The Partisan Political Economy in the Age of Political Polarization

By Dmitri Leybman Advisors: Michael Dawson and Jeff Grynaviski Preceptor: Ainsely Lesure
Submitted as a BA Honors Thesis in Political Science April 24, 2009

2 Leybman Acknowledgements This project began on one rainy October night in 2007 when I stumbled across Paul Krugman’s book Conscience of a Liberal. Here was an economist saying something I rarely heard economists say: politics mattered in shaping the income distributions of nation. Starting with that insight, I was intent on seeing whether Krugman’s view had in credence in the available empirical data. Almost a year and a half later, I am still fascinated by questions and ideas Krugman brought up. After I read acquired Larry Bartels book Unequal Democracy in April of 2008, I immediately knew that his work would be the basis of my senior honors thesis in political science. After I finished the book, I emailed Bartels asking for some of his data and, to my surprise, he completely obliged. Most of the data I used came from him, free and no questions asked. Whenever I had any questions, he was always willing to help out, even though I was not one of his students and I assume he had more important scholarly work to attend to. For all that, I am extremely grateful to him and everything he has provided me. I want to also thank Jeff Grynaviski for being my thesis advisor when Michael Dawson was briefly out of commission. His patience with me and his helpful suggestions (the equation on page 23 was based upon some of his ideas) were instrumental in getting this thesis completed. I thank him for his time and advice. Without my advisor, Michael Dawson, this thesis would have also not been completed. He routinely showed patience, kindness, and wisdom when helping me get this project finished. Despite numerous health setbacks and a demanding schedule, he

3 Leybman almost always promptly responded to my emails and helped me. Thanks for everything. Thanks must also be given Ainsley LeSure for her insightful suggestions and her discerning ear for good prose. Without her, this thesis would have sounded far worse, would have been less organized, and most of all, would not have had the intellectual rigor it needed to be persuasive. Also thanks to my friends, who supported me and encouraged me when I became frustrated with the research and the writing of this investigation. They provided me some of my best times and without them, the research would have gone by much more slowly and unhappily. Thanks to all of them for keeping me on the right track and never wavering in their persistence. And of course I want to thank my parents, my grandparents, and my uncle for supporting me in my interests and encouraging my pursuit of knowledge in political science. Without their encouragement and steadfast support, this thesis would have been more difficult to write and complete than it really was. Everything I have and most of what I have accomplished is because of their sacrifices and their help. Without them, nothing.

Abstract

4 Leybman Recent political research has found a strong correlation between a President’s political affiliation and a rise in income inequality. Under Democratic Presidents, income inequality flattens, while under Republican Presidents economic inequality tends to rise (Bartels 2008). This investigation seeks to understand if between 1949 and 2005 the Legislative Branch’s increased political polarization has also played a role in increasing or decreasing such inequality. This analysis uses multivariable regression analysis and a copious amount of economic and political data to see if political polarization has had an impact on how income is distributed. Our regressions show that political polarization in the House of Representatives not had increased income inequality. However, our analysis does show that the House of Representatives’ mean ideological score (liberal/conservative) does strongly influences how income is distributed. When the House of Representatives is on average more conservative, income inequality tends to escalate. These findings show that political polarization and ideological affiliations in the Legislative Branch does have an impact on the distribution of income. However, more work is needed to see precisely how the Legislative Branch is able to impact the economy. Furthermore, more research is needed to quantify the impact of fiscal and monetary policies on individuals in differing socio-economic strata.

The Partisan Political Economy in the Age of Political Polarization

5 Leybman Economists and political scientists often disagree about the causes and impacts of various social phenomena. One issue that highlights the disjunction between economic and political explanations concerns is the escalation of income inequality since the 1970s. The most popular explanation blames inequality on a combination of globalization and skill-biased technical changes (SBTC). As globalization increases, the American labor market can most effectively compete with other nations by placing a premium on skillintensive as opposed to labor-intensive work (Katz and Murphy 1992; Krugman 2007: 131-133). Thus, the observed wage disparity between groups of people does not arise because of politics, but rather as a result of inexorable shifts in the type of skills demanded in the United States. There are several reasons why one should be skeptical of this explanation. First, SBTC is effective only in explaining the “rising gap between less-educated and more educated workers” (Krugman 2007: 136). It does not explain why college-educated individuals have seen their wages stagnate even as productivity has increased1 (Krugman 2007: 136; Dew-Becker and Gordon 2006). Instead of being distributed across various income brackets, increases in income have been confined to a narrow group of people (Saez and Piketty 2003). Emmanuel Saez, one of the leading researchers on income inequality, has himself attributed this inequality to “retreats of institutions developed during the New Deal and World War II such as progressive tax policies, progressive unions, corporate provision of health and retirement benefits, and changing social norms

1

The rise of productivity and its failure to translate into higher income growth for workers is a very peculiar feature of America’s economy, albeit it one that has not been effectively explained. Ian-Dew Becker and Robert J. Gordon’s work on this topic has provided much empirical and theoretical validity to the thesis that income inequality in the United States can’t simply be the result of skill-biased technical change.

6 Leybman regarding pay inequality” (Saez 2008: 4). Second, income inequality is not endemic in every industrialized society. Political and social pressures in countries such as Canada and Great Britain mitigated income inequality when it began to escalate (Piketty and Saez 2006). In countries like France and Japan, income inequality also has remained stable (Piketty and Saez 2006). These disparities in income inequality across nations provide prima facie evidence that formal economic explanations are not enough to explain what has happened in the United States. Social and political features are almost certainly partly responsible for America’s growing disparity in the accumulation of wealth. The impetus for this study arose from Larry Bartel’s work on the partisan political economy (Bartels 2008). Bartels found that a President’s political affiliation was strongly tied to the rise of income inequality under his term in office (Bartels 2008: 1-36). Unlike Bartels, I intend to add polarization as a cause concept to his data to see if it has any impact on income distribution in the United States. Where his regressions focused on the effect of the executive branch of the income inequality, I intend to investigate the impact a unified government has on a President’s success at reducing or increasing income inequality.

