Brad DeLong

Department of "WTF?!?!": Education Gap Weblogging

Why oh why can't we have a better press corps?

For at least half a generation, liberals--at least liberals that I know--have been hammering on the fact that the stepping-away from the commitment to universal free or nearly-free education has been a long-run disaster for America. With Claudia Goldin and Larry Katz's The Race Between Education and Technology serving as its analytical spearhead, the liberals I know spend lots of time talking about how the pace of technological progress requires a more-educated and thus more-skilled workforce, and about how the rise in college costs starting around 1970 stopped the normal American pattern by which each generation gets much more education in its tracks--with rising income inequality between the 80th and the 20th percentile being a big consequences:

Solutions proposed vary from having your college costs be an income-contingent grant recaptured from those who earn much in life by a surcharge on your form 1040 to a mammoth federal commitment to universal access to broadband and to free provision of the highest-quality education online.

Some liberals (e.g., Larry Mishel of EPI) go further, and say that rising 80/20 inequality is the result not just of our losing the race between education and technology but also the collapse of labor unions. The Goldin-Katz alliance (or which I am a part) tends to see the collapse of the union movement as a consequence of the loss of the race.

Now comes Timothy Noah to tell me that none of this focus that I see among the liberals I talk to ever happened:

The 1 Percent Are Only Half the Problem: Most recent discussion about economic inequality in the United States has focused on the top 1 percent… that if we would just put a tight enough choke chain on the 1 percent, then we’d solve the problem of income inequality. But alas, that isn’t true, because it wouldn’t address the other half of the story: the rise of the educated class. Since 1979 the income gap between people with college or graduate degrees and people whose education ended in high school has grown….

Conservatives don’t typically like to talk about income inequality. It stirs up uncomfortable questions about economic fairness….

Liberals resist talking about the skills-based gap because they don’t want to tell the working classes that they’re losing ground because they didn’t study hard enough. Liberals prefer to focus on the 1 percent-based gap. Conceiving of inequality as something caused by the very richest people has obvious political appeal…

And it is at this point that I say: "WTF?!?!"

Now let me say that Timothy Noah is one of the very best of mainstream American journalists--he isn't an opinions-of-shape-of-earth-differ-both-liberals-and-conservatives-have-a-point clown uninterested in policy substance who covers our nation from a celebrity-gossip perspective.

But here we have, I think, another example of the Michael Kinsley-Clive Crook disorder: Noah provides no links to and no quotes from "liberals" who "resist talking about the skills-based gap because they don’t want to tell the working classes that they’re losing ground because they didn’t study hard enough". So he winds up just making stuff up--and the New York Times editorial process is sufficiently jelly-like that nobody asks him "who are you talking about?". This produces bad thought.

Indeed, read further down in the article and you find, near the end, links to Larry Mishel definitely not being resistant to talking about the decline of unions, to Josh Bivens not being resistant to talking about workers' reduced bargaining power and the 80/20 wage gap, Barack Obama and his staff worrying about the rising costs of college--in a story reported by Timothy Noah himself.

Are these people not liberals?

Economic Possibilities for Our Grandchildren

'"Well, is it art?" "I do not know," said Mordel. "It may be. Perhaps randomicity is the principle behind artistic technique. I cannot judge this work because I do not understand it. I must therefore go deeper, and inquire into what lies behind it, rather than merely considering the technique whereby it was produced. I know that human artists never set out to create art, as such," he said, "but rather to portray with their techniquest some features of objects and their functions which they deemed significant." "'Significant'? In what sense of the word?" "In the only sense of the word possible under the circumstances: significant in relation to the human condition, and worth of accentuation because of the manner in which they touched upon it." "In what manner?" "Obviously, it must be in a manner knowable only to one who has experience of the human condition." "There is a flaw somewhere in your logic, Mordel, and I shall find it." "I will wait." "If your major premise is correct," said Frost after awhile, "then I do not comprehend art."' -- Roger Zelazny, "For a Breath I Tarry"

Kevin Drum:

Why the Digital Revolution Won't be a Rerun of the Industrial Revolution: Whenever you talk about smart machines taking all our jobs, the usual pushback is that you're being a Luddite—an argument that's especially appropriate this year since it's the 200th anniversary of the end of the Luddite movement… all those skilled weavers in 1813 thought that power looms would put them out of jobs, but they were right only in the most limited way…. But the Digital Revolution won't be a rerun of the Industrial Revolution…. Karl Smith… [has a] take:

Creating things is a matter of rearranging atoms. Broadly speaking, you need two things to do this — a power system to overcome the gravitational and electromagnetic forces that tend to hold atoms in their relative positions and a control system to guarantee that atoms wind up in the right place. The industrial revolution was about one thing — more power! But, more power means the need for more control. Hence, the Industrial Revolution meant a rapid increase in the demand for human brains, not decrease. Smart machines provide both the power system and the control system in one convenient package. You can still argue that displaced humans will end up doing something else—we just don't know what yet—but it's a tough argument to win. If you agree that artificial intelligence will be real someday soon, then by definition smart machines will be able to do just about anything that humans can do. The answer to "Humans will do X," for any value of X, is "But robots can do that too." That wasn't true of the Industrial Revolution.

If you don't believe that AI is around the corner, then there's no argument to have here (aside from why you think AI is so far off). But if you do, then we have some serious questions to ponder about the future of work, the future of money, and the future of democracy. That's what my piece is mainly about.

Brad DeLong Commenting on Myself: Price of Haut Brion Monday Hoisted from Comments Weblogging

Brad DeLong : Selections from Samuel Pepys Diary for April 1663: Thursday History Weblogging: John Locke reports that he could get Haut Brion at the vineyard gate in barrels for about 2 shillings a bottle. 2 shillings would get you an unfurnished room in central London for 2 weeks (with fireplace), or about 10 one-pound loaves of bread…

---

A day's unskilled work would buy perhaps 5 one-pound loaves of bread...

Today you can get a loaf of bread for, say, $1. And a day's unskilled work will buy you 80 of them. And a bottle of Haut Brion will run you $1000 for a good year (admittedly, not at vineyard gate).

So back then you could get a bottle of Haut Brion with one day's unskilled work. Today it would take 12.5 days…

Department of "Huh!?": George Borjas Says Richard Zeckhauser Chaired Jason Richwine's Thesis Committee?

Jennifer Rubin:

What the anti-immigrant movement really believes: I received the following e-mail attack from Borjas, who, keep in mind, is a Harvard professor:

Someone copied me on an email that contained your column trashing Jason Richwine’s dissertation work, and along the way you decided to trash me as well. Just for your info, the dissertation committee was formed of Richard Zeckhauser (who, by the way, was the chair of the committee), Christopher (Sandy) Jencks, a very influential sociologist whose lifetime work on inequality you may perhaps be familiar with, and myself. Perhaps next time around before you decide to trash anyone who disagrees with your ideological musings you may want to do some background reporting. I know that this request will fall on deaf ears, since it is not part of the modus operandi of people like yourself, but I would hope you correct the record in print. (I actually know you won’t since once the membership of the committee of faculty who advised Jason on his dissertation is well known you can no longer employ the by-association method of character assassination).

