Maybe Sarah Palin and all the social conservatives before her are right – live out here in Los Angeles, and particularly in Hollywood, and you develop a different sense of things. They chatter on about Hollywood Values, or the obvious lack of them, and then drift off into dreamy-eyed talk of Real Americans. That’s a little irritating, as if those of us who live out here will soon need a passport to visit Iowa, after we drop by the Iowa Consulate on Wilshire and pick up our limited tourist visa, granted if we can prove we’re not terrorists or something. Iowa is nice enough, but it’s not that nice. And Long Beach is a short drive down the Harbor Freeway – founded by folks from Iowa. It will do. Of course it’s multicultural now – Spanish is useful in places, and Thai and Vietnamese, and for a time they had a problem with those Tongan gangs. And across the harbor in San Pedro half of everybody is Croatian, with others muttering at you in Portuguese. Nope, there really is no Iowa here. We put that in that in the Field of Dreams movie for the rest for you. Is this heaven? No, it’s Iowa. It was a good line.
And if you want to believe that’s the real America knock yourself out. But, as much as all the social conservatives hate the idea, this is America too. And just east of Hollywood is Echo Park – with its odd Mack Sennett and Laurel and Hardy history, where all the Keystone Cops shorts were filmed. Now it’s something else. Sometimes it’s excruciatingly hip and the next moment it’s like walking around a sleepy little city in El Salvador. And there’s Aimee Semple McPherson’s big Angeles Temple – from the Elmer Gantry days of tent meetings and the Scopes Monkey Trial. Frank Zappa and Charles Bukowski lived here too, and Jerry Rubin had a law office here for years. Cool place. It’s not Iowa, but it’s America too.
And drive east on Sunset Boulevard, through Echo Park on your way to the city, and just past the oddly named Elysian Park Avenue, on your right, there’s a concrete-lined trash-filled lot carved out of the hill – what’s left of the foundation of some minor building that burned down long ago. It’s now an impromptu art gallery – the latest street art, ever changing. It’s a bit of a secret, so don’t tell anyone. But here is where capitalism and nationalism face off against common decency with this sort of thing – another assertion that we’re all in this together. We may not be family. We may be quite different from each other in all sorts of ways. But we’re all in this together.
It’s odd that anyone has to assert that. It didn’t used to be like that. We’re all in this together. That got the Greatest Generation through the Good War. But maybe the word community is too close to the word communism – and Obama used to be a community organizer. Horrors – he never ran a big business where he had to make money or go under. That was the problem, although no one mentioned that neither McCain nor Palin did either. Ah well – it was the word community that was used against him. What did he know of the hard reality of the winner-take-all world? That was the issue. McCain had killed people from an airplane. Palin has shot wolves from an airplane. Image matters.
And that Obama won the presidency – people for a short time, in a small window, seemed to be longing for a real sense of national community – settled nothing. This sort of thing has been going on for a long time.
Jacob Hacker and Paul Pierson explore this in their recent book Winner-Take-All Politics: How Washington Made the Rich Richer – and Turned Its Back on the Middle Class – getting a lot of buzz these days. They argue that middle-class wage stagnation and growing income inequality are due to political decisions over the past thirty years as much as they are due to broad economic trends. Yeah – globalization and outsourcing – the world is flat – and the digital revolution and amazing automation of what no one expected could be automated is there. All that is real enough, but they examine what they consider a thirty-year war of sorts. Corporate coalitions, lobbying, tax policies geared to the wealthy, and the recent absurd use of the “rule of sixty” filibuster – that matters too. You can try to make things fairer but you cannot catch up with economic realities in time, and serious powers block attempts at reform. Moderates used to be the swing vote, now radical conservatives are, and unions are powerless while lobbying public interest groups are more powerful than the government in many ways. Obama is the anomaly here.
And Bob Herbert, in his last column for the New York Times, captures it nicely:
So here we are pouring shiploads of cash into yet another war, this time in Libya, while simultaneously demolishing school budgets, closing libraries, laying off teachers and police officers, and generally letting the bottom fall out of the quality of life here at home.
Welcome to America in the second decade of the 21st century. An army of long-term unemployed workers is spread across the land, the human fallout from the Great Recession and long years of misguided economic policies. Optimism is in short supply. The few jobs now being created too often pay a pittance – not nearly enough to pry open the doors to a middle-class standard of living.
It is winner-take-all time:
Limitless greed, unrestrained corporate power and a ferocious addiction to foreign oil have led us to an era of perpetual war and economic decline.
He seems to think we’ve misplaced our priorities:
When the most powerful country ever to inhabit the earth finds it so easy to plunge into the horror of warfare but almost impossible to find adequate work for its people or to properly educate its young it has lost its way entirely.
