To the editor:
The major parties' campaign messages portray both presidential candidates completely agreeing that the party controlling the White House determines both economic growth and the income distribution.
Recently The Economist reported income growth rates, by presidential party, for the top and bottom quintiles of Americans (page 64, Oct. 6-12) for 1952 to 2004. Citing Larry Bartel's recent book, "Unequal Democracy": Under the rule of the four Democratic presidents (20 years) the income of the rich grew at an annual real (inflation-adjusted) rate of 1.37 percent while the poor's income grew at 1.56 percent. In contrast, under the six Republican presidents (32 years) the rich's income grew at 0.92 percent while the poor grew poorer, at minus 0.32 percent annually.
In nominal dollar terms, a typical rich guy earning $50,000 in 1952 would have earned $724,000 in 2004, and the poor guy earning $2,000 dollars in 1952 would have earned $32,000 if all presidents had been Democrats. And if all presidents had been Republicans, then the 2004 income of the rich guy would have been $573,000 and the poor guy would earn only $12,000. The real income of the rich would have increased 104 percent under all Democrats but increased only 61 percent under all Republicans. And the real income of the poor would have increased by 125 percent under all Democrats but declined 15 percent under all Republicans.
(In reality, in constant-dollar terms, Bartel's figures show that the rich got 77 percent better off from 1952 to 2004 while the poor got better off by only 23 percent.)
Also The Economist reported data from Barclays Capital showing stocks have also suffered under Republican presidents: gilt-edge stocks grew 7 percent per annum in real terms under seven Democrats' (during 1929 to 2011) 42 years in the Oval Office. In contrast the seven Republican deciders-in-chief achieved an equities growth rate of precisely nil, nada, zed, zero. If all presidents were Democrats, $1,000 in 1929 stocks would have a nominal value of today of more than half a million dollars. If all were Republicans, the same $1,000 would have been worth less than $12,000 by 2011, all only inflationary gains.
The four biggest stock market crashes in the past century have all occurred on the watch of the GOP: Hoover lost 89 percent, starting the Great Depression; Nixon lost 48 percent in the agony of Stagflation and Watergate; Reagan lost 22 percent on Black Friday in 1987; and Bush 43 lost 54 percent in the great meltdown inaugurated by Lehman's collapse in 2007. Obama inherited the Rose Garden but no picnic.
Recently a refugee from communist eastern Europe has mounted his own personal crusade to oust Obama. His TV ad declares that under socialism (sic), "The rich will be poorer, but the poor will be poorer." The irony is that this is precisely what the last six Republican presidents have collectively achieved.
Anthony G. Lawrence
(Sources: The Economist, Bartel's book, Dow Jones via a Wikipedia page, television ad, author's own calculations)