Advice To The Left: Leave The Paranoia To The Experts

On CNN’s “Reliable Sources” on Sunday, host Brian Stelter began the program with a segment on the “troubling behavior by Donald Trump’s right hand man, campaign manager, Corey Lewandowski.” It was almost as if CNN just now discovered that there reliable sourceswas anything “troubling” about Drumpf’s campaign at all, let alone what his gangsterish groupies, including those working for him, have been doing at his hateful rallies for months now. But at least, you may have noticed, CNN and MSNBC have lately been critical of some aspects of Drumpf’s effort to become con man-in-chief. That’s a good thing. But.

A guest on the segment, Jeff Greenfield—a television journalist whose political experience goes back to 1960s—made the point that “an appetite for the ratings” has turned much of cable news into Castro-like “state TV” on behalf of Drumpf. Greenfield also made an additional point about the kind of journalism we have been seeing since the GOP front-runner hit the stage with his bigoted act:

I think the desire to have him on—and the unpreparedness of so many of the people interviewing him—will stand for a long time as a serious black mark on the American press.

That indictment is true enough and bad enough. But perhaps Greenfield’s most important point was something else he noted, what he called “one of the essential questions.” He explained:

reliable sources and greenfieldAs the media, some of it, had gotten critical about Trump, it has had no effect on his support, and one of the really central questions we’re going to have to face is whether a chunk of the American electorate has been taught to distrust the media so long and so completely that even when the media zeroes in on some of Trump’s blatant falsehoods or the dangerous rhetoric, his supporters say, “Oh, that’s coming from The New York Times or CNN or in some cases even FOX. We don’t believe it.”

And the whole theory about what the press is supposed to do in a free society, to put spotlights on political people seeking power…we may be in a situation where a fairly large chunk of the United States electorate is saying, “We don’t care what you say. We don’t believe you. If Trump says it, it’s true.”

And that’s a real problem. I don’t know how we deal with that.

Yes. It’s a real problem. And I don’t know how we deal with it either. For years, going at least back to William F. Buckley’s dominance of the movement, conservatives have always distrusted journalists who weren’t conservative. Beginning in the 1980s, right-wing radio made a fetish out of attacking mainstream journalism, with Rush Limbaugh calling it the “drive-by media” because it was, in his paranoid, ideological mind, completely biased in favor of liberals. In fact, there was so much distrust of the press, so much of a market for niche journalism that would tell conservatives what they wanted to hear, that a new cable channel, masquerading as a news channel, was born. And now, ironically, many conservatives, as Greenfield noted, don’t even trust Fox to bring them “the truth.”

But, sadly, it’s not just conservatives these days who are sowing seeds of distrust by attacking the press. Some liberals are doing it too. And such liberal attacks would be okay, if they were actually making specific, valid claims of bias—for instance, lefty Amy Goodman was also on “Reliable Sources” and she made the point that, in 2015, Drumpf “got 23 times the coverage of Bernie Sanders”—rather than just blanket statements that, like what conservatives do, sow general distrust of mainstream journalism. If journalistic malpractice is going on, liberals (or conservatives) should point it out, but they should be specific and not generalize. A general distrust of the mainstream press hurts the country by making us collectively dumber.

Let me give you just one example of such a harmful generalization coming from a liberal, an example from this morning. Robert Reich—a man whose opinion I normally greatly respect—tweeted the following:

reich tweet on bernie

Now, I listened to right-wing talk radio religiously for almost two decades, mostly as a right-winger myself, and I can say that the phrase, “Pay no attention to the national media, who want you to think” is exactly the kind of phrase that would, day after day, slide off the lips of Limbaugh, Hannity, and all the other conservative zealots on the air. And it’s the kind of claim that goes to what Greenfield was talking about when he said a “large chunk” of the electorate so distrusts the press that they simply refuse to believe even basic facts.

delegate count march 21 2016I realize Robert Reich is a fierce Bernie Sanders supporter. Fine and dandy. He can say all kinds of nice things about Bernie and even tell people the race is not yet over if he wants to. But come on. Just because journalists are, quite accurately, reporting how exceedingly difficult the math is for a Bernie comeback, that doesn’t mean Bernie supporters should undermine the role of journalism by resorting to that old Limbaughesque “they want you to think” nonsense. I see no difference between saying, as Greenfield put it, “We don’t care what you say. We don’t believe you. If Trump says it, it’s true,” and “We don’t care what you say. We don’t believe you. If Bernie says it, it’s true.”