Nearly fourteen million Americans are jobless and the outlook for many of them is grim. Since there is just one job available for every five individuals looking for work, four of the five are out of luck. Instead of a land of opportunity, the U.S. is increasingly becoming a place of limited expectations. A college professor in Washington told me this week that graduates from his program were finding jobs, but they were not making very much money, certainly not enough to think about raising a family.
Sure we have lots of cool economic activity and plenty of wealth:
But like greedy children, the folks at the top are seizing virtually all the marbles. Income and wealth inequality in the U.S. have reached stages that would make the third world blush. As the Economic Policy Institute has reported, the richest 10 percent of Americans received an unconscionable 100 percent of the average income growth in the years 2000 to 2007, the most recent extended period of economic expansion.
Americans behave as if this is somehow normal or acceptable. It shouldn’t be, and didn’t used to be. Through much of the post-World War II era, income distribution was far more equitable, with the top 10 percent of families accounting for just a third of average income growth, and the bottom 90 percent receiving two-thirds. That seems like ancient history now.
It seems that what is normal or acceptable does change over time. General Electric, the nation’s largest corporation, did not have to pay any taxes last year, at least in the United States, on their over fourteen billion in profits. They got a refund. That’s where your tax dollars went. Its chief executive, Jeffrey Immelt, is the leader of President Obama’s Council on Jobs and Competitiveness. Americans behave as if this is somehow normal or acceptable, or they just don’t do irony.
But most folks shrug:
So the corporations and the very wealthy continue to do well. The employment crisis never gets addressed. The wars never end. And nation-building never gets a foothold here at home.
And so it goes. And see T. A. Frank, in the Washington Monthly, with this – Why Is Bob Herbert Boring?
It seems Herbert is too obvious. And as for that winner-take-all stuff from Jacob Hacker and Paul Pierson, Kevin Drum finds their arguments persuasive, but says there’s no question that this is a tough case to make:
After all, exactly which political decisions are we talking about? Can we point to specific pieces of legislation or specific agency decisions that have retarded wage growth? In fact, we can—things like tax policy, financial deregulation, the decline of antitrust enforcement, and anti-union rulings by the NLRB all played a role. By themselves, though, these just aren’t enough to account for what’s happened. So what’s the smoking gun when it comes to the impact of politics on wage stagnation and growing income inequality?
He suggests that Lane Kenworthy had it right, arguing that the abandonment in recent decades of full employment as even a rhetorical goal of American economic policy:
The post–World War II experiences of the rich democracies suggest three routes to rising working- and middle-class wages. One is an environment in which firms face only moderate competition in product markets and limited pressure from shareholders, allowing them to pass on a significant share of growth to their employees. This characterized the period from the late 1940s through the mid 1970s, but it’s now long gone. The second is strong unions. I see little hope of that in America’s future. The third is full employment.
But the problem is that full employment is only possible if the Federal Reserve is committed to it, and that is clearly no longer the case:
Since the late 1970s, independent central banks such as the Fed almost always have prioritized low inflation, rendering low unemployment difficult to achieve. If the Fed isn’t on board, even a workable plan for full employment supported by the American public and our elected officials probably won’t be enough.
Following the stagflation of the 70s, conservatives decisively took over Fed policy and put it in the service of the wealthy, prioritizing low inflation over low unemployment and tacitly promising bailouts whenever Wall Street found itself in danger (a practice charmingly known as the “Greenspan put”).
And that leads to Matthew Yglesias arguing that progressives need to take the Fed far more seriously if they ever want to have any chance of reversing this:
Central banks and monetary policy are the primary determinant of short-term economic conditions – of the unemployment rate, and thus of workers’ ability to bargain for wages. This is, clearly, a hugely important subject in its own right. But it’s also a critical determinant of overall political conditions. …
But when Barack Obama was elected in 2008, he rather hastily chose to reappoint [Ben] Bernanke, creating a situation in which no Democrat has held the most important domestic policy job in the land since 1987. He inherited two vacancies on the Board of Governors that he left open for over a year, only putting names forward after a third vacancy emerged in 2010…. Of course, no one can know for sure what the Fed would have done had Obama picked someone other than Bernanke to chair it or filled the vacancies more rapidly. But it’s certainly plausible that different personnel would have led to swifter and more forceful moves toward monetary stimulus, a more rapid end to the recession, and a lower unemployment rate.
Drum buys that:
A lot has happened over the past thirty years, but if you’re looking for a single political sea change that’s had the biggest impact on middle class wages – more important than union decline, more important than NAFTA, more important than the end of Glass-Steagall – it’s the political consensus that underlies the Fed’s reluctance to allow labor markets to stay tight enough to generate wage increases in the real economy. And it’s something we’re seeing all over again right now, as the DC chattering classes have almost unanimously decided that inflation is our real enemy right now, even though core inflation is running around 1% and unemployment is still near 9%.
