“Why Inequality Matters”: Rising Inequality Is By Far The Most Important Single Factor Behind Lagging Middle-Class Incomes
Rising inequality isn’t a new concern. Oliver Stone’s movie “Wall Street,” with its portrayal of a rising plutocracy insisting that greed is good, was released in 1987. But politicians, intimidated by cries of “class warfare,” have shied away from making a major issue out of the ever-growing gap between the rich and the rest.
That may, however, be changing. We can argue about the significance of Bill de Blasio’s victory in the New York mayoral race or of Elizabeth Warren’s endorsement of Social Security expansion. And we have yet to see whether President Obama’s declaration that inequality is “the defining challenge of our age” will translate into policy changes. Still, the discussion has shifted enough to produce a backlash from pundits arguing that inequality isn’t that big a deal.
They’re wrong.
The best argument for putting inequality on the back burner is the depressed state of the economy. Isn’t it more important to restore economic growth than to worry about how the gains from growth are distributed?
Well, no. First of all, even if you look only at the direct impact of rising inequality on middle-class Americans, it is indeed a very big deal. Beyond that, inequality probably played an important role in creating our economic mess, and has played a crucial role in our failure to clean it up.
Start with the numbers. On average, Americans remain a lot poorer today than they were before the economic crisis. For the bottom 90 percent of families, this impoverishment reflects both a shrinking economic pie and a declining share of that pie. Which mattered more? The answer, amazingly, is that they’re more or less comparable — that is, inequality is rising so fast that over the past six years it has been as big a drag on ordinary American incomes as poor economic performance, even though those years include the worst economic slump since the 1930s.
And if you take a longer perspective, rising inequality becomes by far the most important single factor behind lagging middle-class incomes.
Beyond that, when you try to understand both the Great Recession and the not-so-great recovery that followed, the economic and above all political impacts of inequality loom large.
It’s now widely accepted that rising household debt helped set the stage for our economic crisis; this debt surge coincided with rising inequality, and the two are probably related (although the case isn’t ironclad). After the crisis struck, the continuing shift of income away from the middle class toward a small elite was a drag on consumer demand, so that inequality is linked to both the economic crisis and the weakness of the recovery that followed.
In my view, however, the really crucial role of inequality in economic calamity has been political.
In the years before the crisis, there was a remarkable bipartisan consensus in Washington in favor of financial deregulation — a consensus justified by neither theory nor history. When crisis struck, there was a rush to rescue the banks. But as soon as that was done, a new consensus emerged, one that involved turning away from job creation and focusing on the alleged threat from budget deficits.
What do the pre- and postcrisis consensuses have in common? Both were economically destructive: Deregulation helped make the crisis possible, and the premature turn to fiscal austerity has done more than anything else to hobble recovery. Both consensuses, however, corresponded to the interests and prejudices of an economic elite whose political influence had surged along with its wealth.
This is especially clear if we try to understand why Washington, in the midst of a continuing jobs crisis, somehow became obsessed with the supposed need for cuts in Social Security and Medicare. This obsession never made economic sense: In a depressed economy with record low interest rates, the government should be spending more, not less, and an era of mass unemployment is no time to be focusing on potential fiscal problems decades in the future. Nor did the attack on these programs reflect public demands.
Surveys of the very wealthy have, however, shown that they — unlike the general public — consider budget deficits a crucial issue and favor big cuts in safety-net programs. And sure enough, those elite priorities took over our policy discourse.
Which brings me to my final point. Underlying some of the backlash against inequality talk, I believe, is the desire of some pundits to depoliticize our economic discourse, to make it technocratic and nonpartisan. But that’s a pipe dream. Even on what may look like purely technocratic issues, class and inequality end up shaping — and distorting — the debate.
So the president was right. Inequality is, indeed, the defining challenge of our time. Will we do anything to meet that challenge?