Guenter Grass DeLong Smackdown Watch: Monday Hoisted from Comments Weblogging

Brad DeLong : Thursday Dozen Hoisted from the Archives: Keepers from May 2005: Grebmörts said...

I see that you rethought part of your criticism of Guenter Grass shortly after posting it. The events that have happened since 2005 should make you rethink the rest. He complained that the "growing gap between rich and poor" had brought about "the impotence of politics", a political system that responds only to the interests of the elites. Democracy is being destroyed.

That sounds a lot like the situation in the US today. Washington is unable to end this depression because gridlock serves the interests of the overclass.

Grass was right. You owe him an apology.

Asset Market Trading Is the Top 0.01% Exploiting the Top 5%…

David Wessel: Robert Solow:

Trading [is] a way to transfer wealth from those w/inferior information and calculation ability to those w/more… http://t.co/olpLNTSOsG

Global Trends in Inequality Are Not the Result of Local Factors: Tuesday DeLong Smackdown Watch

Kindred Winnekoff:

Global Trends Are Not Caused by Local Factors: Brad DeLong describes three types of inequality: 1. Global inequality, which was expanding from 1800-1975, and receding since (due primarily to China and India). 2. US inequality, which was declining from 1925-1980, but increasing since, in two ways: 2.a. The separation of the top 20% from the bottom 80%, partially as a function of college wage premium. 2.b. The separation of the top 0.1% from the rest of the top 20%, for reasons unexplained. 3. The rise of the top 1% globally -- the development of a new international plutocracy -- since... 1980 or so?

For reasons that escape me he does not link the three together…. This is something that has disappointed me about the conversation regarding American inequality over the past few years more generally. (I've written about it before.) Folks like DeLong, Krugman, Cowen, and others think in global terms quite frequently. But when they seek to explain the Great Stagnation and the rise of inequality they concern themselves almost entirely with local explanations. I think such analyses are very likely to suffer from omitted variable bias.

Around the 43rd minute, DeLong takes a direct question about this from the audience. He answers it fairly well, but still downplays the role of the global economy in influencing outcomes in the US, favoring cultural explanations (e.g. explosion of CEO pay) and changes to marginal tax rates. He does not consider that these might be related to global dynamics either. If global forces eroded the bargaining power of American Labor, then maybe that's why society has tolerated the enormous increase in executive pay. If global forces are pressuring American corporations through new competition, then maybe we've cut top-end taxation in an attempt to gain back some competitiveness.

Mark Thoma Laments the Gramscian Hegemony of the Overclass

Why Don’t Politicians Care about the Working Class?: If we want to ensure that our children and grandchildren have the brightest possible future, the national debt is not the most important problem to address. Reversing the polarization of the labor market… is much more important. But money driven politics and a political class that has all but forgotten about the working class… stand in the way of progress…. [A]round two-thirds of the jobs lost during the recession were in moderate-wage occupations… more than one-half of subsequent job gains have been in low-wage jobs….

To be successful, we must make jobs our top priority. Instead, our focus has been on the debt, but all of the hand wringing over the debt and the future of our children is a ruse by Republicans that diverts our attention from the plight of the working class. As I explained a few weeks ago, we can pay our bills. If we have problems, it will be because of the politics surrounding the debt, the political brinksmanship conservatives have used in pursuit of ideological gains, not the economics…. Republicans see the large debt, much of which was caused by the recession, as a golden opportunity to reduce the size of government…. I don’t blame Republicans for their efforts. I wish the working class was more important to Republicans, and I cannot understand the indifference to the struggles of so many people. But… [f]undamentally, it’s the party of the rich and this is a chance to lower government spending and reduce the pressure for tax increases on high-income households.

"If I Had Not Known the Topic of the Paper, I Would Have Thought This Was a Map of the Obama Vote Share in 2012"

Yes, Restricting Access to Contraception Is Immoral. Why Do You Ask?

Moishe ben Amram and the "Nation of Takers": Wednesday Hoisted from the Archives from the Reign of Rameses II Weblogging

Another thought...

Focus on those entitlements--unlike Social Security or unemployment insurance--where you do get more the poorer you are. These are programs that you can think of as providing an incentive to slackerhood, of subsidizing moocherhood. Nicholas Eberstadt writes in his A Nation of Takers:

[p]overty- or income-related entitlements... increased over thirty-fold [since 1960]...

Yes, I know that these are aggregate--not per capita--nominal--not real--spending-growth numbers, and hence the wrong numbers to look at. But he does then take much of it back:

two-thirds of those... are... Medicaid... traditional safety-net programs now comprise only about a third of entitlements granted on income terms...

Had Eberstadt gone a step further, he would have computed that cyclically-adjusted spending on traditional safety-net programs have risen from 1.1% of GDP in 1960 to a cyclically-adjusted 1.5% of GDP today. That is an increase. Our safety-net programs really are somewhat more generous as a share of our national resources than they were in 1960. Should they be?

Eberstadt likes to talk about how Americans in the past were self-reliant Randite individuals, scornful of dependency and charity, different from the moochers of these degenerate days, and how we should return to our old time values. But before America's rich were Randites America's settlers were church-going Protestants. They saw themselves as building a City Upon a Hill, building the New Jerusalem, becoming the New Israel. I know: those who hit the beaches at Plymouth in 1620 and Boston in 1630 were pretty much all (some of) my ancestors.

My New England WASP Puritan ancestors read the Hebrew Bible very seriously indeed. And they hearkened unto Moishe ben Amram:

J. Bradford Delong for Democracy Journal: Shrugging off Atlas

J. Bradford Delong for Democracy Journal: Shrugging off Atlas: Issue #28: Exactly how did once-respectable conservative economists get swept up in “moocher class” mania?

Review of Nicholas Eberstadt (2012), A Nation of Takers: America’s Entitlement Epidemic (Templeton Press) http://www.amazon.com/Nation-Takers-Americas-Entitlement-Epidemic/dp/1599474352.

If there was a single moment when Mitt Romney lost the 2012 presidential election, it was in May when he stood in front of the $50,000-a-plate audience at Sun Capital honcho Marc Leder’s home in Boca Raton and spoke his soon-to-be-infamous words:

There are 47 percent of the people who will vote for the President no matter what…. There are 47 percent who are with him, who are dependent upon government…who believe that government has a responsibility to care for them, who believe that they’re entitled to health care, to food, to housing, you name it…. These are people who pay no income tax…. My job is not to worry about those people—I’ll never convince them that they should take personal responsibility and care for their lives…

This is what Mark Schmitt of the Roosevelt Institute calls “the theory of the moocher class.” And Romney is all in with it. In July, after a poorly received speech at the NAACP convention, he boasted:

When I mentioned I am going to get rid of Obamacare, they weren’t happy…. But I hope people understand this… if they want more stuff from government tell them to go vote for the other guy—more free stuff.

