Check out the following quote, then guess where the authors were working when they wrote these words: "Mark Twain, upon reading his obituary in the New York Journal, famously quipped that the reports of his death were greatly exaggerated. The same could be said today of reports from the scholarly world, the media and even the White House about the shrinking of the middle class." Now, where did the authors hang their hats during the day? The quote certainly sounds like something somebody working at the conservative Heritage Foundation would say. Or maybe somebody from the libertarian Cato Institute.
The correct answer, however, is the liberal Brookings Institution, which published the study from which those words were taken Dec. 22, with the title of "The exaggerated death of the middle class." The authors were Ron Haskins and Scott Winship, and what they found in their research is especially relevant in view of President Obama's Galesburg speech last week. In his address, the chief executive asserted that "the income of the top 1 percent nearly quadrupled from 1979 to 2007, but the typical family's incomes barely budged." Further on in the speech, he described America as having a "winner-take-all economy where a few are doing better and better and better, while everybody else just treads water." Obama would not have said those things had he read Haskins and Winship beforehand.
Here's why: Obama's claim is not new, as he and countless other liberals in government, academia and the mediasphere have repeated it ad nauseum in recent years. It appears to be the perfect statistic with which to argue America's super-wealthy don't pay their fair share of taxes and as a consequence the middle class is disappearing. But that's not what the facts show, as the Brookings scholars found.
Claims about the rich getting richer while middle class incomes stagnate are typically based on IRS or Census Bureau data, which, according to the Brookings duo, exclude the "net impact on income of government taxes and non-cash transfers like food stamps and health insurance, which benefit the poor and middle class much more than richer households. Plus, "the value of health insurance provided by employers is also left out."
Haskins and Winship note that when the numbers are crunched with all of the relevant data included, "the incomes of the bottom fifth of households actually increased by 26 percent, rather than declining by 33 percent. Those of the middle fifth increased by 37 percent, rather than by only 2 percent. There is no disappearing middle class in these data; nor can household income, even at the bottom, be characterized as stagnant, let alone declining. Even after 2000, estimates from the Congressional Budget Office (CBO) show the bottom 60 percent of households got 10 percent richer by 2009, the most recent year available."
None of this is to say things are hunky-dory for middle class Americans. Too many of them have been vainly looking for jobs for years because Obama's economy isn't growing. Maybe he's focused on the wrong problem? - The Washington Examiner