The Economic Class Divide In The US

By Big Tent Democrat, Section Other Politics
Posted on Thu May 13, 2010 at 01:18:23 PM EST
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This Brad DeLong post is rightly getting a lot of attention:

The most astonishing and surprising thing I find about Washington DC today is the contrast in mood between DC today and what DC was thinking a generation ago, in 1983, the last time the unemployment rate was kissing 10%. Back then it was a genuine national emergency that unemployment was so high [. . .] Today…. nobody much in DC seems to care. A decade of widening wealth inequality that has created a chattering class of reporters, pundits, and lobbyists who have no connection with mainstream America? The collapse of the union movement and thus of the political voice of America’s sellers of labor power? I don’t know what the cause is. But it does astonish me.

I like to criticize the Beltway as much as anyone, but this phenomenon transcends DC and has infected the entire country. I used to write a lot about the concept of the Common Good and how it historically animated the Dem Party and how it should again. But it simply hasn't. Matt Yglesias writes:

It’s typically the out-of-power party’s job to complain about poor economic performance, but the GOP is ideologically committed to the view that less stimulus and tighter money are preferable.

I think this gives the Dem Party a pass it does not deserve. I wrote a lot about Barack Obama's opportunity to be our FDR and have sadly been proven to have been delusional. Even now, Dems and progressives spend most of their time telling us how well the stimulus package worked.

There is no Party willing to argue for the Common Good anymore and that is just terrible.

Speaking for me only

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The Economic Class Divide In The US | 32 comments (32 topical)

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I hoped that ... (5.00 / 1) (#30)
by Robot Porter on Thu May 13, 2010 at 06:47:24 PM EST

your delusion about Obama being a new FDR would come true.

The rest of the post: So sad, so true.

Good little post, BTD (none / 0) (#1)
by david mizner on Thu May 13, 2010 at 01:29:33 PM EST

'82 was before the corporate-DLC takeover of the Democratic party, which relegated jobs-creating, deficit-spending liberalism to the back benches, where it still remains.

As for Ygelesias, he seems to think it's the job of the out-of-power party to complain about economic performance but not the job of the in-power party to, you know, try to solve the employment crisis. The lack of urgency in DC about jobs is due to the Dems' lack of urgency about jobs.

(What's more, the GOP actually complains quite a bit about economic performance.)

Fear the Great Recession (none / 0) (#2)
by abdiel on Thu May 13, 2010 at 01:41:38 PM EST

it feels like everyone expected this to be very short and ultimately a non-issue, like the 2001 recession. Bush used it to pass his agenda and I think Obama was looking to walk the same pass. Bush didn't take very much flak for a jobless recovery.

What nobody in Washington seems to have expected is that the economy might actually be in trouble.

The fortunate thing for Democrats is that Republicans are even more single-minded about politics and unconcerned about fixing the economy. Unfortunately for the country, we're falling into the same hole as Japan - our political parties are too strong and polarized to break with accountability votes but too weak to get a handle on our problems.

: Learned helplessness (5.00 / 2) (#29)
by reslez on Thu May 13, 2010 at 05:41:33 PM EST

There are two ways out of the current deflationary recession.
(1) Pump up another bubble to increase demand. Wait for household and business balance sheets to repair themselves.
(2) Increase government spending to increase demand. Wait for household and business balance sheets to repair themselves.
If the Bubble option is chosen (#1), another collapse will follow shortly when the bubble inevitably bursts. And the easy money fueled by the Fed's low interest rates, guarantees and other giveaway programs will cause severe disruptions in the real economy. The commodity boom of 2008 resulted in mass famine and starvation around the world. Hedge funds relying on insane leverage (30:1, 100:1) bid up the price of food beyond the reach of real live people. Coming soon to a theatre near you... since this is the option that Wall Street and Obama have chosen.
Option #2 has been ruled out by Beltway insiders who object on principle to borrowing money to spend on people. They have no objections to borrowing money to spend on bankers and bombs. This learned helplessness means our economy, which is severely depressed by anemic private demand, has no way to compensate. It's like the starving man who refuses to reach for the loaf of bread on the table in front of him.
Because of course, the government has no need to borrow money. The government cannot run out of money. The government is the source of all money. The economy is currently suffering a collapse in demand -- government spending cannot cause monetary inflation in this environment.
Austrian economists object to both Option #1 and #2. Like Mellon ("Liquidate! Liquidate! Liquidate!") they would accelerate defaults and bankruptcies to clear out the bad debt and repair balance sheets. Budget cutbacks and austerity suffered by average people but never by elites. But this will bring on the deflationary nightmare described by Irving Fischer. As GDP collapses and workers are laid off, demand collaspes. Businesses close. More workers are laid off. And debt becomes harder and harder to repay. Far from a world of "sound money", we instead enter the realm of radical politics. Tea Party? Arizona? You ain't seen nothing yet.

