Posted on 06/02/2007 2:50:47 PM PDT by K-oneTexas
A Progressive Backlash? By ALAN REYNOLDS
Friday, June 01, 2007
It suddenly became clear that Hillary Clinton and her advisors intend to run a negative presidential campaign — not negative about other candidates, but about the U.S. economy.
Last Tuesday, Sen. Clinton launched her "Modern Progressive Vision: Shared Prosperity," which strains to justify "returning high-income tax rates to the 1990s levels." It was full of gloomy rhetoric blaming "globalization" (bargains at Wal-Mart?) for some bizarre allegations about falling U.S. living standards for all but a lucky few.
Clinton said, "Last year, the share of America's national income . . . going to the salaries of American workers was the lowest (since 1929)." Huh? The labor share was just 64% in 2006, but it was 63.9% in 1997. Employee compensation averaged 64.9% of national income from 1960 to 2005, 65% from 1993 to 2000 and 65.3% from 2001 to 2006.
Clinton even claimed 59% of "net corporate revenues" went to profits over the past five years — a number so patently ridiculous that it only served to demonstrate that she is easily confused about numbers.
Three days earlier (coincidentally), the Pew Charitable Trusts released the first of many reports on economic mobility timed (coincidentally) to hit the press between now and the election. The slickly dismal pamphlet — subtitled, "Is the American Dream Alive and Well?" — was written by John Morton of Pew Charitable Trusts and "a team of Brookings Institution scholars," led by Isabel Sawhill. Two conservative think tanks were ostensibly involved, but must have been out to lunch.
The Pew-Brookings report was full of alarming rhetoric, similar to Clinton's, about "the rough edges of capitalism." Some data were the same. Clinton said, "CEOs have seen their pay go from 24 times the typical worker's in 1965 to 262 times the typical worker's in 2005." The Pew-Brookings pamphlet found "figures that are perhaps even more striking. Between 1978 and 2005, CEO pay increased from 35 times to nearly 262 times the average worker's pay."
Those figures from the Economic Policy Institute bear little relationship to typical pay of CEOs or their corporate employees. They instead compare onetime windfalls of just 350 CEOs (exercised stock options) with a narrow measure of production worker wages, which includes part-timers' low wages multiplied by 2,080 hours.
The Pew-Brookings paper claims we currently face "rapidly growing income inequality" because "the Congressional Budget Office (CBO) finds that between 1979 and 2004, the real after-tax income of the poorest one-fifth of Americans rose by 9%, that of the richest one-fifth by 69%, and that of the top 1% by 176%."
What happened for several years after 1979 was dominated by horrific inflationary recessions from 1980 to 1982. From 1988 to 2004, by contrast, the CBO says the poorest one-fifth saw their share of after-tax income rise from 2.7% to 3.4%, while that of the top fifth fell from 59.3% to 57% and the share of the top 1% was unchanged, at 13.4%.
On the day of Clinton's speech, Brookings Institution senior fellow Ron Haskins wrote about "The Rise of the Bottom Fifth" in The Washington Post. He noted that from 1991 to 2005, the real earnings among the bottom fifth of families with children increased "by 80%, compared with around 50% for the highest-income group and around 20% for each of the other three groups."
Clinton disregarded gains among the poor but sounded angry at two-earner families earning six figures: "In 2005, all income gains went to the top 10% of households (joint returns reporting more than $96,563), while the bottom 90% saw their incomes decline, in spite of the fact that worker productivity has increased for six years." What do one year's incomes have to do with productivity over six years?
The claim that 90% "saw their incomes decline" came from a New York Times article about a study of the top 10% of income tax returns by Thomas Piketty and Emmanuel Saez. Those economists never claimed to have examined incomes of the bottom 90% because that cannot possibly be done by looking only at income reported on tax returns.
As they acknowledged in The American Economic Review last May: "Our database also suffers from important limitations. In particular, our long-run series are generally confined to top income and wealth shares and contain little information about bottom segments of the distribution."
Clinton considers herself "a thoroughly optimistic and modern progressive." Optimistic progressives and liberals find her old-fashioned and grumpy.
The day after Clinton's speech, Washington Post columnist Steven Pearlstein wrote, "To hear it from Democratic leaders and presidential candidates, you'd think the American dream was melting away as quickly as the glacial ice floes in Greenland." He called attention to a Progressive Policy Institute report by Stephen Rose about "The Trouble With Class-Interest Populism."
The class-interest paper from Pew and Brookings asserts that median family income should keep pace with worker productivity, for example, which might make sense if all income came from work and everyone worked. Rose, by contrast, observes that median income includes a growing fraction of seniors and young singles and students. Excluding those under 29 and over 60 lifts median income from about $44,500 to $63,000.
Defining middle class as a real income between $30,000 and $90,000, Rose finds that group did indeed shrink from 47% to 37% of all households between 1979 and 2004. But that was only because the percentage earning more than $90,000 increased from 29% to 38%.
Rose warns against presidential campaigns based on pitting labor against business or blue-collar against white-collar, because "the group that could reasonably be categorized as having a clear, class-based interest in voting for Democratic policies would comprise less than one-quarter of the population."
