The Secrets of Princeton

by Ross Douthat, New York Times, April 6, 2013

Excerpt

…a truth that everyone who’s come up through Ivy League culture knows intuitively — that elite universities are about connecting more than learning, that the social world matters far more than the classroom to undergraduates, and that rather than an escalator elevating the best and brightest from every walk of life, the meritocracy as we know it mostly works to perpetuate the existing upper class…

The intermarriage of elite collegians is only one of these mechanisms — but it’s an enormously important one…What better way to double down on our pre-existing advantages? What better way to minimize, in our descendants, the chances of the dread phenomenon known as “regression to the mean”?…The “holistic” approach to admissions, which privileges résumé-padding and extracurriculars over raw test scores or G.P.A.’s, has two major consequences: It enforces what looks suspiciously like de facto discrimination against Asian applicants with high SAT scores, while disadvantaging talented kids — often white and working class and geographically dispersed — who don’t grow up in elite enclaves with parents and friends who understand the system. The result is an upper class that looks superficially like America, but mostly reproduces the previous generation’s elite… The days of noblesse oblige are long behind us, so our elite’s entire claim to legitimacy rests on theories of equal opportunity and upward mobility, and the promise that “merit” correlates with talents and deserts. That the actual practice of meritocracy mostly involves a strenuous quest to avoid any kind of downward mobility, for oneself or for one’s kids, is something every upper-class American understands deep in his or her highly educated bones…

Full text

SUSAN PATTON, the Princeton alumna who became famous for her letter urging Ivy League women to use their college years to find a mate, has been denounced as a traitor to feminism, to coeducation, to the university ideal. But really she’s something much more interesting: a traitor to her class.

Her betrayal consists of being gauche enough to acknowledge publicly a truth that everyone who’s come up through Ivy League culture knows intuitively — that elite universities are about connecting more than learning, that the social world matters far more than the classroom to undergraduates, and that rather than an escalator elevating the best and brightest from every walk of life, the meritocracy as we know it mostly works to perpetuate the existing upper class.

Every elite seeks its own perpetuation, of course, but that project is uniquely difficult in a society that’s formally democratic and egalitarian and colorblind. And it’s even more difficult for an elite that prides itself on its progressive politics, its social conscience, its enlightened distance from hierarchies of blood and birth and breeding.

Thus the importance, in the modern meritocratic culture, of the unacknowledged mechanisms that preserve privilege, reward the inside game, and ensure that the advantages enjoyed in one generation can be passed safely onward to the next.

The intermarriage of elite collegians is only one of these mechanisms — but it’s an enormously important one. The outraged reaction to her comments notwithstanding, Patton wasn’t telling Princetonians anything they didn’t already understand. Of course Ivy League schools double as dating services. Of course members of elites — yes, gender egalitarians, the males as well as the females — have strong incentives to marry one another, or at the very least find a spouse from within the wider meritocratic circle. What better way to double down on our pre-existing advantages? What better way to minimize, in our descendants, the chances of the dread phenomenon known as “regression to the mean”?

That this “assortative mating,” in which the best-educated Americans increasingly marry one another, also ends up perpetuating existing inequalities seems blindingly obvious, which is no doubt why it’s considered embarrassing and reactionary to talk about it too overtly. We all know what we’re supposed to do — our mothers don’t have to come out and say it!

Why, it would be like telling elite collegians that they should all move to similar cities and neighborhoods, surround themselves with their kinds of people and gradually price everybody else out of the places where social capital is built, influence exerted and great careers made. No need — that’s what we’re already doing! (What Richard Florida called “the mass relocation of highly skilled, highly educated and highly paid Americans to a relatively small number of metropolitan regions, and a corresponding exodus of the traditional lower and middle classes from these same places” is one of the striking social facts of the modern meritocratic era.) We don’t need well-meaning parents lecturing us about the advantages of elite self-segregation, and giving the game away to everybody else. …

Or it would be like telling admissions offices at elite schools that they should seek a form of student-body “diversity” that’s mostly cosmetic, designed to flatter multicultural sensibilities without threatening existing hierarchies all that much. They don’t need to be told — that’s how the system already works! The “holistic” approach to admissions, which privileges résumé-padding and extracurriculars over raw test scores or G.P.A.’s, has two major consequences: It enforces what looks suspiciously like de facto discrimination against Asian applicants with high SAT scores, while disadvantaging talented kids — often white and working class and geographically dispersed — who don’t grow up in elite enclaves with parents and friends who understand the system. The result is an upper class that looks superficially like America, but mostly reproduces the previous generation’s elite.