Those of us who know the numbers, or who simply live in America and look around, know that the 47 percent who aren’t paying federal income taxes this year are by and large not “moochers.” About a fifth are elderly retired. About two-thirds are in households with incomes of less than $20,000 a year—definitely not living high. And nearly one-third owe no income taxes because of the earned-income and child tax credits, which both became law with bipartisan support.

As a group, the 47 percent who pay no income taxes do not lack work ethic. They do take personal responsibility for their lives. They may not pay federal income taxes this year, but they pay plenty of sales, property, and payroll taxes. For the most part, they do not constitute the Democratic base. More than half of the 47 percent are the elderly white and Southern white voters who voted for Romney by substantial margins.

So how does someone like Romney, along with his peers and all their staffs and everyone else in that Boca Raton room, become convinced that 47 percent of Americans are the moochers, the takers, dependent on “free gifts” from the government, lacking work ethic, lacking personal responsibility?

Enter Nicholas Eberstadt of the American Enterprise Institute (AEI), with his contribution to the think tank’s “New Threats to Freedom” series. We need venture no further into A Nation of Takers than the bottom of the second page…

Thursday Underrated Economics Weblog: Middle Class Political Economist

Middle Class Political Economist:

Last week the Washington Post ran a story on the weaknesses of 401(k) retirement accounts, focusing on the the fact that 1/4 of Americans with 401(k)'s have used them to meet current income needs. Among people in their forties, the share rises to 1/3,  an astounding figure considering how close this group is to retirement. In the wake of the Great Recession and continuing job market problems, it is perhaps not surprising that 28% of 401(k) account holders presently have loans against their accounts. As the Post delicately puts it,

Many employers have embraced 401(k) and other defined-contribution accounts as a way of helping workers save for retirement while relieving themselves of the financial risks that come with managing a traditional pension plan. In theory, 401(k) accounts are better suited to an economy in which workers are changing jobs more frequently than ever because the accounts can be rolled over from previous employers.

A more accurate way of saying this would be that employers have embraced 401(k) plans because they are less expensive than providing pensions, thereby "cut(ting) overall employee compensation," and that 401(k) plans don't take into account the stagnation of real wages, points well made by commenter "Sean2020." Moreover, as I reported before, 49% of private sector worker have neither a 401(k) or a defined benefit pension plan. Thus, they have no supplement to their eventual Social Security benefits unless they are able to save outside of a 401(k).

The Smart and Witty Michelle Goldberg Says: Sheryl Sandberg’s "Lean In" Is Reasonable, Thoughtful, and Necessary

Michelle Golberg:

The Absurd Backlash Against Sheryl Sandberg’s ‘Lean In’: Columnists are mercilessly attacking Facebook COO Sheryl Sandberg’s new book, Lean In. Michelle Goldberg says they might be surprised to find that her ideas are reasonable, thoughtful—and necessary….

“My hope is that my message will be judged on its merits,” she writes. She may have been hoping for too much…. [A] strange, sour backlash has already begun, aimed… at who Sandberg is. Joanne Bamberger, who either didn’t read Lean In or didn’t comprehend it, lumps Sandberg in with Yahoo CEO Marissa Mayer, accusing both of launching “the latest salvo in the war on moms.”… [S]upercilious Maureen Dowd evince[s] a sudden concern for feminist authenticity…. Melissa Gira Grant, writing in The Washington Post, carps that “this is simply the elite leading the slightly-less-elite, for the sake of Sandberg’s bottom line,” which makes sense if you believe that a woman worth hundreds of millions of dollars would go into feminist publishing for the money. (Skirting feminist self-parody, Grant proceeds to complain that Sandberg fails to grapple with the struggles of domestic workers, the unemployed, people whose caretaking duties extend beyond children to aging parents as well as “close friends and extended families,” women who can’t have children, and those who are lesbian, bisexual, or transgender.)… Deanna Zandt admits that she didn’t bother trying to get a review copy of Lean In, but nonetheless claims that Sandberg’s message is “buck up, little campers. It’s a tough world, and you’ve got to be tough.”… [Thus] there’s already a lot of public misunderstanding of her book’s message. One would think she was peddling a multilevel marketing scheme, not the most overtly feminist mainstream business book ever written….

American Conservatism’s Crisis of Ideas: Project Syndicate Monarchy, Patriarchy, Orthodoxy Weblogging

Let me note three things:

1. Most of what I have to say is highly, highly derivative from Mike Konczal and Mark Schmitt (and others);
2. The problem is not just that today's crop of AEI-conservative ideas is not politically sustainable, but that it is simply wrong--Cahn and Carbone's Red Families, Blue Families has convinced me that contra Murray America's (Blue) families are actually in pretty good shape (Red families that try to keep their daughters ignorant about family planning not so much), my take on Eberstadt is coming out in Democracy Journal later this month; and
3. Arthur Brooks seems to me at bottom simply lamenting that Democratic policies work and make people's lives better--that Republicans are losing their campaign to try to make America a worse-off place does not strike me as a minus.

And we are live at Project Syndicate:

American Conservatism’s Crisis of Ideas: BERKELEY – On the back left corner of my desk right now are three recent books: Arthur Brooks’ The Battle, Charles Murray’s Coming Apart, and Nicholas Eberstadt’s A Nation of Takers. Together, they constitute an important intellectual movement, which also happens to be a large part of the reason that American conservatism today has little that is constructive to say about managing the economy – and little purchase on the center of the American electorate.

But let’s back up historically, to the founding of what we might call modern conservatism in early nineteenth-century Britain and France. There were some – Frédéric Bastiat and Jean-Baptiste Say come to mind – who believed that government should put the unemployed to work building infrastructure when markets or production were temporarily disrupted. But they were balanced by those like Nassau Senior, who spoke out against even famine relief: Although a million people would die in the Irish Potato Famine, “that would scarcely be enough.”

The main thrust of early conservatism was root-and-branch opposition to every form of social insurance: make the poor richer, and they would become more fertile. As a result, farm sizes would drop (as land was divided among ever more children), labor productivity would fall, and the poor would become even poorer. Social insurance was not just pointless; it was counterproductive.

The proper policy was to teach people to venerate the royal throne (so that they would respect property), the paternal hearth (so that they would not marry imprudently young), and the religious altar (so that they would fear pre-marital sex). Then, perhaps, with women chaste for half or more of their childbearing years, the surplus population would diminish and conditions for the poor would be as good as they could be.

Yes, Thoughtful Economists Think Raising the Minimum Wage Right Now Is a Good Idea

I would point out that the EITC and the minimum wage have different weak points--too high a minimum wage will have a substantial disemployment effect, and too high an EITC does create incentives to pad your hours. A mixed strategy helps attenuate both these flaws.

Steve Roth:

Leading Economists Vote on Raising the Minimum Wage: I’m delighted to see the U Chicago IGM Forum ask a really useful, non-softball question.

The panelists are evenly split on whether an increase to $9 would make it “noticeably harder for low-skilled workers to find employment.”

A 4:1 majority thinks that weighing the costs and benefits, “this would be a desirable policy.”