This is a policy beloved of the business community, which prefers loose labor markets that keep wages low and executive compensation high, but it hasn’t always been the Fed’s policy and it’s not written in stone that it has to be now. Tight labor markets and rising middle-class wages are, to a large extent, a choice we make. Politics took them away thirty years ago, and politics can return them to us if we want.
In which alternative universe would that be?
Digby covers that here – the current budget debate comes down to two competing messages – 1) the Republicans need to convince the people that the way boost the economy and create jobs is to eliminate the deficit, and 2) the Democrats need to convince people that the way to eliminate the deficit is to create jobs and boost the economy. Yes. There is no way they could ever match up. Cutting spending will reduce uncertainty and encourage the private sector to make investments that will grow our economy – that is the Republican line. But why would they invest? There is no one buying anything. They’re out of work, or just hanging on.
But she also cites this:
The paper makes the party’s anti-Keynesian case that fiscal consolidation (read: spending cuts) can spur immediate economic growth and reduce unemployment. But in making that case, the Republicans may also have given Democrats some political ammunition.
For example, the paper predicts that cutting the number of public employees would send highly skilled workers job hunting in the private sector, which in turn would lead to lower labor costs and increased employment. But “lowering labor costs” is economist-speak for lowering wages – does the GOP want to be in the position of advocating for lower wages for voters who work in the private sector?
Personally, I think it goes without saying that they want to lower wages and I don’t know why the Democrats haven’t been pounding them for it relentlessly already. I am, however, surprised that they’d openly attach themselves to it.
Well, almost everyone buys into the winner-take-all mentality – even Democrats. That’s why there’s the angry street art east of Echo Park.
And of course they bought this stuff in Texas:
When Texas Gov. Rick Perry (R) gave his annual state address he promised that his plan to fill the Lone Star state’s $27 billion budget gap without raising any new revenue would lead to economic prosperity and job growth. “Balancing our budget without raising taxes will keep us moving forward out of these tough economic times, creating more jobs and opportunity and leaving Texas more competitive than ever,” he said. “As other states flounder about, oppressing their citizens with more taxes and driving away jobs with bad policy, Texas will make the right decisions, and emerge stronger.”
However, the bipartisan Legislative Budget Board found that the budget before the legislature could cause the state to lose 600,000 jobs, including more than 260,000 in the private sector:
Texas could see more than 600,000 jobs disappear if lawmakers adopt the $83.8 billion budget that will go before the state House late next week, according to a state agency. Harsh spending cuts in the budget could cost more than 263,500 private sector jobs and 343,000 government positions over the next two years, according to estimates released Wednesday by the Legislative Budget Board, a bipartisan committee.
But Perry won’t even bother to address that. All those folks lose their jobs? Who said we are in this together?
And Steve Benen has the other tale:
Last week, facing the latest in a series of deadlines, there was bipartisan support for another budget extension, funding the federal government through April 8. It gave policymakers three weeks to craft a deal that would finance the rest of the fiscal year, and discussions have been quietly ongoing.
So, has there been any progress? Not really.
Yesterday morning, Sen. Chuck Schumer (D-N.Y.) expressed some optimism, saying he’s “feeling better” about the prospects for a larger compromise than he had been. As for completing a package that would prevent a shutdown in the short term, Schumer added he’s seen “some progress.”
A few hours later, House Majority Leader Eric Cantor (R-Va.) issued a statement saying the negotiations are going nowhere, and said Democrats who refuse to give Republicans what they want should be blamed.
And everyone agrees this process isn’t going well:
With time running short and budget negotiations this week having reached an angry impasse, Congressional leaders are growing increasingly pessimistic about reaching a bipartisan deal that would avert a government shutdown in early April.
Senior Democratic officials involved in high-level efforts to bring House Republicans, Senate Democrats and the White House to a budget agreement said that while some progress had been made toward an accord on an overall level of spending cuts, the parties remained divided on the final figure and had to resolve the fate of ideologically charged policy provisions demanded by House conservatives.
Republicans will not go “too far below” the sixty-one billion in cuts approved by the House, and they will not debate which parts of the budget the cuts can come from as an alternative, and as for combining cuts with even modest tax increases on the wealthy – as Benen notes, an idea with broad public support – that is entirely out of the question. And that’s that. Defund the EPA and the Centers for Disease Control and IRS Collection and the SEC, and start the shutdown of Social Security – or no dice, we shut down the government. And Benen notes:
There are 13 days left to work something out, but given the extremism and inflexibility of the hysterical House Republican caucus, I can’t find anyone who thinks a deal is likely. As a quantitative matter, I’d say the likelihood of a shutdown on April 8 is at least 85%, if not higher.
It’s a winner-take-all world. We’re not all in this together. Is this heaven? No, it’s Iowa.