I. Literature Review
Political polarization and the partisan political economy are two extensively studied fields in political science (Hibbs 1988; McCarty, Poole, and Rosenthal 2006). The political impact of income inequality has also begun to elicit scholarly inquiry within political science and sociology (Bartels 2008; Jacobs and Skocpol

7 Leybman 2005; Morris and Western 1999). Indeed, the salience of inequality in political scholarship has grown to such an extent that the American Political Science Association, with the support of the Russell Sage Foundation, convened the Task Force on American Democracy and Inequality to investigate how inequality has been and should be studied by political scientists (APSA 2004). Since my investigation is concerned with income and wage distribution, two fields generally under the purview of economics, I will also survey literature written from the perspective of economists who employ models relatively devoid of political considerations to explain how and why wage disparity has occurred (Katz and Murphy 1992). Part of the reason for this emphasis on economics is to uncover what exogenous economic variables need to be considered in the regression models that will be utilized. Additionally, we will utilize Keith Krehbiel’s theories on how the U.S. Congress passes legislation. Krehbiel’s theory of U.S. lawmaking will let us see if the shifting liberal/conservative ideological scores in the House of Representatives and Senate have had an impact on income distribution. By using Krehbiel’s theory of pivotal politics, we will be able to set up a model wherein the composition of the Senate and House of Representatives will serve as independent variables to help gauge their impact on economic inequality.

I.

Political Polarization a) Measuring Polarization

8 Leybman Political polarization among members of Congress has increased to its highest level since the early 1920s (McCarty, Poole, and Rosenthal 2006: 8). Two scholars, Keith Poole and Howard Rosenthal, have contributed to the study of polarization results by constructing a unique methodological approach to measuring the ideological leanings of Senators and Representatives2. By collecting the roll call vote of every member of congress, they can assign a NOMINATE score that spatially positions each representative on a liberal-conservative dimension. These NOMINATE scores can range from -1 (most liberal) to 1 (most conservative). 3

b) Explaining the Rise of Polarization
Despite the public’s increasing convergence toward the middle on political and social issues, the political elites have gravitated further apart (Nivola and Brady 2008: 8; Fiorina, Abrams, and Pope 2005). Four factors have been proposed to explain this seemingly paradoxical situation. The first explanation centers on the increasing importance of income in determining political allegiance. “Income differences have become more important in determining where a congressional district’s representative is likely to fall on the liberal-conservative dimension [than in the past]” (McCarty, Poole, and Rosenthal 2006: 115). Poole, McCarty, and Rosenthal note that the median voter’s income has remained constant over the past thirty years in comparison with median family
2

For a more extensive analysis of how NOMINATE scores are obtained, see Poole’s Spatial Models of Parliamentary Voting (2005).
3

When speaking about the political elites, I will alternate between calling them “members of congress” or simply “representatives.” When referring to members of the House of Representatives, “Representatives” with a capital “R” will be used.

9 Leybman income in the United States (McCarty, Poole, and Rosenthal 2006: 115)4. Since the median voter’s income has remained relatively stable, there is less incentive for him or her to vote for candidates who promote more redistributive policies. If, on the other hand, the median voter’s income had diminished, then Poole, McCarty and Rosenthal would predict increased pressure on political elites to redistribute wealth. One of the reasons why the median voter’s income is greater than the median family’s income is due to the rise of immigration (McCarty, Poole, and Rosenthal 2006: 120). Non-naturalized immigrants are precisely the ones most likely to be affected by redistributive policies since they tend to earn less than other citizens (McCarty, Poole, Rosenthal 2006: 120)5. Additionally, immigrants, being noncitizens, cannot vote and thus cannot pressure politicians to adopt more redistributive policies. Such demographic changes, then, create a political environment where certain politicians can move further and further to ideological extremes without repercussions from those individuals most hurt by their policies. The second explanation uses religion to understand the current political divide. There is a very strong correlation between church attendance and political affiliation. “More than half of those who attend church weekly call themselves conservatives, four times the percentage of those who regard themselves as liberals” (Nivola and Brady 2006: 22). Additionally, the presence of certain “wedge issues”
4

McCarty, Poole, and Rosenthal do not inform us if this measurement is taken in real or nominal dollars.
5

It is important to note that in terms of income, there is a wide disparity between naturalized and unnaturalized immigrants. For example, McCarty, Poole, and Rosenthal find that “naturalized citizens are likely to look, in terms of income, much like native citizens” (McCarty, Poole, and Rosenthal 2006: 117).

10 Leybman such as abortion further polarizes the electorate along ideological lines. For example, a study conducted by Larry Bartels found that since 1984 the importance of social issues on party affiliation and presidential choice has more than doubled (Nivola and Brady 2006: 22). These social issues galvanize certain religious voters to support more politically extreme representatives who rarely if ever vote across their party lines. The third explanation concerns the transformation of the Southern states from Democrat to Republican. When Democrats embraced the Civil Rights Platform, they began to alienate many white Southern conservatives (Krugman 2007: 121-123; Nivola and Brady 2006: 19-21). This alienation was exacerbated in the 1980s when the Democratic and Republican Party moved further way from each other on the contentious issue of abortion. Additionally, the small government rhetoric during the Reagan Revolution was especially appealing to the South’s emphasis on states’ rights (Krugman 2007: 121-123). The result was a transformed nation, where politicians exploited regional and cultural divisions to get elected6. The last explanation relates to how politicians are elected to the national legislature. The argument is that “competitive districts are vanishing”, thus reducing the incentive for politicians to moderate their policies once they reach Congress (Nivola and Brady 2006: 24). The sources for this reduction in district competitiveness are numerous. Some blame gerrymandering, arguing that political influences purposefully carve out districts to maximize the likelihood of one party achieving dominance (McCarty, Poole, and Rosenthal 2006: 60-62). Others blame
6

For a more comprehensive account of the political historical factors that went into the creation of a Republican South, see Rick Perlestein’s Nixonland (2008).

11 Leybman the increasing incumbency advantage that has made politicians less accountable to their constituents. As politicians become more certain they will be re-elected, they have little incentive to moderate their policies. All the above explanations have their own unique shortcomings. For example, the religious explanation for polarization overemphasizes church attendance while not accounting for the type of religion being practiced. For example, in the 2004 election of George W. Bush, the majority of fundamentalist Christians voted for George W. Bush, while Mainline Protestants were split down the middle. Furthermore, as David W. Brady and Pietro S. Nivola note, even if religion plays a role in determining political affiliation, “potent faith-based constituencies do not always skew a party policies to the right…since religious conservatives…have favored increasing” the amount of money allocated to antipoverty programs and foreign aid (Nivola and Brady 2006: 23). The Gerrymandering/reapportionment hypothesis has also been shown to not have a strong impact on political polarization in Congress. Empirical research conducted by McCarty, Poole, and Rosenthal showed that district reapportionment had only a limited explanatory role in accounting for the re-election of politically polarizing politicians. For instance, if reapportionment were responsible for increased polarization, one would observe a distribution of voter preferences that was more polarized across districts but less polarized within districts (McCarty, Poole, and Rosenthal 2006: 63). To test this hypothesis, the authors examined the distribution of the presidential vote, which is often used as a measure of partisanship and ideology within a district. The authors argue that “[i]f the districting process is

