the new normal

by russell

OK, here is some food for thought.

My personal take on this: folks who are, say, younger than forty should not plan on living as well as their folks did.

Sorry about that kids.

Likewise, folks who are, say, fifty and over, and who got hit with big losses over the last couple of years - I'm talking lost jobs, savings, homes - are probably not ever going to live as well as might have before, say, fall of 2008.  For a lot of folks, that ground is lost, and is not going to be made up.

Get used to it.  It's a great big crap sandwich, and we're all going to eat our bite, some way more than others, until it's all gone.

Jobs may well be returning to the US, but they're gonna pay $10 an hour.  Employment at will, limited or no benefits, no retirement other than whatever you put together for yourself.

If you're some form of exceptionally clever fellow and work your behind off, you may find a way to do well.  Most folks will basically scrape by, one way or another.  For a lot of folks, that's gonna be for their entire productive lives.

But the kind of world I grew up in, where a person of average ability with a reasonable work ethic could expect to find some kind of useful, satifsfying work to do, and achieve a moderate level of basic financial security, is probably not going to happen for a lot of folks.  Probably the majority.  For quite a while.

Welcome to the new normal.  It took us a generation to dig ourselves into this, it's gonna take us at least a generation to dig ourselves back out.

Comments

[bobbyp]

But, but, but....we all have flat screen tv, cell phones, and fresh asparagus year round. Plus you can day trade stocks and futures.

Financial security is highly over-rated.

Welcome to the conservative paradise...a place where the illusion of liberty is more important than its reality, where the incredibly remote chance of becoming wealthy is the same as being wealthy, and where employing the power of government to your social advantage is the very essence of freedom.

[Tony P.]

Russell,

Fifteen years ago, Paul Krugman wrote this essay titled White Collars Turn Blue that you might find either consoling or depressing. I wonder what you make of it, anyway.

The essay is written as a "retrospective" look from the year 2096 at the major changes in the US economy since 1996, so it's obviously a bit tongue-in-cheek. But only a bit.

--TP

[Hartmut]

Agreed. But it will be less than 10$ per hour (unless there is stronger inflation). Do you think minimum wage laws will survive the onslaught from the right and the effectively non-existent defense from the 'left' (politicians, the base may rebel but to no avail)? I see a lot of 'lower your wages and you can keep your benefits. Promise'..."What promise? Be grateful that we take only your benefits away and postpone lowering your wages...until next week."

[sapient]

"the base may rebel but to no avail"

When the base doesn't vote the base is not effectively rebelling. When the base votes Democratic, things change for the better as they began to do when Obama took office, and as they would continue to do if he had a Democratic Congress.

In other words, it doesn't have to be this way if the base would quit acting like spoiled children who are "disappointed," therefore take their ball home.

[Donald Johnson]

There's a basic problem here sapient and I haven't seen anyone on either side come up with a solution. Democratic politicians have every incentive to shift rightwards if the base doesn't act like "spoiled children" and instead acts like disciplined party members. They are then free to go seeking money and campaign contributions by shifting rightwards and governing like a centrist and they can show their feisty independence and impress the Serious People by ridiculing their base. On the other hand, if the base rebels either by voting third party or staying home then it helps the Republicans. I see people arguing about this constantly and what strikes me about it is that nobody on the one side ever seems to acknowledge the strength of the other side's case. I think it has something to do with an unwillingness to acknowledge even to oneself how rotten the choices are.

[Slartibartfast]

things change for the better as they began to do when Obama took office

What exactly got better?

[Rob in CT]

What Donald said. It is equally true that loyally voting D over and over allows the Ds to sell you out, and that refusing to vote D because they sell you out leads to R wins, which tends to be even worse, at least in the short term.

The R base gets this, and has chosen to accept election losses at times in exchange for better control over their elected officials... I loathe their agenda but I respect the power they wield. I wish the Dem base wielded half as much power. And yet, I don't want current-day R's winning elections, so I find myself ultimately doing what Sapient wants me to do: voting D while holding my nose.

[Rob in CT]

As for Russell's pessimism... well, yeah. In truth, you're describing something that has been happening for some time, but was papered over (via debt).

We can all hope that a game-changer comes along and saves us, but in the meantime, managing the "new normal" (which is really the old normal, but now we can't avoid looking at it) responsibly is important.

[JanieM]

My personal take on this: folks who are, say, younger than forty should not plan on living as well as their folks did.

For that matter, folks older than forty should not plan on living as well as their folks did/are in old age.

My dad was a low-paid small-town firefighter; he worked a second, almost-full-time job and practiced his patented version of extreme frugality to make sure we had a decently comfortable life, moving (in the fifties) from poor immigrant working class toward lower middle class, kids going to college (scholarships, cheap in-state tuition within reach of almost everyone), etc.

Along with the low wages, however, he had a great pension with medical benefits. My dad died relatively young (71), but my mom is still living on his pension at 87.

Because of it, she has an expectation of modest financial security and independence that few ordinary working people in my generation can expect as head into old age.

This process has been at work for a long time now. Can you say "downsizing"?

[Rob in CT]

Now, now, Janie. It's "rightsizing" dontchaknow.

[Countme-In]

"What exactly got better?"

Gun and ammo sales.

[Laura Koerbeer]

Oh for crying out loud, Slarti. Really.

Anyway things will get a great deal worse if Republicans have their way. Now, after a life time of just getting by people can expect to have a old age of just getting by ,too. If the Republicans have their way a life time of just getting be by will be followed by an old age of destitution and unnecessary suffering.

[Countme-In]

Oh, and Sarah Death Palin hauls her grifter butt around in a better mode of transport.

[Slartibartfast]

Oh for crying out loud, Slarti. Really.

Thanks for the non-responsive emoting!

[sapient]

Donald: "I think it has something to do with an unwillingness to acknowledge even to oneself how rotten the choices are."

I agree that there is a problem with keeping Democrats to the left once they get elected. But the first problem is electing them, and keeping them in office for a reasonable period of time.

The first time (in my lifetime) this came up was when Johnson decided not to run again because of his unpopularity as a result of Vietnam. So the ultimate choice was between: Humphrey (about the closest thing to russell's "socialist" vision as we've had, but who was identified with Johnson's war policies) and Nixon, who was the devil incarnate. Let me see, which one to choose?

Then, after Nixon/Ford, we got (ultimately) Carter. Carter certainly had some unappealing qualities, and maybe wasn't as effective as we would have liked. But he wasn't good enough for us - we needed to let Reagan get elected, which was very effective in beginning the dismantling of the social safety net, environmental regulation, the FCC, etc. Excellent choice!

So 12 years of Reagan/Bush, then we got Clinton elected. Okay, Clinton - the most rightwing choice because he was the only one who would appeal to the lovely, independent-minded "Reagan Democrats." But Democrats couldn't maintain their enthusiasm in sufficient numbers to vote in midterm elections, so we got Gingrich and the Kenneth Starr reality show.

It seems a bit silly to complain about Democrats not doing enough for us when we can't even keep a solid Democratic-led government for more than 2 years at a time. Let's worry about moving Democrats leftward after they feel a bit more secure about being elected in the first place.

As to what Democrats were able to do in the first two years of Obama's term: a lot. He faced the worst economic crisis seen for almost a century, the depth of which was misrepresented, unprecedented foreign policy debacles, a major environmental disaster, and had to work with a dysfunctional Congress, not to mention a reactionary Supreme Court. And whatever you might think about him "worrying about reelection," of course he has to worry about reelection, or we'll be taking another two steps back.

I'll be voting for him with gratitude, and am not holding my nose at all.

[theradicalmoderate]

Unfortunately, I doubt that this is actually the new normal. It's a transition to something that's probably worse.

