Kevin Drum has a series of interesting posts at Political Animal on the differences between Democrats and Republicans on the subjects of prosperity and equality. His conclusion: The democrats are better for the country both in terms of making everyone richer, and in terms of making the country more equal. Now, it shouldn't be a surprise that Kevin would think so, or that I would agree with him. But he's got numbers to back him up. Below are some samples of the argument.
First:
The first thing Bartels did was break down economic performance by income class. The unsurprising result is shown in the chart on the right.
Under Democratic presidents, every income class did well but the poorest did best. The bottom 20% had average pretax income growth of 2.63% per year while the top 5% showed pretax income growth of 2.11% per year.
Republicans were polar opposites. Not only was their overall performance worse than Democrats, but it was wildly tilted toward the well off. The bottom 20% saw pretax income growth of only .6% per year while the top 5% enjoyed pretax income growth of 2.09% per year. (What's more, the trendline is pretty clear: if the chart were extended to show the really rich — the top 1% and the top .1% — the Republican growth numbers for them would be higher than the Democratic numbers.)
In other words, Republican presidents produce poor economic performance because they're obsessed with helping the well off. Their focus is on the wealthiest 5%, and the numbers show it. At least 95% of the country does better under Democrats.
But if people tend to vote their pocketbooks ("values" issues aside), why aren't the democrats, so to speak, kicking ass? The argument continues:
If 95% of the country does better under Democrats, and if economic performance is the most important factor in most presidential elections, then how do Republicans ever get elected? The most common hypothesis — spelled out in detail in last year's What's The Matter With Kansas? — is that cultural issues often override economic considerations. But Bartels proposes a surprising alternative explanation illustrated in the two charts below.
The top chart shows income growth during non-election years, and it displays the usual characteristics: under Democrats, income growth is strong overall and the poor do a bit better than the well off. Under Republicans, income growth is weak overall and is tilted heavily in favor of the already prosperous.
But now look at the bottom chart. It shows economic performance during election years and it's a mirror image of the top chart: Republicans produce better overall performance, and they produce especially stupendous performance for the well off. Democrats not only produce poor overall performance, they produce disastrous performance for the well off, who actually have negative income growth.
In other words, voters aren't necessarily ignoring economic issues in favor of cultural issues. Rather, Republicans produce great economic growth for all income classes in election years, and that's all that voters remember. They really are voting their pocketbooks.
Finally, if everyone is getting richer, well, are we getting more or less equal in the process? It turns out that, with the exception of Jimmy Carter (!), Democratic presidents enact policies that distribute that increased wealth more equally, while Republicans enact policies that tilt the benefits of the riches toward, well, the rich:
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.
Ok, so I'm partisan, so this is both unsurprising to me, and also an unambiguously good thing. I specify that last because it's not something you can take for granted that a more equal society is a better society.
I'm expecting to receive a book in the next few weeks called The Efficient Society, about the social conditions in Canada. The thrust of the book is that Canada has made some social decisions that have contributed to making it a much more livable society than the United States is, and that these decisions are based on the idea that a society ought to reflect its values. In Canada, they value a greater degree of equality; they value universal health care; they value a high quality of public education, etc. In the United States, we say we value these things, but then declare that our hands are tied to actually achieve these things by our commitment to capitalism and an efficient society. But these aren't givens. We aren't ruled by an economic model. We choose economic models that we then enact as policy.
It's not socialism to suggest that there is a level of inequality that hurts society, and a level of equality that creates a more optimal set of social circumstances. By the same token, I'm not advocating complete equality here. I'm rawlsian at least to this exent: I think that there are reasons to provide incentives for people to perform certain social tasks that they might otherwise decide aren't worth the effort. To the degree that inequality provides those incentives, it's both necessary and desirable. But only to that degree. Beyond that, it's unjust. Democrats tend to recognize that and embrace it (at their best). Republicans don't agree with that, and embrace a different set of values (rooted, I suppose, in the idea of individual achievement and merit). Even at their best, Republicans embrace a set of values that I don't. I guess this is why I vote democratic. On the other hand, if I met a Republican that convinced me that he honestly shared my values, I'd vote for him with little difficulty. (I did, after all, vote for Lowell Weiker for Senate a long time ago).
So, when people talk to you about values. It's worthwhile to ask them to specify the values they have in mind. On economic matters, Democrats and Republicans have embraced different sets of values, and it's up to us to decide which set we find more attractive.