WHY I LIKE DEMOCRATIC PRESIDENTS….Yesterday morning I presented some graphs from Larry Bartels’ paper about economic growth under Democratic and Republican presidents. As long as I have the paper handy, here’s another one.
This graph displays income inequality under Democratic and Republican presidents since 1947. Bartels uses a very simple measure of inequality: the income of the 80th percentile family divided by the income of the 20th percentile family (raw data here). From 1947 through 1969 this ratio was steady at about 3:1, but since then it’s risen to about 4:1.
But the graph also shows something else: Democratic presidents tend to promote policies that either keep income inequality in check or lower it a bit (Jimmy Carter is the exception), while Republican presidents pursue policies that make income inequality worse. The upper and lower lines are guesstimates of what income inequality would be if we had followed only Republican policies or only Democratic policies since 1947. Pure Democratic rule would have produced a slight decrease in inequality, while pure Republican rule would have produced a staggering increase in the ratio to 6:1.
This is important because it’s at the heart of the difference between liberal and conservative views of what’s good for the economy. I won’t try to pretend that I can prove this, but I believe pretty strongly that the single most important economic indicator you can look at is the health of the working and middle classes, the (approximately) middle 60% of the country. Why? Because if unemployment is low and middle class incomes are growing, then everyone wins. The poor win because a healthy middle class is more likely to support safety net and anti-poverty programs, and the rich win because a healthy middle class drives overall economic growth.
Conservatives drive up income inequality because they focus primarily on the well off, which benefits only the well off. Liberals keep income inequality in check because they focus (or should focus) primarily on the working and middle classes, which benefits everyone. And that’s the underlying reason that Democratic presidents are better for the economy than Republican presidents. If you keep the unemployment level low and middle class incomes growing, the rest of the economy will pretty much take care of itself.