Nathan J. Kelly

The Rise of the Super-Rich: Power Resources, Taxes, Financial Markets, and the Dynamics of the Top 1 Percent, 1949 to 2008

The income share of the super-rich in the United States has grown rapidly since the early 1980s after a period of postwar stability. What factors drove this change? In this study, we investigate the institutional, policy, and economic shifts that may explain rising income concentration. We use single-equation error correction models to estimate the long- and short-run effects of politics, policy, and economic factors on pretax top income shares between 1949 and 2008. We find that the rise of the super-rich is the result of rightward-shifts in Congress, the decline of labor unions, lower tax rates on high incomes, increased trade openness, and asset bubbles in stock and real estate markets.

Religion and Latino Partisanship in the United States

This article examines the interplay among religion, ethnicity, and the partisanship of Latinos in the U.S. Using pooled data from the 1990-2000 National Election Studies, we assess denominational affiliation and religious commitment as explanations of partisanship. We show that there is more religious diversity among Latinos than is usually acknowledged in studies of Latino politics and that the political importance of religion among Latinos has not been adequately assessed because variation beyond a Catholic/non-Catholic dichotomy has been ignored. We demonstrate that variation in Latino religious affiliation has important political implications.

Federalism and American Inequality

Studies of the political determinants of economic inequality have usually focused on the national government, but in federalist systems subnational governments may also be important. In recent decades, the U.S. national government has been less active in fighting inequality, but increasing devolution means that states wanting to address this problem have had a greater incentive and perhaps means by which to do so. Applying power resources theory, we argue that in states where left parties are stronger and more liberal politics are enacted, the government will reduce inequality and that this state effect becomes more pronounced as middle- and lower-class power wanes nationally. In the analysis we find that both federal and state governments influence inequality, and since the Republican takeover of Congress in 1995, the states have played a more important role in shaping the income distribution.

Conditional Status Quo Bias and Top Income Shares: How U.S. Political Institutions Have Benefited the Rich

This article develops and tests a model of conditional status quo bias and American inequality. We find that institutional features that bias policy outcomes toward the status quo have played a central role in the path of inequality. Using time-series analysis of top income shares during the post-Depression period, we identify the Senate as a key actor in the politics of income inequality. Our findings suggest that the supermajoritarian nature of the Senate and policy stagnation, when coupled with economic and social factors that produce rising inequality, create a situation in which inequality becomes difficult to reverse.

Religious Traditionalism and Latino Politics in the United States

This article examines how and why ethnic context conditions the link between religious traditionalism and the political attitudes and behaviors of Latinos in the United States. Existing research shows that the impact of religious traditionalism on political attitudes varies by policy and religious context. Through an analysis of issue attitudes, ideology, and partisanship, we confirm this existing work and also show that religious traditionalism influences Latino political behavior differently than it influences Anglo politics. The impact of religious traditionalism is not nearly as strong among Latinos as among Anglos. To the extent that traditionalism does influence political attitudes and behavior, it generally produces greater ideological conservatism but does not translate into support for the Republican Party—the latter is quite different from its impact in the Anglo population.

Market Inequality and Redistribution in Latin America and the Caribbean

This article analyzes how politics influences Latin American and Caribbean income inequality. Most studies view the distributional process in two phases with inequality shaped first by markets and then by state redistribution. Typically, cross-national analyses of inequality limit the influence of politics to the redistributive phase. But we argue that a full understanding of how government affects inequality must also consider how politics shapes the market. While redistribution is undoubtedly an important mechanism employed by government to influence distributional outcomes, we find that inequality produced by the market is more responsive to politics than is redistribution. Left partisan power and public investment in human capital significantly reduce inequality in the market phase. In addition, social spending on human capital conditions the effect of economic growth. As human capital investment increases, growth becomes more equality enhancing, providing further evidence of the market conditioning e...

Does Politics Really Matter? Policy and Government’s Equalizing Influence in the United States

Analyses of the U.S. governing system indicate that national policy is influenced by public opinion, and this is interpreted as representation. Not as much is known aboutwhether policy systematically influences societal outcomes. In fact, some analyses suggest that there is little connection between policies and the outcomes these policies seek to produce. This article seeks to determine whether such a connection exists for income inequality. Although connections should exist, various views of the policymaking process cast doubt on the prospect. Measures of government’s equalizing influence and aggregate policy are created for 1979-1996, and time series regression is used to test the connection between the two. Even in the presence of controls for economic and demographic factors, policy liberalism produces greater government redistribution. When assessed in light of earlier research, these results indicate that shifts in public opinion lead to important changes in the way government influences society.

Partisan Politics, Financial Deregulation, and the New Gilded Age

This paper examines how financial deregulation and the partisan underpinnings of deregulation shaped the path of income inequality in the United States. Using time-series data from 1914 to 2010, we assess the effect of partisan politics on financial deregulation and, in turn, the effect of deregulation on income inequality. We find that financial deregulation has generally declined when Democrats attain more power in Washington and that deregulation has contributed to rising inequality. We also learn that the partisan effect on deregulation has diminished since the early 1980s, suggesting that one way partisan politics has contributed to the recent rise in inequality is related to convergence on matters of financial deregulation. We explore several potential explanations for this post–1980 partisan convergence, finding evidence supporting the idea that globalization, the increasing availability of credit, and shifts in campaign finance were contributing factors.

Don’t jettison the general error correction model just yet: A practical guide to avoiding spurious regression with the GECM

In a recent issue of Political Analysis, Grant and Lebo authored two articles that forcefully argue against the use of the general error correction model (GECM) in nearly all time series applications of political data. We reconsider Grant and Lebo’s simulation results based on five common time series data scenarios. We show that Grant and Lebo’s simulations (as well as our own additional simulations) suggest the GECM performs quite well across these five data scenarios common in political science. The evidence shows that the problems Grant and Lebo highlight are almost exclusively the result of either incorrect applications of the GECM or the incorrect interpretation of results. Based on the prevailing evidence, we contend the GECM will often be a suitable model choice if implemented properly, and we offer practical advice on its use in applied settings.

Explaining Public Attitudes toward Fighting Inequality in Latin America

This paper uses the 2008 Americas Barometer survey data from 22 countries to explore the factors that shape Latin American attitudes about the role of the state in reducing inequality. Using multilevel analysis to properly model both the individualand country-level predictors of these attitudes, we find that traditional explanations of public attitudes about government’s redistributive role also carry weight in Latin America. Economic evaluations, personal wealth, trust in government, and assessments of government performance are each associated in predictable ways with attitudes about redistribution. But the analysis also identifies factors that have been overlooked in previous research on the state’s role in combating inequality, which has been primarily conducted in the context of the developed world. Namely, we find that Latin Americans appropriately view crime and inequality as interrelated, and as their perceptions of crime as a problem increase so does their support for government efforts to reduce inequality. This relationship is particularly important in poorer countries where inequality and poverty are widespread social ills. The analysis suggests that in the Latin American context it is appropriate to view pursuing anticrime and anti-inequality policies as compatible rather than competing goals.