The other wealth gap: rich congress, poor America

Rep. Darrell Issa is one of 235 congressional millionaires...

If Congress seems a little bit out of touch …

… with the economic realities most Americans are facing, this could be one reason why:

the financial gap between Americans and their representatives in Congress has widened considerably since then, according to an analysis of financial disclosures by The Washington Post.Between 1984 and 2009, the median net worth of a member of the House has risen 21/2 times, according to the analysis of financial disclosures, rising from $280,000 to $725,000 in inflation-adjusted dollars.

Over the same period, the wealth of an American family has declined slightly, with the median sliding from $20,600 to $20,500, according to the Panel Study of Income Dynamics from the University of Michigan.All figures have been adjusted for inflation and exclude home equity, which is not included in congressional reporting. The year 1984 was chosen because it was the earliest for which consistent wealth data were available.The growing disparity between the representatives and the represented means that there is a greater distance between the economic experience of Americans and those of lawmakers.

… The growing financial comfort of Congress relative to most Americans is consistent with the general trends in the United States toward inequality of wealth: Members of Congress have long been wealthier than average Americans, and in recent decades the wealth of the wealthiest Americans has outpaced that of the average.

Another possible reason for the growing wealth of Congress is that running a campaign has become much, much more expensive, making it more likely that wealthy people, who can donate substantially to their own campaigns, gain office. Since 1976, the amount that the average winning candidate for a House seat spent has quadrupled in inflation-adjusted dollars to $1.4 million, according to the Federal Election Commission.

About a decade ago, academics studying the effect of income inequality on politics noticed a striking fact: The growth of income inequality has tracked very closely with measures of political polarization, which has been gauged using the average difference between the liberal/conservative scores for Republican and Democratic members of the House. The scores come from a database widely used by academics. …

The Post also reported on an analysis that shows a direct correlation between a person’s career before entering congress, and how conservative or liberal they are when they get there:

In order from most conservative to most liberal: farm owners; businesspeople such as bankers or insurance executives; private-sector professionals such as doctors, engineers and architects; lawyers; service-based professionals such as teachers and social workers; politicians; and blue-collar workers, according to the analysis, which is being published in Legislative Studies Quarterly.

Carnes said that while party affiliation is the strongest determinant of voting records, “the differences between legislators of different occupational backgrounds are pretty striking. People tend to bring the worldview that comes with their occupation with them into office,” he said.

This as the number of millionaires in congress is growing. From the New York Times:

Congress has never been a place for paupers. From plantation owners in the pre-Civil War era to industrialists in the early 1900s to ex-Wall Street financiers and Internet executives today, it has long been populated with the rich, including scions of families like the Guggenheims, Hearsts, Kennedys and Rockefellers.

But rarely has the divide appeared so wide, or the public contrast so stark, between lawmakers and those they represent.

The wealth gap may go largely unnoticed in good times. “But with the American public feeling all this economic pain, people just resent it more,” said Alan J. Ziobrowski, a professor at Georgia State who studied lawmakers’ stock investments.

There is broad debate about just why the wealth gap appears to be growing. For starters, the prohibitive costs of political campaigning may discourage the less affluent from even considering a candidacy. Beyond that, loose ethics controls, shrewd stock picks, profitable land deals, favorable tax laws, inheritances and even marriages to wealthy spouses are all cited as possible explanations for the rising fortunes on Capitol Hill.

What is clear is that members of Congress are getting richer compared not only with the average American worker, but also with other very rich Americans.

… With millionaire status now the norm, the rarefied air in the Capitol these days is $100 million. That lofty level appears to have been surpassed by at least 10 members, led by Representative Darrell Issa, a California Republican and former auto alarm magnate who is worth somewhere between $195 million and $700 million. (Because federal law requires lawmakers to disclose their assets only in broad dollar ranges, more precise estimates are impossible.)

And at this stage, nearly half of the 535 members of the House and Senate are millionaires.

Relatable much?

This entry was posted in 112th Congress, Politics, U.S. Economy, Wall Street vs Main Street and tagged , , , . Bookmark the permalink.

One Response to The other wealth gap: rich congress, poor America

  1. SpkTruth2Pwr says:

    I was shocked when I read the stats from the Center for Responsible Politics. 47 percent?! I would agree that this could be why a large percentage of Congress can spend time over petty battles when their antics affect the day-to-day lives of most of America.

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