“No Recipe For Addressing Economic Inequality”: The Republican Candidates Can’t Say How Obama Wrecked The Economy
One of the most striking and mystifying aspects of the Republican presidential primary has been the candidates’ inability—or unwillingness—to offer up any kind of coherent economic prescription for the country. That didn’t change on Thursday night. On the Fox Business debate stage in South Carolina, the remaining GOP field had the floor to rebut President Barack Obama’s rosy picture of the American economy during this week’s State of the Union.
Instead, they pivoted to fear-mongering on foreign policy.
The tone was set with the debate’s very first question, posed to Senator Ted Cruz. Fox Business moderator Maria Bartiromo asked him to respond to Obama’s declaration earlier this week: “Anyone claiming that America’s economy is in decline is peddling fiction.”
That should have been a softball, ready for the surging candidate to hit out of the park. Instead, Cruz launched into a prepared digression on the American soldiers captured and released by Iran before addressing the actual question—with another digression. “The president tried to paint a rosy picture of jobs,” he said. “And you know, he’s right. If you’re a Washington lobbyist, if you make your money in and around Washington, things are doing great. The millionaires and billionaires are doing great under Obama.”
Cruz played on Obama’s own words on the sources of inequality in his State of the Union. “Food Stamp recipients didn’t cause the financial crisis; recklessness on Wall Street did,” Obama said on Tuesday. “Immigrants aren’t the reason wages haven’t gone up enough; those decisions are made in the boardrooms that too often put quarterly earnings over long-term returns. It’s sure not the average family watching tonight that avoids paying taxes through offshore accounts.”
Cruz turned that around, pinning the blame exclusively on the president for rising inequality—not on the wealthy. “Median wages have stagnated. And the Obama-Clinton economy has left behind the working men and women of this country,” he said.
It was like that all night: The candidates never took the bait Obama set up for them, to disprove they are doing anything but “peddling fiction” that his agenda—addressing economic inequality, immigration reform, and energy regulations—has left Americans worse off. Instead, the Republicans beat the drum on fear of ISIS and terrorism abroad, but never provided a counter to Obama’s economic claims.
If the GOP debate revealed one thing about these candidates’ views of rising inequality—a hot topic in the Democratic primary—it’s that they can’t quite bring themselves to cast the wealthy in a bad light.
Ohio Governor John Kasich said that Americans shouldn’t hate the rich—that’s just not American. People are “very concerned about” the economy, he said. “And they wonder whether somebody is getting something to—keeping them from getting it. That’s not the America that I’ve ever known. My father used to say, “Johnny, we never—we don’t hate the rich. We just want to be the rich.”’
Ben Carson shot back at Bernie Sanders and Clinton, who he claimed “would say it’s those evil rich people” who are to blame for inequality. Carson said they’re the wrong target; it’s “the evil government that’s putting all these regulations on us.”
Throughout the night, Republicans proved more comfortable playing to their base’s fear of terrorism than directly rebutting the president’s economic victory lap. Maybe that’s because they can’t muster the same strong descriptive language for how Obama has set fire to the economic world as they have for his foreign policy. So much easier to berate the president on his approach to ISIS all night, as New Jersey Governor Chris Christie did: “If you’re worried about the world being on fire, you’re worried about how we’re going to use our military, you’re worried about strengthening our military and you’re worried most of all about keeping your homes and your families safe and secure, you cannot give Hillary Clinton a third term of Barack Obama’s leadership,” he said.
But what about Obama’s leadership on the economy? The answers were more timid—with the exception, not surprisingly, of Donald Trump, who in his usual style promised he’d “make America rich again and make America great again.”
Why were the candidates so quiet about the economy on Thursday night? Simple. The Republicans don’t have a recipe for addressing economic inequality, instead focusing exclusively on tax breaks or highly regressive flat taxes that help the top earners. As my colleague Suzy Khimm has explained, “Bush, Marco Rubio, and Trump have all released tax plans that they are trying to sell as a boon for ordinary families.” That’s a hard sell, to say the least. A conservative estimate of Trump’s plan, for example, would lower the middle 40 to 50 percent of American wage earners’ taxes by 5.3 percent, but the wealthiest would see almost a 22 percent decrease. Carson and Cruz have called for flat taxes—a highly regressive policy.
