June 1, 2005

From Paul Krugman in the American Prospect:

At this point, income inequality is right back where it was in the 1920s. Just about all that?s left of the New Deal legacy is Social Security — and they?re trying to get rid of that, too. Back when I wrote ?The Rich, the Right, and the Facts? for The American Prospect in September 1992, I was trying to get two ideas across: The middle-class society of the postwar era was unraveling, and the right was lying about it.

It was a very straightforward exercise. My favorite figure was the graph showing how the postwar ?picket fence? chart of widely shared growth had turned into a ?staircase? of rising income inequality. And all I needed was a bit of elementary statistical analysis to demonstrate the falsity of the various obfuscations the right was offering.

How did it all turn out? Those of us who warned about inequality and right-wing dishonesty circa 1992 have been completely vindicated on the facts: Both the unraveling and the lies have gone even further than we imagined. But we?ve lost all the political battles.

At the time that I wrote that piece, Bill Clinton was using income distribution pretty effectively as a campaign theme. There was also quite a bit of genuine populist outrage over corrupt businesspeople and their political friends. So it seemed reasonable to expect a political realignment something like the one that happened in Britain under Tony Blair (pre-poodle) — a public demand for a reinvigoration of the welfare state, financed by a return to progressive taxation.

In fact, during the recent U.K. campaign, the Financial Times printed graphs identical to those I used in the Prospect article, showing exactly the reverse trend: Thatcher?s staircase gave way to Blair?s picket fence.

But it didn?t happen here. The Clinton health-care plan crashed and burned, the DeLay Republicans took over Congress, and under George W. Bush ? well, you all know about that.

The result was that everything I wrote about in 1992 is far more extreme today.

Compared with 1970, America in the early ?90s looked radically unequal; from today?s vantage point, it looks positively egalitarian. In 1992, it seemed shocking that the ratio of the paychecks of the top 100 CEOs to the earnings of the average worker had gone from about 40, the postwar norm, to 200. By 2000 that ratio was up to 1,000; it slumped to 500 when the stock bubble burst, but it?s headed up again.

At this point, income inequality is right back where it was in the 1920s. Just about all that?s left of the New Deal legacy is Social Security — and they?re trying to get rid of that, too.

Meanwhile, I thought officials in the first Bush administration were dishonest about economics; these days, they look like Boy Scouts. In 1992, it seemed shocking that the administration was trying to pretend that the obvious increase in inequality wasn?t happening. But these days we have a White House pretending that a tax cut — whose main components are ending the inheritance tax, cutting the top marginal rate, and reducing taxes on dividends — is somehow aimed at helping ordinary working people.

At this point, the important question is political: What will it take to wake people up?



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Not by women were designed.
Bells o'erthrown nor churches sacked
Speak not ill of womenkind."
~ Gearoid Iarla Fitzgerald

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Nature

"Eventually, all things merge into one; and a river runs through it. The river was cut by the world's great flood and runs over rocks from the basement of time. On some of the rocks are timeless raindrops. Under the rocks are the words, and some of the words are theirs..." ~ Norman Maclean

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Truth

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"Blessed are the peacemakers: for they shall be called the children of God." ~ Jesus

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Hypocrisy

"And thus I clothe my naked villany with odd old ends stol'n forth of holy writ, and seem a saint when most I play the devil." ~ William Shakespeare

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Pretended Patriotism

"Guard against the impostures of pretended patriotism." ~ George Washington

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"The nationalist not only does not disapprove of atrocities committed by his own side, he has a remarkable capacity for not even hearing about them." ~ George Orwell

"To (say) that we are to stand by the president right or wrong is not only unpatriotic and servile, but it's morally treasonable to the American public." ~ Theodore Roosevelt
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