CDZ Census Bureau data --> delta --> real pre-tax income growth under Dem & GOP POTUSes

Discussion in 'Clean Debate Zone' started by Xelor, Jul 2, 2017.

  1. Xelor
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    Xelor Gold Member

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    On USMB, unlike in the real world when conversing with people who routinely study such things, I see members attest to Democratic Administrations being detrimental to income growth among poor and middle class Americans. Seeing such comments, I routinely ask myself, "From what alternative universe did you come that you can believe that so? Do you these people truly give a damn about poor and middle class individuals, or is that just empty rhetoric they're spewing?"

    It's one thing to surmise, based on one's anecdotal observations, poor and middle income citizens' economic position has been on the whole and progressively diminished by Administrations of one party or the other. It's something altogether to extrapolate those observations to the whole or even majority of the U.S.' middle class and poor citizenry, and do so in the face of empirical evidence -- both in terms of real income growth and in political representation/policy making that can spur income growth -- to the contrary.
    • Partisan Politics and the U.S. Income Distribution
      • Census Bureau data reveal striking differences in patterns of real pre-tax income growth under Democratic and Republican presidents in the U.S. over the past half-century. Democratic presidents have produced slightly more income growth for poor families than for rich families, while Republican presidents have produced a great deal more income growth for rich families than for poor families. As a result, families at the 95th percentile of the income distribution have experienced identical average income growth under Democratic and Republican presidents, while those at the 20th percentile have experienced more than four times as much income growth under Democrats as they have under Republicans.
    • Presidents and the U.S. Economy: An Econometric Exploration
      • There is a systematic and large gap between the US economy’s macroeconomic performance when a Democrat is President of the United States versus when a Republican is. While other macroeconomic indicators largely agree, we have concentrated on real GDP growth over the full sample, which is 1.8 percentage points higher under Democrats--a stunningly large partisan gap relative to the sample mean of 3.3 percent. The growth advantage is correlated with Democratic control of the White House, not with Democratic control of Congress. A similar partisan growth gap appears in Canada, but not in the UK, France, or Germany.
    • Economic Inequality and Political Representation
      • Senators are vastly more responsive to the views of affluent constituents than to constituents of modest means. The magnitude of this difference varies from issue to issue, and many of the separate estimates fail to satisfy conventional standards of “statistical significance.” Nevertheless, the consistency of the difference across a variety of political issues, opinion measures, and model specifications is quite impressive, and the magnitude of the disparities in responsiveness to rich and poor constituents implied by my results is even more impressive.
    • Democracy and the Policy Preferences of Wealthy Americans -- This study of affluent Midwesterners, though it is not suitable as a foundation for making paradigmatic attestations, is particularly intriguing because it includes analysis of preferences with regard to personal traits, thereby providing a basis not only for subsequent research but also for preliminary portents. It "provide
    • a first systematic glimpse of the policy preferences of wealthy Americans and shed suggestive light on the potential implications of unequal responsiveness to those policy preferences.
      • Can we say anything about what sorts of wealthy Americans tend to favor or oppose various public policies? For example, do conservative views on social welfare policy, economic regulation, or tax policy tend to increase as wealth increases? Do wealthy professionals differ from wealthy business owners? Do bankers tend to disagree with manufacturers? Owners or employees of domestically-oriented firms with those oriented toward exports? Entrepreneurs who have worked their way up from the bottom (“new money”) with inheritors of great wealth (“old money”)? There are reasons to expect some differences of these sorts.
        • Level of Wealth

          By fitting simple bivariate regression models in which the amount of a respondent’s net worth is the independent variable we can obtain estimates of how attitudes change as one moves from the bottom of our wealth distribution (under $5 million) to near the top (around $40 million). For this range of wealth, we can estimate the gradients with respect to wealth of various attitudes and behaviors.

          Using our questions about whether respondents favored “more,” “less,” or “about the same amount” of regulation for each of six different industries or industrial sectors, we computed the number of cases in which each respondent favored more regulation minus the number of times he or she favored less regulation. The result was an index of net support for regulation, running from 6 (regulate all six industries less) to 6 (regulate all six of them more).

          Respondents with $5 million or less in net worth tended to lean slightly toward more regulation, but those with $40 million leaned distinctly toward less regulation. The wealthiest Americans tended to favor less regulation than the less wealthy did. This is particularly true of regulating the health insurance industry.
        • Personal Characteristics and Economic Positions

          Somewhat to our surprise, when we looked beyond wealth levels, the personal characteristics and economic positions of our respondents generally seemed to make rather little difference to their preferences about government regulation or social welfare policy. Among our wealthy respondents, the relatively young did not differ much from the old. Men and women had very similar preferences. So did the married and the unmarried. Levels of formal education made no discernable difference—at least when we lumped together all advanced degrees, MDs and JDs with MBAs. (One will see, however, that professionals tended to differ from business owners and managers.) Catholics did not differ much from non-Catholics. Those who regularly attended religious services did not generally disagree with those who did not attend. One exception: Jewish respondents were substantially less inclined to cut back social welfare programs than non-Jewish respondents were.

          Particularly striking to us is the fact that—contrary to our expectations—the economic backgrounds and roles of wealthy respondents generally seemed to make little or no difference to how they felt about regulatory or social welfare policies. Households with “old money”—inheritors of substantial wealth—did not differ significantly from those with “new money” (non-inheritors). Business owners did not differ from other wealthy respondents. Those who worked in banking or finance did not tend to be more or less favorable to social welfare programs or economic regulation than others were. Nor did those who work in manufacturing. There was a marginally significant tendency for respondents who did substantial business abroad to be slightly more negative about government regulation—perhaps because they viewed regulation as imposing handicaps on international competitiveness.

