If the Great Depression went down in history as the great equalizer (by razing the incomes of the wealthy), the Great Recession may be known for having the opposite effect. According to a new report issued by the Congressional Research Service, the share of wealth owned by the richest 1 percent of Americans grew from 2007 to 2010 to 34.5 percent. The only time, in the last two decades, when this group had a greater share of wealth was in 1995, when the World Wide Web was first commercializing.
This is startling not only because every other group outside of the wealthiest ten percent have seen their wealth decline -- the bottom 50 percent lost more than 56 percent of their wealth since 2007 -- but also because there still seems to be no fundamental concern for shared prosperity in Washington.
As my colleague David Callahan explained, "The more dominant face of the economy is well-established corporations run by professional managers who keep finding new ways to drive labor costs down and profits up." This signals that the fundamental American problem isn't just about jobs, but also about the kinds of jobs that people have access to. This is especially true in an economy where your home may no longer be the safest place to house your wealth. But the conversations about job creation center around the same old paradigms -- especially on the right.
A week old report from the Federal Reserve indicated that over 18 years of savings and investment have been wiped away by the Great Recession. What did we hear from conservatives in Washington? That the "job creators" were the hardest hit given that most of this wealth came from America’s richest families and that their prosperity is linked to our country's success. But that belies the two aforementioned reports underscore: somehow public policy has been set so that, over five years later, when accounting for gains in wealth, the poor, working, and middle classes have been hardest hit by the Great Recession and their prospects for future seeming increasingly bleak.
That's unlikely to change under any Republican administration, but especially one led by Mitt Romney. The GOP nominee plans to cap federal spending at 20 percent of GDP while at the same time enacting policies that reduce federal revenues. Governor Romney would permanently extend the Bush tax cuts, eliminate the estate tax, and cut corporate tax rates, reducing revenues by $5.075 trillion over the next ten years. The results would be cuts to Medicaid, Medicare, Social Security, Food Stamps, TANF, housing subsidies, and the like. All the while, he would maintain tax loopholes like offshore accounts, the 15 percent capital gains tax, and the mortgage interest deduction on second homes and yachts.
After the Great Depression, America rebounded and created a middle class. After the Great Recession, it seems that only the wealthy may rebound.