Because they have such shallow policies to draw on, the GOP finds it easier to play on fears of an uncertain international landscape. That works just fine when they’re pitching themselves to an anxious, unhappy Republican base. But when one of these candidates faces Clinton or Sanders in the general election, the Democratic nominee will easily poke holes through his paper-thin economic message.
By: Rebecca Leber, The New Republic, January 15, 2015
“Cronyism Causes The Worst Kind Of Inequality”: Friends Of The Rulers Appropriating Wealth For Themselves
Economic inequality has skyrocketed in the U.S. during the past few decades. That has prompted many calls for government policies to reverse that trend. Defenders of the status quo argue that rising inequality is a necessary byproduct of economic growth — if we don’t allow people the chance to become extremely rich, the thinking goes, they will stop working, investing, saving and starting businesses. A receding tide will then cause all boats to sink.
Critics of the status quo have responded with the claim that inequality doesn’t help growth, but instead hurts it. This view was given ammunition by a number of recent studies, which have found a negative relationship between how much income inequality a country has and how fast it grows. One example is an International Monetary Fund study from 2015:
[W]e find an inverse relationship between the income share accruing to the rich (top 20 percent) and economic growth. If the income share of the top 20 percent increases by 1 percentage point, GDP growth is actually 0.08 percentage point lower in the following five years, suggesting that the benefits do not trickle down. Instead, a similar increase in the income share of the bottom 20 percent (the poor) is associated with 0.38 percentage point higher growth.
A similar 2014 study from the Organization for Economic Cooperation and Development concluded the same thing. Interestingly, the negative correlation between inequality and growth is found even when controlling for a country’s income level. This isn’t simply a case of wealthier countries growing more slowly and also being more unequal.
So the evidence is pretty clear: Higher inequality has been associated with lower growth. But as with all correlations, we should be very careful about interpreting this as causation. It might be that countries whose growth slows for any reason tend to experience an increase in inequality, as politically powerful groups stop focusing on expanding the pie and start trying to appropriate more of the pie for themselves.
The IMF and OECD list some channels by which inequality might actually be causing lower growth. The most important one has to do with investment. When poor people have more money, they can afford to invest more in human capital (education and skills) and nutrition. Because these investments have diminishing marginal returns — the first year of schooling matters a lot more than the 20th — every dollar invested by the poor raises national productivity by more than if it gets invested by the rich. In other words, the more resources shoring up a nation’s weak links, the better off that nation will be.
That’s a plausible hypothesis. But there might also be other factors contributing to the correlation between inequality and growth. It could be that there is something out there that causes both high inequality and low growth at the same time.
The obvious candidate for this dark force is crony capitalism. When a country succumbs to cronyism, friends of the rulers are able to appropriate large amounts of wealth for themselves — for example, by being awarded government-protected monopolies over certain markets, as in Russia after the fall of communism. That will obviously lead to inequality of income and wealth. It will also make the economy inefficient, since money is flowing to unproductive cronies. Cronyism may also reduce growth by allowing the wealthy to exert greater influence on political policy, creating inefficient subsidies for themselves and unfair penalties for their rivals.
Economists Sutirtha Bagchi of the University of Michigan and Jan Svejnar of Columbia recently set out to test the cronyism hypothesis. They focused not on income inequality, but on wealth inequality — a different, though probably related, measure. Concentrating on billionaires — the upper strata of the wealth distribution — they evaluated the political connections of each billionaire. They used the proportion of politically connected billionaires in a country as their measure of cronyism.
What they discovered was very interesting. The relationship between wealth inequality and growth was negative, as the IMF and others had found for income inequality. But only one kind of inequality was associated with low growth — the kind that came from cronyism. From the abstract of the paper:
[W]hen we control for the fact that some billionaires acquired wealth through political connections, the effect of politically connected wealth inequality is negative, while politically unconnected wealth inequality, income inequality, and initial poverty have no significant effect.
In other words, when billionaires make their money through means other than political connections, the resulting inequality isn’t bad for growth.
That’s a heartening message for defenders of the rich-country status quo. If cronyism is the real danger, it means that a lot of the inequality we’ve seen in recent decades is benign. Eliminate corrupt connections between politicians and businesspeople, and you’ll be safe.
But Bagchi and Svejnar’s finding cuts two ways. It also means that plain old inequality isn’t beneficial for growth, as its defenders have claimed. That removes one of the big objections government policy makers face in talking steps to reduce inequality — and that doing so is unlikely to hurt economic growth.