But don’t come out and say it! Next people will start wondering why the names in the U.S. News rankings change so little from decade to decade. Or why the American population gets bigger and bigger, but our richest universities admit the same size classes every year, Or why in a country of 300 million people and countless universities, we can’t seem to elect a president or nominate a Supreme Court justice who doesn’t have a Harvard or Yale degree.

No, it’s better for everyone when these questions aren’t asked too loudly. The days of noblesse oblige are long behind us, so our elite’s entire claim to legitimacy rests on theories of equal opportunity and upward mobility, and the promise that “merit” correlates with talents and deserts.

That the actual practice of meritocracy mostly involves a strenuous quest to avoid any kind of downward mobility, for oneself or for one’s kids, is something every upper-class American understands deep in his or her highly educated bones.

But really, Susan Patton, do we have to talk about it?

I invite you to follow me on Twitter at twitter.com/DouthatNYT.

http://www.nytimes.com/2013/04/07/opinion/sunday/douthat-the-secrets-of-princeton.html?emc=tnt&tntemail0=y&_r=0

Bye, Bye American Dream! U.S. Economic Inequality Is Permanent, Study Finds

AlterNet [1] / By Steven Rosenfeld, March 22, 2013  |

Excerpt

A new study [3] by a team of economists in academia and the government has concluded that economic inequality is a permanent—not temporary—feature in the United States…“The reason the permanent/transitory distinction matters is that lifetime earnings are much more important than a single year’s earnings. It’s lifetime earnings that decide how you live in general, what sort of house you can afford, whether you can send a kid to college, whether you can retire comfortably.”… this study suggests that there are irreconcilable gaps in income, lifetime wealth, consumption and the resulting health between the haves and have-nots in America…That means federal safety nets are more needed than ever—despite the GOP’s ideological crusade to cut spending on them.

Full study

A new study [3] by a team of economists in academia and the government has concluded that economic inequality is a permanent—not temporary—feature in the United States, based on an analysis of 350,000 federal income tax returns between 1987 and 2009.

“For household income, both before and after taxes, the increase in inequality over this period was predominantly, although not entirely, permanent,” the highly technical report concluded. “We also find evidence that the U.S. federal tax system helped reduce the increase in household income inequality; but this attenuating effect was insufficient to significantly alter the broad trend toward rising inequality.”

The study by economists at two state universities, the Federal Reserve and U.S. Treasury Department, also found, not surprisingly, that the wealthiest Americans consume more than less well-off people, and that disparity causes poorer Americans to suffer as a result.

“Our findings, along with economic theory, suggest that the increase in income inequality observed in roughly the last two decades should translate into increases in consumption inequality, and is therefore likely to be welfare-reducing, at least according to most social welfare functions,” the report said. “Although measurement problems with household consumption data in the U.S. have made it difficult to convincingly measure the degree of the increase in consumption inequality, some recent studies… suggest that the increase in consumption inequality was indeed substantial.”

Simply put, the study confirms what Vermont’s U.S. Sen. Bernard Sanders has been saying for years, “The rich are getting richer and the poor are getting poorer.”

“The takeaway here is rough,” the Washington Post’s Ezra Klein wrote [4] in his Wonkblog column. “The reason the permanent/transitory distinction matters is that lifetime earnings are much more important than a single year’s earnings. It’s lifetime earnings that decide how you live in general, what sort of house you can afford, whether you can send a kid to college, whether you can retire comfortably.”

Better-off Americans often opine that those below them on the economic ladder should just work a little harder. But this study suggests that there are irreconcilable gaps in income, lifetime wealth, consumption and the resulting health between the haves and have-nots in America. It also suggests progressive taxation can buffer those inequalities a bit, but not make up for the gaps.

