Hey, What’d I Miss? OTE Summary, 9/11 – 9/16

September 18th, 2012 at 1:04 am
  • Thinking about what qualifies as “middle class”:  most of us would probably agree that the cutoff is somewhere below the 98th percentile.
  • Explaining where jobs come from:  on the process of job creation, both in normal times and in times like these.
  • Highlighting some new moves announced by the Fed:  will it help?
  • Considering the Census Bureau’s new data on poverty, incomes, and health coverage:  the bottom line is, policy matters.
  • Looking at the teachers’ strike in Chicago and value-added models, with a tip of the hat to this Steve Greenhouse piece.
  • Pointing out how not to govern:  in a better world, legislators would not accept temporary when they mean permanent.

Music: radio silence, no Musical Interlude!  My bad, but to fill the void until next time:  what were you all listening to this week?

 

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3 comments in reply to "Hey, What’d I Miss? OTE Summary, 9/11 – 9/16"

  1. Auros Harman says:

    So Jared, regarding that “what qualifies as middle class” question. Say you have a couple in the SF Bay Area who both work and jointly make $220k. Their life may look enviable to a couple who make $60k, but it doesn’t look alien. They’re very well-off — they have a nice house with a yard, a reasonably new car, etc. Maybe they have a cleaning service that comes in once a week. But they don’t have a yacht. They don’t have personal servants who work for them, personally, full time (unless it’s a nanny, and in that case it’s one of their major expenses, for which they are sacrificing other luxuries they could have).

    People who are in the low six figures are still relatable to the rest of the population. As you pass $250k and take off for the stratosphere, you start looking like something else — a real class divide, like existed between feudal lords and their serfs, starts to emerge. The plutocratic leisure class does not have to work if they don’t want; their money works for them.

    We used to have a fundamentally middle-class country, where even CEOs and extremely successful lawyers and entertainers lived in houses that looked like really nice versions of the homes of mere mortals. Paul Krugman talked about this in his great article for the NYTimes Magazine, “For Richer”. ( http://www.nytimes.com/2002/10/20/magazine/20INEQUALITY.html?pagewanted=all )

    As a Democrat, I think it’s reasonable to support keeping taxes where they are, in the near term, on incomes up to around $250k — people in that range still spend a large portion of their marginal dollar. Furthermore, they still face many of the same risks those of on less exalted rungs of the income ladder do: they worry that a serious illness, or a shock to their industry (like clever algorithms figuring out how to replace legal researchers), might lead to losing their house, their kids’ schooling options, etc. The Dems have an offer: Yes, you’ll probably have to pay a little more in taxes; a few percentage points, call it $5-8k for a family making $200k. In return, we promise peace of mind. You’ll be certain of having healthcare, a reasonable retirement, and schooling for your kids that will give them a fair shot in the next generation’s job market. And because we’ll work at reining in the inflation of healthcare and education costs, we may well be able to save you enough to make up for the tax increase.

    I think that’s a pretty good deal.


    • Jared Bernstein says:

      Well said and I agree with much of that…except I guarantee you that on average, and with exceptions I’m sure, a family living anywhere on the median HH income of $50K is considerably more economically stressed out than a same size family living anywhere else with $250K.


      • Auros Harman says:

        Sure. And we ought to double down on the stuff that really helps the people in the “true” middle, i.e. around the median income. Larger investments in public education, universal healthcare, etc. Not to mention, for the people below them, better Medicare, better EITC, etc.


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