President Obama’s critics are accusing him of waging class warfare. They have a point, but not the one they hope will arouse the American people against his policies and plans.
The charge got started in the election campaign when he told “Joe the Plumber” that he wanted to “spread the wealth around.” It gained steam when his new national budget contained a chart showing that the “Top One Percent of Earners Have Been Increasing Their Share” from 10 percent of the national income in 1980 to 22 percent in 2006.
Accompanying text said: “While middle-class families have been playing by the rules, living up to their responsibilities as neighbors and citizens, those at the commanding heights of our economy have not.” It accused the latter of taking risks and piling on debts that harmed themselves and the economy as a whole. “With loosened oversight and weak enforcement from Washington, too many cut corners as they racked up record profits and paid themselves millions of dollars in compensation and bonuses.” It concluded that “there is something wrong when we allow the playing field to be tilted so far in favor of a few.”
Leveling the playing field has always sounded like plain fairness, but a storm arose over the budget’s description of the top 1 percent. Wall Street Journal columnist Daniel Henninger attacked the chart as exaggerating the income and wealth of the top 1 percent and called it a “moral argument for raising taxes on the rich.”
True enough, figuring the increasing wealth and income of that top 1 percent can vary depending on what exactly is included and what years are cited — as well as on what the housing and stock market plunge has done to rich, poor and middle class.
The Internal Revenue Service reported in mid-October 2007 that the wealthiest 1 percent of Americans earned 21.2 percent of all income in 2005, up from 19 percent in 2004, and higher than the 20.8 percent set in the previous bull market in 2000. The bottom 50 percent earned only 12.8 percent of all income.
The Congressional Budget Office confirmed the gap. It reported in December 2007 that just the increase in incomes of the top 1 percent from 2003 t0 2005 was more than the total income of the poorest 20 percent.
So, regardless of statistical quibbles, it is clear that the rich have been getting richer and the poor poorer.
President Obama is doing something about the gap. If that means class warfare, it’s just a different type of class warfare.