“Inequality Is A Drag”: There’s No Evidence That Making The Rich Richer Enriches The Nation
For more than three decades, almost everyone who matters in American politics has agreed that higher taxes on the rich and increased aid to the poor have hurt economic growth.
Liberals have generally viewed this as a trade-off worth making, arguing that it’s worth accepting some price in the form of lower G.D.P. to help fellow citizens in need. Conservatives, on the other hand, have advocated trickle-down economics, insisting that the best policy is to cut taxes on the rich, slash aid to the poor and count on a rising tide to raise all boats.
But there’s now growing evidence for a new view — namely, that the whole premise of this debate is wrong, that there isn’t actually any trade-off between equity and inefficiency. Why? It’s true that market economies need a certain amount of inequality to function. But American inequality has become so extreme that it’s inflicting a lot of economic damage. And this, in turn, implies that redistribution — that is, taxing the rich and helping the poor — may well raise, not lower, the economy’s growth rate.
You might be tempted to dismiss this notion as wishful thinking, a sort of liberal equivalent of the right-wing fantasy that cutting taxes on the rich actually increases revenue. In fact, however, there is solid evidence, coming from places like the International Monetary Fund, that high inequality is a drag on growth, and that redistribution can be good for the economy.
Earlier this week, the new view about inequality and growth got a boost from Standard & Poor’s, the rating agency, which put out a report supporting the view that high inequality is a drag on growth. The agency was summarizing other people’s work, not doing research of its own, and you don’t need to take its judgment as gospel (remember its ludicrous downgrade of United States debt). What S.& P.’s imprimatur shows, however, is just how mainstream the new view of inequality has become. There is, at this point, no reason to believe that comforting the comfortable and afflicting the afflicted is good for growth, and good reason to believe the opposite.
Specifically, if you look systematically at the international evidence on inequality, redistribution, and growth — which is what researchers at the I.M.F. did — you find that lower levels of inequality are associated with faster, not slower, growth. Furthermore, income redistribution at the levels typical of advanced countries (with the United States doing much less than average) is “robustly associated with higher and more durable growth.” That is, there’s no evidence that making the rich richer enriches the nation as a whole, but there’s strong evidence of benefits from making the poor less poor.
But how is that possible? Doesn’t taxing the rich and helping the poor reduce the incentive to make money? Well, yes, but incentives aren’t the only thing that matters for economic growth. Opportunity is also crucial. And extreme inequality deprives many people of the opportunity to fulfill their potential.
Think about it. Do talented children in low-income American families have the same chance to make use of their talent — to get the right education, to pursue the right career path — as those born higher up the ladder? Of course not. Moreover, this isn’t just unfair, it’s expensive. Extreme inequality means a waste of human resources.
And government programs that reduce inequality can make the nation as a whole richer, by reducing that waste.
Consider, for example, what we know about food stamps, perennially targeted by conservatives who claim that they reduce the incentive to work. The historical evidence does indeed suggest that making food stamps available somewhat reduces work effort, especially by single mothers. But it also suggests that Americans who had access to food stamps when they were children grew up to be healthier and more productive than those who didn’t, which means that they made a bigger economic contribution. The purpose of the food stamp program was to reduce misery, but it’s a good guess that the program was also good for American economic growth.
The same thing, I’d argue, will end up being true of Obamacare. Subsidized insurance will induce some people to reduce the number of hours they work, but it will also mean higher productivity from Americans who are finally getting the health care they need, not to mention making better use of their skills because they can change jobs without the fear of losing coverage. Over all, health reform will probably make us richer as well as more secure.
Will the new view of inequality change our political debate? It should. Being nice to the wealthy and cruel to the poor is not, it turns out, the key to economic growth. On the contrary, making our economy fairer would also make it richer. Goodbye, trickle-down; hello, trickle-up.
By: Paul Krugman, Op-Ed Columnist, The New York Times, August 7, 2014
“Far From The First Time”: Karl Rove Still Can’t Find An Actual Obamacare Victim
Politics is a constantly changing business, but there are still a few things you can count on in every election cycle: like Karl Rove’s dark money group, Crossroads GPS, blowing its donors’ money on misleading, ineffective attack ads.
Since President Barack Obama signed the Affordable Care Act into law in 2010, its opponents have spent over $400 million on television ads attacking it, with Crossroads leading the way. But despite Republicans’ repeated assertions that Obamacare would be the issue that causes Americans to rise up against Democrats and throw them out of office, the torrent of attack ads has actually done little to sway public opinion against the law. In fact, according to a Brookings Institution study, anti-Obamacare ads may have actually increased ACA enrollments by raising awareness about the law and its benefits.