It will be curious to see if this study will be cited in Washington’s ongoing debate about ‘reforming’ entitlement programs—namely Medicare and Social Security. It suggests, if anything, that growing slices of American society are heading to less financially secure futures, especially in old age. That means federal safety nets are more needed than ever—despite the GOP’s ideological crusade to cut spending on them.

Source URL: http://www.alternet.org/economy/bye-bye-american-dream-us-economic-inequality-permanent-study-finds

Links:
[1] http://www.alternet.org
[2] http://www.alternet.org/authors/steven-rosenfeld
[3] http://www.brookings.edu/~/media/Projects/BPEA/Spring%202013/2013a_panousi.pdf
[4] http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/22/good-news-for-people-who-like-bad-news-about-inequality/
[5] http://www.alternet.org/tags/economic-inequality
[6] http://www.alternet.org/tags/progressive-taxation
[7] http://www.alternet.org/tags/entitlement-reform
[8] http://www.alternet.org/%2Bnew_src%2B

 

Life Among the Plutocrats — What Unimaginable Wealth Does to a Person

The Tyee [1] / By Crawford Kilian [2] Alternet (http://www.alternet.org)  January 4, 2013  |

Reviewed:Plutocrats: The Rise of the New Super-Rich and the Fall of Everyone Else [3], by Chrystia Freeland (Doubleday, Canada 2012)

Last year the Occupy movement brought the subject of inequality into public debate, and especially the inequality between those of us in the 99 per cent and the happy few in the one per cent. But Chrystia Freeland has been studying the happy few for years, and has spent many hours talking with some of their most famous and powerful members.

The result is a book full of surprises and insights. Today’s plutocrats are the latest variation on an old theme, and at the same time they’re strikingly new in many ways.

Societies have supported plutocratic classes at least since ancient Rome, and the Gilded Age of the US after the Civil War presaged our own: A rising class of self-made men, imaginative exploiters of new technology and wider trade. Then it was the telegraph and the railroad; now it’s the internet and the container ship.

Freeland’s plutocrats are mostly self-made also, and overwhelmingly male; one very rich man suggested to her that women lack the “killer instinct” needed for real success. But they are not the idle heirs of rich parents. The “working rich” are a distinct class: smart, ambitious and often outsiders.

What’s more, they represent a dramatic change from the 19th and early 20th century, Freeland argues. Then, the conflict was between capital and workers, with workers doomed to lose because they couldn’t own the means of production.

The communist revolutions were supposed to transfer those means to the workers, but instead transferred them to a new class of upstart intellectuals and technical experts. She cites Milovan Djilas, Tito’s second in command in communist Yugoslavia. In the 1960s Djilas wrote “The New Class” to describe this phenomenon as a corruption of communist orthodoxy; Tito threw him in jail.
They didn’t come entirely out of the blue. Freeland documents the gradual but decisive shift in fields like finance, which since the age of the superstar had been regulated to the point of boredom. This came along with a new struggle: Now it wasn’t capital versus labour, but capital versus talent.Even more ironically, the same new intellectual class now runs capitalism — with the exception of the princelings of the Chinese Communist Party, the billionaire sons and grandsons of Mao’s old proletarian comrades. But elsewhere, smart young men got possession of ex-Soviet resources, or an operating system for newfangled personal computers, and within months were rich beyond imagining.

The age of the superstar

Companies were no longer stuck with local workers and their high wages. Globalization meant they could outsource the work to anywhere in the world, whether Chinese special economic zones or Mexican maquiladoras.

And by the 1970s we were in the age of the superstar: the baseball player, singer, or CEO whose talent could make the difference between corporate success and failure. Talent couldn’t be bolted to the shop floor, and superstars in any field could name their price.

Hence, says Freeland, CEOs’ salaries began to rise while their workers’ pay stagnated or fell. Financial superstars set up their own hedge funds, and drew investors by the sheer power of their reputations. The superstar entrepreneurs thrive in a globalized economy, equally at home in Beijing, Moscow, New York or London.

In fact, they are now so rich that they form their own economy, a “plutonomy” producing goods and services just for them: private jets, monster yachts, and armies of professionals dedicated to making them comfortable.

