Don’t Mind the Gap

Income inequality has become a hot-button issue during this political campaign. A recent Pew Research Center poll, for example, attracted an extraordinary amount of attention when it found that 66 percent of Americans believed there were “very strong” or “strong” conflicts between the rich and the poor — an increase of 19 percentage points since 2009.

But while Americans are hearing more and more about class conflict, there is little indication that they are increasingly divided along these lines. People don’t necessarily want to take money from the wealthy; they just want a better chance to get rich themselves. They care about policies that give everyone a fair shot — a distinction that candidates in both parties should understand as they head into the 2012 campaigns.

An awareness of economic inequality is not new. Pew surveys going back to 1987 have found an average of 75 percent of the American public thinking that the “rich are getting richer and the poor are getting poorer.” As far back as 1941, 60 percent of respondents told the Gallup poll that there was too much power in the hands of a few rich people and large corporations in the United States.

 

Despite that longstanding sense of inequality, there is no more sentiment today for populist revolt than there was then. A Gallup poll last month found 54 percent believing that income inequality was an “acceptable part of our economic system” — a slight increase, in fact, over the 45 percent that held that view back in 1998.

What’s different these days is that a despondent public, struggling with difficult times and an uncertain future, is upset over a perceived lack of fairness in public policy. For example, 61 percent of Americans now say the economic system in this country unfairly favors the wealthy.

Pew’s surveys in recent years present a detailed picture of these frustrations. One major complaint is tax policy: Dissatisfaction with the tax system has grown over the past decade, but the focus is not on how much respondents themselves pay, but rather on the perception that the wealthy are simply not paying their fair share. Just 11 percent of Americans say they are bothered by the amount they pay, while 57 percent of respondents say they are bothered by what they believe are unfairly low amounts paid by the wealthy.

Reactions to the bailout programs of 2008 and 2009 got the unfairness ball rolling. Early on the public was divided over the fairness of government helping financial institutions, and overwhelmingly opposed loans to Detroit automakers. Much of the public was even put off by plans to help homeowners facing mortgage foreclosures. By 2010, 51 percent said the bailout of the banks was the wrong thing for the government to do, while just 40 percent thought it was right.

No doubt outrage over Wall Street bonuses played a large part in this trend: Pew Research Center surveys at the time found 86 percent disapproved of high bonuses reportedly given out by many financial institutions, with as many as 62 percent saying they were angered by them.

Even recent reforms to financial-sector regulation have not allayed public concerns. In a poll last month, 56 percent of Americans said the power and influence of banks and other financial institutions represented a major threat to the country.

But before candidates read this frustration as a call for class warfare, they should recognize the limits of that approach. Americans are still confident that their society provides opportunities for economic mobility. In one recent Pew poll, 58 percent of respondents said they believed that people who wanted to get ahead could make it if they were willing to work hard.

The issue here is not about class envy. Rather, it’s a perception that government policies are skewed toward helping the already wealthy and powerful. While a December Gallup poll found few respondents wanting the government to attempt to reduce the income gap between rich and poor, 70 percent said it was important for the government to increase opportunities for people to get ahead. What the public wants is not a war on the rich but more policies that promote opportunity.

Original Article

Source: NY Times 

Author: ANDREW KOHUT