Bushonomics - The Rich Get Richer

Jared Bernstein @ The Huffington Post nails it dead on:

So, what are the economic outcomes of this great, neocon experiment? From Bivens and Irons:

·         Of the 10 expansions since 1949, as measured from the end of the recession (trough) to the end of the expansion (peak), the expansion from 2001 through last year ranks last in average growth of GDP, investment, employment growth, and employee compensation.

·         Despite [supply-side] tax changes that were promoted as incentives to increase investment, average growth in total investment over the latest expansion was less than half of the post-WWII average, and ranked last in this group. For the full cycle (from the 2001 peak to the last quarter of 2007), investment growth was also less than half the average and worse than all cycles in the last 50 years.

·         Corporate profits were the only area of strength in the latest cycle, ranking 2nd strongest among the last the prior 10 cycles.

·         The rankings for all 10 full business cycles since WWII show that the 2000s rank eighth in GDP, ninth in consumption spending and employment growth, and last in labor compensation and the ratio of the population employed.

Regarding the variables that matter most to working families, the neocon experiment was a particularly dramatic failure. Employment grew one third as fast as the average over the 2000s business cycle and the unemployment rate, though low on average, was higher at the end of the cycle than at the beginning. Perhaps the most damning indictment is this: for the first time on record, going back to the mid-1940s, the income of the typical, middle-income family was slightly lower last year than at the prior peak in 2000 (see their figure A).

The reason, of course, is that the benefits of the economy's growth flowed largely to those at the top of the scale, an outcome long associated with YOYO'ism. In the history of income inequality data going back to 1913, income is now more concentrated among the top 1% of households than in any other year, bar one: 1928.