          Professionals were particularly distinctive in their support for environmental protection, for action against climate change, and for economic aid abroad. They were also more supportive than others of certain social welfare programs and progressive taxation. Most notably, professionals tilted distinctly in the direction of more regulation rather than less regulation of various industries.

          This is not just an artifact of professionals’ tendency to be less wealthy than our other respondents. A regression analysis predicting support for more or less regulation indicates that being a professional has independent effects. Controlling for wealth, professionals tended to be about 1.3 points more pro-regulation on our 12-point index. To put it another way, being a professional was associated, on the average, with moving from preferring “less” regulation to favoring the “current amount” of regulation on a little more than one of the six types of regulatory targets included in the index.
        • Party Identification

          Affluent Americans are more likely than those further down the income scale to think of themselves as Republicans. The generally conservative policy views of our wealthy respondents also make it natural to suppose that they should be predominantly Republican. And indeed, that is the case. However, on economic issues wealthy Democratic respondents tended to be more conservative than Democrats in the general population. It may be that these Democrats’ partisan attachments were grounded in social backgrounds and family histories, or in views about moral and social issues, rather than in economic policy preferences.
        • Conclusions -- Beyond the following, I'm not going to post them here.

          Our evidence supports the long-standing finding that the affluent participate disproportionately in politics. But if one accepts the notion that the wealthy exert substantial political power, our findings may shed some light on the current state of American politics. For example, the contemporary emphasis in Washington on reducing the federal budget deficit addresses what is, by far, the most important public problem in the minds of wealthy Americans—though not of the American public as a whole. The willingness of many policy makers to cut popular social welfare programs, and their reluctance to increase taxes on people with high incomes, may be explained in part by the fact that social welfare programs and increased taxes on the rich are much less popular among wealthy people than among ordinary citizens. And the turn away from economic regulation in recent decades—a turn that left exotic financial derivatives unregulated before the 2008–'09 financial crash in which they played such a prominent part, and that left Washington surprisingly inhospitable to more rigorous banking regulation even after that crash—may be attributable, in part, to the distinctive antipathy of wealthy citizens to government regulation of the economy.
    Even more baffling is that when presenting their thoughts about the empirical analysis, the dissenters with it don't bother to present any germane methodological shortcomings in the research they yet disbelieve. The only response to that is incredulity...."Okay. You disagree, but you have no credible basis than you can articulate for why. You just just do disagree." What? Well, fine. The Sun does just shine and water is wet; however, we have incontrovertible empirical knowledge guiding why we say so...we don't just say and believe so because it seems right.

    Middle-class and poor Americans like services but dislike taxes, and Democrats currently appear to be the party of taxes. And so, the struggle for Democrats is what Suzanne Mettler refers to as the “submerged state.” That is, the way the government actually benefits the middle class often goes unseen, while taxes, particularly the income tax, are very obvious. Mettler notes that our federal tax code is full of handouts like the Mortgage Interest Deduction, but these tax benefits primarily benefit the affluent and middle class. [1]

    The implication is that many people who believe themselves independent of government support in fact rely heavily on it. The Congressional Budget Office estimates that the 10 largest tax breaks cost the government $900 billion in 2013. But the benefits accrue to the wealthy: The top 1 percent gets 17 percent of the benefits and the bottom quintile only 8 percent. As the New York Times reported in 2012, "The government safety net was created to keep Americans from abject poverty, but the poorest households no longer receive a majority of government benefits... The share of benefits flowing to the least affluent households, the bottom fifth, has declined from 54 percent in 1979 to 36 percent in 2007, according to a Congressional Budget Office analysis published last years." Further evidence comes from Christopher Howard who notes in his book, The Hidden Welfare State, “There is, still, a misconception that U.S. social programs primarily benefit the poor. That is not true for the visible welfare state direct expenditures, and it is an absurd claim to make about the hidden welfare state.”

    The short is that as political science and economic literature shows persuasively, Democrats are far better for economic growth, and particularly middle-class and poor income growth, than Republicans.


    Note:

    1. One simple example of that is well known by gobs and their financial advisors. Buy a boat and you'll know it too if you didn't before
     
  2. Dale Smith
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    Dale Smith Gold Member

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    The ones that control the printing of the money are the ones that dictate whether financial growth increases or decreases. It is ridiculous to tout one political party over the other when both are bought and paid for by the ones printing this fiat currency we call "Federal Reserve Notes". We are all indentured debt slaves with no allodial rights to property. Claiming that leftardism promotes growth by skewing the figures by stealing the sweat equity of others via taxation isn't anything to be proud of. Until we get rid of the Fed and return to an honest monetary system, nothing will ever change or get better and that is a fact.
     
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  3. Dan Stubbs
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    Dan Stubbs forget....Hell Gold Supporting Member Supporting Member

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    Should be noted that these numbers come from the Government who seems to change them from time to time to "bring out" better data to tell the facts as they see them. We must trust the Governments positions in as they have been so good over the past years. (It is a joke mindy you don't have to start trusting anyone again) See ya on visiting day.
     
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  4. Dale Smith
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    Dale Smith Gold Member

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    Yep, the only thing keeping the dollar on top of the heap is the military might of USA.INC working in conjunction with OPEC countries to only accept dollars for oil.
     

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