By: Paul Krugman, Op-Ed Contributor, The New York Times, December 15, 2013
“Family Values Hypocrisy”: We Need To Think More About “Positive Liberty”, The Ability To Realize Certain Goals In Our Lives
Politicians talk about family values but do almost nothing to help families. They talk about parental responsibility but do almost nothing to help parents. They talk about self-sufficiency but do precious little to make self-sufficiency a reality for those who must struggle hardest to achieve it.
How often can we hear that government should be more responsive to the problems Americans face now? But the vogue for simply assuming that government cannot — or should not — do much of anything about those problems leads to paralysis. This, in turn, further increases disaffection from government.
For all these reasons, it was exciting last week to see Sen. Kirsten Gillibrand of New York and Rep. Rosa DeLauro of Connecticut introduce the FAMILY Act, the acronym standing for their Family and Medical Insurance Leave Act. The bill would provide partial income for up to 12 weeks of leave for new parents and for other family demands, such as care for a sick family member, including a domestic partner.
How far behind the rest of the world is our country on this quintessential family values matter? The Post’s Amy Joyce cited a Harvard University study in 2004 noting that of 168 countries it examined, 163 had some form of paid maternity leave. We weren’t one of the 163. Joyce observed that “the U.S. is on par with places like Papua New Guinea and Swaziland when it comes to paid family leave.”
The usual knock on proposals of this sort is that they would put an excessive economic burden on employers — or cost the federal government money it doesn’t have. Gillibrand and DeLauro, both Democrats, solve this problem by establishing FAMILY as an insurance program. Premiums would range from about $72 to $227 a year, depending on a person’s income. The maximum benefit is capped at $4,000 a month. They expect the average monthly benefit to be less than half that.
There is nothing revolutionary about this proposal. It builds on the existing (and highly popular) Family and Medical Leave Act, which requires unpaid leave and was enacted two decades ago. It is modest in comparison with leave policies in other well-off countries.
Yet in light of Congress’s dismal record since the Republican takeover of the House in 2010, it would be revolutionary to see any law passed that empowered individuals and families to ease their everyday difficulties.
Our current discussion of what constitutes “freedom” is shaped far too much by a deeply flawed right-wing notion that every action by government is a threat to personal liberty and that the one and only priority of those who care about keeping people free is for government to do less than it does.
This perspective ignores the many ways over the course of our history in which government has expanded the autonomy of our citizens. Consider how much less freedom so many of us would have without civil rights or voting rights laws, without government student loans, without labor laws, without public schools and without Medicare, Medicaid and Social Security. (And we don’t take seriously enough the implications of a most basic fact of our national story: that it took big government in Washington to outlaw slavery.)
Gillibrand’s role in championing this proposal also deserves attention. She is known nationally for her battle on behalf of victims of sexual assault in the military. But she has put forward five bills labeled as an “American Opportunity Agenda.” All of them involve ideas that have won broad support over many years. Besides pressing for paid family leave, she is calling for a minimum wage increase, affordable child care, universal pre-kindergarten programs and equal pay for equal work.
At a time when the political news is dominated by a debate between do-little conservatism and do-nothing conservatism — which is to say, between a right-tilting Republican establishment and the radical tea party — Gillibrand’s package includes building blocks for a broader counter-vision inspired by the idea of an Empowering Government.
Yes, we need to protect what the philosophers call “negative liberty.” There are, indeed, many things that government should never be able to do to us. But we need to think more about “positive liberty,” the ability to realize certain goals in our lives. Democratic government can create the framework in which we have more power to reach those ends.
And surely a country that honors the devotion of family members to each other should want to make it at least a little easier for them to do their jobs.
By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, December 15, 2013
“Not So Easy Rider”: Marco Rubio, From GOP “Savior” To Tea Party Troll In 12 Months
You can understand why Senator Marco Rubio (R-FL) is bitter.
While Senators Rand Paul (R-KY) and Ted Cruz (R-TX) became Tea Party rock stars this year with high-profile but legislatively inconsequential filibusters, Rubio went from right-wing hero to RINO by risking his career to back a comprehensive immigration reform bill that actually passed the Senate.
