Lyndon Johnson, Yes. William Jennings Bryan, No.

Paul Krugman:

The Big Disconnect - New York Times: There are still some pundits out there lecturing people about how great the economy is. But most analysts seem to finally realize that Americans have good reasons to be unhappy with the state of the economy: although G.D.P. growth has been pretty good for the last few years, most workers have seen their wages lag behind inflation and their benefits deteriorate.... [T]he disconnect didn't begin with Mr. Bush, and it won't end with him, unless we have a major change in policies.... The real wage of nonsupervisory workers reached a peak in the early 1970's, at the end of the postwar boom. Since then workers have sometimes gained ground, sometimes lost it, but they have never earned as much per hour as they did in 1973. Meanwhile, the decline of employer benefits began in the Reagan years.... The most crucial benefit, employment-based health insurance, has been in rapid decline since 2000.

Ordinary American workers seem to understand the long-term disconnect between economic growth and their own fortunes better than most political analysts.... The [Pew] center finds that workers perceive a long-term downward trend in their economic status. A majority say that it's harder to earn a decent living than it was 20 or 30 years ago, and a plurality say that job benefits are worse too....

Workers' concern about worsening benefits is new... the health care crisis is back, both because medical costs are rising rapidly and because we're living in an increasingly Wal-Martized economy, in which even big, highly profitable employers offer minimal benefits. Employment-based insurance began a steep decline with the 2001 recession, and the decline has continued in spite of economic recovery....

Why have workers done so badly in a rich nation that keeps getting richer? That's a matter of dispute, although I believe there's a large political component: what we see today is the result of a quarter-century of policies that have systematically reduced workers' bargaining power. The important question now, however, is whether we're finally going to try to do something about the big disconnect. Wages may be difficult to raise, but we won't know until we try. And as for declining benefits -- well, every other advanced country manages to provide everyone with health insurance, while spending less on health care than we do.

The big disconnect, in other words, provides as good an argument as you could possibly want for a smart, bold populism. All we need now are some smart, bold populist politicians.

I'm enough of a believer in CPI bias to want to say "real compensation for male nonsupervisory workers has stagnated since 1973"--I think it has grown, but only very slowly, and much less rapidly than productivity.

On the other hand, I'm enough of a touchy-feey sociology-lover to believe that a good chunk of the utility the rich derive from their conspicuous consumption is transferred to them from the poor: the happiness America's working poor and middle class derive from the compensation distribution--given their compensation, the compensation of the rich, and the lifestyles of the rich and famous--seems to me to be certainly less than that of their counterparts back in 1973.

The easiest and most important thing the government can do to neutralize the adverse consequences of rising inequality is to make the tax system more progressive, not less. A reality-based government would react to growing pretax inequality by taxing the rich more, and subsidizing the poor more (through policies like the EITC) as well.

But when I read Paul's call for "smart, bold populism," I am reminded of earlier calls a couple of decades ago by Milton Friedman, Marty Feldstein, and their ilk for smart, bold conservatism or smart, bold libertarianism. But they did not get what they ordered: on the economic policy front the policies of Reagan and of Bush II have been a horrible botch. What populist policies that we can think of would be smart? And how can we make our high politicians allergic to populist policies that are stupid?

Lyndon Johnson, yes. William Jennings Bryan, no.

Comments

[howard]

prof, i assume brother paul means, first and foremost, returning to the fight for a national health-care system, and i assume you agree.

[CalDem]

Big swing and miss on this one Brad. Secondary measures (tax emasures) to combat income inequality are difficult and seem very unfair. What Paul and many others are talking about are primary measures such as increasing the ability of unions to organize via card check laws and repeal of Taft laws and increasing the minimum wage. And also, of course, universal health care. I would add a return to a more generous set of bankruptcy law. You should make the argument against these policies if you don't like them.

[kim]

Brad: "I am reminded of earlier calls a couple of decades ago by Milton Friedman, Marty Feldstein, and their ilk for smart, bold conservatism or smart, bold libertarianism. But they did not get what they ordered: on the economic policy front the policies of Reagan and of Bush II have been a horrible botch."

I don't know. Seems like they got most of what they wanted (lower tax rates, privatization of public institutions). The only thing they didn't get was less spending in real terms. Don't fault Friedman and Feldstein for that.