By: Noah Smith, Bloomberg View, Bloomberg Politics, December 24, 2015
“Getting Beyond The Racism That Divides Us”: It’s Not Like We Used To Be A Racism-Free Country
Issac Bailey has written that President Obama is the person who should reach out to angry white Trump supporters.
There is only one person who can unite the country again, and he works in the White House. Yes, President Barack Obama—ironically, the man who is the personification of the fear Trump is exploiting—is the one in the best position to quell the anger being stirred up.
This is not something the president can do from the Oval Office, or from a stage. What he needs to do is use the power of the office in a different way, one that matches the ruthless effectiveness of a demagogue with a private jet. Obama needs to go on a listening tour of white America—to connect, in person, with Americans he has either been unable or unwilling to reach during his seven years in office.
As I read this article, I tried to get beyond my initial reaction that Bailey was simply making another Green Lanternism argument. That’s because, as I’ve written before, I’ve watched Barack Obama closely for over seven years now and I think he would at least stop and listen to this advice.
While it has mostly gone unheeded, the President has reached out to angry white Americans on several occasions (much to the chagrin of a lot of Black academics and political leaders). For example, if we go back to his famous speech on racism in 2008 during the whole Jeremiah Wright controversy, he spent quite a bit of time affirming the reasons why a lot of white people are angry.
Most working- and middle-class white Americans don’t feel that they have been particularly privileged by their race. Their experience is the immigrant experience – as far as they’re concerned, no one’s handed them anything, they’ve built it from scratch. They’ve worked hard all their lives, many times only to see their jobs shipped overseas or their pension dumped after a lifetime of labor. They are anxious about their futures, and feel their dreams slipping away; in an era of stagnant wages and global competition, opportunity comes to be seen as a zero sum game, in which your dreams come at my expense.
But ultimately, to judge the value of Bailey’s suggestion, there needs to be some indication that it would actually work to “unite the country once again.” The first error Bailey makes is to assume that we were ever united in the first place. It’s not like we used to be a racism-free country until all of the sudden Barack Obama came along. Bailey knows that. And he accurately described what’s going on in his very first paragraph.
…we are fast becoming a nation in which minorities make up a majority of the population. As a result, tens of millions of white Americans, accustomed for so long to having all the benefits of being the majority, are scared out of their minds—and it is this fear that Trump is exploiting so effectively.
Bailey’s point is that this fear needs to be aired…at the President.
Let them see their president. Let them speak directly to their president. Let them shout, cuss, fuss and unload if that’s what they need to do. Because no matter how you slice it, the country they’ve long known is dying, and a new one is taking shape. Obama’s presence in the White House, while heartening to many, is the tip of the spear to those fretful about what’s to come.
The question is: does that help? This kind of thing stems from a myth that has developed in our culture that airing negative feelings makes them magically go away. It’s not true. And it is especially not true in large groups where people feed off of each other.
What actually helps people get over these kinds of feelings is to identify the real source of their anger/fear – something that Trump’s style of fear-mongering is designed to misdirect – and then empower themselves to do something about it.
So the question becomes, how do people actually get beyond their racism? If there was an easy answer to that one, we would have solved this problem a long time ago.
Obviously President Obama is struggling with that question. In interviews with Marc Maron, Marilynne Robinson and Steve Inskeep, he kept returning to a similar theme. Instead of a focus on airing our grievances, the President talks about calling out our better natures. He continually stresses the idea that we are better people than our politics suggests. In other words, the way to deal with darkness is not to simply dwell on it – but to shine more light.
By: Nancy LeTourneau, Political Animal Blog, The Washington Monthly, December 25, 2015
“Donald The Sensible”: There’s No Centrist Superman To Save You
You’re all well familiar with Kubler-Ross’s famous five stages of death: denial, anger, bargaining, depression, acceptance. Here are Tomasky’s five stages of watching a Republican debate: mockery, rage, double rage, boredom, despair.
I start, as I’d reckon most liberals do, with mockery, which was easy Wednesday night when most of them said in essence that their greatest flaw was that they cared too much (in fairness, Hillary Clinton had earlier said something similar). Then one of them says something unforgivably idiotic—and yes, there’s such a thing as forgivable idiocy—like Carly Fiorina pretending that the characters “401k” were handed down to the human race from God on Sinai and not created by the very federal government she was in that selfsame sentence traducing, and it’s rage time. And so on and so on.
