Larry Bartels’s new book Unequal Democracy: The Political Economy of the New Gilded Age helps explode some persistent myths about income inequality. We are frequently told that inequality–even the extreme growth in inequality witnessed over the past 30 years–is an inevitable concomitant of globalization, or is necessary for economic growth, or can’t be remedied by politics. Bartels’s work complements the growing consensus–led by people like David Cay Johnston, Jacob Hacker, Stephen Gosselin, Barbara Ehrenreich, and Robert Frank, among many others–that all these complacent contentions are not merely unsupported, but actually reverse the true causes and effects at work. Political change has accelerated US inequality–and only political change can address it.
This quote doesn’t do Bartels’s book justice, but it discloses one foundation of his argument:
[T]he real incomes of middle-class families have grown twice as fast under Democrats as they have under Republicans, while the real incomes of working poor families have grown six times as fast under Democrats as they have under Republicans. These substantial partisan differences persist even after allowing for differences in economic circumstances and historical trends beyond the control of individual presidents. . . .
[E]scalating in equality is not simply an inevitable economic trend—. . .a great deal of economic in equality in the contemporary United States is specifically attributable to the policies and priorities of Republican presidents. . . . .Voters’ seemingly straightforward tendency to reward or punish the incumbent government at the polls for good or bad economic performance turns out to be warped in ways that are both fascinating and politically crucial.
Insights like this should not be news–one need only to look at how lopsidedly the tax cuts of 2001 and 2003 helped the very wealthy in order to see real partisan differences in attitudes about inequality. But it turns out that the same political ignorance that libertarians like Ilya Somin and Bryan Caplan have been complaining about turns out to be quite helpful to their fiscal strategy: