Quotes of the day
posted at 10:41 pm on March 18, 2014 by Erika Johnsen
Just a few months ago, it looked like 2014 would be the year of the populist, with Democrats running on economic inequality, tea party Republicans bashing banks and newly minted New York City Mayor Bill de Blasio pledging to soak the rich with higher taxes.
That was so January. The terrain is now shifting fast as the 1 percent fights back hard and the effectiveness of the populist approach comes into question.
Fresh off a bruising loss in Florida, the Democratic playbook for the midterms appears in need of a major rewrite — and the pro-business wing of the party is ready to draw up new plans. President Barack Obama in his budget once again floated a plan to raise taxes on Wall Street, but no one took it seriously. And just days later, the president was raising money at the home of one of the wealthiest private equity executives in New York. Mayor de Blasio’s hopes to increase taxes on the wealthiest got blown out by Wall Street’s newest hero, New York Democratic Gov. Andrew Cuomo. And de Blasio is facing major heat from the rich over his opposition to charter schools.
So it’s comical, in a way, to see Mr. Ryan trying to explain away some recent remarks in which he attributed persistent poverty to a “culture, in our inner cities in particular, of men not working and just generations of men not even thinking about working.” He was, he says, simply being “inarticulate.” How could anyone suggest that it was a racial dog-whistle? Why, he even cited the work of serious scholars — people like Charles Murray, most famous for arguing that blacks are genetically inferior to whites. Oh, wait. …
Or we’re told that conservatives, the Tea Party in particular, oppose handouts because they believe in personal responsibility, in a society in which people must bear the consequences of their actions. Yet it’s hard to find angry Tea Party denunciations of huge Wall Street bailouts, of huge bonuses paid to executives who were saved from disaster by government backing and guarantees. Instead, all the movement’s passion, starting with Rick Santelli’s famous rant on CNBC, has been directed against any hint of financial relief for low-income borrowers. And what is it about these borrowers that makes them such targets of ire? You know the answer.
Let’s for a moment concede that roughly half the country is focused on punishing the poor. Let’s say they communicate this viewpoint via thinly-veiled racist rhetoric that apparently anyone can hear. Still, is it really “difficult” to find a Tea Party denunciation of bailouts? I guess asking your intern to type the words “bailout” and “Tea Party” into a Google search is problematic for a guy who insulates himself from the opposition’s arguments. Arduous as the work can be, though, Krugman would have first found a Wikipedia page that cited all larger 2009 Tea Party protests and found around a dozen of them were partly or explicitly aimed at denunciating Wall Street bailouts. …
Actually, nearly every Tea Party-affiliated candidate had come out strongly against TARP, many of them making it the centerpiece of their runs against establishment Republicans — including Mike Lee and Marco Rubio. Is there no editor on the Times’ opinion page editor that can email the professor and ask him whether he wants to make such a ludicrous claim?
It should matter that what Ryan told Bennett is true, as anyone who has spent time in America’s inner cities and working with kids there can testify. The reasons for the hardships facing those living in America’s inner cities are complicated and not simply cultural; they are economic as well. But to say that there isn’t a problematic culture that has taken root in America’s inner cities is a lie; and to attack those like Ryan who speak about it is to compound the lie. …
But as Jonathan points out, there’s something more fundamental going on here. Liberals who have complicity in the problems plaguing America’s inner cities are attempting to make an honest conversation about poverty impossible. They are signaling that they intend to try to take out Republicans who want to address some of the root causes, the behavioral causes, of poverty. …
For them the villain isn’t, say, the ruinous public school systems in Chicago, Detroit, and D.C. that are destroying the lives and future of hundreds of thousands of kids; it’s Paul Ryan, who among other things supports school choice for inner-city parents. This is what large parts of liberalism have been reduced to: the praetorian guard of corrupt, poverty-creating institutions and organizations.
Half a century later, with the Census Bureau reporting more than 46 million Americans still mired in poverty, these same liberals seem insistent on denying low-income children quality educational opportunities, through cruel policies that will only perpetuate the cycle of poverty.
In New York, Mayor Bill de Blasio has embarked on a systematic campaign to destroy the city’s burgeoning charter school movement. He’s diverting more than $200 million in funding marked for charter schools, and has also thrown hundreds of students out of their promised school buildings. He has also declared his intent to nullify arrangements that allow charters to locate in existing public schools rent-free. …
Worst of all, the left and teachers unions aren’t just denying the clear facts — they’re denying millions of low-income students the opportunity for a better future.
I am mystified. Charter schools are not private schools. They are free public schools that are open to any student, usually by lottery. Some very rich people support them, provide extra funds for special programs and, in return, get vilified for their efforts. One columnist, citing the pay package of charter-school CEOs, referred to a “gilded crusade,” another to an “all-out campaign by the elite.” You would think we’re talking about the “gilded” and “elite” getting their own kids into some fancy school. Instead, they’re helping poor children. …
When the rich insist that lower taxes would do wonders for the poor, the orphaned and the grievously widowed, I detect the faint aroma of self-interest. But when they plump for charter schools, the only ulterior motive you can find is that down the road, years from now, society will benefit and so, as night follows day, will they. I can live with that.
America has always had a love-hate relationship with its rich. But lately, there’s been more hate than love.
The welfare state, primarily devoted to pensions and medical care for the elderly, aggravates inequality. Young people just starting up the earnings ladder and families in the child-rearing, tuition-paying years subsidize the elderly, who have had lifetimes of accumulation. Households headed by people age 75 and older have the highest median net worth of any age group.
In this sixth year of near-zero interest rates, the government’s monetary policy breeds inequality. Low rates are intended to drive liquidity into the stock market in search of higher yields. The resulting boom in equity markets — up 30 percent last year alone — has primarily benefited the 10 percent who own 80 percent of all directly owned stocks. Charles Wolf writes in the Weekly Standard: “The financial sector’s profits rose from 18 percent of total corporate profits preceding the recession in 2007 to 23 percent in 2013.” …
The monetary base having expanded 340 percent in six years, there is abundant money for businesses. But, says Fisher, the federal government’s fiscal and regulatory policies discourage businesses from growing the economy with the mountain of money the Fed has created. This is why “the most vital organ of our nation’s economy — the middle-income worker — is being eviscerated.” And why the loudest complaints about inequality are coming from those whose policies worsen it.
The factor in all this that liberals have been emphasizing the most in recent months has been stagnation in the minimum wage. It is true that a recent Congressional Budget Office analysis found that a substantial increase in the minimum wage would lift 900,000 low-wage workers out of poverty. But a minimum-wage hike would be very poorly targeted if our goal were to help poor families. Specifically, the CBO found that only 19 percent of the income gains that would follow an increase in the federal minimum wage to $10.10 would go to households whose earnings fall below the poverty line. And the CBO also projects that the U.S. work force would become smaller by an amount equal to 500,000 workers as employers found large numbers of Americans unemployable at a higher wage floor. That is, a minimum-wage hike risks making the worklessness problem worse rather than better.
So what can we do about the worklessness crisis?
First, Republicans need to back macroeconomic policies that will bring us closer to full employment. David Beckworth and Ramesh Ponnuru have argued in these pages that if the Federal Reserve keeps the growth of nominal spending and nominal income on a steady path, we will see a far more robust labor-market recovery. Achieving full employment is a crucial first step, as periods of full employment are also periods during which inflation-adjusted incomes rise for all households, including those at the bottom of the ladder.