First, offshoring has made the US labor market uncompetitive. Short of erecting huge tariff walls, the only solution to that is to wait for equilibrium, and that means that US labor prices will fall until they meet the rising labor prices of the developing world. That'll take--what? 10 years? 15? 20? But eventually, there really will be equilibrium and prices will slowly rise as the developing world becomes, well, developed. So this is a temporary, albeit lengthy, problem.

But there's another problem that's permanent, and only gets worse over time: Automation causes productivity to skyrocket, which means that there's downward pressure on labor demand pretty much forever. (Somebody check me on this: If productivity grows faster than GDP, then the economy will shed jobs, even if growth is good, right?)

I see no way to reverse this trend. If you legislate a certain amount of labor content in goods and services, there's always going to be somebody offshore that's willing to use the technology to undercut American labor. But there ought to be a silver lining to this, eventually. Goods and services become really, really, really cheap. So eventually the flatscreens and lattes for the poor actually become reality, as long we we're willing to acknowledge that you need a welfare state that's capable of providing a decent standard of living for the chronically unemployed.

This is where things will get sticky. The latest innovations--especially medical innovations--are always going to be too expensive to be provided to everybody on the government's dime. So you're going to continue to have huge perceived wealth inequality, irrespective of how well the unemployed are living. So: how good a standard of living is required before the unemployed aren't stressed-out any more? My guess is that, if I'm living off of the government and somebody else has more stuff than I do, I'll continue to think that I'm impoverished. So the flatscreen and latte discussion, even though kinda silly right now, will become a crucially important piece of social consensus.

[hairshirthedonist]

From Tony P.'s link to an article written in 1996 but set in 2096:

If you record a magnificent concert, next week bootleg CDs will be selling in Shanghai.

Heh.

(It's an interesting article, but I found that bit of future-casting to be amusing.)

[Donald Johnson]

"So the ultimate choice was between: Humphrey (about the closest thing to russell's "socialist" vision as we've had, but who was identified with Johnson's war policies) and Nixon, who was the devil incarnate. Let me see, which one to choose?"

Um, maybe one could vote for Humphrey while expressing some unhappiness about the choice? A vote for Humphrey was the lesser of two evils but when you do that you are in fact sending a message--it's okay to wage an unjust war so long as you are better than the other guy. One way to mitigate that a little is to voice one's disgust. It's a very unsatisfactory solution (and any third party advocate reading me would die laughing or throw up) and it still leaves the politician rewarded with one's vote (or alternatively, it gives him an opportunity to posture and show his feistiness by attacking his base), but it's better than just pretending that everything is fine. And as for the devil incarnate (good grief), Nixon by current standards was a liberal. He was a mad bomber in Vietnam, but so was LBJ. He was very anti-leak, which got him into a bit of trouble, but then Obama is very anti-leak too. Krugman (citing Bruce Bartlett, who I'm going to link ) says Nixon governed as more of a liberal than Obama has.

"Let's worry about moving Democrats leftward after they feel a bit more secure about being elected in the first place."

But that will make them feel less secure, won't it? The instant any liberal places any pressure on any Democrat to shift leftwards, it makes them less secure. They might offend some self-described centrist. You are restating my problem, but putting off the solution into some hypothetical future that will never arrive.

[GoodOleBoy]

'(Somebody check me on this: If productivity grows faster than GDP, then the economy will shed jobs, even if growth is good, right?)'

I'm an absolute amateur in economic theory, but I think this statement is essentially correct. We have faced this condition now for half a century with much of the productivity improvement effects on employment absorbed by what might be termed the 'nonproduction' sectors: service industries (travel and entertainment, as examples) and government (includes public education). Now, perhaps this alternative is saturated.

What else can be done (after new business resulting from technological advances)? I think I see existing businesses using a greater number of 'contractors', particularly to handle matters not core to the business. These 'contractors' are generally viewed as self-employed and many do work for multiple businesses. Another option is 'voluntary' unemployment, where the effects of productivity improvement are spread across industry so that more people work, but for fewer hours. It also appears to me that the educational process has skewed our productive capacities in ways that lead to unemployment under the conditions we face. Vocational training is non-existent in many locations in the country.

[joel hanes]

What exactly got better?

Sotomayor and Kagan instead of Alito and Roberts as SCOTUS nominees (and Meier and Gonzales, remember?)

The Obama Administration has been quietly making some attempts to once again enforce existing laws and regulations -- environmental and food safety laws most prominently, but some progress on labor law as well.

Monica Goodling and Hans von Spakovsky are no longer at Justice.

The President of the United States speaks, and apparently thinks, in grammatical, connected paragraphs. His demeanor is a model of adult restraint.

John Bolton is no longer connected to the US government. Perle and Wolfowitz likewise.

The vice-President is not competing with the President for control of policy, nor outing CIA arms control specialists in a fit of pique, nor shooting his friends in the face with a shotgun while drunk.

Now, I can easily make a much longer list of things that did not get better, and some of them quite important -- but I can't really think of a list of things that Obama made worse.

[CCDG]

"But the kind of world I grew up in, where a person of average ability with a reasonable work ethic could expect to find some kind of useful, satifsfying work to do, and achieve a moderate level of basic financial security"

Outside unions, this hasn't changed in 40 years. I expect, MHO, that the reality is surprising a generation (or two) that expected this somehow, although it didn't exist widely. The really big change has been in the frugality of the individuals from generation to generation.

My parents generation was not only frugal, but they had a very different view of what financial security was. They felt that if they could live with dignity on their savings and SS they were ok in retirement.

Now, that is considered a bad outcome. Now everyone needs "a number" and expects to live as well in retirement as they live while working.

[Scott de B.]

"Democratic politicians have every incentive to shift rightwards if the base doesn't act like "spoiled children" and instead acts like disciplined party members."

That's not how it works. When Dems lose, they shift rightward. When they win, they shift leftward.

[Scott de B.]

"'(Somebody check me on this: If productivity grows faster than GDP, then the economy will shed jobs, even if growth is good, right?)'"

I don't think so. That's the "lump of labor fallacy" -- the idea that there is a fixed number of things that need doing and that people will pay to have done. Increased productivity, by itself, frees up resources, which are then spent on other, newer things.

[hairshirthedonist]

Increased productivity, by itself, frees up resources, which are then spent on other, newer things.

But then productivity wouldn't outpace GDP, given the newer things, violating the "faster than GDP" constraint in the question.

[GoodOleBoy]

'"'(Somebody check me on this: If productivity grows faster than GDP, then the economy will shed jobs, even if growth is good, right?)'"

I don't think so. That's the "lump of labor fallacy" -- the idea that there is a fixed number of things that need doing and that people will pay to have done. Increased productivity, by itself, frees up resources, which are then spent on other, newer things.'

Yes. I should have limited my agreement to those industries incurring the productivity improvement and limited also that the growth is, in fact, less than the productivity improvement. New things to do are always there, but typically come in large waves, We need one now.

[Tony P.]

hairshirt,

Yeah, I noticed that bit about CDs when I reread the article before posting the link :)

There's another bit that I thought sure would draw comment from our conservative friends; favorable or unfavorable, I don't know:

The economic consequences of the conversion of environmental limits into property were unexpected. Once governments got serious about making people pay for the pollution and congestion they caused, the cost of environmental licenses became a major part of the cost of doing business. Today license fees account for more than 30 percent of GDP. And such fees have become the main source of government revenue; after repeated reductions, the Federal income tax was finally abolished in 2043.

Krugman can be impish when he wants to be, eh? I mean, here he is taking a dig at the sort of conservative old coots like Alan Simpson whose "futurecasts" imply that the next generation of Americans is more likely to run out of money than out of, say, petroleum.