12 Leybman contributing to polarization, we would expect that the distribution of the presidential vote across districts to have ‘fatter’ tails [than] the distribution of the vote across geographic units that are not subject to political manipulation” (McCarty, Poole, and Rosenthal 2006: 63). Instead, estimates show that these distributions are in fact quite similar to each other, with densities in the tails of each of these distributions appearing nearly identical. Even the rise of Southern Republicans7 has been demoted from its position as the leading explanation of political polarization. One way to observe this is by seeing how polarization scores in Congress, post-1965, would look if Southern representatives were not included. Using NOMINATE score scaling, McCarty, Poole, and Rosenthal conducted such an experiment. They scaled polarization measures in two separate series, one that included all members of the U.S. House of Representatives and one that excluded all Southern Representatives. They found that the two series were high correlated (r=.94) and exhibited the same “U-shaped trajectory” in the visual representation” (McCarty, Poole, and Rosenthal 2006: 4950). This suggests that Southern Representatives and their political polarization are actually part of a nationwide political phenomenon where political elites across the country have become strongly divided. The impact of income upon voting patterns within the U.S. population also has limitations in how much it can explain about the rise of political polarization.
7

The best empirical criticisms offered against the Gerrymandering hypothesis and the role of the South in increasing polarization are found in chapter 2 of McCarty, Poole, and Rosenthal’s Polarized America: The Dance of Ideology and Unequal Riches. Additionally, Nivola and Brady’s Red and Blue Nation: Characteristics and Causes of America’s Polarized Politics, Volume 1, offers further an exhaustive analysis of each of these explanations, along theoretical and empirical grounds.

13 Leybman For example, one could argue that the increased role of income in determining voting behavior is the product, rather than the cause, of political polarization. Additionally, using income as an independent variable on voting behavior does not sufficiently explain why in certain states there is a lower threshold at which an individual voter votes for a Republican President. For example, in poorer states, one finds that income matters more in determining how one votes than it does in richer states. In poorer states like Mississippi, there is a noticeable disjunction between the political affiliation of poor voters and the affiliation of richer voters. In richer states like Connecticut, income however matters less in determining which party a voter supports (Gelman et al 2008). Such a pattern indicates that income, as a causal variable in voting behavior, needs to be better studied to see why it impacts voting behavior so differently across states.

II. The Political Macroeconomy a) Political Business Cycle
In a partisan political economy, Democrats and Republicans have mutually exclusive preferences concerning the ideal rates of inflation and unemployment (Hibbs 1988; Alesina and Rosenthal 1995). Both parties seek to exploit the short-run Philips curve that expresses an inverse relationship between inflation and unemployment. When the economy is growing, inflation grows, but unemployment is diminished, whereas when the economic growth is diminished, inflation decreases but unemployment rates go up (Alesina and Rosenthal 1995: 161-162). One consequence of these different policy preferences is the existence of

14 Leybman differing partisan business cycles. Much work has been done in establishing models to effectively explain how Democrat and Republican Presidents create business cycles that suit their preferences. The most empirically successful of those proposed is the rational partisan business cycle model (Alesina 1987). Within this model, the economy is impacted by voters’ expectations of how Presidents will impact the short-term trade off between unemployment and high inflation. Once the mid-term election arrives, voters almost always consistently vote for the President’s opposing party in order to moderate the incumbent President’s macroeconomic objectives. However, it should be noted that within this model neither Republicans nor Democrats have substantial control over the economy. Rather it is the assumption by voters that they can guide the economy towards different macroeconomic ends that drives the rational partisan business cycle.8

b) The Tradeoff between Inflation and Unemployment
Since inflation and unemployment are so integral to this model, it is important to ask who each of these macroeconomic indicators impact the most. In other words, why are Republicans less tolerant of inflation as opposed to unemployment? Why are Democrats concerned with reducing employment even at the cost of incurring higher inflation? The answer is found in the socio-economic constituencies of each party. Wealthier individuals and older citizens on fixed incomes have disproportionately supported Republicans, while the Democrats
8

Alberto Alesina’s work on the rational partisan cycle has largely focused on the tradeoff between inflation and unemployment and how voters incorporate these trade-offs in their voting behavior. His rational partisan cycle theory, however, has little to say directly about how political partisanship can impact income distribution

15 Leybman receive their most consistent support from relatively poorer constituents (McCarty, Poole, Rosenthal 2006: 71; Hibbs 1987: 213-214). The costs of inflation and unemployment are also borne differently by the poor and the rich. Since the rich are more likely to have investments, inflation easily erodes the value of any profit or gains these investments may yield. The poor, however, having fewer savings, are especially at the mercy of the job market9. The result is a situation where individuals with different economic objectives tend to align themselves with political parties that cater to their economic interests. For the purposes of our investigation, these macroeconomic models and economic indicators provide the theoretical and empirical knowledge needed to understand how and why polarization could impact the distribution of income in the United States. As the political economist Douglas Hibbs argues, “the impact of unemployment on the income distribution…is stronger substantively [than the impact of inflation]” (Hibbs 1987: 80) When the economy moves into a recession, which almost always occur under Republican Presidents10, this creates more financial hardships for income earners in the bottom 40 percent “to the relative advantage of the top 40 percent-particularly the top 20 percent (the upper middle class and the rich)” (Hibbs 1987: 80).11
9

For a much more thorough analysis of the costs of inflation and unemployment to different socio-economic groups, see Chapters 2 and 3 in Hibbs The American Political Economy (1987).
10

Hibbs notes that , “…six of the seven recessions experienced since the Treasury-Federal Reserve Accord of 1951, which made possible activist monetary policies coordinated with fiscal policies, occurred under Republican Presidents. Every one of these contractions was either intentionally created or passively accepted, at least for a while, in order to fight inflation (Hibbs 1987: 218).
11