I note how many who commented bring up the EITC, suggesting that an increase in that support might be better than a minimum-wage increase. I note further that they apparently haven’t read the very good reasoning and research suggesting that the two together very effectively address the problems of each. But Paul Krugman has. And his surprise helps explain why the others haven’t thought about this:

Second — and this is news to me — the usual notion that minimum wages and the Earned Income Tax Credit are competing ways to help low-wage workers is wrong. On the contrary, raising the minimum wage is a way to make the EITC work better, ensuring that its benefits go to workers rather than getting shared with employers. This actually is Econ 101, but done right.

Brownback's Kansas: Good Example or Horrible Warning?

No More Mister Nice Blog:

Brownback's Kansas: Good Example or Horrible Warning?: I've told you, and others have told you, that cutting or eliminating state income taxes (which tend to be somewhat progressive) is all the rage among GOP governors, as is raising sales taxes (which fall disproportionately on the poor, the lower middle class, and the middle class, because the more of your paycheck you have to spend to live, the more they get to tax you). Bobby Jindal is a big fan of this approach (he wants to eliminate all income and corporate taxes in Louisiana) -- and you know he wants to be president.

So it's not a surprise to read what I'm reading in The Wall Street Journal this morning: that Republicans -- bizarrely -- think this approach could win them the White House four years from now.

Monday Hoisted from Comments: On Gene Steuerle's 2005 Social Security Reform Plan

Robert Waldmann:

Gene Steurle's article is excellent policy analysis but, as noted by Lancelot, DOA politically. Steurle writes from the point of view of a social planner with a budget contstraint. Policy is made by politicians under political constraints. I don't think that cutting middle class benefits is a way to have more money to help the poor. I tihnk that politicians can aid the poor only by linking aid to the poor to middle class benefits (I recall a heated discussion with you about this in the greenhouse cafe in the science center some decades ago).

A tinhat paranoid view is that somewhere there is a right of center advocate of directing benifits towards the poor who is just trying to trick progressives into implementing a good policy which is politically doomed so as to get to no social welfare state at all.

Now if you want to help the poor more someone has to lose. You can try to soak the middle class and you will get nowhere. If you try to soak the rich, there will be no problem.

Middle Class Political Economist: America Shows No Increase in College Graduation Rates over the last 30 Years

Middle Class Political Economist: America Shows No Increase in College Graduation Rates over the last 30 Years:

Jared Bernstein (via Paul Krugman) highlights an amazing breakdown in the prospects for reducing economic inequality any time soon. Over the last 30 years, the U.S. has made no progress whatsoever in increasing college graduation rates. To be specific, 25-34 year olds in 2009 had a college degree rate of about 40%, almost exactly the same as for 55-64 year old baby boomers. In the meantime, other industrialized countries were racking up substantial gains, most spectacularly in the case of South Korea where a little over 10% of 55-64 year olds have college degrees, but more than 60% in the 25-34 age group do. If you want to understand how South Korea has gone from a poor developing country to an industrial powerhouse within our lifetimes, this is one big reason.... As we can see, the U.S. has fallen from a tie for second with Canada among current OECD members (Russia is not a member) to 15th in the OECD. The big question is why this is happening. One major reason is rising college costs, which have far outstripped overall inflation....

As we can see, the rate of cost increase for public four-year universities was the most rapid of all. One big reason for that, of course, is reduced state support of higher education.... As Alan Krueger noted in January, there is a strong relationship between higher inequality and lower social mobility. The OECD data show that the U.S. is making no progress on one of the most important tools for social mobility, college. If access to higher education in this country actually declines, as it is threatening to do, our inequality problem will become infinitely harder to solve.

Jared Bernstein: Disability Rolls and the Makers/Takers/Fakers Nonsense

Jared Bernstein:

Disability Rolls and the Makers/Takers/Fakers Nonsense: Jimmy Pethokoukis… went on a rant about all the fakers on the Social Security Disability rolls, prompting me to inject some facts from my CBPP colleague Kathy Ruffing….

[The] number on the DI rolls has doubled since 1995 while the working-aged population has only grown by about a fifth.  Sounds bad, right? Not necessarily. What if the population was aging, with a larger share in their high-disability years, while more women were working and thus eligible for the program?  In fact, about half of the increase since 1990 is due to those factors…. [T]he increase in the eligibility age for Social Security from 65 to 66 over this period has also played a role over these years, as once DI recipients hit the retirement eligibility age, they transfer onto the retirement program.

The Genealogy of "A Nation of Takers": Tuesday Morning Wingnut Watch Weblogging

• Brad DeLong : The Right's "47%" Theory Seems Stronger than Ever Among the Wingnuts...

• Brad DeLong : Michael Gerson and Paul Ryan Lie About What Republicans Say to Each Other About the "Takers"

• Brad DeLong : And Ci Devant Confederate Vice-President Alexander Stephens, Grasping at Straws

• Brad DeLong : Hoisted from Comments: Origins of the Right's "47%" Theory in 1970s Science Fiction

---

• Brad DeLong : Steve M.: The Theory of the Moocher Class Lives!
• Brad DeLong : By No Means a Nation of "Takers"...
• Brad DeLong : We Are All Welfare Queens Now II
• Brad DeLong : Paul Ryan Also Believes That America Is at Least 47% Welfare Queens
• Brad DeLong : Mitt Romney and "Those People": Reading Ta-Nehisi Coates Weblogging
• Ta-Nehisi Coates: No One Left to Race Bait

Wanted: SF w/ 2 Kids < 10 Making ≥$260K/Year Weblogging

@delong [The] CPS March supplement finds 1-3 each year from 2008-2012 [in their random sample], suggesting a couple of thousand [single mothers with two kids under ten making $260K/year or more], out of 16-17 million single mothers

— Evan Roberts (@evanrobertsnz) January 16, 2013

But they all read the Wall Street Journal, and are miserable:

Just how many female-headed single-parent families with two children under 10 are there in the United States making $260K/year, anyway?

Why oh why can't we have a better press corps?

Xenos:

Reading is for Snobs: These Are The People The Wall Street Journal Thinks We Should Have Sympathy For?: The Wall Street Journal had an article providing a fairly thorough breakdown of the new tax policies that will now be in effect due to the "fiscal cliff" agreement…. The article itself wasn't too bad…. However, it did include one little thing…. Yes, in that comic, every single one of those families makes a six figure income, the lowest being $180 thousand, and yet because of the new tax hikes imposed by Obama, they all appear as though he ran over the family dog.

The median household income in the U.S. between 2007-2011 was $52,762, but the American people are all supposed to shed tears for those that make between three to twelve times as much? Seriously, how out of touch do you have to be to think that? Of course, this is the same outfit that supported a guy who thought making $250k qualified as "middle income".

Just how many female-headed single-parent families with two children under 10 are there in the United States making $260K/year, anyway?

