You claim that conservative policies are better than liberal policies. Let's review the last 100 years of economic history. From around 1900 to the New Deal, public policy did little to limit extremes of wealth and poverty, mainly because the political dominance of the elite remained intact; the politics of the era, in which working Americans were divided by racial, religious, and cultural issues, have recognizable parallels with modern politics. The result was that income remained about as unequally distributed as it had been the late 19th century – or as it is today, with the bulk of income going to the top sliver.
The later period didn’t evolve gradually or automatically. It was created, in a remarkably short period of time, by FDR and the New Deal. As the below chart shows, income inequality declined drastically from the late 1930s to the mid 1940s, with the rich losing ground while working Americans saw unprecedented gains. This is a seminal episode in American history.
In the 1960s to much of the 1970s, we had a society of broadly shared prosperity, partly because strong unions, a high minimum wage, and a progressive tax system helped limit inequality. It was also a society in which political bipartisanship meant something: in spite of all the turmoil of Vietnam and the civil rights movement, in spite of the sinister machinations of Nixon and his henchmen, it was an era in which Democrats and Republicans agreed on basic values and could cooperate across party lines.
Since the late 1970s the America I knew has unraveled. We’re no longer a middle-class society, in which the benefits of economic growth are widely shared: between 1979 and 2005 the real income of the median household rose only 13%, but the income of the richest 0.1% of Americans rose 296% and is still getting even wider. Why? The great reduction of inequality that created middle-class America between 1935 and 1945 was driven by political change; Likewise, the undoing the gains won from the New Deal and the Great Society evaporated those gains. It’s important to know that no other advanced economy has seen a comparable surge in inequality – even the rising inequality of Thatcherite Britain was a faint echo of trends in America.
So, which policies help the most people? The New Deal policies that reduced income inequality or conservative policies that ever increase the amount of money into fewer hands?