--TP

[bobbyp]

(Somebody check me on this: If productivity grows faster than GDP, then the economy will shed jobs, even if growth is good, right?)'

Well, since GDP growth is driven mostly by productivity and population growth, this presents a rather unique case.

If we ever attained such a state then we could simply take more leisure and still enjoy a rising standard of living for those of us left. Star Trek had one episode where the planet they encountered had solved the "production problem" and the the inhabitants had vast amounts of leisure time.

I could easily imagine many worse outcomes in the far future.

[Donald Johnson]

"That's not how it works. When Dems lose, they shift rightward. When they win, they shift leftward."

They haven't won in several decades then.

[Berial]

How can 'the base' fail to move polices and politicians 'leftward' if they vote Democrat (and win) in the general and vote for the 'leftmost' candidate in the primary?

If Democrats are winning the general elections they run in, and the left most candidate is wining the nomination in the first place, why would the politics move right?

Politics moved right in 2010 because the Republicans won in 2010.

And now I see that Scott de B beat me to it saying the same thing.

[cleek]

The instant any liberal places any pressure on any Democrat to shift leftwards, it makes them less secure.

partially because there isn't a large-enough solid-left voting block in congress to give people like that the support they need. instead, there are half-a-chamber of GOP-bots, a fifth of a chamber of Blue Dogs, and a handful of solid progressives who can't do anything on their own, but have to please the Blue Dogs to get anything done at all.

what progressives need is better liberal representation in Congress, not a mythical pulpit-pounding, cock-swinging, leader/savior President. a more belligerent President will not change GOP votes to Dem, but a better congressional environment would allow room for more soft-progressives to support progressive policies which Obama would likely sign without complaint.

this is what the Tea Party accomplished for the GOP: it got rid of a lot of troublesome centrists and gave them a solid "conservative" base in the House, which allows them to control policy direction.

too many Dems think seem to think policy begins and ends in the White House. it doesn't. there is real power in the House. it would be worth trying to fill it with progressive Dems, even if that meant having to put up with progressive enemy #1 for another four years.

[Donald Johnson]

" not a mythical pulpit-pounding, cock-swinging, leader/savior President."

"too many Dems think seem to think policy begins and ends in the White House. it doesn't. there is real power in the House."

There are also too many people who think that if one disapproves of Obama's performance one must have in mind some mythical superhuman figure who could have gotten everything he wanted. I'd settle for someone in the White House who would try to explain to the American people why he has been forced to settle for policies that were much less effective than what he would have gotten with a more liberal Congress. Assuming, of course, that he really wanted much more liberal policies. I think Obama has adopted centrist framing on issues because that's what he really believes--he probably also thought that the sane members of the Republican Party would work with him.

I'd like to see a more liberal Congress that pushes Obama to the left. I don't think he'd go willingly, but if he can be shoved rightwards maybe it works both ways.

[bobbyp]

Sapient,

It was not "the left" sitting on its hands that resulted in the 2010 GOP House surge to majority status. It was Blue Dogs losing. The administration did all it could to cater to the whims of these unmitigated losers. Now why did they lose? They exhibited extreme political cowardice. The stench was overwhelming.

So when is the DCCC going to get on these folks and tell them to "man up" and "carry their load"? The Left cannot do it all by themselves, ya' know.

Heh.

[Tony P.]

Sometimes I wonder what people mean by terms like "productivity" and "GDP".

When a barber cuts my hair for $10, does that add $10 to GDP, or not? If he charges $15, does that add $15 to GDP? If he spends 10 minutes either way, is his "productivity" 50% higher in the second case? Or not?

I mention barbers because they seem to me a good example of the class of workers whose "productivity" can hardly have increased much in real terms for about a century. Cab drivers, waiters, teachers, and lots of other workers seem to fall into the same category.

If workers like that do not account for the increase in "productivity" that we hear so much about, then some other classes of workers must do. And we can all name some of those classes: farmers come easily to mind; so do financial analysts.

What puzzles me is this: as farmers become more "productive", we get fewer of them; as financial analysts become more "productive" we get MORE of them. It's almost as if The Invisible Hand itself is confused about what "productivity" means.

--TP

[Donald Johnson]

"If Democrats are winning the general elections they run in, and the left most candidate is wining the nomination in the first place, why would the politics move right?"

This presupposes that Democrats are left-leaning, that progressive who vote for a candidate always get what they hope for, that candidates try to represent the views of ordinary people who supported them, and that the leftmost candidate won the nomination. Are you talking about Obama/Clinton? Among the top three, Edwards was the furthest left, though it turned out he was a sociopath. Obama turns out to have been the same as Clinton. He ran as a "change" agent or people took it that way. He wasn't. He picked Biden, appointed HRC, and his economic team seems to be dominated by Wall Street sympathizers. Krugman isn't the only person a little unhappy with his policies there.

"Politics moved right in 2010 because the Republicans won in 2010."

Obama had the support of a bunch of lefties. They thought they'd won a big victory. Obama then proceeded to talk and govern as a centrist. So he moved to the left of Bush, but to the right of where many of his supporters thought he'd go.

Anyway, this is an old argument, everyone has seen it somewhere if they're interested, and you can find Krugman or others making the case better than I do.

[sapient]

Donald, I'm sure you're not surprised that I disagree strongly with Bruce Bartlett. The list that he presents seems to discount entirely the Congress that Obama has worked with (that includes of course, in his first term, an uncooperative Senate). Obama is an artist of the possible. He wants to win real legislative victories, rather than make rhetorical points. Krugman's constant criticisms similarly fail to take into account the Congress. In other words, what cleek and others here have said.

As to Bartlett's accusation that Obama "caved to conservative demands that the Bush tax cuts be extended without getting any quid pro quo whatsoever" - that's ridiculous. The quid pro quo was extended unemployment benefits for thirteen months. In other words, people who otherwise would have had no income had income for 13 more months. Very necessary, very humane, very stimulative, very wise - and definitely a quid pro quo. And the tax cut repeal was not bargained away - tax cuts will be sunset. It makes me mad when I see people like Bartlett complaining about Obama based on a false premise, and someone as smart as you accepting it.

And the fact that Obama "has supported deficit reductions that go far beyond those offered by Republicans"? Yes, he has. He's supported longer term deficit reductions for a couple of reasons: 1) the deficit is a Republican talking point that gets in the way of progressive legislative initiatives, and 2) paying interest on the deficit is bad long-term economic policy. Obama has never supported kind of Draconian short-term deficit reductions that dump the pain on middle and lower income Americans that Republicans support. Bartlett's accusation is dishonest.

As for Krugman, his economic arguments are persuasive, but his political acumen is zero. He pretends that Obama is a dictator and never mentions Congress.

[wj]

It seems like there is a great opportunity for someone to look at the last 60 years and draw some conclusions.

• First, we had the generation who grew up during the Depression. Their childhoods were rough. After WW II, they made a comfortable life for themselves, and for their children (all us Baby Boomers). And it stayed comfortable all the way thru their retirement.
  
• Then, we had all of us Baby Boomers. We mostly grew up comfortable (in fact, a bit spoiled), had reasonably well paid careers, and now are facing the reality that retirement isn't going to be the easy time it was for our parents.
  
• Finally, we have the succeeding generations. The may have grown up OK, but there careers are going to be marked by uncertainty, and rising taxes to pay for what retirement benefits the Baby Boomers get. And their prospects for retirement are (whether they realize it yet or not) grim.
  

So the question awaiting analysis is: what went right during the middle of the last century, and what has gone wrong since? I know there are a lot of ideology-based answers (from both right and left) already available. But someone really ought to examine the evidence and come up with some reality-based answers.