I think Paul's point is that a new populist movement will be needed to restore the balance between capital and labor in this country. Until that happens, we shouldn't expect the plight of the middle class to improve. Johnson was a "populist" only to the extent that Martin Luther King and other civil rights leaders of the time made him so. Otherwise, do you really think that Johnson would have initiated the War on Poverty all on his own? We need more Martin Luther Kings...

[David]

We need economists to help us identify and quanitfy the government subsides to rich people. Not just the falling progressivity of tax rates, but other tax provisions that favor the rich starting with the reduced rates on dividends, tax benefits for businesses, including the research and development credit and the production deduction. There seem to be some big subsidies for agriculture that end up further enriching the already wealthy. Then there are the import restrictions on sugar and many other commodities that directly help some businesses and hurt poor consumers. Populisim is a hard sell in this country full of optimists who all seem to think they will be rich some day, but perhaps if we gave progressive politicians more ammunition to show how current government policies favor those who do not need government help, it would help make the case for more populist policies.

[Fetal Farmer]

Re: Populist Policy

Most of us have stopped watching cable and network news programs. For those who may peek at them now and again, however, a bleak picture appears. Our discourse is guided by inane sound bites; for example, those crafted to support the cutting of taxes, whether it be rising tides that lift all boats or speculation that taxpayers know best how to spend their hard-earned money.

Media concentration is one-sided now, resting in the hands of the wealthy venal. Since the air waves belong to the public, it follows that the public should take them back.

[Joe S.]

Smart populism? "Medicare for everybody." "Repeal the debt slavery act." "Make the rich pay their share."

[BruceW07]

"I am reminded of earlier calls a couple of decades ago by Milton Friedman, Marty Feldstein, and their ilk for smart, bold conservatism or smart, bold libertarianism. But they did not get what they ordered: on the economic policy front the policies of Reagan and of Bush II have been a horrible botch."

(I know I am repeating what kim said.)

Friedman and Feldstein did get what they wanted most, which was to redistribute income from the poor and middle class to the very rich. Even if Brad DeLong cannot find the mechanism, they certainly knew what they were doing, and what they were advocating, and what the effect would be.

I do not know why it is so difficult for some liberals to recognize that conservatives and liberatarians do not want what you want. Greg Mankiw is not in common cause with decent people.

[John Emerson]

People autimatically think the worst about populism, but the Minnesota Farmer-Labor Party which ran Minnesota during the Thirties did a lot of great stuff, and it was populist. Some FL people were definitely socialists, and some tended more toward isolationism, but the party began a tradition which is still alive today. I really think that heilbroner overstated his case.

So anyway, the late Paul Wellstone as good populist madel.

[kim]

Brad: "The easiest and most important thing the government can do to neutralize the adverse consequences of rising inequality is to make the tax system more progressive, not less."

Hey, I agree. However, the top 1% are already paying 33% of the income tax. If we restored the effective tax rate to 1986 levels, their share would maybe rise to 45% of the total (see http://www.irs.gov/pub/irs-soi/03in05ty.xls). If we do this don't be surprised if some of these rich folks decide to resist an increase in their tax burden thru evasion or creative tax legislation unless they have a damn good reason to feel that higher taxes are justified (maybe like an overland invasion by the Chinese Army). Unfortunately, being a "good" citizen isn't enough for most people (rich, poor, and people in between) to accept a large increase in their tax burden for "nothing" in return.

[STS]

kim:

Right on about MLK -- today's Democratic politicians hesitate to be assertively populist because there is a lack of a broad populist movement to back them up. Unions in decline plus "conservative" mega-churches on the rise equals Republican-leaning popular support.

What we need from the academic crowd is respectable intellectual cover for a populism that isn't "socialist" (dirty word) or isolationist, nationalist or protectionist. On what basis do the masses/classes in the US work together? The current deal is "God talk for the poor, buckets of cash for the rich". If socialism isn't the answer to that, what is? Ideas needed!

These aren't likely to be forthcoming (or at least become widely understood) until after a major recession gets well underway. Meantime, because times are good for the owners of capital, returns to labor are going to continue to decline toward a global equilibrium point well south of what we've been accustomed to. The Republican bet is: it'll be gradual and workers will "get used to it" without a lot of unpleasantness. The Democratic bet: this could get nasty.

[dubblblind]

"what we see today is the result of a quarter-century of policies that have systematically reduced workers' bargaining power."

It is worth mentioning that Americans had the gumption to fight for that bargaining power originally. Americans have neither the stomach nor the spine to do it today. (They're content with JonBenet Ramsey 24/7.) This has not been lost on big business and the current crop of politicians who are only too happy to live in a nation full of sheep who make no demands.

[Jim]

Maybe the "return" rather than nothing will be preventing the squeezed middle class and poor from "taking to the streets" as Kevin Phillips wrote about. Of course the plutocratice/religious/corporate Republican "geniuses," the Roves, and the think tanks will devise a strategy to turn their anger to social issues, like the Saudi leadership turns the "Arab street's" anger at what they live like in a very rich country, toward Israel.

[JRoth]

"What populist policies that we can think of would be smart? And how can we make our high politicians allergic to populist policies that are stupid?

Lyndon Johnson, yes. William Jennings Bryan, no."

And this is, to a T, why we had to spend last week discussing how could we have this curious result that the rich have gotten richer, and the rest of us (as in, the other 99%) have gotten next-to-nothing. All due respect, but liberals like Prof. DeLong don't merely bring a knife to a gunfight; they deny there's a gunfight, and struggle to explain the shrapnel felling their comrades.

Republicans are already using the worst aspects of populism - xenophobia, racism, and implicit anti-Semitism* - to further their anti-popular economic policies. Hell, if Dem populists wanted to use unsavory populism to abet economic populism, I'm not sure they'd be able to wrest the Know-Nothing appeals from Republicans' cold, dead hands.

As Tom Franks suggests in the Times today, let's win now with policies that help the 75% of Americans falling behind, expressed simply, and fret about the decadent era of our policies when it arrives, if it ever does.

* Nearly every adjective applied to liberals and the media - coastal, cosmopolitan, elite, etc. - is identical with universally-understood anti-Semitic code of just 60 years ago.

[Cranky Observer]

Funny thing about economists: they are all so free-market, free-trade, libertarian and all. But they all work their butts off to get tenure, which is basically a Marxist concept

[Bruce Bartlett got fired for saying what he thought about President Bush. Bruce didn't have tenure. Tenure is a good thing for an economist interested in politics to have.]

[anne]

http://select.nytimes.com/2006/09/01/opinion/01frank.html

September 1, 2006

Rendezvous With Oblivion
By THOMAS FRANK

Over the last month I have tried to describe conservative power in Washington, but with a small change of emphasis I could just as well have been describing the failure of liberalism: the center-left's inability to comprehend the current political situation or to draw upon what is most vital in its own history.

What we have watched unfold for a few decades, I have argued, is a broad reversion to 19th-century political form, with free-market economics understood as the state of nature, plutocracy as the default social condition, and, enthroned as the nation's necessary vice, an institutionalized corruption surpassing anything we have seen for 80 years. All that is missing is a return to the gold standard and a war to Christianize the Philippines.

Historically, liberalism was a fighting response to precisely these conditions. Look through the foundational texts of American liberalism and you can find everything you need to derail the conservative juggernaut. But don't expect liberal leaders in Washington to use those things. They are "New Democrats" now, enlightened and entrepreneurial and barely able to get out of bed in the morning, let alone muster the strength to deliver some Rooseveltian stemwinder against "economic royalists."

Mounting a campaign against plutocracy makes as much sense to the typical Washington liberal as would circulating a petition against gravity. What our modernized liberal leaders offer — that is, when they're not gushing about the glory of it all at Davos — is not confrontation but a kind of therapy for those flattened by the free-market hurricane: they counsel us to accept the inevitability of the situation and to try to understand how we might retrain or re-educate ourselves so we will fit in better next time.

This last point was a priority for the Clinton administration. But in "The Disposable American," a disturbing history of job security, Louis Uchitelle points out that the New Democrats' emphasis on retraining (as opposed to broader solutions that Old Democrats used to favor) is merely a kinder version of the 19th-century view of unemployment, in which economic dislocation always boils down to the fitness of the unemployed person himself....