Freeland’s interest in this super-elite is infectious. They really are smart people, superbly educated and culturally sophisticated. They attended the best universities in the world and did brilliantly in fields like mathematics and physics. They understand their own success; coming often from working-class or middle-class backgrounds, they embody the old Horatio Alger dream of rags to riches. Modestly, they think anyone could have done the same, with a lucky break or two and a lot of hard work.

This is where the plutocrats really part company from the rest of us — including the bottom 0.9 of the top one per cent. Living in their own higher world, with its own economy, they have only a fading sense of what non-plutocrats are like. Mitt Romney’s famous dismissal of the 47 per cent was actually an understatement. The plutocrats don’t think much even of the mere multimillionaires scrambling about in hopes of breaking into the billionaires’ circle.

Freeland is keenly aware of the impact of inequality, but she doesn’t see the 99 per cent as the plutocrats’ biggest enemies; it’s the aspiring plutocrats who are beginning to see how the deck is stacked against them. It will be interesting to see if they decide to take serious steps against their superiors.

Those moderate Canadian plutocrats

Freeland gives sympathetic attention to former prime minister Paul Martin (himself a multimillionaire) and outgoing Bank of Canada head Mark Carney, who sympathize with the Occupy movement and support the bank regulation that most plutocrats still reject. But such attitudes are rare among the plutocracy.

In the meantime, the plutonomy is not just booming, but skewing the still-depressed economy the rest of us live in. Many of the plutocrats reflect soberly on Andrew Carnegie’s comment that the man who dies rich dies disgraced. Many, including George Soros, Bill Gates, and Warren Buffett, are giving away their billions to various causes and charities.

Individually, those causes may be admirable (Soros has worked hard to promote democracy in eastern Europe). Collectively, those causes may be compromised and diverted from their original purposes by the sheer quantity of plutocratic money available. And of course many billionaires like the Koch brothers are pumping money into political causes that promise to keep their taxes low while suffocating government programs for the rest of us.

This is just one form of plutocratic “rent-seeking” — getting one’s businesses into a monopoly position, or lowering their operational costs, through favourable legislation. Every business, after all, wants to improve its own working conditions, just as every worker does.

But what is good for one’s business is not always good for the country. Rent-seeking simply runs up the plutocrats’ revenues while doing nothing for their customers. And it never occurs to such plutocrats that their success ultimately stems from the system created and maintained by the rest of society. As Barack Obama observed, “You didn’t build that.”

Freeland makes a useful contrast between plutocrats who are pro-market and those who are pro-business: In the market, companies compete, innovate, or die if they can’t. This is the “creative destruction” that brings genuine improvements in living standards, and it’s still at work. As one plutocrat told Freeland, the big companies used to eat the little ones. Now the swift eat the slow.

But in business, one tries to protect one’s own company by eliminating the competition (and the innovation). Historically, innovators become consolidators and rent-seekers, creating a new privileged class of their children and hangers-on.

Plutocracy 2.0

That second generation, Plutocracy 2.0, is already with us, especially in the U.S. Freeland notes that until the 1970s, sizable numbers of Ivy League graduates went into science, the arts, and public service. Few went into finance, because it paid little better than most other fields. But as superstars came to dominate finance, and their incomes rose, more bright young graduates migrated to the field.

Now, she says, the median earnings for Harvard men in 2005 were $162,000. “But almost eight per cent of the men had labor market income above $1 million, putting them in the top 0.5 per cent. An important driver of the gap was the split between the bankers and everyone else, with financiers earning 195 per cent more than their classmates.”

In effect, the plutonomy is drawing the next generation’s best and brightest into its orbit, leaving everything else (including higher education) to the fools and saints willing to stay in the 99 per cent. More and more of those graduates are themselves the children — bright or not — of plutocrats.

I saw this, without understanding it, as an alumnus-recruiter for Columbia University in the 1990s. The teenage applicants I interviewed here in Vancouver were smart, well travelled, and positively placid about the cost of tuition (then around $30,000 a year; now, much more). What was more, they considered Columbia as a fallback if they couldn’t get into Harvard or Yale, where the real connections could be made.

