A new report on American incomes this week would have been shocking had its message not already become so familiar.
The top 1 percent now collects 19.3 percent of the national income – one fifth, while the top 10 percent gets 48.2 percent -- nearly half. Ninety percent of us make do with just half the pie.
Income inequality has been growing since the Reagan tax cuts, but disparities have now reached breathtaking proportions.
Income distribution hasn’t been this unequal since the ominous year of 1928 – just before the crash that led to the Great Depression, and then New Deal legislation that was supposed to have permanently cured America’s division into haves and have-nots. The growth of the middle class was the dominant story of the 1940s, ’50s and ’60s, decades also featuring strong labor unions, steadily rising incomes, high marginal tax rates, and a remarkably bipartisan approach to economic policy.
If you think those happy economic times bear no relation to our present state, you’re right. The question is what we intend to do about it.
In Maine and the nation, one dominant narrative has shaped our thinking for three decades. It runs like this: Government has become too big. It can’t create jobs, which is the job of the private sector (i.e. corporate executives, not workers). Cutting taxes and spending leads to prosperity.
But don’t take it from me. Scott Moody of the Maine Heritage Policy Center, provides a succinct summary concerning what Maine should do about its aging population: “We understand that creating opportunities for young people ... begins with shrinking the tax burden, repealing oppressive nanny-state regulations, and ensuring that government intervention in the economy is limited.”
But the narrative is fraying. If reducing government is the cure-all, why did the top 1 percent not only increase its share, but accounts for 95 percent of all income gains since 2009, when the recovery officially began? Yes, that’s right: 95 percent.
The middle class has been decimated by the continuing economic crisis, and its future is threatened by continued public spending cuts. The 10 percent reduction in state education funding since 2008 doesn’t threaten people who can send their kids to private school, but it does cloud the future of those who aspire to get ahead on their own merits.
Is government really the problem?
An early indication of a turning tide came in Tuesday’s primary races for New York City mayor. An unabashed liberal, Bill DeBlasio, took the Democratic vote and looks likely to win in November.
Already alarm bells are sounding. A liberal will bankrupt New York City again! Rich people will flee! America’s most dynamic city will collapse!
None of these things are likely to happen. Clues about political trends in America’s largest city – at 8.3 million residents, larger than 39 entire states – came through exit polls.
Of Democrats, who outnumber Republicans 6-1, 50 percent thought Michael Bloomberg has been a good mayor, but 75 percent said the city needs a new direction.
De Blasio made two promises for change. The first is to increase taxes on the wealthiest to provide universal pre-kindergarten education. The second is to end Bloomberg’s policy of “stop and frisk,” where police stopped just about anyone without evidence a crime had been committed, but disproportionately those who are nonwhite and from poor neighborhoods. The practice may not actually reduce crime rates, but it convinces millions of minority residents they’re second-class citizens.
Massachusetts elected Republican governors for 20 years before, in 2006, picking Democrat Deval Patrick. In New York City, Democrats were content with Republican mayors for 20 years – where Bloomburg started before his moderate views forced him to leave the party. But no more, apparently.
These Republicans of yesteryear were elected in Democratic states because voters were persuaded businesses needed more tax incentives and the wealthy needed tax cuts.
Yet economic growth has been far slower than the post-war decades, and what growth has occurred benefits only a small minority of families.
What has this to do with Maine? The narrative here is similar. State government spent too much, regulated too much, and didn’t provide enough financial help to business. The only Democratic governor during this period, John Baldacci, adopted policies that should have pleased any contemporary Republican except the tea party branch – with the exception of Dirigo Health, a precursor of Obamacare, which he abandoned after its first year.
And in those three decades, Maine lagged even farther behind the rest of New England and has hit bottom under Paul LePage. Its performance on job creation is among the worst in the nation.
Is it time for a new narrative here, too?
Douglas Rooks is a former daily and weekly newspaper editor who has covered the State House for 28 years. He can be reached at email@example.com.