Suppose you fell asleep in October and just woke up, like Rip Van Winkle, this afternoon. Now suppose you were handed a transcript of today's inaugural speech, with Joe Biden's boilerplate greeting redacted, and had to figure out who gave it. Unless you were exceptionally thick, you’d know about four or five sentences in. The giveaway would be the statement, “What makes us exceptional—what makes us American…,” followed by these words from the Declaration of Independence: “We hold these truths to be self-evident, that all men are created equal….” Republican presidents talk about freedom. Democratic presidents talk about equality.
Actually, Democratic presidents do more than talk about it. The Vanderbilt political scientist Larry Bartels looked at income growth for families at various income percentiles under Democratic and Republican presidencies. His calculations covered the years 1948 to 2005. The graphic artist Catherine Mulbrandon of VisualizingEconomics.com took Bartels’ data and turned it into a chart that illustrates very dramatically why, if you care at all about income inequality, you should vote Democratic. Take a look at it here. (You can also take a look at it in the paperback edition of my book The Great Divergence: America's Growing Inequality Crisis and What We Can Do About It—updated with a new afterword!—which hits the stores next week. Mulbrandon did the illustrations.)
What Bartels found was that under Democrats, income growth was fastest for those at the bottom of the income distribution and tapered off as you moved up the income distribution. Under Republicans, the precise opposite occurred. Income growth was fastest for those at the top of the income distribution and tapered off as you moved down the income distribution. Another striking feature of the Bartels chart was that overall economic growth was greater under Democrats than under Republicans.
Obama’s first term represents a break from that tradition. Under Obama, income growth has been confined almost entirely to those at the top of the income distribution, continuing a pattern that began under President George W. Bush. As of 2010, 93 percent of the economic recovery (which began the year before) was going into the pockets of the top 1 percent. As of 2011, median income had fallen 8.1 percent since 2007. In 2011 the Gini index, which measures broad-based income inequality, saw its biggest one-year rise since 1993. When you factored in government taxes and benefits and private employment benefits like health insurance, median income was basically flat, but that’s nothing to write home about. And of course overall economic growth has been underwhelming.
Obama’s second inaugural speech can be read as a sort of pledge that he’ll do better on the equality front during his second term.
“While these truths may be self-evident,” Obama said of the Declaration, “they have never been self-executing.” Government must play a role in creating equality. The greatest conflict over equality in American history (and the most painful) was the Civil War. In a mashup of Abraham Lincoln’s second inaugural speech and his “house divided” speech, Obama spoke of “blood drawn by lash and blood drawn by sword” and how “no union … could survive half-slave and half-free.” When contemporary Republicans invoke the abolition of slavery—their party’s single greatest accomplishment—it’s generally to celebrate freedom (or, sometimes, to compare slavery to abortion). When Democrats talk about the freeing of the slaves, it’s to talk about equality, which does not follow automatically from freedom—something African Americans well understood a full century after the Civil War, and understand 50 years after that, even when a black man is president.
Then it was on to the theme of economic equality:
For we, the people, understand that our country cannot succeed when a shrinking few do very well and a growing many barely make it. We believe that America’s prosperity must rest upon the broad shoulders of a rising middle class. We know that America thrives … when the wages of honest labor liberate families from the brink of hardship. We are true to our creed when a little girl born into the bleakest poverty knows that she has the same chance to succeed as anybody else….
Then Obama spoke of equal access to “security and dignity”:
[W]e remember the lessons of our past, when twilight years were spent in poverty, and parents of a child with a disability had nowhere to turn. We do not believe that in this country, freedom is reserved for the lucky, or happiness for the few.
And then of equality based on gender and sexual orientation (including what I’m pretty sure is the first reference ever made in an inaugural speech to the 1969 Stonewall uprising):
We, the people, declare today that the most evident of truths – that all of us are created equal – is the star that guides us still; just as it guided our forebears through Seneca Falls, and Selma, and Stonewall…. Our journey is not complete until our wives, our mothers, and daughters can earn a living equal to their efforts. Our journey is not complete until our gay brothers and sisters are treated like anyone else under the law….
And then, finally, Obama invoked Lincoln once again, this time in a more distant (and somewhat clunkier) echo of Lincoln’s second inaugural (“With malice toward none, with charity for all…”): “With common effort and common purpose, with passion and dedication, let us answer the call of history…”
Will Obama deliver on this promise of greater equality in his second term? Almost certainly he will, mainly because of his health care bill, whose more significant provisions—creation of health insurance exchanges, insurance subsidies, expansion of Medicaid—take effect this year and next. The White House hasn’t gone out of its way to point this out, but Obamacare represents the most significant government redistribution of income in a generation. When you combine Obamacare’s tax component (which takes effect this year) with the fiscal cliff’s tax component (ditto), Paul Krugman figures that the one percent will see their after-tax income fall by 6 percent and that the 0.1 percenters (this is where top executives and Wall Street hotshots dwell) will see it fall by 9 percent. So even if Obama does nothing else for the next four years, we will see at least some improvement in income distribution (at least when you include taxes, government benefits, and employment benefits). It won’t be enough, and the jury's still out on whether pre-tax median income will rise to any significant extent. But it's a start.