The press, particularly television journalism, has a lot to answer for regarding the Drumpfing of America, that’s for sure. The CEO of CBS, Les Moonves, did really say that Drumpf’s presidential run was a “good thing,” mostly, I am sure, because of what he also said: “It may not be good for America, but it’s damn good for CBS.” Thus, it is completely fair to criticize on-air journalists and their producers and their corporate bosses for specific cases of malpractice, like the way coverage of Drumpf has been handled since last summer. But the conspiratorial rubbish—“Pay no attention to the national media, who want you to think”—is the kind of paranoia that belongs on the right, not on the left.

We should be better than that.

[Delegate graph: AP]
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How Long Will The Excluded Wait?

Robert Reich begins his latest column this way:

People ask me all the time why we don’t have a revolution in America, or at least a major wave of reform similar to that of the Progressive Era or the New Deal or the Great Society.

Middle incomes are sinking, the ranks of the poor are swelling, almost all the economic gains are going to the top, and big money is corrupting our democracy. So why isn’t there more of a ruckus?

Revolution? Ruckus? Well, why aren’t people making more election-changing noise? Reich gave three reasons, which I will list without most of his supporting material:

1) “…the working class is paralyzed with fear it will lose the jobs and wages it already has…No one has any job security. The last thing they want to do is make a fuss and risk losing the little they have.”

2) “In prior decades students were a major force for social change. But today’s students don’t want to make a ruckus. They’re laden with debt…record numbers are still living at home.”

3) “Third and finally, the American public has become so cynical about government that many no longer think reform is possible…It’s hard to get people worked up to change society or even to change a few laws when they don’t believe government can possibly work.”

That last reason for a reluctance to raise a ruckus can be documented by the most recent ABC News/Washington Post poll, which found:

confidence in washington

As you can see, Republicans have done a good job of poisoning the well of governance, with their obstructionist tactics and willingness to sabotage the economic recovery and their refusal to do anything to address the income and wealth gap in America. But such tactics, although successful in bringing Democrats down, have damaged the Republican Party’s image profoundly. The poll found that only 36% of Republicans have significant confidence in their own party. Think about that.

But think, too, about the fact that a large part of the reason that even Republicans don’t have much confidence in their own party or their party’s leadership is that extremist teapartiers think the GOP hasn’t gone far enough in its obstructionism. Many of those folks think that John Boehner has sold them out. For God’s sake, many think that Mitch McConnell is too liberal.

As crazy as that sounds, things are actually worse. Consider the right’s reaction to Pope Francis. When the boss man of a gazillion Catholics dared to criticize increasing income and wealth inequality, when he called out “trickle-down theories” for their failure to deliver “greater justice and inclusiveness in the world,” his words were branded as “pure Marxism” by Rush Limbaugh. Other right-wingers called him a socialist and FoxNews.com annointed him “the Catholic Church’s Obama.” Just a few days ago a News Editor for FoxNews.com, himself a Catholic, said that,

Pope Francis has declared war on those who aspire to provide a better life for themselves and their families, expressing the misguided snobbery of a man for whom money has never been an issue.

Such feelings run deep on the right. That FoxNews.com editor went on to say that, “the only charity the pope supports is forced redistribution.” Ahh. That’s the real offense the Pope committed. He thinks, and he thinks Jesus thinks, governments ought to be involved in seeing to it that there is a more equitable distribution of wealth. He can see with his presumably holy eyes that if the world’s poor and underserved are to utterly depend on the generosity of the rich to keep them afloat, they are a most miserable lot indeed. The Pope says trickle-down economics,

expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting.