Scott McLemee on Eugene Genovese: Changing Your Mind and Still Being Wrong

Scott McLemee:

Essay on Death of Eugene Genovese: An ancient and corny joke of the American left tells of a comrade who was surprised to learn that the German radical theorist Kautsky’s first name was Karl and not, in fact, “Renegade.”… Eavesdropping on some young Marxist academics via Facebook in the week following the historian Eugene Genovese’s death on September 26, I’ve come to suspect that there is a pamphlet out there somewhere about the Renegade Genovese…. Genovese published landmark studies like Roll, Jordan, Roll: The World the Slaves Made (1974) and – with the late Elizabeth Fox-Genovese, his wife -- Fruits of Merchant Capital: Slavery and Bourgeois Property in the Rise and Expansion of Capitalism…. The author of the most influential body of Marxist historiography in the United States from the past half-century turned into one more curmudgeon denouncing “the race, class, gender swindle.” And at a meeting of the Conservative Political Action Committee, no less. The scholar who did path-breaking work on the political culture of the antebellum South -- developing a Gramscian analysis of how slaves and masters understood one another… ended up referring to the events of 1861-65 as “the War of Southern Independence.” Harsher words might apply, but “renegade” will do….

Tom Slee: Intellectual Property and Capital-Biased Technological Change

tomslee

I love the singularity video at #22 http://www.jwz.org/blog/2012/05/welcome-to-life-the-singularity-ruined-by-lawyers/, and it highlights one of the major differences between the next round of technologies and previous ones, which is that the new ones will be pervasively governed by license agreements. The ways in which they benefit and harm us will depend more on the terms of those agreements than on the engineering aspects of the technology.

Mark Thoma: Obama Finally Realizes Who Today's Republicans Are

Economist's View: The Republican's 'Biggest Priority': Is Obama finally figuring it out?:

“They [Republicans] say that their biggest priority is making sure that we deal with the deficit in a serious way, but the way they’re behaving is that their only priority is making sure that tax breaks for the wealthiest Americans are protected,” he said. “That seems to be their only overriding, unifying theme.”

Seems to be?

Brad DeLong: Why Next to No Political Reaction to the Second Gilded Age?

CENTER FOR LATIN AMERICAN STUDIES, UC BERKELEY: INEQUALITY: DIALOGUES FOR THE AMERICAS, FALL 2012: OCTOBER 15, 2012 http://www.clas.berkeley.edu/Events/series/inequalityfall2012/index.html

• Full cleaned-up transcript
• Video

---

Oh dear, that's really tough.

I want to sharpen that question and give it historical context.

During the Gilded Age of the 1890s and 1900s you had strong political movements saying "something is going remarkably wrong with this, this isn’t the country we thought we were going to live in". The way that the historian--I'm blanking--Ray Ginger?

Harley Shaiken: Yes, Ray Ginger.

Brad DeLong: Ray Ginger put it in two absolutely brilliant books--Altgeld’s America and The Age of Excess--even the Republicans thought that they wanted to live in Abe Lincoln’s America, where when you are young you split wood into fence rails and go to law school at night and when you are middle-aged you become a lawyer and get rich and when you are old you enter politics and save the union and free the slaves. They wanted to live in that kind of world, of upward mobility, in which opportunity is wide open even to the son of a penniless and not very successful rural farmer.

By 1890 they discovered that they weren’t living in Abe Lincoln's America at all.

Brad DeLong: Money and Politics

CENTER FOR LATIN AMERICAN STUDIES, UC BERKELEY: INEQUALITY: DIALOGUES FOR THE AMERICAS, FALL 2012: OCTOBER 15, 2012 http://www.clas.berkeley.edu/Events/series/inequalityfall2012/index.html

• Full cleaned-up transcript
• Video

---

Chilean Audience Member: Hello. Can you hear me? Can you hear me now? Okay. If we agree with the statement that political structure defines the economic structure. And if we agree with the second statement that our countries--Chile at least--are losing the battle against inequality, do you think that an economic discussion is enough for winning this battle? Or we should start thinking about some political changes in the way politics and economics dialogue? When you said money has too much power, that you can’t defeat money, are you having this discussion in the United States?

Brad DeLong: Not very constructively. The Supreme Court, especially, has been playing an extraordinarily unhelpful role. With moderate Republican Senators who had been advocates of campaign finance reform and campaign funding equalization in the past falling in line behind their party in spite of their expressed policy preferences. Norm Ornstein from the American Enterprise Institute was here last June giving an extremely bitter discussion of the disappearance of the Republican moderates, and the cowardice of those who remain.

Brad DeLong: Are Your Wages Set in Beijing?

CENTER FOR LATIN AMERICAN STUDIES, UC BERKELEY: INEQUALITY: DIALOGUES FOR THE AMERICAS, FALL 2012: OCTOBER 15, 2012 http://www.clas.berkeley.edu/Events/series/inequalityfall2012/index.html

• Full cleaned-up transcript
• Video

---

This is I think an argument from my old teacher Richard Freeman, about how in the eighties and nineties effectively 2 billion workers were added to the potential global manufacturing work force. Developments in communication and trade, the coming of the container, the coming of the Deng Xiaoping policy reforms in China, reform in India, confidence these policy changes would persist--all these meant that businesses all around the world wondering where to locate manufacturing could be confident that they could if they wanted to, if it made sense, draw on a labor force that was 2 billion bigger than it had been in the 1970s.

In that context, the fact that the United States had a lot of highly-skilled manufacturing workers who had an immense productivity edge was no long an effective factor in world production. Thus the claim is that an awful lot of the rise in inequality in the United States between 1980 and today is the result of this global pressure on the American economy.

Back in the mid 1990s when I was working for the Clinton Administration, I wrote a bunch of memos about how this was then nonsense--that is, it was simply too small to matter.

Since the mid 1990s, this factor has become significantly larger.

Jeremie Cohen-Setton Has a Bunch of LInks as He Summarizes the Current State of the "Robots" Debate

Bruegel:

Paul Krugman (HT Mark Thoma) writes that skill bias may be yesterday’s story… twenty years ago… capital bias didn’t look like a big issue. But… profits have been rising at the expense of workers in general, including workers with the skills that were supposed to lead to success in today’s economy….

James Heckman: Yes, Charles, Poverty Can Be Fought Via Early Childhood Programs

http://www.bostonreview.net/BR37.5/ndf_james_heckman_reply_social_mobility.php

Charles Murray mischaracterizes the quality of the evidence on the effectiveness of early childhood programs. In doing so he suggests that my evidence is highly selective. The effects reported for the programs I discuss survive batteries of rigorous testing procedures. They are conducted by independent analysts who did not perform or design the original experiments. The fact that samples are small works against finding any effects for the programs, much less the statistically significant and substantial effects that have been found.

Murray questions whether any early childhood interventions can be effective because while some have worked, others have failed. His methodological stance is peculiar. In evaluating drugs to control blood pressure, we do not dwell on the failures except to learn from them. We should implement the successes. That is common sense and sound science. Perry and Abecedarian are rigorously evaluated, subjected to long-term follow-up scrutiny, and have shown high economic rates of return. Neal McCluskey’s claim that Perry is costly and has few benefits does not hold up. Perry’s high rate of return takes account of the program’s costs.

