By Ezra
Over in his snappily-named "Econoclast" column, Jamie Galbraith argues that the rise in Bush-era inequality differs substantially from the Clinton-era lift. Clinton's increase, he explains, was driven by private sector innovation, while Bush's is a function of public sector spending. So when inequality shot up in the late-90s, the data shows the epicenters of the increase were in Northern California, Washington (where Microsoft is based), and Manhattan (where the banks doing all the IPOs are located).
But the tech bust deflated those counties. The inequality divide, however, has surged again under Bush, but the gains have centered near the capital, in counties flush with defense spending and government contracts. It is, in other words, military-industrial complex inequality.
These inequalities, as experienced by the median American, are fundamentally different. "In economic terms," Galbraith writes, "Al Gore really did invent the Internet, in a way; his cheerleading (and Clinton's, and Greenspan's) steered money into that nascent boom. True, certain citizens got very, very rich. But the tech boom was also good for most of the rest of us: We had nearly full employment, rising wages and productivity, and little inflation; we also got a lot of fiber-optic cable, cheap phone calls, and fast video games."