The analysis provided by Hibbs, Alesina, and Rosenthal should make us skeptical

16 Leybman

III. Income Inequality and the Presidency
The level of income inequality in the United States has risen to its highest level since the 1920s. Money is more concentrated in the hands of fewer people. Additionally, wages have stagnated for most Americans. Since the 1970s, “everyone below roughly the 90th percentile of the wage distribution saw his or her income grow more slowly than average, while only those above the 90th percentile saw above-average gains” (Krugman 2007: 129). Gains in income are disproportionally being accrued at the top of income ladder. “Once you get way up the scale…the gains have been spectacular” (Krugman 2007: 129.) For example, since 1973, the top tenth of a percent of the population had an income that rose fivefold, while the top hundredth of a percent had its income rise by sevenfold (Krugman 2007: 129). This rise in inequality is also strongly correlated with the political party that is in the oval office. As has already been mentioned, Larry Bartels has noted that since 1949-2005, disparity in the distribution of income tends to rise substantially during Republican administration and then subsides during Democratic administrations. The probability of this being a coincidence, or of not observing more than one exception to this type of pattern of inequality “in a random sequence of 11 increases and decreases would 12/2,048=.006” (Bartels 2008: 36).12 Not only of perceiving inflation and unemployment as entirely exogenous variables. In other words, they are impacted by political affiliation of the President in office. This endogeneity should be kept in minding when interpreting any regressions with these two macroeconomic measurements.

12

The only Democratic President of the past 56 years who actually saw inequality increase under his watch was Jimmy Carter. This was partly the result of the recession that Federal Chairman Paul Volcker created to bring inflation under control (Bartels

17 Leybman do the poor do worse under Republican Presidents, but also do the middle class. However, the rich, in terms of real-per-capita income growth, do well under both Democratic and Republican presidents (Bartels 2008: 47-61).

IV. Legislature and Gridlock
Keith Krehbiel’s theory of U.S. lawmaking can provide us with an opportunity to set up a regression model wherein we can measure how the legislative process by itself could have an independent impact on the distribution of income in the United States. Krehbiel’s theory accounts for the constitutional rules and procedures used to pass legislation. Since some of this legislation could have had an impact on how income was distributed, Krehbiel’s theory becomes especially useful in helping us to see whether the legislature has had a statistically significant role in determining whether income inequality rises, flattens, or diminishes. From Krehbiel’s model, we will see that the most important members of Congress are those who sit on the pivot. This conception of the pivot is useful for several reasons. First, finding numerical ideological scores on these pivotal figures is relatively easy thanks to Poole and Rosenthal’s NOMINATE scores (see Literature Review). Second, the increased polarization in Congress allows us to make certain assumptions about the person in the filibuster pivot: 1) As polarization grows, the individual in the filibuster pivot will likely be less moderate; 2) the more extreme the person on the filibuster pivot in one political direction, the less likely a bill from the opposing party is to be passed. If the individual on the filibuster pivot has a 2008: 45-46).

18 Leybman NOMINATE score of .600, then legislature extolled by a Democrats is likely to be vetoed or filibustered. Krehbiel’s pivotal theory of politics makes several key assumptions. First, all policies or legislations can be distributed across a unidimensional policy space. As Krehbiel himself suggests, “it is convenient and intuitive to think of…public space as a continuum on which liberal polices are located on the left, moderate policies are located in the center, and conservative policies are located on the right” (Krehbiel 1998: 21). Within this policy space, there also exists an “exogenous status quo point, q” representing status quo policies from previous Congressional sessions (Krehbiel 1998: 21-22). We also assume that each player in the legislature (Senator, Representative, President) has an ideal point within the policy space. When a proposed legislation is closest to this ideal point, that particular player derives a higher utility from it than do other players around him. For convenient simplification, Krehbiel asks us to imagine a utility function that is both symmetric and single-peaked. This yields the result that when deciding between two policies, the lawmaker selects the policy closest to his ideal point (Krehbiel 1998: 22). Furthermore, within this theory, we also acknowledge that the ability of politicians to enact legislatures is tempered by two supermajoritarian procedures. The first procedure is the executive veto, where the President can veto legislation and send it to the Senate to be voted upon. The second supermajoritarian procedure is the filibuster. This filibuster arises from the U.S. Constitution’s permission to

19 Leybman Senators to “engage in extended debate subject to a 3/5 vote to end debate (invoke cloture)” (Krehbiel 1998: 23). The presence of the filibuster and the executive veto thus complicate the passage of legislation, thereby acting as a system of checks and balances to oversee the power of both legislators and the President. Within Krehbiel’s theory, there emerge two important “pivotal” figures in Congress. The first figure is the veto pivot. This is the individual who is situated in the unidimensional policy space in such a way that to the right (left) of his ideal point there are exactly or more than 2/3 of the legislature. For example, imagine a policy space with eleven lawmakers and a liberal president. The liberal president’s policy position is located on the left of this continuous line and the veto pivot is the fourth individual to the President’s right on this space. For a bill to be approved in the Senate after a President’s veto, the “pivotal player” is the individual whose policy ideal point “make[s] up exactly or just more than 2/3 of the legislature” (Krehbiel 1998: 24). The filibuster pivot is similar to the veto pivot in that both follow “a similar fractional algorithm” (Krehbiel 1998: 24). A filibuster pivot, then, is the individual whose policy ideal point makes up exactly or more than 3/5 of the legislature. Following the same example as above, assume the existence of a liberal president, positioned somewhere along the left of this unidimensional space. Within such a configuration, the filibuster pivot is the legislator for whom “his ideal point and all ideal points to his left make up exactly or jut more than 3/5 of the legislature” (Krehbiel 1998: 24).

20 Leybman Within this investigation we will use the filibuster pivot to understand the impact of supermajoritarian procedures, political polarization, and President’s party on the legislation passed in Congress. The assumption behind this is that different parties approve of different types of legislations. Democrats support policies that redistribute wealth, leading to the flattening of income inequality, while Republicans support policies that mitigate the redistribution of wealth, thus increasing income disparity. Hypothesis 1a: Growing polarization in either the House or Senate will be positively correlated with increased income inequality in the United States except when a Democratic President is in office. Hypothesis 1b: During periods when the mean ideological score in the House of Representatives is conservative, the level of income inequality will rise. Hypothesis 2a: Growing political polarization in the House or Senate will be positively correlated with the percentage change in real pre-tax annual income among individuals in the 20th, 40th, 60th, and 80th percentile. Hypothesis 2b: Unified governments under Democratic Presidents will diminish income inequality, while unified governments under Republican Presidents will increase it.