Murray misrepresents the evidence from the Infant Health and Development Program (IHDP) in an attempt to bolster his argument. IHDP was not a replication of Abecedarian, but rather an application of the Abecedarian model to a low–birth weight population—not the target population of Abecedarian. The designers of IHDP recognized in advance of collecting the data that severely low-weight children had medical needs not likely to be addressed by the Abecedarian curriculum. IHDP had substantial benefits for high–birth weight babies at ages of eight and eighteen. It was particularly effective for children from low-income families, and it promoted maternal employment.

The right interventions empower people to be what they want to be without forcing them to adopt one way of life over another.

In addition, the evaluations of IHDP (discussed by Murray) and Head Start (discussed by Almagor and McCluskey), do not account for David Deming’s point that many members of the control groups of those (and other) studies were enrolled in other early childhood programs, biasing downward simple treatment-control comparisons. (This is called “substitution bias” in the literature.) For these and other programs, there is the additional problem that treatment intensity varies among subjects. Adjusting for these biases boosts estimated program treatment effects. Also, Head Start is a very heterogeneous program and has not had any long-term follow-up, so evaluations of it are not comparable to those of Abecedarian and Perry...

 

Brad DeLong: Education as a Road to Greater Equality

CENTER FOR LATIN AMERICAN STUDIES, UC BERKELEY: INEQUALITY: DIALOGUES FOR THE AMERICAS, FALL 2012: OCTOBER 15, 2012 http://www.clas.berkeley.edu/Events/series/inequalityfall2012/index.html

• Full cleaned-up transcript
• Video

---

Let’s focus on education. My teachers Claudia Golden and Larry Katz make an impressive and largely convincing argument that the trends in inequality between the top twenty percent and the bottom eighty percent in the United States, at least, have been overwhelmingly driven by the race between technology and education. Technology has kept running at a more or less constant pace. Education has not. From, say, 1920 to 1980, the United States essentially followed the recipe of Berkeley chancellor Clark Kerr: the United States ought to provide as much education for free to its citizens as they wanted.

Devotees of the right approved of this policy. People who worship Ayn Rand and have read The Fountainhead a few too many times or Atlas Shrugged a few too many times thought that universal free public education was a way you could separate the sheep from the goats, the strivers from the moochers--a way that the strivers could strive and attain the eminence to that they deserve. People on the left noted that if you make education free you get an awful lot of educated and well-trained people, so the return to human capital goes down, the education premium that those who have been to college and have been trained in the professions can demand becomes a lot lower. And as your accountants and lawyers and doctors facing competition in the labor market can demand lower salaries, that leaves more money for the assembly line workers and the janitors and the home health aids and the nurses and the waitresses.

Around 1980, this strategy of growth and equality through education in the United States breaks down. Since then the costs of higher education have been rising at an extraordinarily rapid pace in the United States, as government subsidies are withdrawn, and as private colleges react to rising sticker costs of public colleges by raising their own sticker prices. In addition the universal commitment to pre-college high quality education has been in decline. This has stuck. Thus, unless we see a major change in American political economy, this education road that appears to have been very effective at promoting equality between the 1920s and the 1970s is now closed to the United States.

Chile has been massively upgrading its commitment to education in the past decade. Is this education road to growth and equality open to Chile now? Or if not why not?

---

Israel did it in the 1990s. It managed to reconfigure its place in the European division of labor, to accommodate a population that suddenly became much much more educated to a remarkable degree very very quickly. Israel is not that much small in economy than Chile.

On the other hand, distance matters a lot. Israel is very close to the population centers of Europe. When you want to sell the work of your most highly-trained and educated workers abroad it is a lot easier if you just have to fly from Tel Aviv to Zurich than of you have the fifteen-hour flight from Santiago to Los Angeles. Is it that long? It’s only twelve hours.

So perhaps Chile will be the first country to over-invest in higher education. From our perspective it’ll be interesting to watch what happens. From your perspective there’s rather more at stake.

Ta-Nehisi Coates: We Are All Welfare Queens Now

Ta-Nehisi Coates reflects on Mitt Romney's "47%", "Gifts", and "Vote for the Other Guy", on Arthur Brooks's The Battle and The Road to Freedom, on Charles Murray's Coming Apart, and on Nicholas Eberstadt's A Nation of Takers:

We Are All Welfare Queens Now: Thinking some more on Mitt Romney's high-handed claim that one in two Americans will vote for Obama simply to better ensure their own sloth, I was reminded of Lee Atwater's famous explanation of the Southern Strategy:

You start out in 1954 by saying, "Nigger, nigger, nigger." By 1968 you can't say "nigger" -- that… backfires. So you say… "forced busing", "states' rights", and all that stuff…. [Now] you're talking about cutting taxes… totally economic things… a byproduct of them is [that] blacks get hurt worse…. [I]f [the Southern Strategy] is getting that abstract, and that coded, then we are doing away with the racial problem…. [S]itting around saying, "We want to cut this," is much more abstract than even the busing thing, and a hell of a lot more abstract than "Nigger, nigger."

The process Atwater is describing really stretches back to 1790….

[W]hat's often missed in analyzing these tactics is how they, themselves, are evidence of progress…. [F]or a century after the Civil War, the South effectively erased the black vote. But there was an actual black vote that had to be [erased]…. It's worth critiquing how the machine manipulated the black vote in Chicago, but it's also worth noting there was a black vote… people exercising their own wills and prerogatives….

[A]s tactics aimed at suppressing black citizenship become more abstract, they… [begin] enveloping non-blacks. Atwater's point that the policies of the Southern Strategy hurt blacks more than whites is well taken. But some whites were hurt too…. [A]t each level what you see is more non-black people being swept into the pool of victims…. At each interval the ostensible pariah grows, until [now] one in two Americans are members of the pariah class…. [And t]he party of white populism [now] finds itself writing off half the country, we are really close.

Felix Salmon: The economics of artisanal chocolate

http://blogs.reuters.com/felix-salmon/2012/11/28/the-economics-of-artisanal-chocolate/

Center for Latin American Studies, UC Berkeley: Inequality: A Dialogue for the Americas

http://www.clas.berkeley.edu/Events/series/inequalityfall2012/index.html

Brad DeLong: Three Dimensions of Inequality: Global, Educational/Technological, and Plutocratic

CENTER FOR LATIN AMERICAN STUDIES, UC BERKELEY: INEQUALITY: DIALOGUES FOR THE AMERICAS, FALL 2012: OCTOBER 15, 2012 http://www.clas.berkeley.edu/Events/series/inequalityfall2012/index.html

• Full cleaned-up transcript
• Video

---

There are, broadly speaking, three dimensions of Inequality.

The first dimension is global inequality between nations. The fact is that the technologies of the industrial revolution--which are now the common heritage of all humankind--have been successfully implemented much much much much more in some parts of the world than in others. Up until 1975 I would say that the relative gap was growing. The rich North Atlantic plus Japan was successfully adapting these technologies extraordinarily rapidly. But by and large the rest of the world was adopting these technologies significantly more slowly,. Thus the relative gap between the North Atlantic core and the rest was in almost all cases growing rapidly, with the exception of the Southern Cone of South America which played a unique and puzzling role that shifted from decade to decade.

