July 27, 2004
Dusting Off the Clinton Truth-o-meter

In his Democratic convention speech, former president Clinton claimed that "Republicans favor concentrated wealth."

Let's see what the Census Bureau has to say.

I propose to evaluate the Clinton proposition by comparing the Gini coefficient (a measure of income inequality; a bigger Gini means less income equality) and the share of income earned by the top 5% of income earners in the 1980-1988 and 1992-2000 periods:

Year Gini Top 5% Share
1980 0.403 15.8%
1988 0.427 18.3%
Gini Change 80 to 88= 0.024
Top 5% Share change 80 to 88= 2.5%

Year Gini Top 5% Share
1992 0.434 18.6%
2000 0.462 22.1%
Gini Change 92 to 00= 0.028
Top 5% Share change 92 to 00= 3.5%

So, ladies and gentlemen, whose presidency seemed to "favor concentrated wealth?"

By the way, the most recent data available are for 2002. They show a Gini of 0.462 (unchanged since the departure of Clinton) and a top 5% share of 21.7%, down slightly since Clinton.

Since precision is particularly important to the president known for carefully parsing the meaning of "is," let me give some caveats to the discussion above:
1. Yes, the Census Bureau data are income not wealth. I suspect wealth data exhibit a similar, if not more pronounced, pattern but those data are not readily available.

2. Unlike USDA surplus cheese, income is earned not distributed. Moreover, income "distribution" data are sensitive to things such as the age distribution of the underlying population.

3. No, I don't really think Clinton policies were more tilted (or whatever) toward the rich; I suspect that the changes in both periods reflect business cycle conditions and the like.

4. Since Clinton was probably referring to the Bush tax cuts of 2001 and 2003 wouldn't after tax data be more relevant? Perhaps, but again I suspect we'd see the same trend. Who hasn't heard those statistics about the increasing share of income taxes being paid by high earners? As with other major tax legislation of the last two decades, the Bush cuts removed many low income earners from the tax rolls.

5. If this posting makes me seem like a Bush flack, please refer back to my earlier posting on the "dismal details on the 'thickening' of government under the Bush Administration."

Posted by E. Frank Stephenson at 12:59 AM  ·  TrackBack (126)

The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. -Adam Smith

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