: I don't know (none / 0) (#5)
by CST on Thu May 13, 2010 at 01:53:33 PM EST

I think a lot of people expected this to be long and drawn out.
In a sense maybe that's why people are giving Obama a pass. The feeling that "there is only so much you can do".
Of course, it would be a lot nicer if they were actually trying to do something.
Personally I didn't expect instant success. I did however, expect them to try. Which I have yet to really see. ESPECIALLY on financial reform. The fact that we have gotten nowhere, and we might get nowhere after a collapse of this kind is atrocious.

: That's how it seems to me too (none / 0) (#6)
by ruffian on Thu May 13, 2010 at 01:57:01 PM EST

Dems used it in the election, I guess just as a reflex. I think they thought they were exaggerating - didn't believe their own rhetoric.
It is getting a little better. It is now only twice as bad as they think it is, instead of 3 times as bad.

: Jobless??? (none / 0) (#8)
by jimakaPPJ on Thu May 13, 2010 at 02:11:43 PM EST

Unemployment went below 5%.

Not delusional (none / 0) (#3)
by gyrfalcon on Thu May 13, 2010 at 01:41:40 PM EST

He did have the opportunity. It's just that he declined it.

: Yep. (none / 0) (#32)
by oldpro on Thu May 13, 2010 at 11:34:15 PM EST

That was the 'hope' part of 'hopey-changey' or whateverthehell that campaign was supposed to be about.
We all wanted an FDR understudy but it was never going to happen.

its starting to seem like (none / 0) (#4)
by Capt Howdy on Thu May 13, 2010 at 01:50:44 PM EST

the width of the gap is inversely proportional to anyones willing to talk about it.

400 b.c, or thereabouts (none / 0) (#7)
by jondee on Thu May 13, 2010 at 02:09:44 PM EST

Plato said something about all governments being dominated by the selfish interests of the ruling class.

Of course there was also the democratic ideal of checks and balances to take into account: an ideal which should extend to checks on the ability of one economic class to exploit and dominate another to the point of engendering civil unrest and open, violent revolt --- which, if we survive, and keep moving in the direction we've been going for the last few decades, we'll eventually have here.

The common good is socialism (none / 0) (#9)
by Dadler on Thu May 13, 2010 at 02:14:17 PM EST

Seriously, we have evolved to become a country where saying you are primarily concerned with the common good is to invite suspicion and scorn from a good segment of the populace, at least when you present it without a religious context. Indeed, it seems common good must include religion to be accepted at face value. Simple decency-motivated common good, when talking economics especially, is looked upon as a threat by that same segment of the population. That this segment includes DC and the MSM, well, there you go.

I think part of the reason for that response... (5.00 / 1) (#10)
by kdog on Thu May 13, 2010 at 02:22:51 PM EST

is how the concept of "common good" was twisted and used to enable a whole lotta nasty in the 20th century.

Hitler was spouting "common good" in Germany, Stalin in the USSR, the drug war here at home is for the "common good". I hear that phrase I can't help but cringe a little myself...it is hard to get 3 people to agree on what constitutes common good.


Even Libertarians (none / 0) (#12)
by jondee on Thu May 13, 2010 at 02:33:16 PM EST

are IMPLYING the common good when they make the maximizing of freedom and "responsibility" (the definition of which no one agrees on) the ideal.

As soon as you establish any kind of govt AT ALL, national goals and ideals and the idea of "the common good" come into play, no matter who's "in power".


: OT Link (none / 0) (#14)
by Dadler on Thu May 13, 2010 at 02:37:12 PM EST

Cover story out today.

I think those guys talked muscle (none / 0) (#13)
by Dadler on Thu May 13, 2010 at 02:34:48 PM EST

I'd like to think we can manage to keep common good going the way of the word "liberal." As for getting three people to agree, the same could be said of liberals themselves, and reminds me of self-deprecating Jewish jokes my dad would tell. I remember one in which one of the three disagreeing people asserts that God agrees with him, whereupon God speaks and says it's out of bounds to include him in their lousy dispute.

