Biggest Political Rift Since the Civil War: The Ticker

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By Mark Whitehouse

U.S. politicians' difficulty in agreeing on a solution to the government's long-term fiscal problems raises a question: How big, in historical terms, is the nearly debilitating rift between left and right? Have we been here before, or is the current crisis somehow exceptional?

The answer from the world of academia is not encouraging. Research by two political scientists, Howard Rosenthal of Princeton and Keith Poole of the University of Georgia, suggests the divide is bigger than at any point since the aftermath of the Civil War. As of the 111th Congress, their index of political polarization in the House -- a measure of the gap between voting patterns on the left and right -- was about 7% higher than its previous peak in 1905 (see chart). Given the infusion of Tea Party radicalism in the 112th Congress, the level of polarization has most likely risen further.

Ominously, the polarization of U.S. politics correlates very well with the growing gap between rich and poor. Consider, for example, the share of a country's total income that goes to the top 1% of earners. In the U.S., according to economists Emmanuel Saez and Thomas Piketty, the share stood at 17.67 percent in 2008, among the highest in the developed world. Over the past century, it has moved more or less in sync with political polarization (see chart). Other measures, such as the Gini coefficient and the wage difference between finance and other industries, also move in close correlation with polarization.

It's hard to know which way the causation flows, whether inequality begets polarization or the other way around. Most likely, it goes both ways -- which would suggest that, as U.S. legislators work out the details of their deficit-reduction deal, they would do well to craft one that doesn't further increase the gap between rich and poor. Assuming, that is, they want to live in a governable country.

-0- Aug/01/2011 20:24 GMT