If we knew why things went right when they did, we might be able to figure out how to make it happen again. Or, if you want to revel in negativity, we might discover that the only way to have things go well for an extended period is to run up bills for the next generation to pay. But either way, it would be good to know, not just believe.

[Sasha]

"Welcome to the new normal. It took us a generation to dig ourselves into this, it's gonna take us at least a generation to dig ourselves back out."

Why do you say "us", paleface?

[RAM]

Frankly, I don't see a political consensus for "digging ourselves out" of the fix we're in. And that goes for Democrats as well as Republicans. We're watching America dissolve right before our eyes.

[sapient]

"Frankly, I don't see a political consensus for "digging ourselves out" of the fix we're in. And that goes for Democrats as well as Republicans."

Well, the debt ceiling crisis sucked up a lot of air, which is why Obama insisted that any future debt ceiling issue had to be put off until after 2012. In the fall, you will see a "digging ourselves out." The Democrats are anticipating the tax cuts expiring, which will create revenue. If they are elected in 2012, they will have money to stimulate the economy with infrastructure projects, etc.

But that leaves us with the cruel fact that some jobs have left for good, or may come back paying less than a comfortable income. Unless there's a new technology, or something unanticipated that will require workers, we'll have to have a real conversation about wealth distribution. If people making $30,000,000 won't work as hard if they have to pay taxes, maybe they should job-share. Or something.

[Duff Clarity]

Welcome to the new normal. It took us a generation to dig ourselves into this, it's gonna take us at least a generation to dig ourselves back out.

If it is the new normal, it is not because of some inevitable change in the US economy or in the quality of the US worker compared to the quality of the foreign workforce, or in the competitiveness of the global economy.

The US worker is near the top of the list when it comes to productivity per hour. US corporations are making record profits.

If US workers are going to have to get used to living less well than their parents, it is because their parents lived in a very rich country where productive workers kept a large share of the profits they produced, and they now live in a very rich country where corporations owned by an ever smaller group of people keep a large and ever growing share of the profits the workers produce.

This is the result of decisions that have been made. Decisions in how to tax, how to spend, how to decide legal issues, how to decide campaign spending issues, how to decide labor rights issues.

If workers are going to have to do with less, it is because of political decisions the workers have made, and because of political decisions they refuse to make, and because of sacrifices they refuse to make, and because of the way they have allowed their enemies to divide them.

It has nothing to do with China, it has nothing to do with globalism, it has nothing to do with an aging populace, it has nothing to do with health care costs and it has nothing to do with a lack of skills or education.

The productivity is there and the profit is there and the money can go to the workers or it can go to the tiny group of people that own the vast majority of the businesses.

It is up to the people to decide what normal will be.

[sapient]

Duff Clarity, good comment.

[sapient]

From Steve Benen at the Washington Monthly:

Rush Limbaugh continues to use racially-charged language in going after the president: “Today on his radio show, Rush Limbaugh described a new Oreo that will have both chocolate and vanilla cream as a ‘biracial’ cookie and said that ‘it isn’t going to be long before it’s going to be called the Or-Bam-eo or something like this.’ Limbaugh later called it the ‘Or-Bam-eo’ himself.”

So that's another thing that Obama faces. I'm not sure how many people Limbaugh speaks for, at this point, but still.... When we're talking about the dynamics of the President/Congress/Courts/ the people / the media .... Sasha has a point.

[Countme-In]

One thing that never gets any better, in further answer to Slart's question way up thread, is the quality of the nigger jokes among the murderous c*ocksucking vermin in the Republican confederate political and media sewer.

Not a single conservative, not even the black jagoffs recruited into that fascist, racist piece of sh*t organization is willing to call out Limbaugh et al on this filth.

Moe Lane, that punk vermin co8ksucker, hasn't got the guts to put a bullet in Limbaugh's fucking fat racist mouth.

There is going to be great bloody scythe run through the 20 million or so hateful f*cking vermin in this country.

It stops now.

[Laura Koerbeer]

One of the other voluteers at the dog rescue leaves rightwing printouts around the break room. On Monday it was a "joke" about Obama beig an affirmative action pick for Prez who got fired for beig useless and whined aobut beig a victim of racism. I have a no-tolerance policy these days for Republican bullshit so I wrote a note on the "joke' I wrote "This is rude. The grown up way to discuss politics is to discuss facts and policies." The "joke" dispappeared.

It always amazes me how rightwingers feel so empowered to just thrust their opinions out there as if they had their thoughts cofused with God's Own Divine Truth. I would never leave a piece of political rhetoric laying around i the break room of ...well, anywhere!

There was more Republican bullshit on display on the table today but it was disinformation from some website, nothig racist. I just wrote a factual contradiction of all of the main points.

[bobbyp]

I vote Duff as winner of this thread.

[crithical tinkerer]

Duff Clarity
Decisions in how to tax, how to spend, how to decide legal issues, how to decide campaign spending issues, how to decide labor rights issues.
Standing ovations for you. Clear answer to (Somebody check me on this: If productivity grows faster than GDP, then the economy will shed jobs, even if growth is good, right?)'

Income inequality, enabled by low marginal tax rate, decides if the economy will shed jobs or not with productivity growth. Economic spending is affected by number of people spending not by number of GDP. Just for example lets say that income inequality is maxed out: One person income is equal to income of the rest of population. Can that person spend as much as the rest of into economic productivity. Nope, he/she will save a lot of it. So there is a lot of "lazy" cash that is also part of the GDP number.
Higher he is taxed, more of that "lazy" cash is redistributed to poor for spending.
Not to forget that low marginal tax rate allows managers to take the profits from productivity growth for themselves, instead sharing it with those that caused it. (Unless someone wants to argue that managers decided to fire the least (short term) useful employees and caused productivity to be raised.)
If profit from productivity is shared with all, then it will raise demand for more services and products so the economy won't shed jobs in faster productivity then GDP growth.

[crithical tinkerer]

Productivity growth was raised by firing people. Productivity is measured in hours needed for output. In short, less workers for same output makes productivity higher. Not total employed per total output within the country.

[bob_is_boring]

Duff Clarity has it, I think (and said it well enough to lure this oft-lurker into commenting). Everything seems to be trickling up; this is clearly unsustainable barring some kind of return to serfdom.

(It's almost as though the means of production must belong to the workers.)

It also seems (things are doing a lot of seeming today) that one would be more inclined to parlay what few resources one has into starting a small business if one new that, on the chance that this venture fails, some kind of social "safety net" (to coin a phrase) would guarantee not living and/or dying in sickly squalor for the rest of one's days.

If only our infrastructure was crumbling so that we'd have an excuse to pay a bunch of people to fix it.

[liberal japonicus]

Nice job of stirring the pot a bit, Russell. A couple of observations.

When I lived in France in the mid 80's, I got some stickers that I still have that have various people (to represent various tranches of society) looking horrified with the catchphrase 'Au secours! La droite revient!"). Thinking about what has happened with basically all the major Western democracies, it seems that there is something inevitable about the right returning, so I wonder if the complaints about Obama's failure to do something actually paper over the potential inevitability of a rightward shift.

Another things that has me thinking of this is a thread on SSJ-Japan. Unfortunately, the archive is not threaded, and they ask that you request the author's permission to quote, so I'll just point you the the intial post, which is here. A lot of folks weigh in and one of the questions concerns why the DPJ, a left of center party that finally was able to take over the government in 2009 (essentially, Japan has been run in the postwar period, with a very brief hiccup, by the rather right LDP party) is so incompetent and it is interesting that the discussion parallels the discussions about Obama that I see here. Japan is a much more conservative country than the US, which is why, probably in the next 6 months, an election will be called and the LDP will be able to take over, despite, in a lot of ways, learning nothing from their previous mistakes, while I still think that Obama has a good chance to win in 2012.

