Graphic: Change in Real Net Income Under Presidents Since Nixon

[BurtWorm]

The following is from fivethirtyeight.com:

http://www.fivethirtyeight.com/2009/02/clinton-economic-record-and-rising.html







This is a chart, culled from Census Bureau data, showing the performance of real (inflation-adjusted) household income for various income classes during the last several presidencies. As you'll see, I've lumped together consecutive administrations when the same party remains in power. Also, the data omits transition years -- for example, 2001 is a transition year between Clinton and Bush, and it's not clear who to credit/blame for the economy's performance in that year, so I'm skipping it.

There's a lot to look at in this little chart. Under Nixon/Ford, the very wealthiest did reasonably well, but oddly enough, so did the very poorest (this may have been LBJ's Great Society programs belatedly kicking in rather than anything Nixon/Ford did). But the middle class was left out of the mix, their incomes barely growing over eight years.

In Jimmy Carter's one term in office, the economy wasn't performing terribly well for most anyone, but the poor bore the brunt of the problems. The principal problem during Carter's tenure was inflation; there is some evidence that higher inflation rates tend to hit the poor disproportionately, although this is debated.

Then we get to Reagan/Bush. And we see a large accumulation of wealth up the economic ladder. When Ronald Reagan took office in 1981, the ratio between income at the 90th percentile and income at the 10th percentile was 9.2; when he left office eight years later, it was 10.2.

Under Clinton, by contrast, the economy was a rising tide that lifted all boats. The poor, finally, did quite well for themselves, their incomes appreciating at about 2.5 percent annually, but the rich did just about as well -- in fact, the rich did better under Clinton than they had under Reagan and Bush. The rich/poor gap, if measured as a ratio, did not increase appreciably under Clinton. The 10th percentile saw their incomes increase by about 17 percent during his tenure, and so did the 90th percentile.

Finally, we get to #36, George W. Bush. Bush is getting a bit of a break here, in fact, because the Census Bureau does not yet have data online for 2008; the numbers will be even worse once it does. Nobody did especially well under Bush, but it was the poorest quartile or so who actually saw their incomes decrease.

[Romulox]

1. If that chart measures net household income, it's wildly misleading

The growth in incomes only exists because both partners in a typical nuclear family are now working; the average male worker has seen a net decrease in their wages (in inflation adjusted dollars) during the period outlined in the chart.

[TahitiNut]

5. I don't know about "wildly misleading" but it seems clear that two-earner households ...

... are far more rare in the lowest quartile (with single head-of-household) and upper 5% (with the affluence of the "idle" rich). Particularly in the lowest quartile, there is little opportunity for income appreciation where there's neither the opportunity for education and training nor an increase in wage-earners.

I think the most glaring condition shown by the chart is the fact that the ECONOMIC CHASM between the 'affluent' and the 'working poor' has NOT narrowed for over 30 years, and has widened abysmally for the vast majority of that time.

[PM Martin]

2. Bookmarked!

[theoldman]

3. The interesting part is that Clinton did this with a Republican congress.

To me it shows the importance of good leadership. It also shows that Bush junior was a terrible leader. Not only was Bush a bad leader, he had no brains. A good president needs leadership skills and brains. Clinton and Obama have both.

[tabatha]

4. I like this comment on that page:

Tony C. said...

The fundamental error made by free marketers is believing they work. Free markets don't work. Competition works, and that is the point and role of government regulation; to preserve competition.

When Reagan deregulated the airlines, he did a good thing, because over-regulation had purposely removed all elements of competition, not just fares but down to exactly what airlines could serve in flight. Deregulating them allowed them to compete and that drove down prices.

When Reagan deregulated food and cheese inspection, he killed people, because companies were already competing for customers, and the deregulation allowed them to compete on a cost basis by skimping or corrupting their food inspection operations. This created health problems, increased salmonella and other problems, and actually killed people.

That is why free markets fail: They tend toward monopolies, and they allow businesses to compete outside the product arena, using lobbyists, lawsuits, false advertising and outright lies, endangering customers that don't know they are risking their health by using a dangerous product, and squashing competition before it is big enough to threaten them.

...