III. Methodology
The above mentioned NOMINATE scores are valuable for two reasons. First, they allow us to see how representatives’ ideal points have changed throughout their terms. For example, the scores can capture “some changes in position [of individual representatives], such as the conservative—to liberal journey of Senator Wayne Morse of

21 Leybman Oregon” (McCarty, Poole, and Rosenthal 2006: 21). NOMINATE scores are also used because they are the only methodology that allows for an intertemporal comparison of Congresses across different periods of time (McCarty, Poole, and Rosenthal 2006: 21).13 In other words, we can compare the shifts in political ideology from the 81st Congress (1949-1951) to the108th Congress (2003-2005). Since our investigation spans the years 1949 to 2005, it is imperative that we have such measurement incorporating the major ideological shifts that have occurred during this fifty-six year period My analysis is also dependent on the use of multiple regression analysis to attempt to measure the impact of the Presidency and Congress on income inequality and income growth from 1949 to 200514. The use of regression allows us to quantify as well as control for certain variables, thus allowing for a more precise and accurate measurements of how one independent variable impacts another. The multiple regression equation we will be using can be stated in the following generic form: Y = a + b1*X1 + b2*X2 + ... + bp*Xp (1)

Where Y is the dependent variable, a is the intercept, b1 is the coefficient for independent variable X1, and b2 is the coefficient for independent variable X2 and so on… In our investigation, our dependent variable will be either income inequality
13

Other procedures used to measure political ideology cited by McCarty, Poole, and Rosenthal include Poole’s optimal classification, the factor analytic method devised by James Heckman and James Snyder, and Bayesian Markov Chain Monte Carlo analysis proposed by Joshua Clinton, Simon Jackman, and Douglas Rivers (McCarty, Poole, and Rosenthal 2006: 206).
14

Such time-series regression analysis requires certain assumptions like linearity, nonstochaisticism, nonautoregression, etc. (Ostrom 1990: 14-15). The data we are analyzing conforms to these conditions and therefore can be analyzed via these regressions.

22 Leybman measured through an 80/20 ratio, or the percentage change in annual pre-tax income across the 20th, 40th, 60th and 80th percentile. To obtain this 80/20 ratio, I divided the amount of wealth controlled by individuals in the eightieth income percentile by the amount of wealth belonging to individuals in the 20th income percentile. To compute polarization scores, I obtained data listing the ideological mean scores for Democrats and Republicans along the first political dimension15. These political scores range from -1 to 1, from most liberal to most conservative. Then, following McCarty, Poole, and Rosenthal 2006, I subtracted the Democratic ideological mean score along the first dimension from the Republican ideological mean score along the first dimension for each House and Senate from 1949 through 2005. Thus: Polarization Score Chamber of Congress, year x= [Republican Ideological Mean Score along First Dimension Chamber of Congress, year x] - [Democrat Ideological Mean Score along First Dimension Chamber of Congress, year x] (2)

Following the work of Bartels (2008), I used a distinctive set of exogenous and statistical variables to determine the Presidential and Congressional impact on income growth and inequality. These variables are oil prices (percentage change), labor force participation (percentage change), lagged pre-tax growth for 95th percentile, lagged growth for nth income distribution, and a variable to indicate the presence of a Democratic President in office, lagged by one year. The reason for the
15

McCarty, Poole, and Rosenthal’s analysis included a second dimension to account for voting representative’s voting behavior toward issues of civil rights. After Civil Rights seized to be a salient political issue, the dimension contributed less and less accuracy to their NOMINATE scores. Thus, this second dimension was discontinued. In this investigation, we will concern ourselves only with scores along the first dimension, the liberal-conservative spectrum.

23 Leybman lags in the Presidential indicator variable is that a President’s macroeconomic policies take one year to be reflected in macroeconomic outcomes.16 We note oil because fluctuations in its price can have a strong impact on other macroeconomic variables, including the amount of disposable income available to Americans. Recall, for example, the OPEC oil shocks of the 1970s. The percentage of people participating in the labor market is also an important variable in economic life. Caeteris paribus, the greater number of individuals that participate in the work force, the more aggregate goods are produced, leading to a rise in the overall GDP. We note lags in the 95th and nth percentiles because it often takes a year for the impact of Presidential policy to have an impact on the dependent variable. Also lags in the 95th percentile assume that it takes some time for growths in that income bracket to impact the distribution of income in other brackets. Unlike Bartels, I am also adding the percentage of individuals belonging to unions as a variable since a decline in unionism has been cited as one of the causes of income disparity (McCarty, Poole, Rosenthal 2006: 166; Card 1992)17. The second model, using Krehbiel’s pivot theory, will incorporate the filibuster pivot to see if a more polarized Congress is correlated with higher income inequality. To uncover which member of the Senate controlled the filibuster pivot point of the minority
16

Bartels writes: “I have investigated the statistical fit of alternative lags by replicating [certain analysis]…using current (unlagged presidential partisanship) as well presidential partisanship lagged by two, three, four, or five years. In every case, the resulting regression model fit the data 4 to 5% percent less well than the model with presidential partisanship lagged by one year” (Bartels 2008: 33).
17

I attempted to incorporate the percentage of the foreign-born population into the regression but was stymied by a lack of data. The foreign-born population is only tallied during each decennial census. As a result, there would only be six percentages out fiftyseven observations (for 1950, 1960, 1970…2000). Due to the paucity of data, the variable was discarded in the analysis.

24 Leybman party, several steps were taken. First, I organized Poole and Rosenthal’s database of every single member of the Senate from the 81st Congress (1949-1951) to the 109th Congress (2005-2007)18. Then, within each enumerated Congress, I ordered every Senator in ascending order from most liberal to most conservative along the first ideological dimension (see footnote 11). Then I counted the 40th most conservative/liberal Senator of the minority party. Thus, if the Minority party in the Senate was the Democratic Party, I would start counting from the most liberal Senator down to the 40th most liberal one. If the Minority party was the Republican Party, I began my count with the most conservative Senator until I reached the 40th most conservative one. The reason we use the 40th most conservative/liberal member is because it requires 60 votes to filibuster a bill. Thus, if a bill is passed, it requires that the 40th member agree to it for it to be voted upon. Next, I obtained the 1st dimension Mean Score of the Majority Party in the House of Representatives database.19Then the following multivariable equation was regressed: 80/20 Ratio=b0 + b1*Party of President + b2*Median Ideological of Majority Party in House+ b3*Ideology of the Senator who controls the filibuster pivot opposite the Majority Party+ b4*socio-economic controls+ b5* socio-economic controls+… bn*socioeconomic controls (3) Such an equation provides a test of Presidential influence, majority party influence, and the influence of super-majoritarian checks.

