This has led him to a series of solutions, aimed at reducing costs in energy and health care, that most policymakers in his own party would probably reject out of hand, mainly because they involve relieving the burden on industry rather than punishing it. But even if you’re inclined to disagree with Shapiro’s remedies, or even if some rival economist wants to debate aspects of his methodology, there are a few essential conclusions we should draw from his work.
First, we should recognize that neither party is giving us an especially accurate accounting of what’s happened over the last 20 years. Government hasn’t, in fact, throttled economic growth, as conservatives maintain that it has; incomes rose sharply under an activist administration in the ’90s (and under a Republican administration that raised taxes several times) while falling off a cliff under an administration that slashed taxes and regulation.
While the inequality cited by Democrats is real and pervasive, Shapiro’s data shows us that this is really a symptom of a larger structural problem in the economy, rather than the problem itself. Inequality was rising in the ’80s and ’90s too, when most Americans were getting richer and the wealthiest earners were outpacing everyone else. Inequality seems more acute now mainly because while the wealthy continue to soar, college-educated workers are barely gaining, and everyone else has been in free fall.