So it’s the plutocracy’s world; we just live in it. It funds our politics, shapes our societies, owns our universities, and outsources our jobs. Many individual plutocrats are personally admirable, but their collective efforts inevitably crowd the rest of us into poverty. Their offspring may do well, but most will regress to the mean, becoming merely rich mediocrities. Unless some talented political superstar emerges (perhaps the renegade child of a plutocrat) and turns our society around, such mediocrities will flourish for the next generation or two.

Perhaps the Chinese have the only way to limit the plutocracy. As Freeland says, “China’s plutocrats don’t fight the state because they are the state — and when any of them forget that, they are treated with summary brutality: between 2003 and 2011, at least 14 Chinese billionaires were executed.”

Source URL: http://www.alternet.org/life-among-plutocrats-what-unimaginable-wealth-does-person

Links:
[1] http://www.thetyee.ca/
[2] http://www.alternet.org/authors/crawford-kilian
[3] http://www.amazon.com/Plutocrats-Rise-Global-Super-Rich-Everyone/dp/1594204098
[4] http://www.alternet.org/tags/plutocracy
[5] http://www.alternet.org/tags/billionaires
[6] http://www.alternet.org/%2Bnew_src%2B

Wall Street CEOs are the ‘Faces of Class Warfare’

- Common Dreams staff, Published on Friday, November 30, 2012 by Common Dreams

Sen. Sanders: Wall Street CEOs are the ‘Faces of Class Warfare’

Incredulous that Wall Street investment bankers and billionaire CEOs have descended on Washington in the midst of ongoing budget talks to tell Americans that they should “lower their expectations” when it comes to the security of their retirement and future health care, Vermont Senator Bernie Sanders took to the Senate floor Thursday to call out the audacity of corporate-minded millionaires and billionaires, calling them the new “face of class warfare” in the United States.

“I find it literally beyond comprehension, that we have folks from Wall Street who received huge bailouts from the people of our country—from working families in this country—because of the greed and recklessness and illegal behavior, which Wall Street did to drive us into this recession, and now these very same people are coming here to Congress to lecture us and the American people about how we have to cut Social Security, Medicare, and Medicaid while they enjoy huge salaries and retirement benefits.”

Sanders specifically called out CEO of Goldman Sachs, Lloyd Blankfein, who has recently been making both the media rounds and consulting with lawmakers regarding the ongoing tax and budget debate in Washington during the current lame duck session. Blankfein, one of the highest paid executives on Wall Street and worth hundred of millions personally, made the comments about ‘lowered expectations’ in a recent evening news interview with CBS and said that average Americans should understand that the US simply can’t “afford” to maintain programs like Social Security and Medicare.

The facts of such sentiments, as many economists repeatedly point out, are false, but Sanders said that Blankfein delivered the familiar rightwing trope “with all the sympathy for someone struggling to get by on $14,000-a-year retirement that you’d expect from a Wall Street banker paid $16 million last year.”

Blankfein is also a member of the CEO cabal that has come together under the banner ‘Fix The Debt’ to protect the historically low tax rates of the nation’s wealthy elite while simultaneously calling for the slashing of social programs. As the Huffington Post reports:

CEOs including Blankfein have been warning that the fiscal cliff could hurt business investment, hiring and the economy as a whole, and they have been calling for cuts to the social safety net to avert it. Dozens of major CEOs, including Blankfein, are members of the CEO council of the campaign Fix the Debt, which calls for cuts to Medicare and Medicaid and vague Social Security reform to address the deficit. More than 80 CEOs, including Blankfein, also signed a recent letter calling for deficit reduction.

But as a recent report from the Institute for Policy Studies aimed to show, the ‘Fix the Debt’ campaign, which has raised $60 million to lobby for a debt deal that “would reduce corporate taxes and shift costs onto the poor and elderly,” is really just a Trojan horse designed to use an invented debt crisis to achieve long-held agenda goals.

