The Rich Get Richer

Yesterday's New York Times reported on a new Congressional Budget Office report that the top one percent of earners in the United States doubled their share of the nation's income since the late 1970's.

Unlike some economic statistics, this is a win-lose proposition. The share of the nation's income received by the lower 99% has decreased by 9%.

From the NYT account, specific increases and reductions in the share of national income were as follows:


"¶ The share of after-tax household income for the top 1 percent of the population more than doubled, climbing to 17 percent in 2007 from nearly 8 percent in 1979.
¶ The most affluent fifth of the population received 53 percent of after-tax household income in 2007, up from 43 percent in 1979. In other words, the after-tax income of the most affluent fifth exceeded the income of the other four-fifths of the population.
¶ People in the lowest fifth of the population received about 5 percent of after-tax household income in 2007, down from 7 percent in 1979.
¶ People in the middle three-fifths of the population saw their shares of after-tax income decline by 2 to 3 percentage points from 1979 to 2007."

Why did this happen? The rules changed to benefit the already wealthy.

Presidential candidate William Jennings Bryan described the process in 1896:

"There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it."

What happened after 1979? The political rise of "supply-side," "trickle-down" economic actions. A kind of reverse Robin Hood policy. This was not new. Such thinking was plainly evident to William Jennings Bryan in 1896. And the results were foreseeable.