How Powerful Are The Poor?

Ezra Klein argues against the notion “that corporations win every fight and everyone else — particularly the poor — get shafted”:

Corporate America holds real power in Washington. But to a degree that’s often overlooked, so too do the people, and the political party, most concerned with directly improving the lot of the poor. That’s the reality of politics right now: Corporate American and the poor can both wield a lot of power at the same time, as they’re not typically locked in a zero-sum struggle with each other. If anything, it’s the middle class, or perhaps the upper-middle class, that’s been left out.

Larry Bartels counters with the above chart on “what has happened to the net wealth of people at different points in the U.S. wealth distribution over the past decade”:

Stop a moment to think about what those numbers are telling us. Millions of people in the bottom tier of the working class have lost, on average, 85% of their net worth.

(Their average net wealth, which was already falling before the onset of the Great Recession, went from $6700 as recently as 2007 to $1500 in 2011). People even lower in the wealth distribution don’t appear in the graph because their net worth was negative all along; but in real terms, they have been hit even harder (at the 5th percentile, $39,000 in debt in 2011 as compared with $13,000 in 2007). Meanwhile, those near the top of the wealth distribution have been held harmless.

Ezra goes another round:

The absurdity of [Bartels’] case is nicely encapsulated by the top line on the graph: How can anyone say the rich hold power in Washington when their net worth fell by 27 percent between 2007 and 2011? But that’s only to say that net worth during the worst recession since the Great Depression isn’t a measure of political power. What happens in Congress is not the sole determinant of America’s economic experience — the two can even diverge sharply at times.

(Chart from (pdf) “Wealth Disparities Before And After The Great Recession” by Fabian Pfeffer, Sheldon Danziger, and Robert Schoeni)