[STS]

Brad,

Assuming yours are the bracketed remarks: [Bruce Barlett got fired ...] I think you're missing Cranky's intended irony.

Most liberal economists are careful to trash Marx and all things even faintly socialist, yet rely critically for their ability to speak out at all on a "socialist" institution: tenure.

Tenure *is* a form of "labor market inflexibility" such as those nefarious "sclerotic" Europeans indulge in, no?

[Denis Drew]

"The easiest and most important thing the government can do" is reset the bargaining power of American labor to match ownership's by making union organizing as free as voting -- if necessary by making it a constitutional right. Do that and every government other policy -- domestic and foriegn -- will become much more humanized, automatically.

[Sonia]

The median worker is unlikely to respond to a call for national health insurance since the median worker already has health insurance that provides him care he believes to be satisfactory at a cost that is generally nearly hidden. Median worker earnings have increased considerably more than median wages when the value of the median worker's employer health insurance is taken into account.

Futhermore gains in the stock market and in residential values have allowed many workers to consume more than their after tax wages. Yes real median wages are barely more than flat but consider the size of the median home, the new flat screen TY and the size of the median worker's car today versus 1970. Consumption not income is probably the metric that matters most to the median worker.

[joan]

The Democrats should stop talking about poverty and start talking about Middle America, such as John Edwards "Two Americas" speech. The Republican are willing support programs that help the destitute when it is politically expedient. It is a lot cheaper for the rich taxpayers than programs for the middle class such as social security and national health care. Republicans have successfully convinced the public of two half truths. One, that people are need help because the have a character defect which has enough truth in it to be effective, especially for the destitute. This has the effect of reducing public’s support for programs for the poor and reducing the probability that the average worker will think of himself as needing help from the government. Two that the health care received by the average American is better than the average care received under national health care in other countries. Our best may be better, but the best is available only to a select few. Any hope of real reform must start with a refutation these half truths.

[andres]

As a brief aside, I think Brad is being not quite fair to William Jennings Bryan. Bryan's only major platform item, recited over and over, was to shift to a gold _and_ silver standard as opposed to just relying on gold, i.e. a looser monetary policy. Considering that the US had two major recessions between 1896 and 1916, and that the situation of family farmers became increasingly desperate due to higher debt and higher interest rates during those years, Bryan's "cross of gold" populism may not have been as economically unsound as his critics believe.

One more thing: you're deeply mistaken, Brad, if you believe that Bill Clinton was a smart, bold, populist president. Smart, yes. But neither Clinton nor his advisors understood that in order to reverse the decay of the political process towards corporate fascism, they needed to undertake some serious political reform, starting with the news media. Without such reform, smart, bold, populist economic policies will never become a reality.

[howard]

joan, while i think your broader points are worth remembering, actually, the average working person has .6 of medical insurance. And i betcha that the 60% isn't distributed in a bell-shape curve, either.

[Jonathan Goldberg]

"I don't know. Seems like they got most of what they wanted (lower tax rates, privatization of public institutions). The only thing they didn't get was less spending in real terms. Don't fault Friedman and Feldstein for that."

I do fault them for it. The present situation is the totally predictable consequence of applying their policies to the real world.

Actually, Friedman has annoyed me recently by his support for the Bush tax cuts. He says (paraphrase) "I don't believe that we get enough for the amount we spend on government." He then supports Federal tax cuts (while including State and Local taxes in his bill) without specifying which of the four categories* of Federal spending he wants to cut. I find this dishonest.

*The categories being: interest on the national debt, defense, transfer payments, principly Social Security and Medicare, and everything else. The fourth category was a little less than 15% of the total the last time I saw numbers.

[wml]

"As a brief aside, I think Brad is being not quite fair to William Jennings Bryan. Bryan's only major platform item, recited over and over, was to shift to a gold _and_ silver standard as opposed to just relying on gold, i.e. a looser monetary policy. Considering that the US had two major recessions between 1896 and 1916, and that the situation of family farmers became increasingly desperate due to higher debt and higher interest rates during those years, Bryan's "cross of gold" populism may not have been as economically unsound as his critics believe."