18

Since my data ends at 2005, my results for the 109th Congress will only cover that single year and not the remaining years of that Congressional term.
19

ftp://voteview.com/junkord/hmeans3.txt

25 Leybman

IV. Results
[Insert Tables 1-7 Here]

The regressions are divided into seven tables. The first table provides the data showcasing the impact of political polarization in the House of Representatives on the annual percentage change in pre-tax income across the 20th, 40th, 60th, and 80th percentiles. The control variables are lagged income growth for each nth percentile, lagged income growth in the 95th percentile, percent changes in price of oil (lagged by one year), linear trend, quadratic trend, and the percentage of population membership in unions.20The second table accounts for the exact same dependent variables except now we attempt to uncover the impact of polarization in the Senate on the annual percentage change in pretax income across the four different percentiles. Table three incorporates a new dependent variable, the 80/20 ratio, and uses a set of distinct socio-economic variables as controls. These variables are the presence of a Democratic president in office (lagged one year), the percentage of population participating in the labor force, lagged growth for 95th percentile, percentage change in the price of oil (lagged one year), the incorporation of linear and quadratic trends the percentage of population membership in unions, and the polarization indices for the House of Representatives and the Senate from 1949 to 2005.

20

We use a linear trend to prevent any spurious correlations that can occur when trending economic phenomena. The quadratic trend is also incorporated in the regressions to eliminate electoral cycle induced effects on the economy.

26 Leybman

The next three tables use Krehbiel’s pivotal politics theory of U.S. lawmaking to account for the legislative branch as an independent causal variable on income inequality. Our controls for Table 4 include the 1st dimension coordinate of the Senate filibuster pivot, the ideological mean score of the majority party in the House of Representatives, the presence of a Democratic President (lagged one year), the percentage of people employed in the labor force, percentage of population employed in unions, and change in price of oil (lagged one year)21. Table Five includes the exact same controls except for the omission of the Democratic President indicator variable. Instead, I chose to replace it with a unified government variable (lagged one year) to see if having a unified government, Democratic or Republican, would have a different impact on the 80/20 ratio. The next two tables use the exact same controls as Table Five with the single exception being that we now have a new unified government variable: Unified Government Under a Democratic President and Unified Government Under a Republican President.

V. Analysis
Tables 1 and 2 indicate that political polarization in both the House and Senate is positively correlated with the percent change in the distribution of annual pre-tax income in the 20th, 40th, 60th, and 80th percentiles, thus confirming one of our hypothesis (2a). However, although the coefficients derived are statistically
21

I tested the equation I set up for Keith Krehbiel’s pivot politics model (see page 23 above) with percentage inflation and unemployment as economic controls. However, the results of my key variables (80/20 ratio, the filibuster pivot score along first dimension, mean ideological score of majority party in the House, etc.) were approximately the same with or without the incorporated percentage changes in unemployment or inflation.

27 Leybman

significant, the standard deviations remain very high. For example, the impact of political polarization in the House on the 40th percentile has the coefficient 18.87 as well as a standard of error of 8.04. Such a high standard deviation precludes us from making an accurate estimate of the precise impact polarization has had on income distribution in these income percentiles. Table 3 undermines the hypothesis (1a) that political polarization is positively correlated with income inequality as the data lacks statistically significant coefficients. This does not refute our hypothesis, but merely makes its assertion more problematic in light of the data used. More puzzling, however, is the fact that the coefficients on polarization in the Senate and the House are negatively correlated with the 80/20 ratio. This is especially peculiar given the high positive coefficients attached to the political polarization independent variable where nth percentiles were used as the dependent variables. One possible reason for this is because of the different types of dependent variables being used. Tables 1 and 2 have as their dependent variables changes in percent, while Table 3 has a ratio as its dependent variable. Because these two dependent variables are describing different macroeconomic measures according to different data specifications, it is possible that we would see a positive coefficient in one regression and a negative coefficient in another regression for the exact same variable.

28 Leybman

In the second set of regressions (Tables 4-7), we observed the diminishing impact of unified governments on income inequality. Nether Democrats nor Republicans, when presiding over Congresses unified with them, had a strong impact on the distribution of income in the United States. In Table 5, we see that having a unified government, regardless of whether it is under a Democrat or Republican majority, has no statistically significant impact on income distribution. This is result at first appears surprising given that people often expect unified governments to be able to pass more legislation than divided governments (Krehbiel 1998: xiii; 3-5). However, Keith Krehbiel’s pivot politics model actually predicts that even unified governments are likely to be stymied by gridlock (Krehbiel 1998: 39-40). Krehbiel argues that even in unified governments, there is still a tendency or gridlock to occur because of the importance of the filibuster pivot in passing legislation. More research however is needed to explain how the filibuster pivot could have prevented Presidents in unified governments from impacting income distribution via legislation during 1949 to 2005 interval22. By far the most robust results we obtained in tables 4-7 concerned the impact of the ideological scores of the Majority Party in the House of Representative. We saw that the higher the mean ideological score of the majority party in the House of
22

Such research would presumably be interdisciplinary, combining the methodologies of history, political economics, sociology, and political science. Utilizing these disciplines would ensure that the approach was multi-faceted, and thus more likely to be successful at explaining how politics, economics, history, and society are all interwoven in the political process.

29 Leybman

Representatives, the more likely we were to see increased income inequality. Since a “high” mean ideological score would indicate a stronger affiliation with Republicans, we can infer that under Republicans, there is a stronger tendency for inequality to increase, thus confirming one of our hypotheses (1b). More research is still needed to understand precisely what legislations are most likely to impact income distribution and whether political polarization has made it more or less difficult to pass such legislations. Having a unified government under a Republican President (Table 7) does not appear to be a strong contributor to the rise in income inequality. However, it should also be noted that there are not many periods when Republican Presidents ruled in a unified government. The first period occurred in 1954 under Eisenhower and the other period occurred most recently under Bush Presidency from 2001 to 2005. A unified government under a Democratic President (Table 6) also does not have a substantial impact on income inequality according to our data, thus disproving hypothesis (2b) where we conjectured that Democrats in unified governments would reduce income inequality. However, we should also note that within our data sample, there were nineteen years in which Democrats ruled in unified governments compared to just six years for Republicans. Also, since the composition of the Houses and Senate have been largely the same in terms of party

30 Leybman

affiliation23, it becomes difficult to measure how much of the income inequality is the result of changes in the types of policies being passed and how much of it is the result of external economic forces.

