Busting The 1% Vs. 99% Myth

IBD Editorials ^ | October 9, 2011 | Editor

[Kaslin]

Inequality: President Obama's class-envy strategy is built on a false premise — that the rich get richer at the expense of the poor. Amazingly, such zero-sum thinking is influencing public opinion.

Twice as many Americans support the anti-Wall Street protesters as oppose them. And even Rasmussen is polling that nearly half of Americans support proposals to soak the rich.

This is an emotional response to both the hard economic times and dishonest political rhetoric. People are buying into the notion peddled by the left that the rich steal from people. It's a pernicious myth left over from preindustrial Marxism.

The left says current levels of income inequality echo the late 1920s and the Gilded Age. They've zeroed in on the richest 1%, citing Census Bureau data showing these top earners "grabbing" more income than the bottom 90%.

But the census stats are misleading.

For one, they are a snapshot of income distribution at a single point in time. Yet income is not static. It changes over time. Low-paying jobs from early adulthood give way to better-paying jobs later in life.

And income groups in America are not fixed. There's no caste system here, really no such thing even as a middle "class." The poor aren't stuck in poverty. And the rich don't enjoy lifetime membership in an exclusive club.

A 2007 Treasury Department study bears this out. Nearly 58% of U.S. households in the lowest-income quintile in 1996 moved to a higher level by 2005. The reverse also held true. Of those households that were in the top 1% in income in 1996, more than 57% dropped to a lower-income group by 2005.

[okie01]

Bush may have warned about Fannie and Freddie in 2003-2004 but what did he do about it? Did he have the Republicans in Congress introduce legislation?

Yes. See the Financial Reform Act of 2005. Passed the House. Was filibustered and failed in the Senate.

It was the fourth such bill attempting to reform Fannie and Freddie. All failed due to a Senate filibuster.

[Publius6961]

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