Tilting at Windmills

May/June 2012 The great “Great Divergence”

By Charles Peters

As we all know, income inequality in this country has been growing for a long time. The latest evidence: in 2010 the top 1 percent of taxpayers captured 93 percent of the additional income created over the previous year. Thirty-seven percent of it went to 0.01 percent, households with average annual incomes of $23.8 million. These facts come from studies reported by Steven Rattner and Harold Meyerson in op-eds in the Times and the Post.

For a brilliant account of how and why this nation has become more and more unequal, I recommend The Great Divergence, a new book by Timothy Noah. One study he cites shows that from 1948 to 2005, “under Democratic Presidents, the biggest income increase went to people in the bottom 20th percentile,” but “under Republican Presidents … the pattern was precisely the opposite.”

Under the Democrats, Noah finds that incomes grow and become more equal simultaneously. In other words, the economic pie becomes larger for everyone at the same time that the slice going to the bottom 95 percent gets bigger. The Republicans’ current complaint about class warfare seems to come down to the fact that, though they have done well under the Democrats, they’re mad because the rest of us did proportionally better.

Noah identifies Bryce Harlow, who worked in both the Eisenhower and Nixon White Houses but spent most of his career as the top Washington lobbyist for Proctor and Gamble, as a prime mover in the anti-equality conservative revival that became increasingly powerful from the 1970s on, coming perilously close to proving Harlow’s contention that “when business really tries, when it is fully unified and raring to go, it almost never loses a big battle in Washington.”

Charles Peters is the founding editor of the Washington Monthly and the author of a new book on Lyndon B. Johnson published by Times Books.