This is all to say that there seems to be something less American about these problems and more global.

[The Creator]

The fundamental problem is, of course, growing income inequality. However, growing income inequality means that the beneficiaries of the inequality have a lot of money to spend, and they can choose to spend it on a) hiring people to lie about how inequality is either good or doesn't exist (politicians and journalists of virtually all stripes, that is) and b) hiring thugs to beat up or kill people who are not persuaded by the lies.

In other words, not only is the system broken, but it is becoming increasingly broken because of the logic of the system. There is no force which encourages things to get better, and nobody is working to mend the situation. Within the system, all you can do is vote for a politician who will promote unequal distribution of wealth; you can't vote for a politician who proposes to make the distribution more equal, because such politicians are prevented from running and the very discussion of such policies is kept out of the media.

Basically, the Western political system has become a version of the late Soviet Union, except that you get to vote for your own choice of Brezhnev.

[Hartmut]

The Right has a large advantage because things go their way when nothing happens to counter the problems. Solving the massive problems requires something to be done. By simply preventing that (and 'justifying' it as saving money) they can reach a lot of their goals (like non-enforcement of laws and regulations). A special case is the deliberate lowering of revenue by simply not appropriating money for the actual collection of taxes and the checks that due taxes are actually paid.
Btw, I expect demands for the return of tax farming to arrive any day (what I call the re-http://en.wikipedia.org/wiki/Publicani>publicanization). The private sector (latin: privare = to rob; secare = to cut up/off) does everything better, or so I hear.

[sapient]

The Creator: "Basically, the Western political system has become a version of the late Soviet Union, except that you get to vote for your own choice of Brezhnev."

Again, I don't buy this because it lets the voters off the hook. Although gerrymandering makes it more and more difficult to get Democrats in office, it's still possible for voters to learn about the issues, decide on the better candidate, and go to the polls. It can get better. We must make it better.

Much of our history has been about our struggle and ability to make things better. If that's a cultural myth, it's one that we can make come true, as many very brave people have done bit by bit. Our system allows us to take control of our future if we collectively make intelligent choices. We need to keep up the fight, and remember that it can be slow and requires incredible perseverance.

[Donald Johnson]

" so I wonder if the complaints about Obama's failure to do something actually paper over the potential inevitability of a rightward shift."

Uh, no. There's been a steady rightward drift in our politics on economic issues since the 70's. I think I became dimly aware of it when Milton Friedman's "Free to Choose" was on public TV, which was around 79 or 80. Then Reagan came. I vaguely recall reading there have been rightwing think tanks hard at work putting their ideas into the press, something which started sometime in the 70's. That was also the period of stagflation when liberal economists didn't seem to know what to do, and the supply siders came along with their nostrum which was initially ridiculed, but like rightwingers tend to do, they won by sheer persistance and a refusal to adopt the terms of their opponents. But anyway economic issues have been framed in rightwing terms ever since then and the complaint that some of us have about Obama is not that he could have obtained more if he'd fought harder (I don't know), but that he himself adopts their framing of the issues. But he's just a symptom of the larger trend.

[cleek]

what went right during the middle of the last century, and what has gone wrong since?

part of it has to be that nearly all of our economic competition was in ruins thanks to WWII. that set us up for some good times. but eventually, other countries caught up.

[Countme-In]

Yet more:

http://www.dailykos.com/story/2011/08/18/1008223/-Shorter-Tom-Coburn:-Obama-got-unfair-advantages-from-being-black?via=blog_1

This sh*t can stop one way or the other.

How do subhuman Christianist Republican vermin want it?

[Slartibartfast]

Productivity growth was raised by firing people. Productivity is measured in hours needed for output. In short, less workers for same output makes productivity higher.

So, you're saying that they fired the lower-productivity workers, or the workers in occupations that have seen fewer productivity growth. You can't get productivity growth by getting rid of people across the board, I don't think.

[Ugh]

what went right during the middle of the last century, and what has gone wrong since?.

Well, since 1950 U.S. society has decided, in general, that maybe government should provide some services to the non-white population, whereas before that we didn't really feel the need. And the people who have disagreed with that decision, or providing services to the poor generally, have been trying to escape its effects ever since.

[GoodOleBoy]

There's some strange notions going around here. First, I get that there are unemployed but income inequality per se means little to me if those who are employed and have income can live at a current standard.

If I, as the capitalist, have 100 employed to produce 1000 widgets, along comes the inventor who trades me an idea or a tool so that the 1000 widgets are produced by 10 laborers, this may look like a labor productivity improvement (and by some definitions, it may be), but the result was not from anything the 100 employees (now 10) did. What makes the 90, who now must find their livelihood elsewhere (maybe with the widget inventor) deserving of the fruits of the improvement (except if they have capital invested in the production)?

[Countme-In]

Change the word "livelihood" in that final question to Russell's more accurate formulation of "crap sandwich" and the answer to the question -- "Nothing" -- isn't as harmless as you seem to believe.

[liberal japonicus]

Uh, no. There's been a steady rightward drift in our politics on economic issues since the 70's.

I thought that was what I said, or at least what I was trying to say, but with the added point that, while acknowledging the persistence of the right, the fact that it seems to have happened pretty much everywhere suggests something deeper is going on. It is not 'our' politics, it seems to be pretty much everyone's. Scandanavia is sort of outpost, like something out of a zombie flick, but the rest of the world has been taken over.

I found this 2009 French piece that has one of the signs and, if my french hasn't completely escaped me, is pretty much the same as Countme-in's comments and my feelings. I don't say this to support sapient's call to vote for Obama and like it (though I'm probably a lot closer to that position than you are, Donald) but to note that it doesn't seem like just us.

[Ugh]

What makes the 90, who now must find their livelihood elsewhere (maybe with the widget inventor) deserving of the fruits of the improvement (except if they have capital invested in the production)?

Directly or indirectly?

[hairshirthedonist]

What makes the 90, who now must find their livelihood elsewhere (maybe with the widget inventor) deserving of the fruits of the improvement (except if they have capital invested in the production)?

At some point, deserving doesn't matter, because the whole system will collapse if there is no one to buy the output from the widget. Henry Ford was smart enough to know this. He and J.P. Morgan couldn't buy enough cars to make it worth producing them.

[hairshirthedonist]

I really should have phrased it as "deserve's got nothing to do with it."

[LeftishLurkish]

If I, as the capitalist, have 100 employed to produce 1000 widgets, along comes the inventor who trades me an idea or a tool so that the 1000 widgets are produced by 10 laborers, this may look like a labor productivity improvement (and by some definitions, it may be), but the result was not from anything the 100 employees (now 10) did. What makes the 90, who now must find their livelihood elsewhere (maybe with the widget inventor) deserving of the fruits of the improvement (except if they have capital invested in the production)?

Why should the capitalist get anything? Only the inventor and the workers have produced anything in this example. All the capitalist contributes is government fiat.

[Model62]

If I, as the capitalist, have 100 employed to produce 1000 widgets, along comes the inventor who trades me an idea or a tool so that the 1000 widgets are produced by 10 laborers, this may look like a labor productivity improvement (and by some definitions, it may be), but the result was not from anything the 100 employees (now 10) did. What makes the 90, who now must find their livelihood elsewhere (maybe with the widget inventor) deserving of the fruits of the improvement (except if they have capital invested in the production)?

Each worker could work one day in ten at her old wages and put herself to productive use elsewhere the other nine.

Why is the default assumption that productivity gains and surplus ought to flow first to capital?