My understanding was the move to silver standard was in order to cause one quirk, massive burst of inflation. It had nothing to do with what we would call loose monetary policy today. It would of been basically a massive lump sum transfer from creditors (banks,savers) to debtors (farmers). This might be considered "bad" in that it might drive creditors out of business, and that it might undermine confidence in the right to property (why risk investing when the government has shown itself willing to redistribute property at will?)

[Wayne]

When thinking about the declining economic wellbeing of ordinary folks, it's important to look for all the ways of pushing wealth up and, at least as important, ways of pushing costs "down" the economic ladder. Here's one that often gets overlooked, which results in understating the relative decline of ordinary workers: Since 1970, and especially since the Reagan era, college (education in general) costs have skyrocketed at the same time that college degrees have increasingly become straightforward training-for-employment. People (parents, sutdents) have responded to the incredible increase in insecurity and competition by going into debt for more and more elaborate vocational training. Corporations have thus managed to shift a huge share of the cost of training workers off themselves and onto individuals. Nice deal: Wealth concentrates upwards into corporations and the wealthy elite who own so much, at the same time that much of the cost of creating that wealth is pushed off them onto ordinary folks. Wish I could find a deal like that!

[dubblblind]

"Why have workers done so badly in a rich nation that keeps getting richer? That's a matter of dispute, although I believe there's a large political component..."

Well here's a large political component, as Bushco continues it's war against the middle class:

http://blog.aflcio.org/2006/08/31/bush-makes-backdoor-appointment-to-wage-and-hour-office/

http://www.gibsondunn.com/insidegdc/whoswho/bio/?contactId=998bdda07ba02c51

[William Bennett]

William Jennings Bryan was influential in supporting the popular election of senators, the income tax, creating a Department of Labor, and woman suffrage. His monetary policy may or may not have been off the mark; I leave that to economists. It is not altogether clear to me that his support of Prohibition was misguided at the time. His opposition to Darwinism in the schools was clearly misguided, but he was engaging a still-unresolved question: at what level of society is curriculum to be determined? Is it the state, the community, or the individual teacher who determines what children will be taught? His born-again Christianity is not to my taste, and his role as one of the first politician celebrities is troublesome from the perspective of what has followed. But on the core issues of small-p progressive politics, he comes out pretty well, doesn't he?

[joan]

andres:
The point I was trying to make was that you have to be able to research your options to get the "best" health care, and since most people making important treatment decisions are too sick to do research, they just follow the advice of their doctor. Even if you have insurance you choose between the doctors that will make more money if they do minimum treatment (HMO) and doctors that make more money for maximizing test and procedures. (fee for service) The results for vast majority of people is no better maybe worse than a national health service.

[mike]

Joan wrote: "This has the effect of reducing public’s support for programs for the poor and reducing the probability that the average worker will think of himself as needing help from the government."

Perhaps I misunderstand you, but isn't it a good thing that average workers are less likely to think of themselves as needing help from the government?

[DJ]

I also want to speak out in favor of Bryan's economic policies.

Bryan wanted to loosen monetary policy during a contractionary period by loosening the gold standard. I think we can all agree that is sound policy. It is important to remember when discussing Bryan that he was speaking from the perspective of decades of deflation. Prices were lower in 1896 than they were during the Civil War. So, it is wrong to say that Bryan advocated inflation. He advocated reflation. That is a subtle but very important difference. We would all support reflation during a deflationary period.

Where did I learn this stuff? From my Financial History course while earning an MBA of course.

[Robert Waldmann]

Krugman almost made me shrill by talking about raising wages without mentioning taxes. Weird.

You fear William Jennings Bryan (who was dumb but what's wrong with free coinage of silver during a deflation?). Kevin Drum wonders how to explain to the American muddled middle that they are getting shafted. I think both problems have one solution. Argue for a specific policy proposal now. A simple sloganisable plan for making the tax code more progressive with brackets and tax rates and simulations of the increase in total revenues, the median families tax cut and the 95th percentile income families tax cut should solve both problems. Simple so you can explain it. A simple change would be good policy.

Am I dreaming of making Democrats agree ? Am I dreaming of making politicians make specif proposals ? Am I dreaming of politicians being forced to keep their campaign promises ? Guilty on all counts.