VI. Conclusion
Our results do show that there is a positive correlation between the ideological mean of the House of Representatives and the rise in income inequality. There is also reason to believe that a unified government under a Democratic President yields diminishing income inequality. We also saw a positive correlation between income distribution in the 20th, 40th, 60th, and 80th percentile and political polarization, but the standard errors were much too high for us to be certain of the precise impact of polarization on income inequality. Our investigation shows that politics does indeed have an impact on income distribution in the United States. The next task should be for economists and political scientists to pool their resources to understand precisely how politics and economics are interwoven together. In 2003, an attempt was made by Larry Bartels and Henry Brady to get economists and political scientists to work together. In their address to the American Economic Association, Bartels and Brady urged both economists and political scientists to engage in a more productive research style, employing both the rigor of economic analysis and the “broader more eclectic
23

For the bulk of the latter half of the twentieth century, the Democrats were the majority party in the House and the Senate.

31 Leybman

approach” found in political science” (Bartels 2003: 153). There are several questions that would be best answered by political scientists and economists working together. The first question is: How do economic institutions impact the distribution of income in the United States? Frank Levy and Peter Temin have already conducted some work on this topic. They did indeed find that “income distribution in each period was strongly shaped by a set of economic institutions” (Levy and Temin 2007: 1). However, further research is needed to verify their conclusions. Next, we should seek to understand if and how income inequality impacts the Democratic process. Are poorer individuals less likely to have their views represented in Congress? Furthermore, are political elites equally accountable to wealthier constituents as they are to poorer voters? This question is crucial because one of the key “characteristic[s] of a democracy is the continued responsiveness of the government to the preferences of its citizens considered as political equals” (Dahl 1971: 1). If growing wage disparity does reduce the likelihood of citizens being treated as political equals, then the problem of inequality in the United States becomes ever more crucial for examination. Where this investigation ends, many others should begin. Their goal should be to gauge the political impact of economic policies and institutions on individuals in the United States. The result will be a better understanding of our political system

32 Leybman

and the challenges it faces ahead in the 21st century.

APPENDIX Table 1: The Impact of Political Polarization in the House of Representatives on nth percentiles (1) VARIABLES (2) (3) (4) Annual Real Pretax income growth (%) at 80th percentile

Annual Annual Annual Real Pre- Real PreReal Pretax tax income tax income income growth growth (%) th growth (%) at 40 at 60th (%) at percentile percentile th 20 perce ntile

Democratic President

1.972** (0.857)

1.443** (0.566) 5.113*** (1.074)

1.374** (0.553) 3.248*** (1.044)

1.109** (0.526) 3.161*** (1.016)

Percentage Change in Labor Force Participation

5.008*** (1.555)

Lagged growth 20th percentile

-0.151 (0.129)

33 Leybman Lagged growth 95th percentile 0.317* (0.172) Change in Price of Oil -0.0321* (0.0173) Linear Trend -1.189 (10.85) Quadratic Trend -27.29* (15.72) Percentage of Population Membership in Unions -0.146 (0.339) Polarization Index for House 49.86** (20.10) Lagged growth in 40th percentile 0.261* (0.135) -0.0311** (0.0117) -1.392 (7.293) -18.10* (10.58) 0.0614 (0.229) 39.06*** (13.56) -0.387*** (0.135) Lagged growth in 60th percentile -0.298* (0.163) Lagged growth in 80th percentile -0.298 (0.197) Constant -17.77 (13.65) -18.00* (9.185) -13.52 (8.908) -19.09** (8.729) 0.142 (0.136) -0.0360*** (0.0113) 2.195 (7.042) -16.49 (10.20) 0.0709 (0.223) 28.68** (13.05) 0.110 (0.158) -0.0297*** (0.0109) 8.847 (6.840) -19.85* (9.924) 0.201 (0.214) 29.91** (12.78)

Observations R-squared

56 0.482

56 0.604

56 0.513

56 0.469

Standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1 Sources: Union membership Percentage was obtained from Gerald Mayer’s “Union Membership Trends in the United States”(2004). Polarization index was derived from

34 Leybman data publicly available on voteview.com. All other data was calculated from Census Bureau Historical Income Tables

Table 2: The Impact of Political Polarization in the Senate on nth percentiles (1) VARIABLES (2) (3) (4)

Annual Annual Annual Annual Real Real Pre- Real Pre- Real PrePre-tax tax income tax income tax income income growth growth growth growth (%) at 40th (%) at 60th (%) at 80th (%) at percentile percentile percentile 20th percentil e

Democratic President (lagged one year)

1.718* (0.870)

1.320** (0.593) 5.144*** (1.109)

1.277** (0.575) 3.235*** (1.067)

1.055* (0.553) 3.067*** (1.050)

Percentage Change in Labor Force Participation

5.219** * (1.562)

Lagged growth 20th percentile

-0.140 (0.128)

Lagged growth 95th percentile

0.304* (0.172)

0.243* (0.139)

0.122 (0.139) -0.0370** * (0.0115) -5.998 (6.990) 0.629 (4.540)

0.0706 (0.162) -0.0306** * (0.0112) 0.676 (6.829) -1.461 (4.401)

Change in Price of Oil

-0.0344* -0.0330** * (0.0172) (0.0120) -12.57* (7.322) 5.031 (4.775)

Linear Trend

-16.86 (10.52)

Quadratic Trend

1.017 (6.764)

35 Leybman Percentage of Population Membership in Unions -0.0570 (0.331) Polarization Index in the Senate 29.55** (11.59) Lagged growth 40th percentile 0.145 (0.230) 18.87** (8.043) -0.360** (0.138) Lagged growth 60th percentile -0.262 (0.166) Lagged growth 80th percentile -0.233 (0.200) Constant -8.147 (11.94) -9.175 (8.271) -6.749 (7.948) -11.27 (7.813) 0.130 (0.223) 13.35* (7.686) 0.266 (0.217) 11.82 (7.521)

Observations R-squared

56 0.485

56 0.583

56 0.495

56 0.436

Sources: Union membership Percentage was obtained from Gerald Mayer’s “Union Membership Trends in the United States”(2004). Polarization index was derived from data publicly available on voteview.com. All other data was calculated from Census Bureau Historical Income Tables Table 3: The Impact of Polarization in the Senate and House of Representatives on the 80/20 Ratio (1) VARIABLES 80/20 ratio (2) 80/20 ratio

Democratic President (lagged one year)

-0.0561** (0.0277)

-0.0545** (0.0268)

