President Obama pushed hard his “middle class economics” message during a Cleveland speech yesterday. And in the process, offered his take on recent US economic history:
For the first eight years of this century, before I came into office, we tried trickle-down economics. We slashed taxes for folks at the top, stripped out regulations, didn’t make investments in the things we know we need to grow. At the end of those eight years, we had soaring deficits, record job losses, an economy in crippling recession. In the years since then we’ve tried middle-class economics. Today we’ve got dramatically lower deficits, a record streak of job creation, an economy that’s steadily growing.
The president modified his usual argument just a bit to frame the economic battle as middle-out Obamanomics vs. trickle-down Bushonomics, But in the past, he has subtlety lumped Bushonomics in with Clintonomics and Reaganomics. All part of the same tax-cutting, regulation-slashing, neoliberal wave from 1981 through 2008 that overall benefited the 1% at the expense of everyone else.
Yet despite the president’s critique, many voters probably recall the 1980s and 1990s with great fondness. For instance: A 2014 Quinnippiac survey founds American consider Ronald Reagan and Bill Clinton to be the best two postwar presidents.
What’s the matter with Kansas? What’s the matter with America?
Both Reagan and Clinton pushed deregulation. Both cut taxes for wealthier Americans. Yes, inequality rose. The share of market income going to the top 1% doubled from 1981 through 2001. But it was also a period when nonfarm payrolls increased by 42 million. The employment rate rose to 63% from 59%. Median incomes — when adjusted for transfers, taxes, benefits, and changing household size — rose by 30%. While the middle class shrank, it was “primarily caused by more Americans climbing the economic ladder into upper-income brackets,” the New York Times recently noted. A recent Brookings study found that through the 1980s and 1990s, “households of virtually every type experienced large, steady income gains, whether they were headed by men or women, by blacks, whites or Hispanics, or by people with high school diplomas or college degrees.” Clearly there was a lot happening during those decades other than just the rich getting richer.

