Drum says we should say "The Republicans Owe you $20,000" I think we should say "We Democrats will give you $2,000". That would get their attention. Also Drum is able to fudge by considering an increase in total hours worked per capita an injustice and counting women's relative gain an injustice, I would have to make the numbers add up (of course to his credit he has actually done his calculation).

A huge advantage of the telling the poorest 90% "if you vote for us we will give you $2000 plan", is that it will drive the pundits wild with rage. Strawpundit shrilly screams "that that's worse than demagogery that is bribery". Dream Democrat replies "Strawpundit is an honorable man and I am sure he believes what he says and isn't just saying it because our plan will cost him tens of thousands of dollars given his income."

[joan]

Mike:
The economics I learned said that immigration, trade and outsourcing produced gains for the country as a whole, but some workers lose. There are more than enough gains to compensate the losers. If workers suffer from government policies but receive no compensation, things get nasty, such as the anti Mexican feeling showing up now. It would be better if workers recognized their need for help and work for programs that would share the wealth. Two obvious candidates are health care and education since the government is already paying an increasing share.

[99]

***"Median worker earnings have increased considerably more than median wages when the value of the median worker's employer health insurance is taken into account.***"

Um, yes, but surely this is because health insurance is more expensive than it used to be. Just because your employer is giving you, say, nine hundred bucks worth of health insurance per month in real terms in 2006, and the total was a mere $300 per month in 1988, hardly translates into a higher standard of living. Obviously improvements in medicine are welcome, and they clearly provide a benefit to people, but the people who benefit from said improvement are largely either ill or old. A much better measure of worker well-being might be to look at how many hours the average worker needs to toil to pay the mortgage on a median house, or afford the monthly tab of the average commute.

[rea]

"If they dare to come out in the open field and defend the gold standard as a good thing, we shall fight them to the uttermost, having behind us the producing masses of the nation and the world. Having behind us the commercial interests and the laboring interests and all the toiling masses, we shall answer their demands for a gold standard by saying to them, you shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold.--WJB

My reaction to a Republican proposal to return to the gold standard would be pretty similar today, if not quite so purple.

[anne]

http://economistsview.typepad.com/economistsview/2006/09/globalization_p_1.html#comments

September 1, 2006

Surprise! The Rich Get Richer and . . .

Paul Krugman: There's a dispute about how much of a role international trade has played in the disconnect between productivity and wages; standard economic models say that trade has played some role, but not the dominant one. It's worth pointing out that Wal-Mart — to pick a non-random example — while it sells a lot of imports, must use U.S. workers to operate its stores, so it really isn't in a position to outsource. Nonetheless, it pays low wages and offers minimal benefits. That's not a conclusive proof that trade isn't the villain, but it's a reminder that stories about manufacturing don't easily generalize to the economy. (And imagine how different things would be if service workers were members of strong unions, received universal health care, etc.

[stunster]

Returns to owners of capital are increasing and returns to labor are decreasing. So, the solution I propose is to broaden the pool of people who are owners of capital to include the entire citizenry.

I elaborate My Vision of Socialism at
http://agonist.org/node/33552

I take some inspiration from papal social teaching and some from Meidner. My key proposal is this:

"10 to 20 percent of pretax business profits would be paid into the equivalent of mutual funds or unit trusts, which would be owned by all citizens.
These investment bodies would have an independent board, though subject to democratic election and oversight, and their performance would be regularly reviewed. Subject to some basic guidelines, they would be able to invest (i.e. purchase shares) in any publicly traded companies. There would perhaps be a number of these funds (a dozen, say), whose competitive performance in terms of dividend and capital growth, could be evaluated comparatively. Citizens could switch their notional stake from one fund to another (though perhaps no more than once a year, or once every several years). Underperforming funds would be subject to penalties, including in the case of the worst performing fund, the transfer and redistribution of a fixed portion of its funds to the other funds.

Another form of social ownership would be through the use of public pension and social security funds to invest, like the general citizen investment funds, in the stock market. Returns from these investment funds (and from those financed by the 'citizen share' of company profits) would be distributed in the form of an annual citizen dividend. Gradually, over time, this citizen dividend would predominate over traditional capitalist dividends."