All of which leads me back to Robert Reich’s column. How long will the excluded wait? Reich listed three reasons why more people don’t make a bigger fuss about the breathtaking economic inequities we see here in America and the fact that “big money is corrupting our democracy.” But he should have included a fourth reason: the big money corruption itself. Rich people, particularly rich conservative people, are buying this republic and the politicians who manage it, as well as influencing low-information voters who fall for the slick and misleading advertising that big money buys.

If you have the stomach for it, I invite you to read one the most depressing articles I have read in a long time. The Mother Jones piece, titled “Meet the New Kochs: The DeVos Clan’s Plan to Defund the Left,” chronicles how a wealthy Michigan family, whose billions were acquired through the pyramid-like distributing company Amway, was able to purchase the votes necessary to pass union-crippling right-to-work legislation in a state that was once union friendly.

I will confess that after reading the article, my usual political optimism was shaken. I fear for our future if something isn’t done to restrain the flow of money into our politics. The 87-year-old Richard DeVos, who cofounded Amway, and his eldest son Dick DeVos should not be able to do what they did in Michigan. And what they did has effects beyond the obvious race to the bottom in terms of workers’ wages and working conditions:

Passing right-to-work in Michigan was more than a policy victory. It was a major score for Republicans who have long sought to weaken the Democratic Party by attacking its sources of funding and organizing muscle…So DeVos and his allies hit labor—and the Democratic Party—where it hurt: their bank accounts. By attacking their opponents’ revenue stream, they could help put Michigan into play for the GOP heading into the 2016 presidential race—as it was more than three decades earlier, when the state’s Reagan Democrats were key to winning the White House.

It’s pretty simple. Republicans believe that if they can weaken, if not destroy, labor unions, they can control the country’s politics:

the Michigan fight has given hope—and a road map—to conservatives across the country working to cripple organized labor and defund the left. Whereas party activists had for years viewed right-to-work as a pipe dream, a determined and very wealthy family, putting in place all the elements of a classic political campaign, was able to move the needle in a matter of months. “Michigan is Stalingrad, man,” one prominent conservative activist told me. “It’s where the battle will be won or lost.”

That Michigan fight is going on here in Missouri. The very first hearing this year in the Missouri House, which is dominated by right-wing Republicans, was used to promote anti-union legislation, in this case falsely titled the “Freedom To Work Act.” The only “freedom” written into this bill is freedom for workers who benefit from union representation on the job to opt out of having to pay any fee to the union for its collective bargaining services. In other words, this bill, and other so-called right-to-work legislation, establishes that there is, after all, such a thing as a free lunch.eric burlison

The idea, obviously, is to starve unions of needed resources, even though the Missouri bill’s sponsor, a Springfield Republican, claimed that the legislation “would make unions stronger.” Let me state the obvious here: If a right-winger tells you that a bill he is sponsoring will make unions stronger, he is lying through his gold teeth.

It’s equally obvious that if unions are starved of funds and can’t afford to defend the interests of working people, both on the job and during the election cycle, then rich Republicans will have their way. That is why rich Republicans pour so much money into these efforts, with 24 states now having such laws as the one being crafted here in Missouri. And if more states follow the trend and engage in a race to the bottom, the situation Robert Reich described—sinking middle incomes, growing poverty, and rich people realizing most of the economic gains—will get worse.

And if it gets bad enough, the ruckus, or the revolution, will come.

If This Is The Beginning, God Help Us At The End

Once again, President Obama has taken a rather strange path on the way to negotiating with Tea Party-drunk Republicans.

His latest budget proposal—which includes marrying Social Security to so-called “Chained CPI,” a way to measure inflation that pleases folks at the reactionary Heritage Foundation—may or may not make an acceptable compromise at the end of the budget process and the back-and-forth with the opposition party, but including Chained CPI as part of his initial proposal is no place to start.

And no one summed it up better than the incomparable Robert Reich:

Democrats invented Social Security and have been protecting it for almost 80 years. They shouldn’t be leading the charge against it.