But still, conservative outside spenders are determined to take their anti-health care message directly to the voters. The latest example is a new ad from Crossroads GPS, in which a Colorado woman named Richelle McKim laments that Senator “Mark Udall’s vote for Obamacare has hurt families in Colorado.”
McKim recounts her husband’s decision to start a new business, saying “We knew we needed to find health care. Because we were a single-income family, we couldn’t afford our plan.” Text then flashes across the screen, letting viewers know that “Richelle had to go back to work.”
It seems like a perfect case to make to the suburban women who are likely to decide Senator Udall’s tight re-election battle against Republican congressman Cory Gardner.
It also happens to be totally false.
As Denver television station KDVR reports, McKim has worked constantly over the past six years; from July 2008 through May 2010, she worked from home as the office manager for her husband’s company (which, evidently, wasn’t founded as a response to Obamacare). Since then, she has worked for Anadarko Petroleum and Noble Energy — which have donated $57,550 and $36,000 to Gardner’s campaign, respectively.
By McKim’s own admission, Obamacare didn’t actually drive her back into the workforce, as the ad claims.
“It wasn’t the Affordable Care Act,” she told KDVR. “It was just a financial burden, having a single income for so long.”
And, for good measure, McKim’s husband used to forgo health insurance because he suffers from high blood pressure — a pre-existing condition that made his insurance more expensive until the ACA became law.
This is far from the first time that Obamacare opponents have been forced to stretch the truth, flatly lie, or just give up and use paid actors to tell a scare story. Indeed, it begs the question: If the Affordable Care Act is really such a disastrous boondoggle, why couldn’t Crossroads — or the Koch brothers-backed Americans for Prosperity, or even House Republican Conference chair Cathy McMorris Rodgers — find an actual victim?
In this case, the fact that Obamacare has helped cut Colorado’s uninsured rate by 6 percent might have something to do with it.
By: Henry Decker, The National Memo, August 8, 2014
“The Reverse Mortgage Industry Of Politics”: How The Tea Party Became As Corrupt As The Beltway It Loathes
This week, ProPublica released a report on the financial (and moral) corruption of a Tea Party group operating under the name Move America Forward, which was founded by one Sal Russo. Russo also helped start the Our Country Deserves Better PAC, aka the Tea Party Express. Move America Forward has run fake drives to give care packages to troops, stolen images of other charitable campaigns and passed them off as its own, and trumpeted a nonexistent partnership with Walter Reed Hospital — all while funneling very real millions to itself. The group is an industry leader at taking your Tea Party sentiments (if you have them) and turning them into profits.
Unfortunately, the continuing success of Sal Russo and the Tea Party Express is emblematic of a larger failure of the American right — and perhaps the larger project of American self-governance.
Earlier this year, The Daily Caller‘s Alexis Levinson reported that other Tea Party groups that had raised millions spent up to 80 percent of their money on operating expenditures, salaries, consultants, and mailing list companies, which were often owned by the people who ran the groups themselves. The Tea Party is essentially a landlord class; its fiefdom is the truly felt convictions of others.
There is nothing new about this. The Tea Party gained traction in an environment defined by massive resentment and fear directed at the Obama presidency, disgust at the bailouts of the Bush and Obama eras, and the wreckage of a Republican electoral defeat, all of which was especially conducive to the growth of parasite groups like the Tea Party Express.
In February of 2010, I reported a story from a “Tea Party Convention” in Nashville, hosted by the for-profit group Tea Party Nation. Leader Juddson Phillips left his job as a lawyer to draw a salary. Tickets for this grassroots uprising cost more than $500. The great motive behind it was transforming the organizers into richer men and political kingmakers in their state.
This gross profiteering is not unique to right-wingers. Political consultants do hilariously weird things. John Weaver, a consultant who advises prominent Republican candidates to enact his own distaste for conservatives, pulled an all-timer when he convinced his candidate’s campaign to pay him, partly, through a corporation that shared the exact same name as that of another consultant’s business. That helped to hide how well he was doing — until it didn’t.
People who give themselves to full-time political activism deserve some recompense for their work and expertise. And of course, even the most populist of political movements will attract, and even require, professional leadership from without. After all, even punk rock bands require “the suits” to handle business and arrange for the to-be-destroyed hotel room. Even St. Paul demanded payment for his services.
