June 9, 2009

The 1% Myth and the Victimization of America

By Andrew Foy and Brenton Stransky
A common liberal argument aimed at America's free market economy and reinforced in President Obama's budget proposal A New Era of Responsibility is that, over the last 25 years, the rich have gotten richer while the poor have gotten poorer. While this assertion should be of concern to anyone interested in domestic and economic policy, a critical examination of the data reveals the claim to be almost certainly spurious and uncovers an even more interesting question -- what is the motivation for the current administration to propagate such a claim? The following chart, produced by Thomas Piketty and Emmanuel Saez, and displayed in the President's budget proposal, demonstrates that over the last 25 years, the share of income going to the top 1% has consistently increased and therefore, one must conclude the share going to everybody else has gotten smaller. This would seem to provide compelling evidence for the argument that in America's free market economy "the rich get richer,...(Read Full Article)