That is exactly—exactly—right. As the former Secretary of Labor notes, Chained CPI is a “stingier” formula for calculating inflation adjustments to Social Security payments than even the current stingy formula. Reich also points out:

Social Security benefits are already meager for most recipients. The median income of Americans over 65 is less than $20,000 a year. Nearly 70 percent of them depend on Social Security for more than half of this. The average Social Security benefit is less than $15,000 a year.

Yet, at the start of budget negotiations with never-give-an-inch Republicans in Congress, a Democrat in the White House is proposing a formula for calculating adjustments to future Social Security payments that, again as Reich reminds us, Paul Ryan didn’t even include in his rayless and Randian budget. That is a weird and seemingly defeatist posture to take at the beginning of what will obviously be some difficult, if not nasty, budget negotiations.

Now, all that having been said, there may be a way to make Chained CPI work as a method to reduce future costs to the Social Security program, but that way must—must—include protection for those folks who, as Reich put it, get relatively “meager” benefits under the program.

Time will tell whether Obama’s relatively solid legacy will be tarnished by his rush to compromise with uncompromising Republicans, but he’s not exactly off to a good second-term start by offering Chained CPI at this point in the budget process.

But the press, always anxious to push the Republican Party’s false but widely believed the-debt-is-killing-us meme, will give the President much credit for pissing off liberals, and perhaps pissing off liberals is exactly why Obama’s budget has that stingier cost-of-living adjustment in it. He can now tell Republicans: “See, look how serious I am about entitlement reform and look at how much anger among my base I have created. Now, let’s dance.”

And Republicans, smelling blood, will say: “Dance? Why, sure, we’ll dance. Especially now that you’re dancing to our music.”

Oh, by the way. One of those Republicans who gets mostly undeserved credit for being “sensible” on budget issues, Senator Bob Corker of Tennessee, called President Obama’s budget plan,

A beginning point.

Yep, a “beginning” point. As this White House has done almost from the start, it begins in the middle and the rest, like the public option-less ObamaCare, is history.

Meanwhile, the economy continues not to produce enough jobs for Americans, wages are stagnant or declining, and wealth inequality is increasing. And just about the only talk about public policies that would help create jobs, increase wages, and narrow the gap between the rich and the poor, is coming from the left, those whom the President has, purposely or not, just pissed off with his Chained CPI proposal.

Of Course We Need Economic Growth

Anson Burlingame, local conservative blogger and contributor to the Joplin Globe, commented on a piece I wrote (“Liberals Love Wealth“). His response included the following:

I have just completed a semester of study of macro economics at MSSU…

Not one word, not one textbook assignment, essentially not “anything” was taught about income distribution in the entire course. No “Keynesian vs Classical” theories, no debate of differing views over WHAT is the real income distribution, how do we measure it, what is “good” or “bad” income distribution or most important what to do about it.

That makes me wonder how the “science” of economics addresses that hot political potato of today…I only hear politicians and pundits opining on the matter. To me that is akin to political arguments over nuclear power without understanding to some degree at least the “science” behind such a source of electrical power…

As all of you discuss income distribution I offer this challenge to further consider. WHICH is more important today, growth in REAL production of goods and services that will SELL around the world, a competitive world OR redistribution of WEALTH, not just income, amongst various segments of America? CAN you achieve BOTH at the same time? I frankly don’t know the answer to that question nor have I “studied” such an issue in academia yet…

Anson

My reply:

Anson,

Your study of macroeconomics is admirable, and, like you, I would want (demand?) a discussion about what politicians and pundits argue about all the time: income (re)distribution, especially since, at bottom, what constitutes an economy is the way we collectively use our resources to produce and distribute goods and services.  I can’t think of anyone better suited to help us understand the issue you raised than folks trained to analyze the economy.

As far as how economists in the field address your question, there are think tanks, etc., on all sides that publish papers; there are economists like Robert Reich or Joseph Stiglitz or Paul Krugman (on my side) who write currently about your topic and appear on TV or radio, as well as countless others who have published works in the past. So, it turns out that economists do have a lot to say about the subject.

