It is a truism that the United States, among all the advanced countries, has the most radically skewed income distribution. In the sixteen years from 2000 through 2015, including the years of the Great Recession, the pretax income of the top 1 percent of earners was on average more than one-fifth of all personal income. To put that in perspective, the only other time the rich extracted that much wealth was in 1928, just before the onset of the Great Depression. New Deal social reforms and postwar marvels like the GI Bill effectively evened out income distribution, so that even the richest Americans had to content themselves with income shares that regularly hovered around the 10 percent mark.
That regime ended with the wholesale financial deregulation that was engineered by President Bill Clinton and his Treasury Secretary, Robert Rubin, and enthusiastically adopted by President George W. Bush and Federal Reserve Chair Alan Greenspan. Predictably, a runaway financial sector precipitated a crisis second only to that of the 1930s. But unlike the Depression, the 2000s debacle was not followed by reform. The plutocratic wing of Congress has built formidable barriers to cultivate and protect its wealth. Virtually all the Trump economic initiatives—from his reckless tax cuts to the assault on the federal regulatory apparatus—are looting operations.
It is feckless to hope for an easy delivery from the plunderers, for their power is rooted in decades of gritty and remarkably effective organizing—gerrymanding state legislatures, packing the judiciary, and swinging billionaire-funded PAC money between critical regions to turn elections. That is the kind of battle that must be fought over a broad front—and one of the salients will be data. Although we have good annual data sets based on tax returns, until now there have been no decent statistics on the ebb and flow of individual workers’ incomes over their lifetimes. But a recent paper, working mostly with social-security data, sheds considerable light on dark corners.