Friday, October 31, 2014

Income Inequality Is Real, Destructive And Attributable To Unbridled Capitalism. Shhh!

President Obama has spent the past few weeks reminding voters all over the country that the economy is on the mend. "By almost every economic measure, we are better off today than we were when I took office," he said last month, a tribute to President Reagan's famously effective campaign slogan.

Obama is right. Home prices are up, stock prices are way up, and businesses keep on hiring. The economy is in the longest period of uninterrupted job growth ever. You might think that Thursday's quarterly report from the Bureau of Economic Analysis would bolster his case further. Gross domestic product grew a reasonable 3.5 percent last quarter, and while there were some worrisome points in the data, things certainly could be much worse.

If you have to go around telling people that they're better off, though, then you have a problem. Obama's problem is that recent economic growth has largely benefited the very rich, while median incomes and wages have hardly grown. That is, the middle class is actually worse off than when Obama took office. Only 42 percent of Americans approve of his handling of the economy, according to a new poll by The Washington Post-ABC News.
The reasons that the United States is becoming a less equal country are still being debated, and whatever they are, it's clear Americans are frustrated that they are not broadly enjoying the fruits of economic growth. Obama stopped talking about economic inequality this year, as polling data showed that the topic made people uncomfortable. This is America, after all.

But as Obama's approval ratings show, very few of us are comfortable with the current environment. Rather, voters are insisting on shared growth, and Obama is not longer openly espousing it. Even if talking too loudly about inequality might not be a winning strategy at the polls, enacting policies that actually reduce it will be. Democrats and Republicans alike should keep that point in mind as they formulate their agenda for the next two years.

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