36 Leybman Percentage Change in Labor Force Participation -0.0690 (0.0504) Lagged growth 95th percentile -0.000858 (0.00513) Change in price of oil -0.00107* (0.000559) Linear Trend -1.207*** (0.342) Quadratic Trend 1.303*** (0.220) Percentage of Population Membership in Unions -0.0427*** (0.0107) Polarization Index in Senate -0.145 (0.376) Polarization Index in House of Representatives -0.769 (0.640) Constant 4.666*** (0.384) 4.901*** (0.431) -0.0726 (0.0494) -0.000630 (0.00505) -0.00110* (0.000552) -1.377*** (0.346) 1.820*** (0.502) -0.0399*** (0.0108)

Observations R-squared

56 0.938 Standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1

56 0.939

Sources: Union membership Percentage was obtained from Gerald Mayer’s “Union Membership Trends in the United States”(2004). Polarization index was derived from data publicly available on www.voteview.com. All other data was calculated from Census Bureau Historical Income Tables

37 Leybman Table 4: The Impact of Filibuster Pivots and the Majority Party in the House of Representatives on the 80/20 Ratio

(1) VARIABLES 80/20 ratio

1st dimension Coordinate of the Senate Filibuster Pivot

-0.167 (0.123)

Ideological Mean Score of the Majority Party in the House of Representatives

0.160** (0.0750)

Democratic President (lagged one year)

-0.0184 (0.0306)

Percentage of Population Membership in Unions

-0.0387*** (0.00271)

Percentage Change in Labor Force Participation

-0.0377 (0.0525)

Percentage Change in Price of Oil

-0.000292 (0.000647)

Percentage Inflation

-0.0250*** (0.00563)

Percentage Unemployment

0.0405*** (0.0142)

Constant

4.186*** (0.129)

Observations

56

38 Leybman

R-squared Standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1

0.936

Sources: www.voteview.com provided raw data on individual members of the Senate, their political affiliation, and their NOMINATE scores. The websites’ data was also used to calculate the filibuster pivot. Table 5: The Impact of a Unified Government On the 80/20 Ratio (1) VARIABLES 80/20 ratio

1st dimension Coordinate of the Senate Filibuster Pivot

-0.159 (0.123)

Ideological Mean Score of the Majority Party in the House of Representatives

0.148* (0.0769)

Percentage of Population Membership in Unions

-0.0394*** (0.00287)

Percentage Change in Labor Force Participation

-0.0376 (0.0525)

Percentage Change in Price of Oil (lagged one year)

-0.000329 (0.000642)

Percentage Inflation

-0.0261*** (0.00568)

Percentage Unemployment

0.0445*** (0.0134)

Unified Government (lagged one year)

0.0195

39 Leybman

(0.0306) Constant 4.165*** (0.124)

Observations R-squared Standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1

56 0.936

Table 6: The Impact of a Unified Government Under a Democratic President on the 80/20 Ratio (1) VARIABLES 80/20 ratio

1st dimension Coordinate of the Senate Filibuster Pivot

-0.161 (0.123)

Ideological Mean Score of the Majority Party in the House of Representatives

0.159** (0.0759)

Percentage of Population Membership in Unions

-0.0388*** (0.00277)

Percentage Change in Labor Force Participation

-0.0386 (0.0528)

Percentage Change in Price of Oil (lagged one year)

-0.000335 (0.000645)

40 Leybman Percentage Inflation -0.0255*** (0.00571) Percentage Unemployment 0.0436*** (0.0139) Unified Government Under Democratic President (lagged one year) 0.000479 (0.0322) Constant 4.164*** (0.125)

Observations R-squared Standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1

56 0.936

Table 7: The Impact of a Unified Government Under a Republican President on the 80/20 Ratio (1) VARIABLES 80/20 ratio

1st dimension Coordinate of the Senate Filibuster Pivot

-0.155 (0.122)

Ideological Mean Score of the Majority Party in the House of Representatives

0.136* (0.0775)

Unified Under Republican President (lagged one year)

0.0554 (0.0526)

41 Leybman Percentage of Population Membership in Unions -0.0387*** (0.00269) Percentage Change in Labor Force Participation -0.0399 (0.0521) Percentage Change in Price of Oil (lagged one year) -0.000349 (0.000638) Percentage Inflation -0.0249*** (0.00557) Percentage Unemployment 0.0421*** (0.0132) Constant 4.163*** (0.123)

Observations R-squared Standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1

56 0.937

42 Leybman

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43 Leybman Douglas, Hibbs, Jr., The American Political Economy. Cambridge: Harvard University Press, 1987. Fiorina, Morris, Samuel J. Abrams, and Jeremy C. Pope. Culture War?: The Myth of a Polarized America. Upper Saddle River: Pearson Education, 2006. Jacobs, Lawrence R., and Theda Skocpol, eds. Inequality and American Democracy: What We Know and What We Need to Learn. New York: The Russell Sage Foundation, 2005. Katz, Lawrence F & Murphy, Kevin M, 1992. "Changes in Relative Wages, 19631987: Supply and Demand Factors," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 35-78, February Krugman, Paul. Conscience of a Liberal. New York: W.W. Norton & Co., 2007. Krehbiel, Keith. Pivotal Politics: A Theory of U.S. Lawmaking. Chicago: University of Chicago Press, 1998. McCarty, Nolan, Keith T. Poole, and Howard Rosenthal. Polarized America: the Dance of Ideology and Unequal Riches. Cambridge: The MIT Press, 2006. Morris, Martina and Bruce Western. 1999. “U.S. Earnings Inequality at the Close of the 20th Century.” Annual Review of Sociology. 25:623–657. Nivola, Peter S. and David W. Brady. Red and Blue Nation? Washington D.C.: Brookings Institution Press, 2006. Ostrom, Charles W. Time Series Analysis: Regression Techniques. Thousand Oaks, CA: Sage Publications, Inc., 1990.

44 Leybman Perlstein, Rick. Nixonland. New York: Scribner, 2008. Saez, Emmanuel. (2008). Striking It Richer: The Evolution of Top Incomes in the United States (Update Using 2006 Preliminary Estimates). [online] Available from: http://www.econ.berkeley.edu/~saez/saez-UStopincomes-2006prel.pdf [Accessed 2 March, 2008] Saez, Emmanuel and Thomas Piketty. “The Evolution of Top Incomes: A Historical and International Perspective” (National Bureau of Economic Research working paper no. 11955, Jan 2006).

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