In my vision, individuals do not trade shares in the citizen investment funds. The citizen invesmentment funds act like general mutual funds on behalf of the whole public, providing dividends to each citizen, but their funding does not come from citizens, so there's no room for speculation by Joe Sixpack. Rather, the funds receive a portion of corporate tax receipts to finance their investments.

The funds can be monitored, as mutual funds, banks, insurance companies and other institutional investors are monitored and regulated now (though more transparently and democratically). The citizen investment funds compete with each other for the set-aside portion of corporate tax receipts, and are allocated differential segments of those receipts each year according to a pre-determined formula.

If institutional investment can 'work' at all, then institutional investing on behalf of the whole public can work.

Which means my vision of socialism can work. Over time, the citizenry as a whole would come to own a majorty of publicly traded corporate stock.

[BG]

There are several simple solutions to the ecconomic problems for commoners who now bleed white at the gas pump. One that comes to mind is replinish their money supply by cutting their taxes at least as much as they are being "gas" taxed. Revenue short falls can be made up by simply taxing the freeloaders.

Did you know that only religion owns real estate in the USA? It's so. The rest of us poor dummys only rent our homes from the government. It's a little thing called real property taxes, don't pay and get evicted. Coulifornia could pay off it's massive and increasing debt by making the chuch pay real property taxes too. By the way, that's consistent with the first amendment forbidding laws establishing religion which the tax laws clearly help establish.

http://www.hoax-buster.org is an eye opener.

[Barry]

Mike: "Perhaps I misunderstand you, but isn't it a good thing that average workers are less likely to think of themselves as needing help from the government?"

When their expectations of the likelihood of needing government help are lower than the true probability, then yes, it isn't a good thing.

[David Lloyd-Jones]

The whole joint would probably be a whole lot better off if we just repealed two nasty bits of history:

First we should re-impose the territorial boundaries of the Quebec Act of 1744 -- Upper Canada goes down to the Ohio and west to the Mississippi. That would get those pesky Massachusetts, New York and Vermont reds back into Canada where they obviously belong.

Second, we should remember the Alamo, and kick out all those illegal immigrants -- Aaron Burr and his evil cronies. Restoring the historical boundaries of Mexico would satisfy all thos racist Republicans who hate Mexicans in the United States, by returning the relevant states, Texas, California, Arizon, Utah, and a bunch of other stuff to their rightful patrimony.

What would this leave of the United States of America?

Mainly places like Arkansas, Nebraska, Wisconsin, Minnesota and Kansas. All of these are the historic heartland of American Eugene Debs socialism, so progress ought to become possible.

[David Lloyd-Jones]

Obligatory reminder: Americans' increase in income and wealth during the Bush administration is only visible if it is measured in American dollars. This is like having six foot tall children by using a shrinking tape measure.

Measured by any reasonable basket of currencies, commodities, or other plausible measures of wealth, Bush is the greatest destroyer of wealth and income the world has ever seen.

[Karlsfini]

"This is like having six foot tall children by using a shrinking tape measure."

LOL -- I'm going to repeat that a lot in the years ahead.

[richard]

I read the frustration in the comments.

Don't you people understand that as long as the common working people buy from companies (Walmart to name one) that sell goods made in other countries (China now), jobs will be shipped out of this country.
This means there are less jobs in this country to go around. Less jobs to go around means less demand for workers. Less demand for workers means less wages for workers. Illegal immigrants also have an impact on this (check the historical wages of workers in the large packing plants.)It also lets owners disregard safety and dignity of workers. Why hire American workers when you can hire illegals that won't call OSHA and that work for less money.
If you could educate people to buy products made in this country, you would create more jobs and slow China's growth causing commodity prices to stabilize or fall.
I stumbled onto this website today. I may not visit it again. Her is my background...
I am a maintenance worker in a cash strapped nursing home. My wages have not kept up with rising prices either. I used to work in manufacturing, and I know how this countries workers have been hurt by the imports. The problem is, if there wasn't a market for them, they wouldn't be shipped over here.
Hope I cause some people to think about positives ways to change this country.

