Obamanomics: Rich Get Richer, Everyone Else Poorer
Posted 04/24/2013 06:59 PM ET
When President Obama first ran in 2008, he claimed his economic policies would "foster economic growth from the bottom up and not just from the top down." He said he'd put in place "an immediate rescue plan for the middle class" and would end the "tired, worn-out, trickle-down ideologies we've been seeing for so many years."
Obama got all he wanted in his first two years in the White House, when Democrats had solid control of Congress — a massive stimulus, auto industry bailouts, temporary middle class tax cuts, vast new regulations on businesses and ObamaCare.
But his policies produced the exact opposite of what he'd promised. The latest evidence is a Pew Research Center report out this week, which shows that only the rich have made gains under Obama, while everyone else has fallen further behind.
Using Census data on net worth, the Pew report found that from 2009 to 2011, the richest 7% of Americans saw their net worth climb an average $697,651 — equal to a 28% gain.
The rest of the country saw their net worth drop an average $6,079 — equal to a 4% loss.
As a result, far from making the country more equal, Obama's policies have produced a greater concentration of wealth, with the share of wealth held by the top 7% rising to 63% in 2011, up from 56% in 2009, Pew found.
Pew said this disparity is a result of stocks and bonds rallying over these years, while the housing market remained flat.
But several other indicators show the same trend under Obama — the rich getting richer and the poor getting poorer.
The Census Bureau's latest report on household income, for example, found that in 2011 the wealthiest 20% of households saw their average income climb 2%, while every other income group suffered losses.
Since Obama took office, the average income of the poorest 20% of households fell nearly 8% to levels last seen in the Reagan era.
In addition, the Gini index, which measures income inequality, has climbed steadily under Obama, after remaining flat under President Bush.
Meanwhile, higher paying jobs lost during the recession are being replaced by lower paying jobs in the Obama recovery, which hurts the middle class.
And the sluggish job market during Obama's recovery has left a massive pool of long-term unemployed, whose ability to get a job diminishes month by month. That, in turn, has led to millions giving up looking for work altogether, or taking a part-time job to help make ends meet.
Sentier Research, which tracks monthly median household income, finds that incomes dropped more during Obama's recovery than during the recession itself, and are still down 8% from when Bush left office.
What's more, throughout the Obama recovery, the poverty rate kept climbing, food stamp enrollment continued to skyrocket, and millions left the labor market altogether to go on permanent disability.
There's no mystery why all this is happening. Obama's economic policies — increasingly burdensome regulations and the threat of ObamaCare, higher taxes on investors, a misguided Keynesian stimulus, and massive debt — have suffocated what should have been a strong recovery, leaving an economy in which only the wealthy can make gains while every one else slips further behind.
The real mystery is why Obama's dismal economic results and the need for a serious course correction aren't getting the public attention they deserve.
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