Who Are the “Rich”? We Are

The Associated Press discovers something that Scott and I pointed out quite a few years ago in our paper, “The Truth About Income Inequality”: the “rich” are all around us:

Fully 20 percent of U.S. adults become rich for parts of their lives, wielding extensive influence over America’s economy and politics, according to new survey data.

These “new rich,” made up largely of older professionals, working married couples and more educated singles, are becoming politically influential, and economists say their capacity to spend is key to the U.S. economic recovery. …

They extend well beyond the wealthiest 1 percent, a traditional group of super-rich millionaires and billionaires with long-held family assets. The new rich have household income of $250,000 or more at some point during their working lives, putting them — if sometimes temporarily — in the top 2 percent of earners.

This, frankly, is stupid: the “new rich,” the top two percent, have household incomes of $250,000 or more at some point in their lives. Even reporters understand that such people are not wealthy, let alone rich. But note how the AP describes the top one percent: “the wealthiest 1 percent, a traditional group of super-rich millionaires and billionaires with long-held family assets.” In fact, the top 1%, like the top 2%, consists mostly of “older professionals, working married couples and more educated singles.”

It shouldn’t be a shock that a great many Americans, through persistent hard work, are able to become prosperous. Anyone who didn’t already know this hasn’t been paying attention. But for the AP, the “news” is interesting mostly in a political context:

Both Democrats and Republicans are awakening to the political realities presented by this new demographic bubble.

It isn’t a “bubble.” Americans have been working their way to prosperity for many years, and will continue to do so if the Democrats don’t wreck the economy.

Traditionally Republican, the group makes up more than 1 in 4 voters and is now more politically divided, better educated and less white and male than in the past, according to Election Day exit polls dating to the 1970s.

Well, yeah: in a free economy, people of all backgrounds can make money. This will continue unless the Democrats’ cronyism brings it to a halt.

Sixty-nine percent of upper-income voters backed Republican Ronald Reagan and his supply-side economics of tax cuts in 1984.

Yes, and 59% of voters backed “Reagan and his supply-side economics of tax cuts,” since Reagan’s policies were self-evidently successful.

By 2008, Democrat Barack Obama had split their vote evenly, 49-49.

In 2012, Obama lost the group, with 54 percent backing Republican Mitt Romney.

So Romney was pretty much right about the 47%.

“For the Democrats’ part, traditional economic populism is poorly suited for affluent professionals,” says Alan Abramowitz, an Emory University professor who specializes in political polarization.

Good Lord, I should hope so! Theft is only popular if you are one of the thieves.

There is nothing surprising in the data that underlie the AP story; it is only surprising that the AP considered the data to be news. As always, the GOP must be the party of opportunity. As long as voters understand that Republicans stand for upward mobility and Democrats are the party of establishment cronyism, the future will be bright.


Books to read from Power Line