“Think about the arrogance of these guys on Wall Street who were bailed out by the middle class of this country when their greed and recklessness nearly destroyed the financial system and now they come to Capitol Hill to lecture Congress and the American people about the need to cut programs for working families.” — Sen. Bernie Sanders

The CEOs involved in the group, including Blankfein, are trying to “pass themselves off as noble leaders who are willing to compromise in order the save America from financial ruin,” explain co-authors of the report Scott Klinger and Sarah Anderson. But the reality is that these CEOs are “leveraging the ‘Fiscal Cliff’” in order to push age old attempts to avoid paying taxes at the expense of those in need, they say.

And, as Ezra Klein points out in a recent Bloomberg op-ed, the US has an ‘austerity crisis’ not a ‘debt crisis’. Klein argues that employing the much-used term “fiscal cliff” mistates the nature of the financial and policy realities. Worse, he says, the term “provides no hint of how to solve it.”

He says, “I prefer the term ‘austerity crisis,’ which at least describes the real issue — too much austerity, imposed too quickly.”

Called by its true name or not, the CEOs behind ‘Fix the Debt’—with Lloyd Blankfein and Honeywell’s David Cote leading the charge— are using the generated panic around the talks as a way to impose their own interests and have proven unafraid to speak boldly and use their fast resources to make their case.

However, what Klinger and Anderson call ‘leverage’, Sanders simply called arrogance Thursday.

“Think about the arrogance of these guys on Wall Street who were bailed out by the middle class of this country when their greed and recklessness nearly destroyed the financial system and now they come to Capitol Hill to lecture Congress and the American people about the need to cut programs for working families,” he said.

Article printed from www.CommonDreams.org

Source URL: http://www.commondreams.org/headline/2012/11/30

Class Wars of 2012

By PAUL KRUGMAN, New York Times, November 29, 2012

On Election Day, The Boston Globe reported, Logan International Airport in Boston was running short of parking spaces. Not for cars — for private jets. Big donors were flooding into the city to attend Mitt Romney’s victory party.

They were, it turned out, misinformed about political reality. But the disappointed plutocrats weren’t wrong about who was on their side. This was very much an election pitting the interests of the very rich against those of the middle class and the poor.

And the Obama campaign won largely by disregarding the warnings of squeamish “centrists” and embracing that reality, stressing the class-war aspect of the confrontation. This ensured not only that President Obama won by huge margins among lower-income voters, but that those voters turned out in large numbers, sealing his victory.

The important thing to understand now is that while the election is over, the class war isn’t. The same people who bet big on Mr. Romney, and lost, are now trying to win by stealth — in the name of fiscal responsibility — the ground they failed to gain in an open election.

Before I get there, a word about the actual vote. Obviously, narrow economic self-interest doesn’t explain everything about how individuals, or even broad demographic groups, cast their ballots. Asian-Americans are a relatively affluent group, yet they went for President Obama by 3 to 1. Whites in Mississippi, on the other hand, aren’t especially well off, yet Mr. Obama received only 10 percent of their votes.

These anomalies, however, weren’t enough to change the overall pattern. Meanwhile, Democrats seem to have neutralized the traditional G.O.P. advantage on social issues, so that the election really was a referendum on economic policy. And what voters said, clearly, was no to tax cuts for the rich, no to benefit cuts for the middle class and the poor. So what’s a top-down class warrior to do?

The answer, as I have already suggested, is to rely on stealth — to smuggle in plutocrat-friendly policies under the pretense that they’re just sensible responses to the budget deficit.

Consider, as a prime example, the push to raise the retirement age, the age of eligibility for Medicare, or both. This is only reasonable, we’re told — after all, life expectancy has risen, so shouldn’t we all retire later? In reality, however, it would be a hugely regressive policy change, imposing severe burdens on lower- and middle-income Americans while barely affecting the wealthy. Why? First of all, the increase in life expectancy is concentrated among the affluent; why should janitors have to retire later because lawyers are living longer? Second, both Social Security and Medicare are much more important, relative to income, to less-affluent Americans, so delaying their availability would be a far more severe hit to ordinary families than to the top 1 percent.

Or take a subtler example, the insistence that any revenue increases should come from limiting deductions rather than from higher tax rates. The key thing to realize here is that the math just doesn’t work; there is, in fact, no way limits on deductions can raise as much revenue from the wealthy as you can get simply by letting the relevant parts of the Bush-era tax cuts expire. So any proposal to avoid a rate increase is, whatever its proponents may say, a proposal that we let the 1 percent off the hook and shift the burden, one way or another, to the middle class or the poor.