Since 1975, we have become much more optimistic. Our statistics about global inequality since 1975 have shown rapid increases in equality. They have shown an end to the 1800-1975 trend of rising inequality, whereby if you picked two people at random across the globe you would find the relative gap between their standards of living more unequal at later dates than earlier dates.

A potential problem with this shift is that this is entirely due to good growth performance over the past generation in two countries: China and India. That they have had a good generation is wonderful. Will they have another good generation? We hope so.

Lane Kenworthy: How the United States Stopped Being the Land of Opportunity

http://www.foreignaffairs.com/articles/138368/lane-kenworthy/its-hard-to-make-it-in-america

Barney Frank: Obama Rejected Bush Administration Concession to Write Down Mortgages

Matt Stoller:

Barney Frank: Obama Rejected Bush Administration Concession to Write Down Mortgages « naked capitalism: Here’s Barney Frank, in an exit interview recently in New York Magazine, revealing unwittingly that Obama during the transition rejected a Bush administration concession to write down mortgages.  Here’s what Barney said.

The mortgage crisis was worsened this past time because critical decisions were made during the transition between Bush and Obama. We voted the TARP out. The TARP was basically being administered by Hank Paulson as the last man home in a lame duck, and I was disappointed. I tried to get them to use the TARP to put some leverage on the banks to do more about mortgages, and Paulson at first resisted that, he just wanted to get the money out. And after he got the first chunk of money out, he would have had to ask for a second chunk, he said, all right, I’ll tell you what, I’ll ask for that second chunk and I’ll use some of that as leverage on mortgages, but I’m not going to do that unless Obama asks for it.  This is now December, so we tried to get the Obama people to ask him and they wouldn’t do it.

Jonathan Cohn: Why America's "Heartland" Is So Heartless

Jonathan Cohn:

Blue States Are From Scandinavia, Red States Are From Guatemala: BTHIS In blue America, state government costs more—and it spends more to ensure that everybody can pay for basic necessities such as food, housing, and health care. It invests more heavily in the long-term welfare of its population, with better-funded public schools, subsidized day care, and support for people with disabilities. In some cases, in fact, state lawmakers have decided that the social contract provided by the federal government is not generous enough. It was a blue state that first established universal health insurance and, today, it is a handful of blue states that offer paid family and medical leave. In the red states, government is cheaper… people… pay lower taxes. But they also get a lot less in return….

Shorter Ross Douthat: "Hispanics and African-Americans Vote Democratic Because They Are Losers! Losers I Tell You!...

… winners vote Republican!":

Consider the Hispanic vote…. Democrats… are also winning recent immigrants because those immigrants often aren’t assimilating successfully — or worse, are assimilating downward, thanks to rising out-of-wedlock birthrates and high dropout rates. The Democratic edge among Hispanics depends heavily on these darker trends: the weaker that families and communities are, the more necessary government support inevitably seems.

Likewise with the growing number of… unmarried women…. [S]ingle life is generally more insecure and chaotic than married life, and single life with children — which is now commonplace for women under 30 — is almost impossible to navigate without the support the welfare state provides. Or consider the secular vote… the typical unchurched American is just as often an underemployed working-class man, whose secularism is less an intellectual choice than a symptom of his disconnection from community…. What unites all of these stories is the growing failure of America’s local associations — civic, familial, religious — to foster stability, encourage solidarity and make mobility possible….

[L]iberalism often seems indifferent to [this crisis's] deeper social roots. The progressive bias toward the capital-F Future, the old left-wing suspicion of faith and domesticity, the fact that Democrats have benefited politically… makes it easy for liberals to… minimize the costs of disrupted families and hollowed-out communities… the churches threatened by the Obama White House’s contraceptive mandate…. [T]ransfer payments are not a sufficient foundation for middle-class success….

That is… a judgment on… a certain kind of blithe liberal optimism, and the confidence with which many Democrats assume their newly emerged majority is a sign of progress rather than decline.

If Douthat were interested in actually learning stuff about these issues rather than ranting, he would read Naomi Cahn and June Carbone, Red Families, Blue Families:

Rooted in the urban middle class, the coasts and the "blue states" in the last three presidential elections, the Blue Family Paradigm emphasizes the importance of women's as well as men's workforce participation, egalitarian gender roles, and the delay of family formation until both parents are emotionally and financially ready. By contrast, the Red Family Paradigm--associated with the Bible Belt, the mountain west, and rural America--rejects these new family norms, viewing the change in moral and sexual values as a crisis. In this world, the prospect of teen childbirth is the necessary deterrent to premarital sex, marriage is a sacred undertaking between a man and a woman, and divorce is society's greatest moral challenge. Yet, the changing economy is rapidly eliminating the stable, blue collar jobs that have historically supported young families, and early marriage and childbearing derail the education needed to prosper. The result is that the areas of the country most committed to traditional values have the highest divorce and teen pregnancy rates...

A Book I Will Request in Hardcover from the Library...

$30 for a Kindle edition, yes. $100 no:

The mind of the publisher remains inscrutable to me...

Somehow I Think That They Are Still in Kansas, Toto...

After spending much of the fall in Kansas City, Missouri I think I understand...

Missouri seems to me to be normal America--a little older, a little less Hispanic, about as African-American, a little less well-educated, a little poorer (but also a little bit more equal) than the average.These facts all matter, but they matter in predictable and normal ways. Anxious suburban doctors in Missouri are like anxious suburban doctors anywhere in America. Young urban hipsters are like young urban hipsters anywhere. People watch the same kinds of cable-TV shows, listen to the same advertisements, buy from the same chains--all in different proportions than I am used to, but different proportions as one would expect given age, race, gender, education level, and wealth. Missouri thus seems to me to be normal America in the sense that the I-80 corridor from San Francisco to Truckee is normal America--one sees the same kinds of people and cultural patterns as one goes from Truckee to Folsom to Sacramento to Davis to Vacaville to Fairfield to Vallejo to Berkeley to San Francisco, albeit with significantly different climate, and with tornadoes rather than earthquakes (we hope).

And I used to think that all of America was normal America--just with with different mixes.[

Then I learned more about the white male south...

And now Kansas is scaring me.

Mike the Mad Biologist: "it’s good to see Mark Thoma take Brad DeLong to task for DeLong’s explanation of rising income inequality which ignores the more sociological aspects of political economy"

http://mikethemadbiologist.com/2012/11/11/economics-and-power/

By No Means a Nation of "Takers"...

The largest contributor to Mitt Romney's defeat was his claim that 47% of America were "moochers"--who paid no income taxes, voted for the Democratic Party that promised to keep their benefits flowing, lacked any work-ethic or self-discipline, and thus, in Romney's view, "my job is is not to worry about those people. I'll never convince them they should take personal responsibility and care for their lives."

Merrill Goozner writes about how that American Enterprise Institute brainwashed Romney into believing this--perhaps the first time in history that a think tank has played such a prominent and important role in destroying the electability of the candidate it prefers.

John Holbo: The Year of the MOOC?