[Ugh]

This seems relevant somehow:

The differences in attitude towards redistributive taxes are not just between countries but also within them, and economists have several explanations as to why. When it comes to differences between countries, social cohesion plays a major role. Broadly speaking, countries that are more ethnically or racially homogeneous are more comfortable with the state seeking to mitigate inequality by transferring some resources from richer to poorer people through the fiscal system. This may explain why Swedes complain less about high taxes than the inhabitants of a country of immigrants such as America. But it also suggests that even societies with a tradition of high taxes (such as those in Scandinavia) might find that their citizens would become less willing to finance generous welfare programmes were immigrants to make up a greater share of their populations.
...
Social divisions also play a role in determining who within a society prefers greater redistributive taxation. In America blacks—who are more likely to benefit from welfare programmes than richer whites—are much more favourably disposed towards redistribution through the fiscal system than white people are. A 2001 study looked at over 20 years of data from America’s General Social Survey and found that whereas 47% of blacks thought welfare spending was too low, only 16% of whites did. Only a quarter of blacks thought it was too high, compared with 55% of whites. In general (though not always), those who identify with a group that benefits from redistribution seem to want more of it.

Them. Those people.

[GoodOleBoy]

'Why is the default assumption that productivity gains and surplus ought to flow first to capital?'

I think it is related to the principle of private property. The laborer becomes a capitalist by turning accumulated wealth (private property) into a productive resource (producing something that can be exchanged for someone else's product of value).

[Countme-In]

Goodoleboy: "What makes the 90, who now must find their livelihood elsewhere (maybe with the widget inventor) deserving of the fruits of the improvement (except if they have capital invested in the production)?"

Model62: "Why is the default assumption that productivity gains and surplus ought to flow first to capital?"

I would say that the default assumption under which capital and labor operate, works most of the time, under the rule of law and a reasonable social contract, enforced by government.

The 90 trudge off to their separate fates.

But at some points in history, "assumption" becomes "presumption" on the part of capital and even further a kind of taunting sadism as we see and hear now among the capital class toward labor and the social contract.

Then, the "lucky duckies" take a look at one another, and like the apes' organized, vengeful behavior in the recent "Planet of the Apes", society finds itself in big f*cking trouble.

[Countme-In]

By taunting sadism, an example would be John Kasich's big swinging d*ck threats after he was elected Governor of Ohio that "you can get on the bus, or we will run you over with the bus, etc."

Rinse and repeat in New Jersey, Florida, Wisconsin, the U.S. House of Representatives, etc.

Let me tell you something, you poke people with a stick enough times and they begin to operate under the fundamental rules dictated by their reptilian brain stems, not the Rodney King "can't we all get along" assumptions.

When cracker Eric Erickson at Redrum threatens to point his wife's shotgun at a Census Bureau employee who happens to knock politely on his door and ask him the questions on the American Community Survey, my reptilian brain stem wishes I was that Census worker, just to see if Eric's wife can handle it.

[Countme-In]

Rick Perry, fresh from a week of sadistic taunting, chokes on crow, blames it on a popover (hat tip to commie Muslim faggot, if you believe his hate mail, DKos):

'Inside the café, Gail Mitchell and a companion grilled him: “You said Social Security was unconstitutional.”

“Social Security’s going to be there for those folks,” Perry answered his inquisitors, making reference to the elderly.

“But you said Social Security is unconstitutional,” Mitchell repeated.

“I don’t think I — I’m sorry, you must have,” Perry said before stopping himself.

Instead of elaborating, Perry stuffed a generous piece of popover in his mouth. (Perry called them “pop ups.”)

“I’ve got a big mouthful,” Perry said and then ordering a glass of water. He later tripped over one of the women standing at his side pressing him on Social Security.

“I’m sorry, sweetheart,” Perry said'

Then his concealed laser-pointer pistol went off and he shot himself in the right testicle.

[Donald Johnson]

"I thought that was what I said, or at least what I was trying to say,"

I understood that. I was objecting to the notion that people who are disappointed with Obama are unaware of the rightward drift is somehow all his fault or even primarily his fault and have somehow missed what's been going on for decades now. He's more of a symptom of the rightwing drift--he is what passes for a progressive President these days.

As for its inevitability, it was presumably inevitable that the right would launch an ideological counterattack and would have plenty of funding to do it. They've taken the rhetorical high ground. I think various writers have talked about this, though I'm a little hazy on which ones at the moment. Within the US, maybe Kevin Phillips and Perlstein and Thomas Frank, among others, but I'm not sure.

[Donald Johnson]

Oops. I started to edit my post above, got distracted, and sent it before checking. It was supposed to read--

I was objecting to the notion that people who are disappointed with Obama are unaware of the rightward drift that has been going on for decades now.

[sapient]

"it was presumably inevitable that the right would launch an ideological counterattack and would have plenty of funding to do it. They've taken the rhetorical high ground. "

What? The right has taken the rhetorical high ground? Do tell. Coburn complains that Obama wants to create a culture of dependency because Obama "has advantages" because of affirmative action; Limbaugh does his Oreo stunt; Rick Perry says that we need to have a President that can be "respected." Rhetorical high ground? Who are you referring to, and who are they kidding?

[Roland]

By the time the global costs equilibrium is reached, the USA (and most of the other developed Western countries) will exhibit fairly well-developed, persistent, self-reinforcing social class systems, and many of the fine cultural and political characteristics of such systems.

Clintonites may admire their handiwork. These splendid historical developments would not have been possible without them.

Marxists, on the other hand, will simply laugh at the unsurprising fate of the post-WWII welfare states.

[liberal japonicus]

Thanks for the clarification, Donald. I didn't mean to imply that people who opposed Obama were unaware of the rightward drift of the US. What I was trying to get at was that there is a rightward drift to the whole world. I think that Hartmut's 4:49, along with the way voting blocs have developed in developed countries, comes close to a possible answer.

[Model62]

I think it is related to the principle of private property. The laborer becomes a capitalist by turning accumulated wealth (private property) into a productive resource (producing something that can be exchanged for someone else's product of value).

Awesome. Since there's nothing inevitable about private property, we're free to rejigger the terms to better suit us.

Because we're in an expansive mood, let's say we compromise at "work one day in ten, but get paid 70% of former wages" (setting aside a little something for capital and management for their contribution).

[GoodOleBoy]

' Since there's nothing inevitable about private property, we're free to rejigger the terms to better suit us.'

That's likely the only way you will get what you imagine is your 'fair share', but then you may be hard pressed to keep it.

[bobbyp]

"...but then you may be hard pressed to keep it."

Interesting. So what makes certain outcomes easier to "keep" than others?

[Countme-In]

I could be wrong, but I suspect what Donald Johnson meant by "rhetorical high ground" was actually "they've taken all of the rhetorical low ground and they are winning."

There is no rhetorical high ground left in the discourse in America.

The lower one digs, the more the seething mob shows up on election day.

My chosen course is to find the lowest ground possible and undermine from there.

When in doubt, dig deeper. The enemy (the domestic one, worse than al Qaeda) thinks they want chaos. Give them their desired results and then dig deeper to see if they can handle the true meaning of deep.

In Vietnam, both sides fought over meaningless hills and called it a victory for the day.

Meanwhile, one side was digging tunnels.

Who won?

[The Creator]

The high ground is not the moral high ground, which I think is what sapient was trying to talk about.
The high ground is the ground from which you conquer.
I think what Donald Johnson meant is that the right are winning the war, ideologically, which is blindingly obvious. (Look at the way in which Democrats have learned to spout Republican-created memes.)

Of course, they are actually winning because they are powerful, and that is why you cannot expect the future to be as good as the past. If you want a good future, you will first have to overthrow the government.

Good luck trying that, I regret to say.

