Cross-posted at Reality Window
Alan Blinder, a professor of economics and public affairs at Princeton and former vice chairman of the Federal Reserve, has written up a history lesson for us all in the New York Times. And it blows the old canard about Republicans being better for the economy and taxes, all to hell.
How, you wonder. Follow me below the fold. |
Check this out:
"... few are aware of two important facts about the post-World War II era, both of which are brilliantly delineated in a new book, "Unequal Democracy," by Larry M. Bartels, a professor of political science at Princeton. ... I call the first fact the Great Partisan Growth Divide. Simply put, the United States economy has grown faster, on average, under Democratic presidents than under Republicans.
He explains that from 1948 to 2007 Republicans held the White House for 34 years while the Dems held it for 26 years. During those periods, the average annual growth of real GNP was 1.64% per capita under Repubs vs. 2.78% under Democrats.
What does that really mean?
That 1.14-point difference, if maintained for eight years, would yield 9.33 percent more income per person, which is a lot more than almost anyone can expect from a tax cut.
There's a second big historical fact which he labels "the Great Partisan Inequality Divide" and which "is the focus of Professor Bartels's work".
It is well known that income inequality in the United States has been on the rise for about 30 years now -- an unsettling development that has finally touched the public consciousness. But Professor Bartels unearths a stunning statistical regularity: Over the entire 60-year period, income inequality trended substantially upward under Republican presidents but slightly downward under Democrats, thus accounting for the widening income gaps over all. And the bad news for America's poor is that Republicans have won five of the seven elections going back to 1980.
The Great Partisan Inequality Divide is not limited to the poor. To get a more granular look, Professor Bartels studied the postwar history of income gains at five different places in the income distribution.
. . . . . . . . . . . . . . . . . 
Mr. Blinder goes on to explain the chart at the right above which shows that for those families under the 95th percentile, which roughly equates to those earning less than $180,000 a year which is most of the US wage-earning population, the Republicans have most definitely not been the wise choice. For families at the 20th percentile, "eight years of growth at an annual rate of 0.43 percent increases a family's income by just 3.5 percent, while eight years of growth at 2.64 percent raises it by 23.2 percent."
That's a huge difference. Those families would be earning over 20% more at the end of 8 years under a Democratic administration. The majority of our population would be in a more stable position economically and that has great impact on our future economic growth and national security.
We've just seen 8 years of Republican administration destabilize the finances of the majority of American families. And yes, it has threatened our nation's economic and national security as well as our ability to deal with global economic ups and downs. Mr. Blinder concludes:
The two Great Partisan Divides combine to suggest that, if history is a guide, an Obama victory in November would lead to faster economic growth with less inequality, while a McCain victory would lead to slower economic growth with more inequality. Which part of the Obama menu don't you like?
So tell me again.
How is it that Republicans are better for people's pocketbooks?
The answer is: they're not.
UPDATE: For those who may be curious, here's Professor Bartel's book on Amazon. And here is a Washington Post book review by Dan Balz.
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