John Holbo:

The Year of the MOOC?: I ought at least to link to the NY Times piece on MOOCS - Massive Open Online Courses…. Clay Shirky asked in comments to my last post what I thought about this stuff and I said I was ignorant. Which I am. That said, I’m a big believer that this stuff will somehow work out for the best. The upside is just too way up…. I’ve always availed myself of webcast options whenever possible – especially when I was teaching a 500+ student intro module. Webcast kills live theater attendance but it’s just so damn convenient for students to be able to download an MP3 of the lecture to go with their copy of the PPT…. The book – the old-fashioned paper book – was the original MOOC app. Then again, no. A book is not a course. A library is not a university. And so a library of online learning resources is not an online university. MOOC’s are going to help people who are self-motivated and already know how to learn. They will help those who can already help themselves….

[T]his still requires the students to be mature and self-motivated, as learners, to start with. This is such a huge number of people – especially globally – that it’s great news, all in all. But it leaves a lot of people behind – students better served by a more traditional college experience…. [I]t’s paradoxical to say that MOOC’s are for advanced students, whereas meatspace college is more remedial, in a disciplinary sort of way. (Poor kid, he has to go to Harvard because he’s not ready for Coursera!)… In a world of MOOC’s, traditional college is ambiguous between remedial learning for those who haven’t yet learned how to learn, and a premium personal coaching service…. Oh, and credentialing…

Erick Erickson: "As long as the GOP keeps relying on the usual hucksters, charlatans, and con artists it’ll keep getting the same results"

http://times247.com/articles/erickson-senate-needs-to-clean-up-its-act

 

The Hobson-Reich View Is That Inequality is a Major Source of Macroeconomic Instability

Ribert Skidelsky muses:

Keynes, Hobson, Marx: In chapter 23 of the GT, Keynes quoted the following passage from Hobson's The Physiology of Industry (1889), which Hobson had co-authored with a businessman A.F.Mummery:  

Now saving, while it increases the existing aggregate of Capital, simultaneously reduces the quantity of utilities and conveniences consumed; any undue exercise of this habit must, therefore, cause an accumulation of capital in excess of that which is required for use, and this excess will exist in the form of general over-production.   In this passage, Keynes wrote, can be found the 'root of Hobson's mistake', namely:

his supposing that it is a case of excessive saving causing the actual accumulation of capital in excess of what is required which is, in fact, a secondary evil which only occurs through mistakes of foresight; whereas the primary evil is a propensity to save in conditions of full employment more than the equivalent of the capital which is required, thus preventing full employment except when there is a mistake in foresight.

Cleaned-Up Transcript from October 15, 2012: Center for Latin American Studies: A Dialogue: Inequality in the Americas: Brad DeLong Opening Remarks

Harley Shaiken: Hello. I’d like to welcome everyone on behalf of the Center for Latin American Studies at UC Berkeley, and on behalf of the University of Chile's School of Economics and Business. This is part of a series that the University of Chile and Berkeley are doing: "Inequality: A Dialogue Across the Americas".

The issue of inequality in the United States is a central one at this moment, with an election upcoming with broad concerns about the economy. It is clearly also a central concern in Chile, and throughout the Americas. This is the second of a series that we are doing. The first was in early September, with former president Ricardo Lagos, of Chile and Robert Reich from here at Berkeley.

Today, I am going to introduce both our speakers, one in Berkeley, one in Chile, and then after brief opening presentations we will ask a question of a speaker in another country--in fact, on another continent.Then we will open for questions here at Berkeley, at the University of Chile, and several questions that we’ve received on the internet.

No. Paul Ryan's Experience Is Not Like That of the Average American in Any Dimension. Why Would You Ask?

Frank Pasquale writes:

Balkinization: Fractal Inequality and Politics: According to the Fed, the the net worth of the typical American household was $77,300 in 2010. The new vice presidential candidate, Paul Ryan, had a net worth of $3,207,000 in 2010….

Members of congress get paid $174,000/year. Ryan has been a member of Congress for 14 years--since he was 28. Ryan's wife since 2000, Janna Little, is a tax lawyer, a graduate of GWU Law School. In 2010, 56.1% of graduating GWULS students were employed as of graduation.

Ryan and Little own a "six-bedroom, seven-bathroom, 2.5 story, brick home built in the Georgian revival style in the Courthouse Hill historic district" of Janesville, WI.

He hasn't written any books. As I understand it, Janna Ryan hasn't been a tax lobbyist-lawyer since they married in 2000. Thus some of their $3.2 million is his parents' and other relatives' money, and most of the $3.2 million is her parents' money. They haven't been saving--you can't if you are maintaining an upper-middle class lifestyle and maintaining households in both Wisconsin and DC. And asset returns have been putrid since 2000...

47%

The very smart Mike Konczal:

Four Histories of the Right's 47 Percent Theory: [T]he distribution of the tax burden isn't what the 47 percent theory is about. The 47 percent theory is all about grand political battles…. [T]here are two distinct parts to a good 47 percent theory. The first is who creates and sustains the 47 percent as a political agent. This can't be the bipartisan set of policymakers who wanted to do income support through work requirements as well as expand… the child credit; it needs to be agents with specific, outside political goals…. Who does it? The second part of a good 47 percent theory is that the consequences need to be terrible…. But how high are those stakes, and what do they represent?>Let's start at the beginning. Where does this meme start?

1. Trickle On Trickle Down: The Lucky Duckies of the Wall Street Journal Editorial Page…. [T]his looks like an internal fight among conservatives and Republicans…. The Bush tax cuts are going to be across all families, and the editorial is warning that… it should focus just on the rich…. The editorials seemed more concerned that the federal tax code will retain its progressivity under this tax cut, rather than the lucky duckies initating a new culture war….

2. The Battle: Right Wing Think Tanks and the New Culture War…. As Mark Schmitt wrote, "this theory that we're headed toward a radical egalitarian state is being developed is the American Enterprise Institute, the oldest of the conservative think tanks and one that, much like Romney, has forsaken the traditional business-minded conservatism of, say, the first President Bush, for hard conservatism in which everything is a grand showdown of incompatible worldviews."… The "30 percent" are the ones behind this expansion of people who don't pay federal income taxes…. The 30 percent are a group of people who "reject the free enterprise system culturally." The free enterprise system stands in "stark contrast to European-style social democracy." The 30 percent "twists equality of opportunity into equality of outcome."… Consequences?… [T]his locks young people into… the intellectual space of the 30 percent coalition….

3. The Hammock…. Paul Ryan… at Heritage…. Who? The do-gooders who created the social safety net.  It's too generous…. Consequences?… People will be beyond the ability to help themselves, hypnotized as they are by the siren's call of the welfare state. This is why Romney can say "I'll never convince them that they should take personal responsibility and care for their lives."

4. Takers and Public Choice…. Steve Doocey on Fox and Friends: "Coming up! A controversial question. With 47% of Americans not paying taxes – 47% – should those who don’t pay be allowed to vote?" Who? The 47 percent themselves… those at the bottom half of the income scale vote into office people willing to take from the top half of the income scale…. Consequences? The system eventually collapses… those at the margin work less and also join in demanding more…