The numbers listed are only through the end of 2005 and do not factor in the significant increase in unemployment that occurred in the final years of the Bush administration
[2]Calculated by Bartels from Census Bureau Historical Income Tables. These numbers are also only through the end of 2005 and do not factor in the significant decrease in real income growth that occurred in the final years of the Bush administration
[3]Census Bureau Historical Income Tables
[4]Piketty and Saez 2003 (updated in 2008)
[5]Anna Bernasek, "The Rich Spend Just Like You and Me," New York Times, August 6, 2006, BU 4.
[6]Osberg, Lars, Timothy M. Smeeding, and Jonathan Schwabish. 2004. "Income Distribution and Public Social Expenditure: Theories, Effects, and Evidence" pgs. 826-834 in Kathryn M. Neckerman, ed., Social Inequality
[7]Piketty and Saez 2003 (updated in 2008)

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Sunday, March 01, 2009

Posting again

I'm going to start posting regularly on a wide range of poverty issues. I want to start off with a quote I read today.

Today there is a heretical teaching that is an absolute plague in American Christianity. It is the dogmatic and unexamined credo that whatever we gain is ours to do with as we please. If we earn $50,000, how we spend it is our private affair. Perhaps we will concede that it is legitimate for the church to talk about tithing, but the other 90 percent is none of its business.

How utterly self-consumed and provincial! In no way can we twist the Scripture to justify such a belief. Out lifestyle is not our private affair. We dare not allow each person to do what is right in his or her own eyes. The Gospel demands more of us: it is obligatory upon us to help one another hammer out the shape of Christian simplicity in the midst of modern affluence. We need to love each other enough to sense our mutual responsibility and accountability. We are our brother's (and our sister's) keeper.


Richard J. Foster, Freedom of Simplicity

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