The 2008 election marked the return of progressive politics in America. For the first time in 16 years, Democrats won both houses of Congress and the White House. They wasted no time in articulating a progressive agenda they claimed would offset the Great Recession and turn America toward greater fairness and compassion. Lifting up the poor, decreasing inequality, and curbing runaway income gains among the wealthiest Americans ranked high among their stated priorities.
It has been five years. How has their project turned out?
Since January 2009, the Dow Jones Industrial Average has more than doubled. Last year brought the largest annual increase in the S&P 500 since the late 1990s. And the vast bulk of this sustained market surge has accrued to the extremely wealthy. According to New York University economist Edward Wolff, the top 10 percent of earners own 81 percent of stocks and mutual funds, 95 percent of financial securities, 92 percent of business equity, and 80 percent of non-home real estate. So it comes as little surprise that nearly all the real income growth that President Obama’s “recovery” has generated would flow to the wealthiest Americans. According to University of California Berkeley economist Emmanuel Saez, 95 percent of all recovery gains have accrued to the much-vilified “top 1 percent.”
At the same time, the poor have become even more desperate. The number of Americans receiving aid through the Supplemental Nutrition Assistance Program (known as food stamps) has increased by almost 50 percent since January 2009, from 32.2 million to 47.7 million. One in six citizens in the richest country in the world now rely on food aid from their government.
Today, a lower percentage of Americans are in the workforce—63 percent, according to the Bureau of Labor Statistics—than at any time since the infamous days of Jimmy Carter. This has the effect of reducing the official unemployment rate, which led Binyamin Appelbaum of the New York Times to quip: “We are basically ‘recovering from the recession’ by reducing the share of Americans who participate in the labor force. Hurrah!”
And what has happened to income inequality? A central theme in each of the president’s campaigns, this is one metric by which committed egalitarian liberals might judge this administration. Economists measure inequality with the Gini coefficient, a number from 0 to 1. Zero denotes complete equality, and 1 would be complete inequality, with all income possessed by one person. Since January 2009, the Gini coefficient has moved from 0.47 to 0.48.
In sum, the administration’s ostensibly pro-poor, tough-on-the-wealthy agenda has led us toward a new American Gilded Age. Our putatively progressive president has inadvertently executed a plutocratic tour de force.
But the administration’s failure to achieve the president’s stated goals is nothing for his opponents to celebrate. Few conservatives begrudge the wealthy their gains, and many are skeptical that income inequality is meaningful in and of itself. But the fact that many Americans continue to suffer years after the technical end of the Great Recession should offend any sense of plain justice. The administration’s pathetic performance demands not schadenfreude, but answers. Conservatives need a social-justice agenda of their own.