But there was something especially galling about the level of self-dealing enrichment and deception at the head of the Tea Party movement, particularly because the movement started as a disgusted response to the self-dealing enrichment and deception in Washington.
Profiteering has been an acute problem almost right from the beginning for the Tea Party. It is like the reverse mortgage industry of politics: making money by giving an awful deal to an older, whiter customer base, then leaving town just as the fools realize it leaves them with nothing.
It’s easy to write them off as just another bunch of opportunists. But the endemic corruption of this movement should trouble the American right, if not the American conscience. The conservative diagnosis of Washington’s brokenness is that Americans have outsourced the task of self-government to a managerial class in Washington, a corruption that has transformed our nation’s capital into “the Beltway,” a shorthand for D.C.’s toxic culture of cronyism.
The populist right’s instinctive response — the Tea Party — immediately became just another added layer of cronyism. A grassroots corruption. Really, a weed. If the American people have outsourced their self-government to Washington, the conservative movement made another dirty deal, allowing itself to be entertained in outrage carnivals run by for-profit activists. Excepting the exceptions, the populist right’s response to dishonesty and graft was to generate another set of swindlers who wear flag-lapel pins, lie to their faces, and help themselves to the cash.
Yes, we built that. And H.L. Mencken laughs. Self-government is just another product, and no one can be bothered to read the fine print.
By: Michael Brendan Dougherty, Senior Correspondent, The Week, August 8, 2014
“A Plainly Visible Reality”: Proof That Voter Impersonation Almost Never Happens
An enduring Republican fantasy is that there are armies of fraudulent voters lurking in the baseboards of American life, waiting for the opportunity to crash the polls and undermine the electoral system. It’s never really been clear who these voters are or how their schemes work; perhaps they are illegal immigrants casting votes for amnesty, or poor people seeking handouts. Most Republican politicians know these criminals don’t actually exist, but they have found it useful to take advantage of the party base’s pervasive fear of outsiders, just as when they shot down immigration reform. In this case, they persuaded the base of the need for voter ID laws to ensure “ballot integrity,” knowing the real effect would be to reduce Democratic turnout.
Now a researcher has tried to quantify this supposed threat by documenting every known case of voter fraud since 2000 — specifically, the kind of impersonation that would be stopped by an ID requirement. (Note that this does not include ballot-box stuffing by officials, vote-buying or coercion: the kinds of fraud that would not be affected by an ID law.)
There have been more than 1 billion votes cast in local, state and federal elections over the last 14 years. Out of all of them, the researcher, Justin Levitt, a voting expert at the Loyola University Law School, found 31 cases of impersonation fraud. It’s hardly a surprise that the number is so low; as he writes in the Washington Post today, casting individual fake ballots “is a slow, clunky way to steal an election. Which is why it rarely happens.”
A look at some of the 31 cases shows how pathetic the fraudulent-voter threat really is. In May, Ben Hodzic was accused of voting in his brother’s name in the Catskill, N.Y., School District Board of Education election. In June 2011, Hazel Brionne Woodard of Tarrant County, Tex., allegedly arranged for her son to vote in the municipal runoff elections in the name of his father. In 2004, an unknown person signed the pollbook line as Rose-Mary McGee, of Albuquerque, N.M.
These conspiracies were the pretext for the voter ID laws that have now been passed in 34 states. And the arguments in many of those states have reached an absurdly high pitch. In Virginia, for example, Republicans are saying that the ID card required in their law has to be current; if you happen to let your driver’s license expire, you can’t vote, even though the photo on the card clearly demonstrates your identity. The state’s Democratic attorney general, Mark Herring, says that’s unconstitutional.
But neither the Constitution nor plainly visible reality is likely to halt the Republican crusade to keep certain people from participating in democracy. As the National Commission on Voting Rights documented in a new report, voting discrimination remains “a frequent and ongoing problem,” particularly in the South and Southwest, in part because of new barriers to voting thrown up by state legislators.
“It is difficult not to view these voting changes with a jaundiced eye,” the report says, “given the practical impediments they create and the minimal, if any, measurable legitimate benefit they offer.”
By: David Firestone, Taking Note, Editorial Page Editors Blog, The New York Times, August 6, 2014
“What’s Behind The Media’s Ebola Sensationalism?”: How Deeply The Right-Wing Anti-Science Message Has Taken Hold On TV
CNN, Fox News and MSNBC all treated the return of Kent Brantly, the American doctor who contracted Ebola in Liberia, as if he were riding to the hospital in a white Ford Bronco. Chopper cams and speculative commentary trailed his ambulance Saturday through the streets of Atlanta with the kind of excited intensity usually reserved for police car chases and killers on the lamb.