You believe, as I do, in a Manhattan Project-scale program to develop alternative energy asap. That's a common good proposition entirely, in every way ultimately. And I doubt either of us would cringe at it being presented as such.


Again though... (none / 0) (#15)
by kdog on Thu May 13, 2010 at 03:05:18 PM EST

many good liberals think caging people up over plants is a common good.

Don't get me wrong, I believe there is such a thing as a common good, like the Manhattan Project for Energy...but its not as easy as one would think to define. And even a common good 99% of us would agree on could have some common bad consequences.

It's where my small government libertarian streak comes into play...stick to the bare bones basic common good...the further you stretch the common good concept, the more trouble you run into and the more people you have looking at government as the enemy. In my experience, much of their common good makes me sick.


I doubt there's really (none / 0) (#16)
by jondee on Thu May 13, 2010 at 03:15:09 PM EST

that many "liberals" that believe that..of course, they'll tell you that over at Reason..


: Fair enough... (none / 0) (#17)
by kdog on Thu May 13, 2010 at 03:18:40 PM EST

never let it be said Team D is the liberal party...cuz that's their party line...for the kids of course.

Not the phrase (5.00 / 1) (#23)
by Lora on Thu May 13, 2010 at 04:04:57 PM EST

Sadly, whatever phrase you use will be twisted around by the people who don't want to invest anything in the common good.

I was going to suggest substituting "promote the general welfare" thinking, how could anyone argue against that?

Heh, well I Googled it...and did you know that our Founding Fathers didn't mean that the government should, you know, promote the general welfare? They just meant, you know, promote the general welfare by protecting our boundaries and such so that rich and poor alike can be rugged individualists in our great country, etc etc

Sigh


: Saw a History Channel special (none / 0) (#25)
by Cream City on Thu May 13, 2010 at 04:35:52 PM EST

last night on those all-American rugged individuals, cowboys, and had to laugh at hearing that phrase still used for them.
Per recent research I enjoyed: Most cowpokes were members of a union. :-)

: Plus the word "welfare" (none / 0) (#27)
by jondee on Thu May 13, 2010 at 04:53:49 PM EST

is problematic due to Nobel Laureate Prof Limbaugh's
thesis that it means lazy, immoral people who want something for nothing.

Back in 2000, before the tech bubble burst, (none / 0) (#11)
by observed on Thu May 13, 2010 at 02:30:16 PM EST

an economist friend of mine told me an amazing statistic: the ratio of the wealth of the top .1% to the bottom 40% was 1000 to 1.
That ratio is probably less now, but anyone who thinks this doesn't have political significance is nuts.
Remember, the estate tax repeal was lobbied for by a grand total of 17 very wealth families, who stood to gain hundreds of billions (could be wrong on that figure, but I know it was 17 families).

A captive... (none / 0) (#19)
by kdog on Thu May 13, 2010 at 03:39:20 PM EST

ultimate cheap labor force....for the common good, of course.

The Aristocrats!

It creates a rising tide (none / 0) (#20)
by jondee on Thu May 13, 2010 at 03:48:07 PM EST

that lifts all vessels.


: Unless the tide turns out (5.00 / 1) (#22)
by Cream City on Thu May 13, 2010 at 03:50:09 PM EST

to be a tsunami?

Here's another useful reading (none / 0) (#21)
by Cream City on Thu May 13, 2010 at 03:49:06 PM EST

I came across yesterday -- so perhaps there is, at last, a critical mass of commentary a-building to put pressure on Obama to remember that his job is measured by jobs. The piece criticizes Congress, and both sides of the aisle, as well -- but correctly focuses on how he is supposed to take the lead on getting to work to put America to work.

