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One symptom of the total dysfunction of our political system is the fact that we just suffered a catastrophic economic system failure without anything remotely approaching a coherent political response. Although the economy as a whole shows signs that it may soon bottom out and begin to recover, jobs will continue to be lost for some time, and there is no assurance that we will not see another severe downturn in the near term, given that the systemic problems behind the recession have not yet been fathomed, much less addressed.
Still, at least we know that there is a recession, and that its orgins lie in the financial sector and its facilitation--if not outright creation--of the housing bubble, as discussed in the previous diary. But is that simple fact itself a distraction from even more fundamental problems? I would argue yes, on two counts: First, that the Bush economy was already a miserable failure compared to the Clinton economy before it. Second, that the Clinton economy was actually much, much better for those at the very top levels, and thus was not substantially any different than the Bush economy, when viewed in comparison to the pre-1970s economy, for example. Indeed, it was during the Clinton economy that housing bubble got its start. One can, in a sense, see the Bush economy as an outgrowth of the Clinton economy, in which all the flaws of the latter are heightened, while a whole new round of flaws are larded on top. This was visible first in the recession, then the incredibly anemic employment recovery, and then the income data--all before the ultimate crash.
In this diary, I only look at data through 2007, so there's only the impact of the early slowdown to be seen--nothing of disastrous crash.
We begin by looking at the income levels for the top of the first four quintiles, plus the bottom of the top 5%, collected by Census Bureau, and published in the H1 Table. The second part of the diary will look at the high-end income data--up to the top 0.01% of income-earners--compiled by Dr. Emmanual Saez of UC Berkeley (Excel spreadsheet here). A simple visual inspection is enough to see that growth of all income levels in the census data came to a virtual stand-still during the Bush years:
Here's the underlying data:
As can be seen, income growth basically stopped for just about everyone. Those on the bottom lost a substantial amount, however. Does the phrase "worst President ever" ring any bells?
Removing the top 5% allows us to rescale the first graph, for a clearer view of what's happening with the lower quintiles:
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