The point is that the class war is still on, this time with an added dose of deception. And this, in turn, means that you need to look very closely at any proposals coming from the usual suspects, even — or rather especially — if the proposal is being represented as a bipartisan, common-sense solution. In particular, whenever some deficit-scold group talks about “shared sacrifice,” you need to ask, sacrifice relative to what?

As regular readers may know, I’m not a fan of the Bowles-Simpson report on deficit reduction that laid out a poorly designed plan that for some reason has achieved near-sacred status among the Beltway elite. Still, at least you can say this for Bowles-Simpson: When it talked about shared sacrifice, it started from a “baseline” that already assumed the end of the high-end Bush tax cuts. At this point, however, just about all the deficit scolds seem to want us to count the expiration of those cuts — which were sold on false pretenses, and were never affordable — as some kind of big giveback by the rich. It isn’t.

So keep your eyes open as the fiscal game of chicken continues. It’s an uncomfortable but real truth that we are not all in this together; America’s top-down class warriors lost big in the election, but now they’re trying to use the pretense of concern about the deficit to snatch victory from the jaws of defeat. Let’s not let them pull it off.

http://www.nytimes.com/2012/11/30/opinion/krugman-class-wars-of-2012.html?comments#permid=1

Redistributing wealth upward by Harold Meyerson

Washington Post, September 25, 2012

excerpt

Which is the more redis­tri­b­u­tion­ist of our two par­ties? In recent decades, as Repub­li­cans have devoted them­selves with laser-like inten­sity to redis­trib­ut­ing America’s wealth and income upward, the evi­dence sug­gests the answer is the GOP.

The most obvi­ous way that Repub­li­cans have robbed from the mid­dle to give to the rich has been the changes they wrought in the tax code — reduc­ing income taxes for the wealthy in the Rea­gan and George W. Bush tax cuts, and cut­ting the tax rate on cap­i­tal gains to less than half the rate on the top income of upper-middle-class employees.

The less widely under­stood way that Repub­li­cans have helped redis­trib­ute wealth to the already wealthy is by chang­ing the rules. Mar­kets don’t func­tion with­out rules, and the rules that Repub­li­can pol­i­cy­mak­ers have made since Ronald Rea­gan became pres­i­dent have con­sis­tently depressed the share of the nation’s income that the mid­dle class can claim….

The only time in U.S. his­tory when work­ers sub­stan­tially ben­e­fited from pro­duc­tiv­ity gains was the three decades that fol­lowed World War II, when median house­hold income and pro­duc­tiv­ity gains both increased by 102 per­cent. Not coin­ci­den­tally, that was also the only period of gen­uine union power in U.S. his­tory, and the time when the tax code was at its most pro­gres­sive. Dur­ing the past quarter-century, as pro­gres­siv­ity was less­ened and unions dimin­ished, all pro­duc­tiv­ity gains have gone to the wealth­i­est 10 per­cent, accord­ing to research pub­lished by the National Bureau of Eco­nomic Research. In 1955, at the height of union strength, the wealth­i­est 10 per­cent received 33 per­cent of the nation’s per­sonal income. In 2007, they received 50 per­cent, Eco­nomic Pol­icy Insti­tute data show. If that’s not redis­tri­b­u­tion, I don’t know what is.

Indeed, the United State­s has expe­ri­enced an upward redis­tri­b­u­tion so pro­found that it affects far more than incomes. Whole sec­tors of the econ­omy and regions of the coun­try have been dec­i­mated by these eco­nomic changes. The descent in all man­ner of social indexes is most appar­ent among poorly edu­cated whites…over the past 30 years? Many Democ­rats have been com­plicit in this calamity by their indif­fer­ence to the con­se­quences of dereg­u­la­tion and trade. But the tro­phy for pro­mot­ing the poli­cies that have redis­trib­uted wealth, fam­ily sta­bil­ity and longevity upward goes to the Repub­li­cans, whose standard-bearers are cham­pi­oning even more rad­i­cal ver­sions of these poli­cies today…

Full text

Which is the more redistributionist of our two parties? In recent decades, as Republicans have devoted themselves with laser-like intensity to redistributing America’s wealth and income upward, the evidence suggests the answer is the GOP.