For Obama, Democrats and Republicans, Focus on Jobs Is Not Job 1

. . . .President Barack Obama's visit to a Buffalo factory this week, one of his occasional high-visibility dips into the jobs issue, is striking because jobs are so seldom front and center in the national discussion these days. The word "jobs" hasn't appeared in the title of a weekly presidential address since last Dec. 5. Out of a dozen new laws in "featured legislation" on the White House homepage, there's only one jobs bill (two if you count a "Cash for Clunkers" extension from last August). Events and blogposts by Vice President Joe Biden or White House staff do not count. Only the president can stamp an issue "priority," and that hasn't happened since he signed the stimulus bill 15 months ago.
On the "economic recovery" page of House Majority Leader Steny Hoyer's Web site, the most recent statement Wednesday was from last October (until I pointed that out and it was hastily updated). House Republicans, meanwhile, sent out an e-mail headlined "Republican Economic Recovery Working Group to Announce New Initiative." That sounded like it might be about jobs, but it turned out to be a project called "YouCut." And You'reRight if you surmised that it involves public voting on lists of proposed federal spending cuts. . . .

"The collapse of ... (none / 0) (#24)
by nyrias on Thu May 13, 2010 at 04:33:58 PM EST

.. the union movement"

That i can explain.

Union is founded on the principle of aggregation of market power. One worker has no power and ALL the workers have great power.

This assumption is broken by cheaper labor in other countries. Suddenly management does not have to care as much about all the US workers going on strike .. because their jobs can be done by someone OUTSIDE of the US.

Unless you can unionize a majority of the workers on Earth under the SAME negotiation banner, unions will NEVER recover their market power.

To some extent, it is only a bad thing if your work is in the direct fire of this new reality. If you are doing other type of work (say an real estate agent), you are better off because you can take advantage as a consumer of the cheaper products produced by cheaper labor.

So we're back to the concept (none / 0) (#26)
by jondee on Thu May 13, 2010 at 04:49:49 PM EST

of the common good and the assumption on the part of those coming out of our business schools that their responsibilities of citizenship extend only to the shareholders and no one else. Of course, many of them then proceed to backhandedly acknowledge their duty to the country by claiming that complete and utter deregulation of markets benefits "the economy" and the nation as a whole..


: pretty much ... (none / 0) (#28)
by nyrias on Thu May 13, 2010 at 04:54:53 PM EST

and there is little anyone can do about it.
All the new finance reform has NOTHING to do with jobs and corporation responsibilities. It is all about investor confidence. It is about not to gamble so recklessly with investor's money. The system is still to design to make money for the investors.
I doubt you will find much contradiction to this view if you look at how corporations behave.
Just look at BP. Do you think they have a genuine concern about the environment or do you think they are just trying to say the right words?
Oh, and i don't think we are "back to teh concept" .. that has been the operating concept all along.

2 Issues - as a bottom 187 million (none / 0) (#31)
by seabos84 on Thu May 13, 2010 at 08:46:22 PM EST

peeeee-on for all my 50 years, the cluelessness of the top is ... understandable. They do NOT know how their barista's, waiters, and grocery store clerks live.

Check out table 689, 2010 statistical abstract of the united states, 2007 money income.

187/236 million had LESS than 50k in money income.

214/238 million had LESS than 75k in money income.

24/238 million had OVER 75k in money income.

13/238 million had OVER 100k in money income.

(numbers are slightly rounded.)

many and many of that 13 and that 24 million do NOT live around, prep with, vacation with, shop with, socialize with, grad school with, PTA with ... those bottom 187 or 214 million, except as servants. Given the huge amount of debt that financed the last 3 bubbles, a lot of those servants are carrying coach bags or driving a new car - they almost fit in with their betters!

Those DLC scum haven't cared about me or people like me cuz, aside from being scum, they don't know or care about us.

OH yeah - about the decline of unions ... yawn. You got the SAME problem in unions (I'm in the seattle teacher's union) that you have in the Democratic Party - zillions of hours wasted by us peeeee-ons having to get active by going to boring cliquish insider meetings ... AFTER breaking our butts 40++++++ so we don't end up Junk-Mart Greeter. Oh yeah, btw, then there is the cowpatch grassroots approach to grassroots - we're supposed to be just around for the LEADERS to use up, and ATM out, and cheer for the leaders, and serf for
the leaders ... who keep selling us out.

yeah ... sign me up!

rmm.

The new FDR????? (none / 0) (#33)
by Bornagaindem on Sat May 15, 2010 at 07:31:37 PM EST

Good God anyone with a brain could tell Obama was in no way an FDR. Didn't anyone pay attention to how little he had done for his constituents as a state senator? Find one thing he actually did to change anything for his actual constituents. Nada. And there you have his whole presidency.

delusional truly delusional