In the end, the breathless live coverage was revealed to be embarrassingly over-the-top: Brantly didn’t even need a stretcher; he climbed out of the parked ambulance in a hazmat suit and walked, with the support of just one person, into a back door of Emory University Hospital. That was the tip-off that giving a disease the O.J. treatment is a symptom of a media sickness for which there appears to be no cure.
Ebola is a terrible hemorrhagic fever that can kill from 50 percent to 90 percent of those who contract it. It’s also a symbol to the political right of all the Third World horrors that liberals are inviting past the walls of our City on the Hill. But now that two American aid workers—Nancy Writebol has just arrived at Emory, on a stretcher but, so far, with less fanfare—have brought it directly to our shores, it’s a Clear and Present Danger.
Georgia congressman Phil Gingrey went so far last month as to warn that the Central American children who’ve been turning up at border stations around the country might be smuggling Ebola in with them, like so many contagious Trojan horses (even though Ebola fever has never been detected in a patient outside of Africa). Howlers like Gingrey’s—echoed Monday by Representative Todd Rokita (R-IN)—work because Ebola, “diseased” immigrants, and “blood pollution” of all sorts fit neatly into the racist subtext of the radical right’s opposition to Obama. After all, our “lawless,” African-born POTUS, whose parents faked a birth certificate fifty-three years ago this week in order to infect America with socialism today, just happens to be hosting fifty-one African nations at a summit in Washington. How much proof do you need?
Various studies have shown that conservatives have a lower threshold for disgust than liberals do, and Ebola, which is spread through direct contact with bodily fluids (like vomit, feces and blood, but not through sneezing or coughing) certainly crosses that low bar. Nor is it lost on wingers that AIDS originated in Africa, too.
But many of the diseases that humans are heir to are pretty damn disgusting, no matter where they originate. There aren’t two tiers of diseases any more than there are two tiers of humanity.
There is, however, Donald Trump, who tends to elevate fear of cooties into a political philosophy. He sent out a series of tweets—including “Ebola patient will be brought to the U.S. in a few days—now I know for sure that our leaders are incompetent. KEEP THEM OUT OF HERE!”—that exhibit the germ phobia we’ve come to expect from isolated billionaire crackpots (Trump will be wearing Kleenex boxes for shoes any day now). Unusually for a Republican, though, the magnate’s fears aren’t overcome by the fact that the two infected Americans are Christian missionaries. “The U.S. cannot allow EBOLA infected people back,” he also tweeted. “People that go to far away places to help out are great—but must suffer the consequences!”
And never mind that fighting such viruses at their place of origin is far more effective than pretending there’s a disinfectant force-field around the Homeland. Brantly is reported to have been suffering the consequences of doing good with a vengeance until he received two emergency treatments: an experimental serum developed by a San Diego pharmaceutical company, and, according to Samaritan’s Purse, the relief organization working with Brantly, a blood transfusion from a 14-year-old boy who survived the disease after Brantly cared for him in Liberia. Guess which treatment gets more coverage on American TV?
Which brings us back to the fever the media has been suffering ever since the ascent of the Tea Party. Rather than dispel unscientific and political myths, the instinct at many news outlets has been to promote them. The scientific truth the media should have been promoting all along isn’t that Ebola is a Holy Terror emerging from “other” races and immune to Western treatment; rather, it’s a horrible illness with a terrifically high kill rate because up to now it has appeared only in Africa, where clean water, enforced quarantines and disposable medical supplies are hard to come by. That first take played on cable news channels, regardless of their political leanings, is a measure of just how deeply the right-wing anti-science message has taken hold on TV.
But by sheer accident, the car-chase media did the public a service, demonstrating, as Brantly walked into the hospital, that the existential danger over Ebola is being oversold. MSNBC anchor Alex Witt asked on-air physicians, including NBC in-house doctor Nancy Snyderman, if they would be afraid to treat Brantly. No, said Snyderman. Any doctor would be “excited” by the opportunity to use the medical precautions and equipment available in America to find effective treatments for the disease without spreading it.
And maybe, once again, The Onion said it best: “Experts: Ebola Vaccine at Least 50 White People Away.”
By: Leslie Savan, The Nation, August 5, 2014
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