The most obvious way that Republicans have robbed from the middle to give to the rich has been the changes they wrought in the tax code — reducing income taxes for the wealthy in the Reagan and George W. Bush tax cuts, and cutting the tax rate on capital gains to less than half the rate on the top income of upper-middle-class employees.

The less widely understood way that Republicans have helped redistribute wealth to the already wealthy is by changing the rules. Markets don’t function without rules, and the rules that Republican policymakers have made since Ronald Reagan became president have consistently depressed the share of the nation’s income that the middle class can claim.

Part of the intellectual sleight-of-hand that Republicans employ in discussions of redistribution is to reserve that term solely for government intervention in the market that redistributes income downward. But markets redistribute wealth continuously. In recent decades, markets have redistributed wealth from manufacturing to finance, from Main Street to Wall Street, from workers to shareholders. Rules made by “pro-market” governments (including those of “pro-market” Democrats) have enabled these epochal shifts. Free trade with China helped hollow out manufacturing; the failure to regulate finance enabled Wall Street to swell; the opposition to labor’s efforts to reestablish an even playing field during organizing campaigns has all but eliminated collective bargaining in the private sector.

The conservative counter to such liberal cavils is to assert that the market increases wealth, which will eventually descend on everyone as the gentle rains from heaven. Decrying such Keynesian notions as unions or federally established minimum wages, hedge fund guru Andy Kessler recently argued in the Wall Street Journal that “it is workers’ productivity that drives long-term wage gains, not workers’ wages that drive growth.”

But Kessler assumes — and this is the very essence of the “trickle-down” argument — that workers reap the rewards of productivity gains. Believing and asserting that requires either ignorance or willful denial of economic history. The only time in U.S. history when workers substantially benefited from productivity gains was the three decades that followed World War II, when median household income and productivity gains both increased by 102 percent. Not coincidentally, that was also the only period of genuine union power in U.S. history, and the time when the tax code was at its most progressive. During the past quarter-century, as progressivity was lessened and unions diminished, all productivity gains have gone to the wealthiest 10 percent, according to research published by the National Bureau of Economic Research. In 1955, at the height of union strength, the wealthiest 10 percent received 33 percent of the nation’s personal income. In 2007, they received 50 percent, Economic Policy Institute data show.

If that’s not redistribution, I don’t know what is.

The problem is not just that everyone but the wealthy is claiming a smaller share of the nation’s income; the absolute amount of income they’re getting is declining as well. Median household income has dropped to the levels of the mid-1990s, according to Pew analysis of census data, while the income of the 400 wealthiest Americans rose by a tidy $200 billion last year, according to data released this month by Forbes magazine.

If that’s not redistribution, I don’t know what is.

Indeed, the United Stateshas experienced an upward redistribution so profound that it affects far more than incomes. Whole sectors of the economy and regions of the country have been decimated by these economic changes. The descent in all manner of social indexes is most apparent among poorly educated whites. Conservative commentator Charles Murray has documented in his new book the decline in marriage rates and family stability within the white working class. And now, as the New York Times’ Sabrina Tavernise has reported, that decline includes longevity as well. While other Americans’ life expectancy has advanced, the life expectancy of whites without high school diplomas has declined since 1990 — by three years among men and five years among women.

The market is not just redistributing income in theUnited States, then. It is redistributing life.

So, which party can claim credit for this — the real redistribution this nation has experienced over the past 30 years? Many Democrats have been complicit in this calamity by their indifference to the consequences of deregulation and trade. But the trophy for promoting the policies that have redistributed wealth, family stability and longevity upward goes to the Republicans, whose standard-bearers are championing even more radical versions of these policies today.

A pro-life party? More like its opposite.

meyersonh@washpost.com  

http://www.washingtonpost.com/opinions/harold-meyerson-the-party-that-truly-believes-in-redistribution/2012/09/25/c5877b7a-0740-11e2-afff-d6c7f20a83bf_story.html?wpisrc=nl_headlines