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Robin Hood, Beware: The Rich Get Poorer

Financial crisis hits US wealthiest hard, reduces inequalities

By Kevin Spak, Newser Staff

Posted Oct 27, 2008 1:28 PM CDT

(Newser) – Barack Obama and John McCain have sparred over the country’s income gap, but that gap is shrinking rapidly, Robert Frank writes in the Wall Street Journal. Financial crises always knock the rich down a peg, and this one is no different. One economist predicts the top 1%’s share of all income will fall to 18-19% during the next year, down from 23-24% last year.

Is growing equality good news? “Only if you don’t like rich people,” says one analyst. “It's not like their share decline brings improvements for the middle class.” Some say it’ll put a damper on calls to increase taxes on the rich, but it’s important to note that the rich usually bounce back—as was the case after the 1990 and 2000 recessions.

[Images (3)]

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Barack Obama speaks at a rally at Colorado State University in Fort Collins yesterday. (AP Photo)

A scavenger looks for plastic bottles from a public trash bin with a promotion of a perfume in the background Wednesday, Sept. 3, 2008 in Shanghai, China. (AP Photo/Eugene Hoshiko)

Would-be Robin Hoods need to pause, because the rich aren't getting richer. (Shutterstock)

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Inequality became the central argument for raising taxes on the wealthy. Now that's obviously wrong. - lan Reynolds, senior research fellow at the conservative Cato Institute

Inequality cannot be totally undone by the financial bust. Policy makers now have a golden opportunity, like Roosevelt, to do something more permanent. - Emmanuel Saez, economist

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Robin Hood, Beware: The Rich Get Poorer