Wednesday, September 19, 2012

Four Years Later: Obama Hasn’t Been Very Good At Redistributing Wealth

The Romney campaign today is attempting to draw attention to a 1998 video in which President Obama, then a state senator, says, “I actually believe in redistribution, at least at a certain level to make sure everybody’s got a shot.” Romney’s campaign responded with a statement saying, “Mitt Romney has a very different idea. He knows that we need to foster growth and create wealth, not redistribute wealth, if our economy is to grow the way it has in the past.”

Sen. John McCain (R-AZ) made the same charge in 2008, saying, “that is what change means for Barack the Redistributor: It means taking your money and giving it to someone else. He believes in redistributing wealth, not in policies that grow our economy and create jobs.” But if Obama is truly out to redistribute the wealth, he’s not doing a bang-up job of it, as more wealth has moved to the top of the income scale and the country has gotten more unequal.

The Census Bureau reported last week that income inequality increased in 2011. The Gini coefficient, which measures inequality, has only risen (signalling growing inequality) while Obama has been in office, as this chart from St. Louis Federal Reserve data shows:


According to the Census Bureau, the top one-fifth of households made 50 percent of the income in 2008. In 2010, that rose to 50.2 percent. In 2011, it rose further to 51.1 percent. The top 5 percent of households saw a similar increase, going from making 21.5 percent of the income in 2008 to 22.3 percent of the income in 2011. In 2010, a whopping 93 percent of the country’s income gains went to the richest 1 percent.

Of course, with a larger share of the income, comes a larger share of the wealth. As the Congressional Research Service shows, both the richest 10 percent and the richest 1 percent saw their share of total net worth increase between 2007 and 2010:


Romney, meanwhile, has endorsed an economic plan that would redistribute wealth up the income scale.

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