This past weekend, I had an illuminating discussion with my mother, who has the political misfortune of splitting her time between the red states of Arizona and Idaho. As a known liberal, she's regularly fielding queries from now-anxious red-staters who have been fed a steady diet of lies and propaganda, which conflicts with what their reality-perceiving eyes tell them. When we debrief, she often expresses the wish that she had a simple, very clear point to offer those who are used to the simple, very clear lies they've been fed on Fox. Okay, Mom, this series is for you. I'll do one of these every week or so for the next few weeks. The simple point will be on the front page, and some further discussion will follow below the jump.
Of course, they don't.
Trickle-down (also called "supply-side") theorists hold that pumping money into the hands of the wealthy will cause them to invest in business, which will in turn cause the economy to grow, which will create jobs, which will (finally!) get money into the hands of the working stiff. The theory is behind the Bush tax cut, which John McCain would make permanent, and goes back to Ronald Reagan, the standard-bearer for the modern GOP.
The best measure we have to demonstrate what a wholesale failure they've been is to chart the growth of median household incomes since 1980. (For an explanation of why median incomes is a good measure, see "Further Discussion" below the jump.) When Ronald Reagan was sworn in, the median household income was $48,976. In 2006, the last year US Census numbers were available, it was $58,407, a growth of $9,431 (all in figures adjusted to 2006 dollars). Of that growth, 83% is attributable to the eight years under a Democrat. Republicans account for only 17%. The Bushes, remarkably, have driven median incomes down.
This year, John McCain plans to roll out the tired canard that "a rising tide lifts all boats" and that trickle-down economics--while they've failed in the Bush administration--are just about to deliver the promised riches. Sure, unemployment is up, we're in the middle of our second Bush recession, and the markets are dropping, but all of that is about to change so long as we stay the course. It's not true, and McCain, who voted against the original tax cuts, knows it. (Or maybe he's just confused.) In eight years, Clinton delivered nearly five times as much growth to average Americans' income as Republicans did in eighteen years. The math doesn't lie: Republican economics just don't trickle down.
When Median is "Average"
In any discussion about "the average" anything, it's important to know what you're measuring. The statistics for means and medians are regularly used interchangeably in the media, but they're not the same. The mean statistic is the average of the total. The median statistic is the number that divides the population in half (the number at which half make more, half make less). When we talk about the "average" American, people understand this to indicate the person who makes an average amount of money, not the average of all Americans. One of Bush's sneakiest techniques has been to use the mean to describe the "average American" when he is trying to fudge reality. As in: the "average American will enjoy a $2,000 reduction in taxes thanks to this tax cut measure."
Here's why it matters. Let's say you've got about 100 loggers in a bar in Roseburg. Their salaries range from $20,000 to $80,000. If you add up all their salaries and divide by the total, you get $50k (the mean). If you put the 50 lowest-paid on one side of the room and the 50 of the highest on the other, and see which number would be right in the middle, you also come up with $50k (the median). In this group, average doesn't tell us much.
But as it happens, Steve Rogel, CEO of Weyerhauser, is in town and he steps into the bar. That shouldn't change the average, right? Depends on how you measure. Rogel makes just a bit more per year ($5.3 million) than everyone else in the bar put together. If you use the mean, then the "average" guy in the bar now makes $100k. But if he goes and sits with the loggers on the higher-paid side, moving the median up just a tick (the median), now "average" earns about $51,000. That's why we always use the median to see how Americans are doing, because we know that obscene wealth creation at the top won't conceal how people at the middle are doing.
The GOP Over Time
Historically, Republican administrations have done a better job at keeping the middle-class growing than the current era of supply-siders. Still, for a strong middle class, you can't beat the Democrats. Under all Republican administrations since 1947 (the first dates for which data were available), median incomes have grown a fairly-respectable 8.6%. But under Democrats, it has grown quite a bit more robustly: 14.5%.
In Figure 3, you can see the enormous gains that occurred in that postwar period in mid-century. From 1947 to 1972, median incomes went from $23,433 to $46,820--almost exactly doubling. After that, with the exception of Clinton, things don't look so hot. And even the Nixon/Ford bar is misleading. Growth in the second Nixon/Ford term was almost non-existent, moving up just a tick to $47,118. The Carter administration is roundly excoriated for it's poor performance, but despite the reputation, it out-performed the previous four years. From 1972 to 2006, Democrats (in office just 12 of the 34 years) accounted for 84% of the growth.
There are many, many more factors to consider when looking at economic performance, and I'll try to get to some of them in coming weeks. The upshot of this post should be clear, though: Democrats are far better for middle class incomes than Republicans.