I don’t know anything about this and have hardly read anything to substantiate the claims.
Timothy Noah an American journalist, in this superb interview on inequality says:
Has the trend towards income divergence remained steady over the last 30 years or fluctuated based on which party is in power? What does the research show?
Am I allowed to put in a plea for a sixth book here? Larry Bartels’s Unequal Democracy looked at economic performance under presidencies going back to 1948. What he found was under Democrats the greatest income gains went to those at the bottom and tapered off as he went up the income scale. Under Republicans, the greatest income gains went to those at the top and tapered off as you went down the income scale. It correlates perfectly with our cartoon notions of how Democrats and Republicans differ – the idea that Democrats really are the party that cares about people at the bottom and Republicans really are the party that cares about people at the top.
Cite an example from history where government and society have set out to reverse economic trends and succeeded.
The government has a huge influence over trends towards greater income equality or greater income inequality. This is not just something that the economy does all by itself. There’s a lot of research showing that these trends are heavily influenced by government action. For a long time people didn’t realise that because taxation and government benefits did not have an enormous impact on income inequality – but researchers were looking in the wrong places.
There are all sorts of other things that the government does that do make a difference. It can’t be a coincidence that Democratic presidents have tended to foster economic equality while Republican presidents have tended to foster economic inequality. Democrats and Republicans govern in a million different ways. Fed policy has enormous impact on income inequality. The fact that Democrats are more tolerant of inflation than Republicans has meaningful distributive consequences. Monetary policy is very influential in this area. Raising the minimum wage is certainly a factor. One aspect of Obamacare that President Obama doesn’t want to talk about is that it’s fairly redistributive. It extends healthcare coverage to lower income people through the expansion of Medicaid. I think the Obama administration is a little nervous about talking about that because they don’t want to sound socialist, but Obamacare will certainly achieve a kind of invisible redistribution – it will change the distribution of benefits and the availability of medical care.
The thing to be most hopeful about is that people are concerned about inequality now. They want to talk about it. They want to understand what’s causing this phenomenon. Glib explanations coming from conservatives who would like to deny the Great Divergence aren’t really persuading anybody because they are not only untrue but also unpersuasive. This problem was not created overnight and it’s not going to be solved overnight, but I think that it can be solved and we can start to see some improvement.
It will be interesting to see how inequality fared under various US presidents recently. Emmanuel Saez and company should be expanding their huge data sets to confirm/verify the claims…
May be therr already is a lot of research on the topic. Those who know, please let me know..