Among ordinary folks, talking about income and wealth  distribution is not really akin to talking about nuclear power for the reason that people don’t need a degree in economics to know what fairness-justice is (perhaps they do, though, need a course on John Rawls), and it is our collective sense of fairness (expressed through our political choices) that determines whether, say, we will spend X on redistributive social programs or nothing at all.

You asked which was more important, economic growth or “redistribution of wealth, not just income.” You also asked, “Can we achieve both at the same time?

I went back on your blog and looked at an exchange we had more than three years ago about “How Do We Pay For “STUFF” (your title). Your first sentence was:

I am not sure how the federal government can pay for all the “stuff” demanded by voters, are you?

My rather lengthy response (I was willing, in those days, to invest the time in debating you) included this sentence:

Without economic growth, there is no way to solve any of the fiscal problems.

I hope you read and reread that sentence I wrote three years ago, Anson. Often it is that folks on your side ignorantly claim that liberals like me don’t give a damn about economic growth, only about spending more rich people’s money. Hooey.

Of course growth is essential to doing the stuff we liberals want to do. We are keenly aware that too much taxation and regulation stifles growth, just as conservatives should be keenly aware (few are, though) that too little taxation and too little regulation stifles civilization.

But I said all that to say this: Of course we can have both growth and a more equitable distribution of wealth (and income). In fact, both are necessary for our national well-being. The economic story of America in the twentieth century is the story of how we grew into an economic badass and yet began to figure out how to divvy things up a little more fairly (at least until conservative thinking began to take root in government and media in the 1980s).

Now, just how we get more economic equality without negatively affecting economic growth is what makes public policy choices so difficult. However, we first have to agree—we liberals and you conservatives—that a more equitable distribution of income and wealth is a goal we should pursue. Very few on your side think so (beyond helping those who can’t help themselves), and that is the source of a lot of our disagreements.

I will agree with any conservative who believes that economic growth is the best way to fight poverty. The problem is that some among us inevitably won’t get much from that formula. Indeed, some will get left out altogether, for whatever reason.

What do we do about them? Their children? And what do we do about older folks who are no longer competitively productive?

I’ll give you a hint: we don’t leave them to fend for themselves or agonize in the streets. We should help them, provide for their children (bread, butter, and books), and give them some sense of security in their old age. In a civilized society, that is what we should do.

But those things are expensive. And to pay for them we need to get the money from those who have it. Call it redistribution, call it whatever you want. But in a myriad of ways we do it each and every day, and we should strive to do it better.

And economists can and should help us understand how to do so, and if your professor failed to even bring up the subject then you missed something important.

Duane

Lou Dobbs and Bill O’Reilly Are Nazi Pigs

Lou Dobbs and Bill O’Reilly are fascists. No, they are fascist pigs. No, no, no, they are depraved fascist pigs. In short, they are Nazis.

Since I am using the same logic they employed in the following clip, in which they declared Robert Reich a communist, I dare anyone to contradict me:

Vodpod videos no longer available.

It’s Only Called Class War If We Fight Back

More than a week ago, economist and former Secretary of Labor Robert Reich gave a speech at the “Summit for a Fair Economy” in Minneapolis and addressed several “downright bald-faced lies” told by conservatives and Republicans about the economy.  He ended his speech with this:

The greatest enemy we have is mass cynicism. When people really get to the point where they think nothing can be done, then the other side wins. That’s what they want by the way. That’s what they want…[The other side] wants government at all levels to function so badly that people say government can’t work…they also want politics to be so bad and so paralyzed that most Americans say nothing can be done…

It’s easy, when they are scared and disorganized, for people to be subject and vulnerable to demagogues who come along and say to them, “You know…the reason you’re in trouble is because of government, or it’s because of immigrants or it’s because of the poor or it’s because of blacks,” or it’s because of a number of scapegoats that are always offered up, the same scapegoats.