Initially, Rep. Paul Ryan (R-WI) was supportive of “the Republican Savior” as he tried to accomplish the only policy recommendation Republicans gave themselves in their 2012 election “autopsy.” But the GOP base as represented by the Tea Partiers in the House refused to let Speaker John Boehner even consider letting the Senate bill come up for a vote.
As the far right organized against what they called his “shamnesty” bill, Rubio saw his dream of locking up the 2016 GOP nomination early suddenly replaced with billboards condemning the “Rubio-Obama immigration plan.”
To try to win back the base, Rubio joined with Cruz and Senator Mike Lee (R-UT) in the failed plot to defund Obamacare. When that wasn’t enough, he actually turned against his own bill.
So you can imagine how steamed Senator Rubio was when he heard Paul Ryan being praised as a “dealmaker” for putting together a budget deal that basically re-enforces the status quo.
Well, you don’t have to imagine. Rubio almost immediately went on the attack against the proposed legislation after it was announced, saying not only was he against it, he was pretty sure it would be responsible for destroying the American Dream.
Ryan heard that criticism Thursday morning on MSNBC’s Morning Joe and fired back with a deft response.
“Read the deal and get back to me,” he said. “People are going to do what they need to do. Look, in the minority you don’t have the burden of governing.”
Republicans have stopped trying to hide the fact that there is a civil war going on between the Tea Party and the establishment.
Both of the leaders in the Senate — Senate Minority Leader Mitch McConnell (R-KY) and Senate Minority Whip John Cornyn (R-TX) — are among the half-dozen Senate Republicans facing Tea Party primary challengers.
McConnell has been calling out the right-wing outside groups who are funding many of the challengers against him for weeks.
“I think, honestly, many of [the Tea Party] have been misled,” he told the Wall St. Journal’s Peggy Noonan in November. “They’ve been told the reason we can’t get to better outcomes than we’ve gotten is not because the Democrats control the Senate and the White House but because Republicans have been insufficiently feisty. Well, that’s just not true, and I think that the folks that I have difficulty with are the leaders of some of these groups who basically mislead them for profit… They raise money… take their cut and spend it.”
Boehner joined the fight this week by blasting the outside groups that he now says led to the shutdown.
“They’re using our members and they’re using the American people for their own goals,” Boehner said in a press conference on Thursday. “This is ridiculous. If you’re for more deficit reduction, you’re for this agreement.”
And Paul Ryan is making a case that being a conservative means accepting reality and actually governing.
Senator Rubio has given up on governance and moved as far to the right as he can go without falling off the game board. And he’s still being overshadowed by even more outlandish Tea Partiers.
That won’t stop him from trying to score points wherever he can. But even if he ends up opposing the immigration bills that will likely come out of the House now that the leadership has cut the Tea Party loose, chances are the only thing Marco Rubio will ever be president of is the Ted Cruz fan club.
By: Jason Sattler, The National Memo, December 12, 2013
“Who Cares If Santa Claus Is Real?”: The Megyn Kelly Scandal Is About Race
The brouhaha over Megyn Kelly’s comments about Santa Claus continued this weekend with Kelly’s astonishingly dishonest non-apology. But first a recap: after an article in Slate argued that Santa Claus should not necessarily be played by white men, Kelly expressed outrage on Fox News over the politicizing of her beloved Christmas. “Santa just is white,” Kelly stated. “Santa is what he is.” (She added that Jesus was “a white man too.”) Understandably, the internet erupted in outrage, Jon Stewart mocked Kelly, and various commentators pointed out that the Santa Claus most people recognize today is barely based on Saint Nicholas, who himself was from what today is Turkey. So, on Friday Kelly went back on her show to address the controversy.
It’s here that I should say my once stalwart confidence in the P.R. geniuses at Fox has been shaken. Apparently the best they could come up with was that Kelly was joking (as she states in this clip: http://mediamatters.org/embed/static/clips/2013/12/13/33245/fnc-kf-20131213-whitesantaresponse ), but then she proceeds to play the clip from the previous show where it is abundantly clear that she was not joking. Guys, c’mon! This isn’t rocket science. Kelly then went on to say that America is becoming too politically correct and sensitive, and that Fox News is targeted for its politics.