Not all Democrats seeking the highest office have yet succumbed to the divisive and hypocritical "Two Americas" theme that quickly made the affluent Sen. Edwards such an implausible candidate. Yet Hillary Clinton just jumped into that trap. Presidential candidates with the highest name recognition have the most to lose by misjudging the electorate.
Copyright 2007 Creators Syndicate, Inc
As with Hugo Chavez, politicians here are beginning to realize that there are quite a few people believing they can vote themselves some property or income.
Taking from the rich and giving to the poor only works in fairytales. In real life it gives you the Russias and Cubas of the world. Even China realized that it didn’t work and open up a somewhat market economy. The Hillarys and Edwards of the world equate to the Lenins and Stalins that preceded them.
Anyone with a 401k would be a fool if they voted for Clinton.
If elected, she will take your money. The only question is whether she’ll follow in her hubby’s footsteps and take it retroactively.
Remember the Clinton’s slogan – “It’s the economy stupid”? Mrs. William Jefferson Clinton is playing the same tune when our economy is at record highs. No one is going to be fooled by a couple of Snake Oil salesmen like the Clintons however, some fools will vote for them….again. (Hillary on the issues).
Take a look at progressives:
The National Security Project: Third Way is helping to build a credible, tough and smart progressive national security agenda.
The Culture Project: Third Way is developing new progressive approaches to cultural issues.
The Middle Class Project: Third Way is designing a new economic agenda and narrative for the 21st century. In 2006, we developed a diagnosis of the progressive economic disconnect
Leadership……. Our senior_team has decades of management, policy, political, communications and non-profit experience, including service as a federal agency Chief of Staff, presidential campaign communications director, Senate policy director, White House deputy and non-profit director, in addition to having founded three national advocacy groups.
Progressives aren’t either tough or smart…….culture issues are nothing more than Social Engineering………..What economic disconnect? The Clintons must never regain the White House – Socialist Pelosi and Reid are bad enough. They all throw out figures that are meaningless, thinking people won’t research. Bill and Hill are fleecing their “friends” and will fleece America. Remember how they trashed the White House? These gutter rats have absolutely no respect for America and what we hold dear.
And don’t forget a 2006 report by Nicholas Eberstadt of AEI (The American Enterprise Institute) who found (bottom line) that current Americans who live in “poverty” enjoy the same standards of living as did the American middle class in the 1960s.
See: “Why Poverty Doesn’t Rate.” No longer on the AEI website, which carries on 2007 pubs). Found it on the WP archives, however, at:
http://www.washingtonpost.com/wp-dyn/content/article/2006/09/01/AR2006090101409.html
Without doubt, the 1960’s are alive. “Bring it all down, man.”
The definition on an oxymoron.
More socialist blather from the socialist blatherer in chief.
I fundamentally disagree with Hiliary Clinton, to rob from one to give to another in a attempt to buy votes, is simply immoral.
What I do find when I look into “Clintonesque” issues is there is some small fact involved, that is then blown up to prop up a socialism lite agenda, what I realy want to see is refuting of what she has to screech about.
For instance, what difference if CEO pay is 100x worker pay, isn’t the important thing what the worker pay is in the first place? And what about worker mobility, how many opportunities are there for advacement?
That sort of thing, she ignores the record performance of the NYSE, record home ownership, job creation, low inflation.
And this “we are going to steal from “Big Oil” their profits” is simply mind numbing, so “Big Oil” wouldn’t just pass that cost along to the consumer?
The average Fortune 500 CEO earned $10M or so last year, much of it due to the stock market going up.
While I think boards are remiss in paying so much, and that they could often achieve similar performance for less money, it is really a drop in the bucket when compared to the wealth produced by the companies these guys run.
For an interesting comparison, the average salary for an NFL player last year topped $1M. Since there are 1700 NFL players, they collectively earned close to 20% of what the CEOs did. The 600 NBA players average $5M, for about 30% of the Fortune 500 CEOs’ total. Which group’s performance is more critical to America?
One of the most egregious misuses of these numbers is that the implication is given that every CEO of every company earns this much. The Fortune 500 are the largest 500 companies in America. The CEOs of the hundreds of thousands to millions of smaller companies average a great deal less.
Make that 60%.
Sorry, math-impaired.
In our free and mobile society, THIS CONCEPT is so important, and what separates America from so many other socialist and "quasi-socialist" societies. If you don't like your current job, you can get another. All of us who done this, understand full well that it can be done if you really want to. It's so easy to complain but never do anything about your situation. That's probably what makes me so opposed to Hillary's "We're going to take things away from you for the common good" mentality. As if all Americans are mind-numbed robots who need the "Government" to do everything for them, because they're too dumb to do it themselves. One if the best things written about this--in Engliish--is Ayn Rand's "Atlas Shrugged."
My question is: Where will the “backlash” come from? All of her supporters are Marxists.
BTW, if she does get the Dem nod, that poster would do more to sink her campaign than anything.
HRC is so desperate to crank up her polls that she's going to the population centers with the warmed over communist message they call progressive. Free college, free doctor, free drugs, free childcare...
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