But in reality, we are all struggling over a smaller and smaller share of a bigger and bigger pie. And they are deflecting and diverting attention from the story which is that more and more of the income and wealth is going to big corporations and to the very, very super rich in this country and that is what has to be reversed and that is why we have to take back America.

Class warfare?  Yes, that’s what it is called if someone on our side fights back.  Pay attention today to the criticism of President Obama today as he announces his debt-cutting plan that includes taxes on the rich.  His plan has already been called class warfare by Republicans this past weekend.  Ask yourself why it is called class warfare if a champion of the middle class and poor decides to fight back?

Finally, as ammunition in the effort to fight back, here are some of Reich’s compact responses to the “downright bald-faced lies” told by the Right:

“DOWNRIGHT BALD-FACED LIE” #1: Giving tax cuts to the rich and corporations will trickle down to everyone else

A lie! it has not happened; it has never happened. They don’t need more tax cuts. Big corporations are now sitting on more than 2 trillion dollars of cash. There are higher corporate profits now than we have seen in 35 years. ‘s not happened and The ratio of corporate profits to wages is now higher than it’s been since before the Great Depression of the 1930s.

“DOWNRIGHT BALD-FACED LIE” #2: Shrinking government creates more jobs

I debate a lot of…conservative economists and others on television who keep on saying this and I keep on saying, “Tell me your theory. How is it that if you lay off teachers and social workers and firefighters and police officers, that you have fewer people building the roads, building the highways, building the infrastructure, fewer people rebuilding our schools, fewer people doing all of the public’s work, how can that create more jobs?”

And the answer I get is, “Government always gets in the way.”  I say, “But tell me exactly how is it that if you shrink government you’re going to get more jobs, particularly when consumers are holding back because they can’t do it?”

And the answer I get is, “Government always gets in the way.”  In other words, there is no intellectual basis for the ideology…If you shrink government you get fewer jobs…

“DOWNRIGHT BALD-FACED LIE” #3: Taxing the rich hurts the economy

Under Dwight David Eisenhower—who nobody would call a socialist, I don’t believe—[“Some would now,” said someone in the audience]—some would now? Yes—the top marginal income tax rate on the top earners was 91%.  And even with deductions and tax credits, that still meant that they were paying an effective tax rate of hugely higher than they are today.  And yet the economy grew faster.

That lie about trickle down, the lie that we must not tax the rich because that would deter them from working hard and investing and creating jobs is nothing but a bald-faced lie, based on ideology rather than facts.

“DOWNRIGHT BALD-FACED LIE” #4: Medicare and Social Security and other spending is the cause of the long-term debt problem

It’s not! The long term debt out there is because of rising health care costs. Medicare is the most efficient system we have…the administrative costs of Medicare are so tiny relative to private insurance, that what we really need, if we want to get Medicare and medical costs down in the future, is Medicare for all.  And then we can move from a fee-for-service system to a fee-for-healthy-outcome system…

“DOWNRIGHT BALD-FACED LIE” #5: Social Security is a Ponzi scheme

Can you imagine the irresponsibility—putting partisanship to one side—I’ve never heard a public official running for national office who lies through his teeth by saying that the Social Security system is a Ponzi [scheme]—I was a trustee of the Social Security trust fund, I know exactly what the actuaries project.  For the next 26 years Social Security is purely solvent, completely solvent; there’s no problem. 

Beyond 26 years the only reason there is a problem with potentially being to pay out everything Social Security owes beyond 26 years… is because of rising inequality, because so much money has gone to the top that the portion of income subjected to Social Security taxes is not going to be enough.  And that’s why the easiest most direct response to the post-26 years from now is to raise the cap on incomes subject to Social Security.

“DOWNRIGHT BALD-FACED LIE” #6: Tax reform should include raising taxes on even the poor

Real tax reform is that we’ve got to expand the earned income tax credit…we’ve got to reduce taxes on the middle and lower middle, and we’ve got to increase taxes on the top—and more tax brackets…go back to where we were before.