It’s this last bit that is the most interesting, and also explains why people have been focusing on the wrong aspect of this story. “Race is still an incredibly volatile issue in this country, and Fox News and yours truly are big targets for many people,” Kelly said. Well, yes. Both those things are literally true. But Kelly wasn’t saying them because they are true. She was saying them because one of Fox’s most popular topics is that white people are victimized by accusations of racism, and must tiptoe around all racial topics. (Of course this would be less true if our society didn’t have so much racially insensitive garbage peddled by the likes of Fox News, but let’s leave that aside). In short, Kelly was playing the victimization/self-pity card, which white conservatives have oh-so-charmingly been playing for decades.
But why is this especially relevant? Because this same card was the whole point of the original segment. Why do you think a Fox panel was discussing a Slate piece in the first piece? Well, because they want their audience to feel under siege, and who better (in the minds of Fox execs) to be under siege from than non-whites.
The historical accuracy of Kelly’s comments, which has garnered the most attention, is nearly irrelevant. Imagine for a moment that Santa was real and white, and then imagine that Jesus was white too. And then ask yourself why Fox would run the segment. (Hint: It would have nothing to do with historical accuracy). Fox wants to rile up racial feelings because that is what Fox does. The accuracy can be called into question here, but what is truly despicable is the intent.
This particular Fox News controversy was about religion; yesterday’s was about Sean Hannity lovingly interviewing George Zimmerman; tomorrow’s will be about God-knows-what. Our #1 news channel loves dealing in racial innuendo, regardless of the ostensible topic. Santa has nothing to do with it.
By: Isaac Chotiner, The New Republic, December 15, 2013
“All In The Dysfunctional Family”: Boehner’s Blasts, One More Volley In The Long GOP Battle
With a few words that reflected a mountain of frustration, House Speaker John A. Boehner (R-Ohio) has escalated the ongoing struggle over the future of the Republican Party. Whether it proves to be a truly crystallizing moment for a party still trying to find its way after its defeat in 2012 is the critical question.
For much of the year, the Republican Party has been in a deep hole, its credibility diminished, its image at historical lows and its direction heavily influenced by conservative tea party insurgents and their allied outside groups. This fall’s government shutdown only made the hole deeper. Boehner seems to have decided it’s time to stop digging.
The speaker’s blast at outside groups that were calling for the defeat of the bipartisan budget agreement, even before it was unveiled, has reverberated widely. Among other things, Boehner declared that these organizations, which also advocated the strategy that led to the shutdown, have “lost all credibility” because of their extreme positions and incendiary tactics.
Boehner’s comments did not trigger a Republican civil war, as some have suggested. The reality is that the internal conflict has been underway for years. Mitt Romney’s loss to President Obama in the 2012 election intensified the debate, and those tensions will be front and center as the GOP heads toward a divisive round of primary elections next year and then a potential battle royal when it picks a presidential nominee in 2016.
Both factions in the GOP’s ongoing struggle — those in the tea party wing and those in the establishment wing — have real grievances. Tea party insurgents have long viewed their congressional leaders as capitulating repeatedly over the years on tougher spending cuts. They see Obama’s Affordable Care Act as such an egregious expansion of big government that it prompted them to embrace a budget strategy this fall that had no chance of success.
This past week, with the bipartisan budget deal negotiated by Senate Budget Committee Chairman Patty Murray (D-Wash.) and House Budget Committee Chairman Paul Ryan (R-Wis.), the tea party activists see one more example of the party’s refusal to do more to rein in government. The fact that the agreement could spare all members of Congress — and the public — repeated reruns of budgetary standoffs and shutdown threats (likely political losers for the GOP) is not an adequate offset to them.
