Krugman on Inequality
September 20th, 2006,This has sat on my desk for a while, but it’s too important not to post. In August Paul Krugman published a column in the New York Times about growing inequality in this country. He described the period from 1980 to the present as “The New Gilded Age.” He wrote that between 1980 and 2004, “real wages in manufacturing fell 1 percent, while the real income of the richest 1 percent - people with incomes of more than $277,000 in 2004 - rose 135 percent.”
Here’s more:
…since 1980 the U.S. political scene has been dominated by a conservative movement firmly committed to the view that what’s good for the rich is good for America. Sure enough, the rich have seen their incomes soar, while working Americans have seen few if any gains.
By the way: Yes, Bill Clinton was president for eight years. But for six of those years Congress was controlled by hard-line right-wingers. Moreover, in practice Clinton governed well to the right of both Eisenhower and Nixon.
Now, this chronology doesn’t prove that politics drives changes in inequality. There were certainly other factors at work… But it seems likely that government policies have played a big role in America’s growing economic polarization — not just easily measured policies like tax rates for the rich…, but things like the shift in Labor Department policy from protection of worker rights to tacit support for union-busting.
And if that’s true, it matters a lot which party is in power — and more important, which ideology. For the last few decades, even Democrats have been afraid to make an issue out of inequality, fearing that they would be accused of practicing class warfare and lose the support of wealthy campaign contributors.
That may be changing. Inequality seems to be an issue whose time has finally come, and if the growing movement to pressure Wal-Mart to treat its workers better is any indication, economic populism is making a comeback.
Note: Most of Krugman’s column is available at the Economist’s View blog. The full text is available for subscribers only at the New York Times Select.