Admittedly, this was Reich’s weakest response, as I don’t believe tax rates on the middle income need to come down any further, but otherwise his speech was flawless.

Here is the video:

“America’s Great Regression”

“Just as a rising tide lifts all boats, the ebbing tide is now threatening to beach many of the yachts.”

 —Robert Reich, on the economy

Robert Reich may have been the only liberal economist in Bill Clinton’s administration in the 1990s, and along with Gene Lyons, is one of the few high-powered liberal columnists that Joplin Globe readers are exposed to on the opinion pages of the paper.

Last week, although the Globe didn’t carry this particular column, Reich made an important point about the dwindling purchasing power of the middle class.  He began his column with this:

THE 5 percent of Americans with the highest incomes now account for 37 percent of all consumer purchases, according to the latest research from Moody’s Analytics. That should come as no surprise. Our society has become more and more unequal.

With so much top-heavy income, Reich says that “the middle class doesn’t have enough purchasing power to keep the economy going without sinking ever more deeply into debt.”  And here’s what follows:

An economy so dependent on the spending of a few is also prone to great booms and busts. The rich splurge and speculate when their savings are doing well. But when the values of their assets tumble, they pull back. That can lead to wild gyrations. Sound familiar?

Reich makes a historical point that I’m afraid gets lost in the national cacophony:

During periods when the very rich took home a much smaller proportion of total income — as in the Great Prosperity between 1947 and 1977 — the nation as a whole grew faster and median wages surged. We created a virtuous cycle in which an ever growing middle class had the ability to consume more goods and services, which created more and better jobs, thereby stoking demand. The rising tide did in fact lift all boats.

During periods when the very rich took home a larger proportion — as between 1918 and 1933, and in the Great Regression from 1981 to the present day — growth slowed, median wages stagnated and we suffered giant downturns. It’s no mere coincidence that over the last century the top earners’ share of the nation’s total income peaked in 1928 and 2007 — the two years just preceding the biggest downturns.

Reich says middle income wages began to flatten in the 1970s due to “new technologies,” which “started to undermine any American job that could be automated or done more cheaply abroad.”  Middle class spending, though, didn’t wane because of “the flow of women into the work force” and a dramatic increase in personal debt: “From the late 1990s to 2007, the typical household debt grew by a third.”

Naturally, the liberal Reich didn’t like the governmental response to what was happening:

It deregulated and privatized. It cut spending on infrastructure as a percentage of the national economy and shifted more of the costs of public higher education to families. It shredded safety nets. (Only 27 percent of the unemployed are covered by unemployment insurance.) And it allowed companies to bust unions and threaten employees who tried to organize.

The deregulation included turning Wall Street and the financial sector from servants of American industry into “its master,” Reich said.

And beginning in the 80s, Reich reminds us of something that we just shouldn’t forget: Regressive sales and payroll taxes were increased while “the top income tax rate was halved to 35 percent and many of the nation’s richest were allowed to treat their income as capital gains subject to no more than 15 percent tax.”

Cleverly, Reich cites Germany, a country conservatives love to point to as the beacon of fiscal sanity in Europe.  Germany has, indeed, grown faster than we have over the last 15 years, but unlike here in the United States, the gains didn’t all go to the top:

While Americans’ average hourly pay has risen only 6 percent since 1985, adjusted for inflation, German workers’ pay has risen almost 30 percent. At the same time, the top 1 percent of German households now take home about 11 percent of all income — about the same as in 1970.

How has Germany done this?” Reich asks and then answers:

Mainly by focusing like a laser on education (German math scores continue to extend their lead over American), and by maintaining strong labor unions.

Ironically, this situation—which Reich calls “America’s Great Regression“—can have negative effects on the rich, who also have “an enlightened self-interest in reversing the trend“:

Those at the top would be better off with a smaller share of a rapidly growing economy than a large share of one that’s almost dead in the water.

Convincing those at the top, who have “an undue influence in making the rules of the economic game,” to change course may be the easy part, if we are to reverse Reich’s trend. 