But I end with despair, because the previous two (if we’re lucky) hours have revealed to me that these candidates and the citizens cheering them on just live in a totally different universe than the one I and most of my friends inhabit, and while there can be an occasional meeting of the minds on certain small matters, the sad fact is that we are going to be stuck with the current polarization for a long time yet. I think at least eight more years.
People in my position aren’t supposed to say things like this. We’re supposed to keep telling your sort that bipartisanship is in sight, shimmering in the gloaming just beyond the poppy fields. Now it’s true that Congress did just pass that budget on a bipartisan basis, but that of course is an aberration. And you know it and I know it, and everyone who writes sentences like “Perhaps this will usher in a new era of blahblahblah” knows it too.
I was reading David Brooks the other day, his column fantasizing about “a sensible Trump.” This hybrid ubermensch with “impeccable outsider status but also a steady temperament, deep knowledge, and good sense” would, in Brooks’s telling, bring together the leaders of both parties. He would sit them down and explain to them that we need to help people in the lower half of the income distribution, and that the answer is sitting right there in some research by a Harvard team led by the economist Raj Chetty.
Following the Harvard team’s example means doing some things Republicans like and some things Democrats like, so both sides get a little something but give up something too; but if we can do this, argues Donald the Reasonable, we will have started to solve our two greatest problems, stagnant wages and partisan dysfunction.
I happen to be familiar with the research of which Brooks speaks, and I’d be delighted for Raj Chetty’s work to serve as model for federal government action. But there is, unfortunately, no reason to think in real life that anything like this could happen.
Why? Because before he got elected, Donald the Reasonable would have to take a position on abortion. He would undoubtedly try to find some kind of nuanced lane, to use the au courant word, somewhere in between the standard Democratic and Republican positions. But this of course would just dissatisfy both parties. And as the Republicans appear to be moving toward a position that doesn’t even acknowledge the traditional three exceptions, any deviation from that by D the R will brand him just another baby killer.
He will have to take lots of positions, this fellow. On same-sex marriage. On whether insurers should be compelled to cover contraceptive services. On immigration and citizenship. On who his model Supreme Court justices are. On free trade. On a minimum wage. On how much he’s willing to mix it up with Putin. On whether Hollywood and the universities are ruining America. On climate change. He can’t run for president saying, “Well, sure, all those things are important, but what I’m really all about here is implementing the ideas of Raj Chetty.”
In other words, partisan choices are utterly inescapable. I don’t celebrate this, but I don’t necessarily lament it either, the way a lot of centrist pundits do. These are important things. They’re all worth fighting over, and for. There are plenty of compromises that Democrats and liberals should, and I’m pretty sure would, be willing to make in the climate-change fight, for example. A carbon tax vs. credits, how much fracking and drilling, the mix of renewables, the amount we should contribute to the UN fund—all these and more can be debated by two parties that have different views on the urgency of the problem and the proper role of government in addressing it. But when one party just denies the consensus of 97 percent of the scientific community, you can’t compromise with it. You just have to defeat it.
The hope, if there is one, is this. Hillary Clinton wins. That constitutes the GOP’s third loss in a row (and, in popular-vote terms, sixth out of the last seven). Maybe then the GOP takes a look in the mirror and at the data, which will show them if they study it honestly that they lost, again, because they failed to carry purple states that as a party they’d simply become too conservative to win.
The Ted Cruz “we weren’t conservative enough!” wing will still argue its position. And of course the Republican-led House (or House and Senate, the GOP retains control) will start out by blocking President Clinton in every way it can. But she’d probably win re-election in 2020, simply because most incumbents do, and then the Republicans would be looking at 16 straight years of being locked out of the White House, and the country will be that much more Latino, and Clinton will take Georgia and come close in Texas, and finally they’ll run up the flag. So in 2024, we might have a choice between a liberal-moderate Democrat and a conservative-moderate Republican, which the Republican would probably win, and the party’s conservative wing would be somewhat tamed.
That’s the only hope for the country, really. There are extremists. They need to be defeated enough times so that their less extreme comrades can outmuscle them and guide their party back to a place where we’re all at least agreeing on basic evidentiary propositions. There is no Donald the Sensible who can save us.
By: Michael Tomasky, The Daily Beast, October 30, 2015
Share This Blog
Unknown Feed- An error has occurred; the feed is probably down. Try again later.
mykeystrokes.com 