[wilfred lumer]

Dr Delong:I have just finished reading the
comments about the mess we are in,how we got
here and where do we go from here.Anybody
hear about "Political Economy"? It is all
about "classes" friends.I agree with Thomas
Frank."Democratic leaders must learn to talk
about class issues again." I would add and
back that up by emphasizing that on this Labor Day,working people ought to remember
that before the Wagner Act,there leaders who
successfully organized workers,struck for
better pay and working conditions,and were
not interested in their perks and plush
salaries.What we lack in unions to-day is
the fervor and committment,and willingness
to sacrifice,that characterized the "union
movement" before the "pie cards" took over.

[quiz]

If we have to have republicans why can't we have Teddy Roosevelt?

The plutacratic movement, masquerading as republicans, bears little or no resemblance to the foundations of the original republican party.

It is unfortunate that the only way to get them out involves the tragic give-away of everything that has made this country great. A classic case of "don't it always seem to be, that we don't know what we lost till it's gone".

America will not feel better about itself and reform is impossible until the doctrines of the current majority party are destroyed. I agree with many of the views expressed here, except for the part about bad trade policies are really, really good for us.

It is not about policy implications of a common economic system, anymore. It is about the economic system itself, an ancient political and idealogical struggle. Jefferson vs Hamilton, puritanism vs secularism, aristocracy vs social democracy, cheap slave labor vs organized labor. Liberalism has lost all context.

The South, until recently a democratic stronghold, has become the "go to" voting block of "republicanism". It is not a coincidence, although ironic, that the walmart philosophy arose in Arkansas, one of the first areas devasted by cheap foreign labor. The loss of employment opportunities and chronic poverty have created the over-riding need for poverty level goods. The continuing loss of our manufacturing base will have the same effect on the rest of the country. A drop in our national standard of living, lack of employment opportunities, reduced access to college, chronic poverty, the polarization of income, perpetuation of the plutacracy, and so on.

The democrats need to be bold and figure out how to replace and restore the southern and national industrial might. The living wage base and opportunity must be restored as more important than securing cheap foreign goods that are affordable at or below the poverty level. The states with the highest poverty levels are electing the government who have adopted the walmart policies, ensuring poverty in the rest of the economy.

[Blissex]

Hi I have been very depressed to see that Greg Mankiw first and then ''Jane Galt'' in an even worse fashion have twisted DeLong's comments in this post in a way that I think is thoroughly vile:

http://JaneGalt.net/archives/009434.html
(Mankiw) «But the answer is less obvious if, as Brad suggests, people derive utility from comparisons with others. In this case, making the rich poorer raises others' welfare, even if their material standard of living is unchanged.»
(''Jane Galt'') «No, I think the reason that we recoil is that it is repulsive to make people suffer just because others enjoy it. And it is horifying to give free reign to our worst impulses through the power of the state.»

I have tried to explain what I think DeLong actually meant, quite clearly, and I hope that I haven't misinterpreted it myself:

http://JaneGalt.net/cgi-bin/MT/mt-comments.cgi?entry_id=9434#110374
http://JaneGalt.net/cgi-bin/MT/mt-comments.cgi?entry_id=9434#110379

[Neil Hornbeck]

I would be more inclined to believe that the utility from conspicuous consumption was derived from their peers than the poor with whom the rich have little contact. It is also possible to derive utility from merely imagining someone's discomfiture, but wouldn't the utility rise with the relative status of the imagined (or real) counter-party? The value of feeling superior to a poor person must be nothing compared to that of feeling superior to a wealthy peer.

[Karen Henshaw]

The problem right now is that indeed, the rich are getting richer, on the backs of everyone else.

Real middle class wages in most parts of the country have dropped almost 12% since 1999. While corporate profits, and executive salaries have nearly doubled during the same time frame.
http://www.washingtonmonthly.com/blogphotos/Blog_Median_Income_By_State.gif

Tax cuts for the rich, and trickle down simply does NOT benefit anyone other than the top executives at corporations. You give a small corporate tax breaks, and instead of hiring more people, giving raises, or improving health care, they run out and buy a $150,000 car and build a 2200Sq Foot Cabin on a lake.

I got bad news for these corporate fatcats, the tide is turning, your days are numbered. The pendelum will swing wildly in the other direction. The last few years have proven disasterous for average Americans its time we put people in office that will tax these fat cats back to the stone age, and redistribute wealth in this country.

Either that, or we are in for a class based civil war in this country if this nonsense keeps up!