The hard part may be convincing those who have been most damaged by past neglect to see through the current conservative rhetoric and reject as proposed solutions the very philosophy that got us here.

To help in that chore, liberals need too tirelessly keep pointing out, as Reich did so well, what that philosophy is and what it means.

Obama And The Economy: Going The Way Of The Timid

The President should advance ideas that work, and go to battle for them. 

—Robert Reich

Today’s Joplin Globe featured a column by Robert Reich in which the former Clinton cabinet member scolds President Obama for not being bold enough in “spurring growth of jobs and wages.”

Saying that Obama is embracing ideas that appeal to Republicans, including “a corporate tax cut, accompanied by the closing of some corporate tax loopholes,” Reich makes the point that all economists this side of Sean Hannity are making:

Can we get real for a moment? Businesses don’t need more financial incentives. They’re already sitting on a vast cash hoard estimated to be upwards of $1.9 trillion… The problem isn’t on the supply side. It’s on the demand side. Businesses are reluctant to spend more and create more jobs because there aren’t enough consumers out there able and willing to buy what businesses have to sell… The reason consumers aren’t buying is consumers’ paychecks are dropping, adjusted for inflation.

Now, that’s a pretty standard analysis of the situation. Yet, mainly because of the fact that Republicans control the House and essentially control the Senate—the filibuster now gives the minority party veto power over everything—Obama can’t successfully act boldly to do what needs to be done.

Reich offers some ideas on how to solve the problem of the “continuing crisis on the demand side,” which includes:

♦ Exempt the first $20,000 of income from payroll taxes for a year.

♦ Create a WPA for the long-term unemployed.

♦ Allow distressed homeowners to declare bankruptcy on their primary residence, thereby giving them more clout with lenders to reorganize their mortgage loans.

♦ Lend federal money to (rather than bail out) states and cities that are now firing platoons of teachers, fire fighters, and other workers because state and local coffers are empty.

Of course, there is about the same chance of Newt Gingrich becoming president as there is of seeing the kinds of things Reich proposes getting passed through Congress.  And part of the reason why is demonstrated by today’s editorial from the Joplin Globe, which—back to its usual conservative line—spurted the following falsehood:

Voters have rejected the liberal approach to spend our way back to prosperity. That approach has not worked as the economy teeters on the edge and unemployment seems to be unsolvable, at least in the short term.

The stimulus bill passed in 2009 was a relatively moderate approach to the problem of a severely damaged economy and, thus, it had rather moderate results.  But it did have results.  Now that the money from the stimulus has mostly made its way through the economy, what we have is an obvious need for more short-term stimulus to keep the recovery going. 

As was proved in 1937 here in America and in Japan in 1997 and as is being proved in the United Kingdom and Ireland and Greece and elsewhere in Europe today, cutting back government spending and emphasizing debt reduction in times like these is a recipe for stagnation, or worse.

Unfortunately, as Paul Krugman and others have pointed out, the Obama administration has bought into the idea that worry over deficits is more important than worry over jobs and wages. David Dayen notes that,

Republicans theorize that a deficit deal would increase confidence in the business sector and financial markets, spurring economic growth all by itself.

You hear that all the time from Republicans.  Business hates uncertainty.  Business needs confidence.   

Sadly, Mike Konczal, of the Roosevelt Institute, relays this:

Someone noted that with Goolsbee leaving all of the big names surrounding economic policy are no longer economists but lawyers and people associated with Wall Street. And it is also telling that, with the Larry Summers editorial from the weekend, all of the economists you’d recognize who have left the administration are calling for more stimulus, while it is those there now calling for confidence.

Confidence it is, I suppose. A Democratic administration, in the face of a turtle-like economic recovery, with a game-changing election on the horizon, appears to be going the way of the timid, embracing the tried-and-failed economic theories of the Republican Party.

Perhaps the administration and fanatical Republicans in Congress can come up with a way for challenged consumers to spend that magical business confidence at the grocery store or at the appliance store or at the car dealership.

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