A Long Way Down

Today's New York Times included this excellent editorial:

As is now painfully evident, the economic growth of the Bush era was largely an illusion. Poverty worsened during most of the boom years and middle-class pay stagnated, as most gains flowed to the top. In a recent update of their groundbreaking series on income trends, the economists Thomas Piketty and Emmanuel Saez found that from 2002 to 2007, the top 1 percent of households — those making more than $400,000 a year — received two-thirds of the nation’s total income gains, their largest share of the spoils since the 1920s.

Because many if not most Americans gained little to nothing from the Bush “growth” years, they have found themselves especially vulnerable to the recession.

Federal stimulus spending has helped cushion the blow. The question going forward is whether an economic recovery, when it comes, will help the poor and middle class or whether the top-heavy favoritism of the previous expansion will reassert itself.