There's a new book out claiming to explain the source of America's striking income inequality. The huge—and expanding—gap between rich and poor in the U.S. has been vexing liberal political scientists and economists for some time; while such a large gap isn't unheard of, it's exceptional among industrialized countries. Now, Jacob Hacker and Paul Pierson's Winner-Take-All-Politics, a synthesis of recent studies, argues that the growing political influence of the rich is the real force behind growing inequality. Or, as their subtitle puts it, "Washington made the rich richer." A number of left-leaning bloggers are enthusiastic about its arguments. Here are their thoughts, as well as more skeptical ones, on this new cut on a decades-old debate.
What This Book Does Mother Jones's Kevin Drum summarizes. There's been "no shortage of answers" to the question of why economic inequality in America is so striking, he says, but they've all been "limited and therefore unsatisfactory ... until now." Here's the core idea Hacker and Pierson present, he says: as unions in the '60s were declining, "business interests [took] stock of the country's anti-corporate mood and beg[an] to pool their resources to push for generic pro-business policies in a way they never had before." Here's what you get:
With liberal money and energy focused mostly on non-economic concerns, the country moves steadily leftward on social issues. With conservative money and energy focused mostly on the interests of corporations and the rich--and with no one really fighting back--the country moves steadily rightward on economic issues.
- What It Doesn't Do The Wall Street Journal's Michael Barone is much less complimentary, pointing out the typical left-right divides in the debate: "Messrs. Hacker and Pierson don't really explain how the high earnings of, say, Steve Jobs leave the rest of us worse off," he says, nor do they "explain why there is something inherently illegitimate about businesses lobbying the government when it is threatening to take away large amounts of their money." Ultimately, they "argue that Americans are ignorant of or easily fooled about their real interests," and that corporations are running the show. "But," as an alternative explanation for pro-business policy, "couldn't these middle-class Americans [in the '60s and '70s] have simply feared that government was gobbling up the private-sector economy, and couldn't their representatives in Washington have acted on that concern?"
- Why It Doesn't Do It Political science professor Henry Farrell thinks the book is great: while the thesis isn't "necessarily original ... What is new is both the specific evidence that the authors use, and their conscious and deliberate effort to reframe what is important about American politics." The book's shortcomings, he thinks, are the fault of America rather than the authors: America has no real field of political economy to fall back on.
The authors set the book up as a whodunit: Who or what is responsible for the gross inequalities of American economic life? ... For me, the culprit (the American political system) was like OJ. As matters stand, I’m pretty sure that he committed the crime. But I'm not sure that he could be convicted in a court of law, and I could be convinced that I was wrong, if major new exculpatory evidence was uncovered.
The lack of any smoking gun (or, alternatively, good evidence against a smoking gun) is the direct result of a major failure of American intellectual life. As the authors observe elsewhere, there is no field of American political economy. ... We do not have the kinds of detailed and systematic accounts of the relationship between political institutions and economic order for the US that we have e.g. for most mainland European countries.
- The Influence of the Wealthy, by the Numbers James Kwak at The Baseline Scenario talks about the book's argument that "public opinion on ... inequality has not shifted over the past thirty years," for example--the real change being that "Congressmen are now much more receptive to the opinions of the rich." The rich, the authors explain, pointing to a study, in "strongly support[ing] a policy change," make it "almost three times the chance of becoming law as when they strongly opposed it," while the opinions of those of median-income do little. Says Kwak: "One of the singular victories of the rich has been convincing the rest of us that their disproportionate success has been due to abstract economic forces beyond anyone's control (technology, globalization, etc.), not old-fashioned power politics."
- How the Rich Benefit Disproportionately From Economic Growth The Washington Post's Ezra Klein pulls out a table from the book "showing how incomes would look if growth had been equally shared from 1979 to 2006--much as it was in the decades before 1979." He turns it into a graph which shows that those from the bottom fifth to the bottom 80-90% groups would be making more money today if growth had been shared, while those in the 95-99 percentile would be making marginally less and those in the top 1 percent would have had their incomes "cut by more than half, down to $506,002." But instead, economic growth in this period disproportionately favored the rich, while tax rates on them dropped as well.