In terms of the presidency, many conservatives believe that the GOP has not nominated a true and authentic conservative for the job since Ronald Reagan. (Whether Reagan could win his party’s nomination today, given his gubernatorial record of raising taxes and expanding access to abortion, is another matter.) Neither Romney in 2012 nor John McCain in 2008 met their standards.
But it doesn’t stop there. Former president George W. Bush disappointed many in the party’s base who argue that he perpetuated Washington’s big spending ways. Former Senate majority leader Robert Dole, the party’s nominee in 1996, was derided by supply-side conservatives (among them former House speaker Newt Gingrich) as the “tax collector for the welfare state.”
Former president George H.W. Bush proved an apostate to tax-cutting conservatives for breaking his “no new taxes” pledge, an action that split his party in 1990. Conservatives such as Tom DeLay, the former House majority leader, later recalled being elated when Bush lost to Bill Clinton in 1992, seeing his defeat as an opening to create a more-conservative party.
Now it’s Paul Ryan who is the disappointment. Ryan has been the intellectual leader of conservatives in the House and, more broadly, in his party. Now he is seen as something of a traitor to the cause for negotiating the bipartisan budget deal.
But the GOP establishment has its own list of grievances and is threatening to fight back. Establishment Republicans view the purity police on the right with disdain. They believe in big-tent Republicanism and pragmatism when it comes to governing.
They see the tea party movement writ large as a decidedly mixed blessing, a faction whose grass-roots energy is valued, but which also has engaged in a series of divisive primary battles. It’s arguable that the tea party cost the Republicans four or five Senate seats over the past two elections. Had most of those races gone the other way, Republicans would be at near-parity with Democrats in the upper chamber.
Establishment Republicans have special scorn for outside groups that are fueling the primary challenges and trying to dictate to members of Congress the strategies they should pursue. These groups include Heritage Action, the Senate Conservative Fund and the Club for Growth — the ones that drove the disastrous shutdown strategy and oppose the latest budget agreement.
A few months ago, Boehner made himself an agent of this strategy, and both he and his party paid a big price. This past week, when these groups called for defeat of the Ryan-Murray budget agreement, Boehner blew his stack.
Whether this was a well-thought-out plan to launch an attack or a spontaneous statement by a fed-up leader isn’t clear. Whatever it was, he was able to marshal a big majority of Republicans to support the agreement in the House, along with a sizable majority of Democrats. The partisan breakdown of the vote in the Senate is likely to look considerably different.
Establishment Republicans hope the tea party’s influence will diminish as a result of the shutdown debacle. That will depend in part on the tea party’s success in challenging a number of incumbent GOP senators next year, but there’s nothing right now to suggest its adherents are in retreat.
The announced opposition to the budget deal by three Republican senators who are prospective 2016 presidential candidates — Marco Rubio of Florida, Rand Paul of Kentucky and Ted Cruz of Texas — suggests that they at least believe the tea party wing will continue to be a powerful force in charting the GOP’s direction.
GOP strategist John Feehery said the fact that so many Republicans voted for the budget agreement in the House was “hugely significant” and gives members an opportunity to begin to do some repair work. “It allows Congress to do its job,” he said. “They can get the appropriations process going, go home and talk about accomplishments and get their ratings above 10 percent.”
That could help in next year’s midterm elections, which will be influenced as much by Obama’s approval ratings, the state of the economy and judgments about the new health-care law as by the relative popularity of the Republican Party. But whether Boehner’s pushback marks a real turning point inside the party is another matter.
The business community has vowed to become more active in the intraparty battles, but their history of success is spotty. Conservative groups, fueled by some big donors and grass-roots energy, show no sign of pulling back, but will the fire burn as strongly as it has in the past?
In the absence of a consensus, and with both sides committed to the fight, the intraparty conflict will probably shift from the House and Senate floors to future elections. As one GOP strategist put it: “We’re in for a long, bloody conflict. Inside the family, we’re going to duke it out, and the place you duke it out is where you’re supposed to, which is at the ballot box.”
By: Dan Balz, Opinion Writer, The Washington Post, December 14, 2013
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