[GoodOleBoy]

'So what makes certain outcomes easier to "keep" than others?'

For example, earned outcomes have greater staying power than rejiggered outcomes. In this society, wealth earned has greater staying power than wealth redistributed, Many here have even pointed this out in arguments against inherited wealth.

[Ugh]

For example, earned outcomes have greater staying power than rejiggered outcomes. In this society, wealth earned has greater staying power than wealth redistributed, Many here have even pointed this out in arguments against inherited wealth.

This is a fair point and is part of the reason why, for example, the U.S. doesn't have a 100% marginal tax rate at any level of income or a federally administered "wealth tax" outside the estate tax area, but the word "earned" here is doing a lot of work.

It seems to lack a certain "there but for the grace of god go i" kind of quality, IMHO.

[wj]

Nixon by current standards was a liberal.

Mr. Johnson, just to be clear, by current standards absolutely every single Republican President of the 20th century (including Reagan) was a liberal -- and probably a socialist.

On the standards of the 1970s or 1980s, Obama is definitely a conservative. (Just part of the long tradition of blacks with an overall conservative view of the world.) Only in today's bizzare political climate can he be seen as anything else. And even now, I would argue that his approach to the world is more conservative than not. But don't expect the majority of today's Republicans to see that.

[GoodOleBoy]

'the word "earned" here is doing a lot of work.

It seems to lack a certain "there but for the grace of god go i" kind of quality, IMHO.'

I agree with this. In the real world, how does one tell the difference between what is 'earned' and what results from 'good fortune'. And if one could tell the difference, how does this change actions.

[Countme-In]

"earned incomes have greater staying power than rejiggered incomes"

http://andrewsullivan.thedailybeast.com/2011/08/will-the-middle-class-vanish.html

I would conclude that the highest earned incomes, when you include unearned investment income, have greater staying power than low earned incomes and now, for many reasons, than middle class earned incomes.

I would advise rejiggering as we go, rather than saving it all up for the inevitable "Big Apocalyptic Rejigger" that Larry Kudlow mistakes for the trickling down light at the end of the tunnel.

[Model62]

Heh.

Trickleitizing the eschaton.

[russell]

I would like to add a few thoughts about GOB's widget example.

First, in the specific case provided, yes, it would probably make sense for 9 out of 10 production workers to find another career, and yes, the capital investor should probably get all or most of the gain from the improvement in productivity.

The reason for that is that it is the investor's contribution to the factors of production that have created the added value.

If you make the good thing happen, you should be first in line for the reward. And if you're the only contributor to the good thing happening, it should probably be a very short line.

But IMO it's worth fleshing this example out so that it looks more like the real world.

It's unlikely that the investor's goal will simply be to make exactly the same widgets, in the exact same amount, for less money. It's more likely that the investor will want to make better widgets, in which case the workers may move up to higher-value-added tasks. And/or the investor will want to use the added productivity to make more widgets, so as to increase market share and revenue.

In both cases, fewer or perhaps no workers are laid off. The same folks just create more value. Win!

Another piece that is missing here is the contribution of the workers to making the technical advance actually work. There are very few truly turnkey innovations that require nothing beyond being purchased, plugged in, and turned on in order to make the 1,000 flowers bloom. In most cases, there is significant effort involved in making the damned thing work well in the actual context in which it has to work. A lot of that effort requires hands-on shop floor knowledge and experience. So, in most real life cases, all of the added value is not coming from the guy who writes the check.

Another point I would make is that in real life, layoffs are driven as much by financial considerations as by efficiencies gained from technical advances. Companies often talk a good game, but labor is rarely actually viewed as a form of real human capital. Most often it is viewed as a pure cost center, and is often one of the first things cut if the numbers don't look so good.

The idea that you might, for example, tell capital investors that they're simply not going to make quite so much money this quarter, in order that the enterprise can hold on to the human capital that is represented by their employees, sounds like the ravings of a madman.

Quite often, people are let go so other folks can make their numbers. This may result in an increase in productivity, but quite often that is the result of the remaining folks being told that if they don't double down and produce more, they're next.

More bricks, said Pharoah, and no more straw for you, either. It's a reality. I've got my own war stories on that point, and I'm sure quite a number of other folks on this board do as well.

For whatever reason, it's common now to talk about capital investors as if they "create" jobs, and that somehow the rest of us are all simply the beneficiaries of their largesse.

Capital is a necessary factor of production. As such, folks who supply it deserve a reward. They may not be contributing at a hands-on shop floor level, but they are putting their money at risk.

But capital by itself does nothing. Even wonderful, whiz-bang, modern high-tech capital goods are basically nothing more than highly expensive doorstops without the participation of actual, real live human effort.

The US economy, even in it's current crap state (a state not created, I do not hesitate to point out, by the vagaries of labor) generates great big towering piles of wealth.

Everybody should get a slice, because everybody helps to create it.

[russell]

income inequality per se means little to me if those who are employed and have income can live at a current standard.

Sorry, another quick comment on this specific point.

If all of life was a matter of getting your three hots and a cot, I'd find this argument persuasive.

There is, however, more to life than that, and a lot of the whole of life happens in, or is strongly affected by what happens in, the public sphere.

When 20% of the population owns something like 85% of the wealth, which is true of the US right now, what results is, for all intents and purposes, de facto disenfranchisement.

There's been a lot of noise about whether folks making more than $250K should be considered rich.

I personally find that to be a distraction, because there are private entities - individuals, corporations, special interest organizations - that hold and are happy to spend *billions* of dollars to further their interests.

When differences in wealth become truly extreme, which IMO they are in this nation right now, the ability to have any practical influence on public policies and outcomes becomes the province of an increasingly small part of the population.

Do you want to live that way? I don't.

[GoodOleBoy]

Add to Russell's all valid points:

And one of the greatest benefits of our system is that when the new and improved widgets reach the broader market at lower prices, we have a broad array of winners.

I dislike negative actions taken for the wrong reasons, as well. The most just outcome when human capital is extremely abused is some deserved serious negative result for the enterprise in the marketplace.Same when the abuse is directed toward the consumer. Reed Hastings started Netflix after feeling abused by Blockbuster's cumulative late fees, if that story is true. That's a good outcome, as long as you are not Blockbuster.

[Hartmut]

I always use http://en.wikipedia.org/wiki/Ostwald_ripening>Ostwald Ripening as an analogy for how accumulation of wealth works. Inequalities naturally grow. Or as a favorite Bible quote of the followers of supply-side Jesus goes: To him who has much even more shall be given and from him who has little even that shall be taken. (Too lazy to find the exact King James wording). Or to go LotR.: The [Dwarven] ring needs gold to make gold.

[GoodOleBoy]

'If all of life was a matter of getting your three hots and a cot, I'd find this argument persuasive.

There is, however, more to life than that, and a lot of the whole of life happens in, or is strongly affected by what happens in, the public sphere.'

A discussion of this can get complicated quickly, for sure. I don't disagree with your premise if, in the society under discussion, reasonable effort does not, on average, yield an acceptable living standard. We had a successful 20th century because reasonable individual effort did result in an acceptable standard. Economic growth is critical. Economic growth creates new wealth. If our system is working such that all that new wealth winds up in the pockets of the already extremely wealthy, we get the sad results you are lamenting, and I lament as well.

Here's kinda my bottom line. I was born and grew up dirt poor in Georgia. I managed to squeak by through public school and went to college on a merit scholarship (I don't know if such exist anymore). Over a fifty year period, I was able to move from the bottom decile to the top decile. This happened while many people were filthy rich and getting richer all the time. As long as this is possible for people with ability and initiative, I'm OK with it. When it becomes not possible, not good. We may be at the tipping point. I do not agree that a redistribution of wealth, without policies that foster future economic growth, is a satisfactory solution.

