Comments on: Inequality and Budget Deficits: Why is Only the Latter an Emergency?

By: DHFabian

DHFabian — Wed, 28 Nov 2012 01:05:18 +0000

The US chose social policies that increase poverty, and keeps people firmly trapped at the bottom. With each economic downturn, the number of permanently poor increases. Clinton took a machete to the safety net while embracing policies that increase joblessness. Many are a single job loss from losing everything, with no way back up. How do you get a job without a home address, phone, bus fare? The rungs were cut off the proverbial ladder out of poverty. Historically, when the richest few gained too much power, the poor and middle classes united to push back, to the benefit of both. This time, the poor and middle were deeply pitted against each other, so there can be no effective push-back.

By: urban legend

urban legend — Sun, 25 Nov 2012 18:20:56 +0000

How can you write an entire post dedicated to dealing with forces generating rampant inequality and not even mention to the loss of the ability of middle and lower-middle class workers to combine forces and participate in the setting of their terms of employment? Not even to argue against its importance, even though the forced decline of unionism just happens to coincide almost perfectly with the growth of inequality? .

That seems to me like one of the defining characteristics of neo-liberalism: it’s perfectly comfortable with top-down political policy activity, but not so much with the messy process of worker participation in the enterprise. Something like a turn-off by dirty fingernails or something?

Perhaps one might consider that in most of the European countries with less inequality, unions are a much stronger force. Where arguably that’s not the case, e.g., France, there’s a long tradition of uprisings like national strikes to necessitate some self-discipline by elites.

By: pjr

pjr — Sun, 25 Nov 2012 04:29:23 +0000

I understand that France recently was considering a law that would limit CEO pay to 20 times the average worker’s pay, and that the ratio in the US has grown tenfold since the 1960s to about 300-to-1. I don’t like France’s idea, but I am convinced that the US tax code of the 1960s strongly discouraged high executive pay in favor of a business spending on the business, to include its workers (many of whom were in a union of some type). That tax code also helped to keep deficits low, and the economy was very strong despite an extremely high dependency ratio along with low workforce participation rates by women. Our leaders in Washington need to know that they have been doubling-down on terribly misguided policies that serve only the wealthiest Americans while the country as a whole stagnates.

By: Mike

Mike — Sun, 25 Nov 2012 01:58:11 +0000

I think something is a little off when deficit “hawks” frame the debt issue as the most pressing long-term concern our country has ever seen (OH THE CHILDREN!), when climate change gets nary a mention. I live on Long Island in New York and we were (as you may know) hit hard by Hurricane Sandy. Last year we were hit hard by Hurricane Irene. These are storms that would have happened previously once a lifetime or generation, but now seem to be occurring much more frequently. It would be nice to see that spoken about a bit more by Washingtonians rather than the seriousness of cutting the social safety net for seniors.

Also, a little frustrated about the narrowness of the talk about inequality, which seems to only encompass debate about the Bush tax cuts for the wealthy and a few transfer programs (though the ACA is obviously very important). Trade deals tilted against the working/middle classes, gov’t support of Wall Street and pharmaceutical monopolies (though we are ostensibly trying to deal with the former), and the low-inflation bias of the Fed all contribute to inequality in one way or another, but they are rarely on the political agenda.

I’m aware that change comes piecemeal, but I think one of the biggest problems is what you mentioned in a previous post. Washingtonians may have good intentions (at least some of them), but the fact that many live a comfortable life means that the urgency on an issue like inequality just isn’t really there. I know that there are exceptions, and some members of Congress do some really good work, but it just seems like the same things are always on the agenda, and that isn’t a good recipe for change to the “unequal” status quo.

By: Tom in MN

Tom in MN — Sat, 24 Nov 2012 14:38:54 +0000

And compare the disaster waiting at the end of each problem. Krugman has been arguing that the debt disaster is not even that bad. Bond rates rise, the Fed responds by printing money and the Dollar falls boosting exports. No Greek problem, we can never default, we just print more money. The resulting inflation is even good for those with mortgages.

Inequality, on the other hand, well that ultimately leads to class warfare, literally. Social instability, riots, everyone looses. And those with the most have the most to loose. What do the rich get for their tax dollars? They get a stable country that is a good place to live and make lots of money.

I know which one I’m more worried about.