[JanieM]

Inequalities naturally grow.

Yes. My favorite analogy for this (repeating myself, I'm sure, but then this discussion is endlessly repeated on this blog) is that water always flows downhill ... to where there's already plenty of water.

If we want water at the top of the hill, we have to actively intervene: we have to pump it.

Whether the "pump" is progressive tax rates; minimum wage laws; union activity; worker ownership; a miraculous change in human nature away from the notion that grabbing, whether under cover of the law or otherwise, obscenely more than your share of the goodies is tantamount to "deserving" or "earning" what you've grabbed; or -- most likely -- some eternally struggled-for combination of the above -- without the pump, the water just keeps flowing downhill to where there's already plenty of water.

Actually, as I write this out, I am reminded -- a new connection, at least one little thing to make the day more interesting -- that in nature, water flows downhill and makes ponds and lakes and oceans, but even there, "nature" ensures that water gets back to the top of the hill: evaporation, cloud formation and movement, rain.

But even that's not the whole story. I once read -- pre-internet, don't have time to search for the photocopy of the article -- that without life on earth, i.e. if there were nothing but bodies of water and rocks and sand, the average rainfall over the whole planet would be about 11 inches a year. Because of living things that have created soil, and that absorb and give up moisture themselves, the average rainfall is 29* inches. That is, the water gets cycled and cycled, almost two whole extra times, because there's life on this planet.

What could be the equivalent in terms of sharing/cycling the wealth amongst human beings more equitably?

*Wikipedia says 39 inches.

[bedtimeforbonzo]

The new normal, which I feel has been in place for several years, has left me feeling disenfranchised. (I imagine many poor and working-class Americans feel likewise.)

Rick Perry and Tom Coburn do not speak for me. We could not be farther apart on economic and social issues.

The Tea Party does a great job of capturing anger (something President Obama does not), but has no sense of compassion, empathy or generosity. To them, these are values only a socialist could embrace.

Yet I feel no connection with this president, either.

His fault? Or mine?

It's little wonder his enemies don't listen to him any longer, I often find myself tuning out President Obama.

I'm smart enough to not begrudge the man a vacation. But I did wonder what the point was of his just-completed bus tour through postcard-worthy settings though lilly-white middle America.

How about a townhall of unemployed Americans?

Or, as Congressional Black Caucus member Maxine Waters wondered out loud yesterday in extreme frustration, where was the stop at a black community?

An inner city?

I relate to Detroit more than Corn Cob, Iowa, Mr. President.

The new normal, for me, is one of constantly being one or two mortgage payments behind, of regularly paying the utility bill late, of not even the possibility of a vacation, of putting off the purchase of a good pair of shoes because there's always another bill that has to be paid first.

This is the America I live in. Rick Perry doesn't recognize it. But neither doesn't President Obama.

[bedtimeforbonzo]

The new normal, which I feel has been in place for several years, has left me feeling disenfranchised. (I imagine many poor and working-class Americans feel likewise.)

Rick Perry and Tom Coburn do not speak for me. We could not be farther apart on economic and social issues.

The Tea Party does a great job of capturing anger (something President Obama does not), but has no sense of compassion, empathy or generosity. To them, these are values only a socialist could embrace.

Yet I feel no connection with this president, either.

His fault? Or mine?

It's little wonder his enemies don't listen to him any longer, I often find myself tuning out President Obama.

I'm smart enough to not begrudge the man a vacation. But I did wonder what the point was of his just-completed bus tour through postcard-worthy settings though lilly-white middle America.

How about a townhall of unemployed Americans?

Or, as Congressional Black Caucus member Maxine Waters wondered out loud yesterday in extreme frustration, where was the stop at a black community?

An inner city?

I relate to Detroit more than Corn Cob, Iowa, Mr. President.

The new normal, for me, is one of constantly being one or two mortgage payments behind, of regularly paying the utility bill late, of not even the possibility of a vacation, of putting off the purchase of a good pair of shoes because there's always another bill that has to be paid first.

This is the America I live in. Rick Perry doesn't recognize it. But neither does President Obama.

[GoodOleBoy]

'If we want water at the top of the hill, we have to actively intervene: we have to pump it.'

I like your theme, and have a sense that the identification of what is needed, in terms of results, has merit. For those with libertarian leanings, process often carries greater weight than results. For those with wealth, the result seems to be important, at least for many of them. The most difficult part to understand is why no amount ever seems to be sufficient. So, there are at least two categories of people in opposition to most approaches to priming the pump, the libertarians and the rich.

'I'm smart enough to not begrudge the man a vacation. But I did wonder what the point was of his just-completed bus tour through postcard-worthy settings though lilly-white middle America.'

Votes?

[JanieM]

GoodOldBoy, thanks, and I in turn like your observation that there are both process reasons and results reasons for people's ways of looking at these issues.

I tend to be a very abstract, big picture, back to first principles thinker. On the one hand, that makes me desperately ineffectual in the ruckus and detail orientation of practical politics. On the other hand, when these discussions come up I am constantly frustrated because we ("we" in the broadest sense) go around and around the same points, and yet a lot of it is talking past each other because we are starting from different first principles (sometimes conscious, sometimes not) and unexamined or at least unstated underlying assumptions. Sometimes I think that if people would just state their first principles -- by which I mean, more or less, axioms that can't be "proven" -- the discussion would just stop, because it would be apparent at the outset that people are working from different and incompatible axioms, and therefore are inevitably going to come to different conclusions.

Then, I suppose, how much fun would that be? ;)

One of my first principles is that we are all in this together, and we ought at some level to be taking care of each other, not just ourselves. (Or is that two principles?)

Working that out in practice is another thing entirely.

[GoodOleBoy]

'GoodOldBoy, thanks, and I in turn like your observation that there are both process reasons and results reasons for people's ways of looking at these issues.'

You get a positive reaction from me for the text and meaning of your comment.

And here's the thing. If the wealthy willingly relinquished their excessive portion of wealth, we still face the problem of constructive deployment of that wealth. This is a re-statement of the Right's never-ceasing question on government social spending. And the actual need is to figure out a way to re-align the ongoing stream of wealth creation so that the results are not skewed like now. I won't contest the attractiveness of the outcome envisioned by 'priming the pump', but I have many doubts about how to get there. Some of the very wealthy have decided how to relinquish their wealth, some positive, some not so.

[russell]

I think that if people would just state their first principles ... the discussion would just stop

LOL.

I think it would stop for about three minutes, while everybody's heads exploded, and then the real ruckus would begin.

Sounds like fun to me. :)

[Bernard Yomtov]

Somebody check me on this: If productivity grows faster than GDP, then the economy will shed jobs, even if growth is good, right?

Yes, as a matter of arithmetic. That is, GDP is (productivity per worker) times (number of workers). So the only way GDP can decline if productivity/worker increases is if the number of workers drops.

[liberal japonicus]

I was born and grew up dirt poor in Georgia. I managed to squeak by through public school and went to college on a merit scholarship (I don't know if such exist anymore). Over a fifty year period, I was able to move from the bottom decile to the top decile. This happened while many people were filthy rich and getting richer all the time. As long as this is possible for people with ability and initiative, I'm OK with it.

Not trying to throw gas on the embers here, but the thing that strikes me about this is that this whole system of getting ahead is attributable not to a conservative urge, but to liberal efforts. It was progressive taxation that allowed public schools to be built, and I'm having a hard time imagining that the idea of merit scholarships and identifying people who deserved a break has any position in a conservative constellation, either now or back then. That there was massive inequality back then does not seem to be an argument that massive inequality is necessary for such things, but more that these things can happen in spite of such conditions.