Cartoon of the day

Special mention

Cartoon of the day

Special mention

 

Chart of the day

Thomas B. Edsall’s view [ht: sm] is that, after decades of pro-business policies, “The slow implosion of the Republican Party — along with the growing strength of a Democratic coalition dominated by low-to-middle-income voters — threatens the power of the corporate establishment and will force big business to find new ways to reassert control of the policy-making process.”

But a little historical perspective suggests that corporate America won’t take this shift lying down:

Although the stars are lined up in favor of the anti-corporate left, American business, when its back is to the wall, has historically proved to be extraordinarily resourceful.

Just over 40 years ago, at a similarly volatile moment, Lewis F. Powell, Jr. wrote a 6,030-word memo to the United States Chamber of Commerce that has gained legendary status: The Powell Manifesto or, as it was formally titled, “Confidential Memorandum: Attack on American Free Enterprise System.” The soon-to-be-appointed associate justice of the Supreme Court warned: “We are not dealing with sporadic or isolated attacks from a relatively few extremists or even from the minority socialist cadre. Rather, the assault on the enterprise system is broadly based and consistently pursued. It is gaining momentum and converts.”

In the face of this onslaught, business mobilized and by 1977 was back on top, defeating liberal initiatives like consumer protection and labor law reform during the Carter administration. Then, in 1980, a unified coalition of corporations and trade associations helped Ronald Reagan win the presidency, and the Republican Party wrested control of the Senate.

Austerity—not if but how much

Friends continue to remind me that, back in the day, when Obama first announced his plans to run for the presidency, I explained to them that, based on watching him in Illinois, he was one of the smartest and at the same time most moderate, middle-of-the-road Democrats around. He was not then, nor would he ever become, a “progressive.” Instead, he (along with much of the Democratic Party) was firmly in the middle of the mainstream consensus that austerity was inevitable. The only question was, how much?

Tim Duy, after witnessing Obama in the most recent negotiations over the fiscal cliff, comes to much the same conclusion.

From day one this has been a debate about the extent of the austerity, not a debate about austerity itself.  Does anyone have the sense that President Obama does not fundamentally believe in the pursuit of deficit reduction sooner than later?  I keep coming back to this observation from Bruce Bartlett:

In a little-noticed comment on Spanish-language television on December 14, Obama himself confirmed this typology of today’s political spectrum. Said Obama, “The truth of the matter is that my policies are so mainstream that if I had set the same policies that I had back in the 1980s, I would be considered a moderate Republican.”

I think this is correct and explains a great deal about why Obama refuses to use his leverage to pursue liberal policies and keeps inviting Republicans back to the negotiating table again and again on the budget. He wants a deal, he wants to cut spending and balance the budget if possible. This may or may not be a wise course for a Democratic president to follow, but that is who Obama is.

I frequently see commentators saying that Obama is terrible at the bargaining table, but I can’t help thinking that he is getting pretty much what he wanted.  Despite all the hate heaped upon him by the right, Obama just isn’t a progressive, and we shouldn’t expect him to seek a deal as if he was one.  After all, what progressive ensures a tax hike on the lower and middle classes (the expiration of the payroll tax cut with no offsetting cut elsewhere)?  Obama seems to believe the best deal is the one no one likes. . .

My guess is that Obama already knows that the outcome of that debate will be one in which he looks like he retreated over time.  But I also believe that the place he retreats to will be where he wanted to go in the first place; indeed, I suspect he never believed he would get 100% of the Bush tax cuts reversed in the fiscal cliff negotiations.  Note too that, to DeLong’s complaint, the next debate will again be an issue of how much austerity.  And expect that Obama will allow the negotiations to drag out to the eleventh hour, thereby forcing both Republicans and Democrats to choke down a meal – some combination of tax hikes and entitlement cuts – they both find distasteful.

But, we should remember, Franklin Delano Roosevelt wasn’t a progressive either. He and his administration moved in a more progressive direction, with the New Deal, because of sustained criticism from progressive economists, pressure from the left-wing of the Democratic Party, and, of course, organizing on the part of the Left and the threat of mass rebellion in the streets of America.

Their absence today makes the choice between two different paths to austerity the only game in town.

We have met the enemy. . .

Obama’s willingness to give away the store in current negotiations over the budget is driving liberal-minded Americans crazy. As for the Left, well, ‘nuf said.

Obama and the rest of the Democratic Party now stand for tax cuts on all but the wealthiest Americans? And they’re willing to cut future Social Security benefits in exchange for a budget deal?

Clearly, the official structure of U.S. politics has shifted to the Right. The Tea Party nutters now run the Republican Party, which can’t even muster enough votes to raise taxes on the .01 percent, while the Democrats have lost whatever working-class soul remained in the aftermath of the Clinton takeover of the party.

Which is pretty much the view of Bruce Bartlett. And, of course, of many others. What’s interesting about Bartlett’s analysis is that he identifies two main factors: the decline of the trade union movement and the collapse of the Soviet Union.

When the AFL-CIO was strong, it looked out for the working class as a whole. Its leadership understood that improving the pay and benefits of all workers was ultimately to the benefits of unionized workers. Labor support was critical to the passage of every important piece of social welfare legislation since the 1930s. Hence the decline of unionization has deprived liberals of their most important ally.

Secondly, the collapse of the Soviet Union essentially led to the collapse of support for socialism worldwide. I think voters bought the idea that the economist F.A. Hayek made during World War II that socialism impoverishes people and necessarily becomes totalitarian eventually. The disappearance of socialism as a viable political philosophy deprived liberals of their ideological anchor, causing liberalism itself to drift rightward with the tide.

Let me focus on the second point. In my view, socialist ideas haven’t disappeared. Not entirely. But, in the United States at least, it is certainly much more difficult to call oneself a socialist and to put forward openly socialist ideas than it has been for much of the past century (even with the end of the Cold War). The result is both a decline of the Left and, in Bartlett’s analysis, a shift to the Right of the once-liberal Democratic Party.

And that raises an important point: it’s not that the resurgence of more conservative ideas has made life difficult for the Left (which is what many left-wing types seem to want to believe). Rather, it’s the virtual disappearance, at least in public life, of socialists and socialist ideas that has permitted a shift to the right of the Democratic Party (and, with it, of course, the Republican Party).

In other words, as Pogo would say, we have met the enemy and he us is.

Cartoon of the day

Special mention

 

Map of the day

This is the 2012 election map created by Mark Newman. It is a cartogram, a map in which the sizes of states are rescaled according to their population. The map above reflects county-level results and uses red, blue, and shades of purple in between to indicate percentages of votes.

Compare it to the state map used in much of the election coverage:

For richer, for poorer

Economic inequalities around the world are so obscene even the Economist has taken notice.

In the latest issue, Zanny Minton Beddoes has assembled a special report examining the growing inequalities within countries—with special attention to the most unequal of the advanced countries, the United States.

The report is a useful overview of the available information, in an attempt to repair mainstream economists’ general neglect of the topic.* And it goes beyond the usual Economist advice to the jet-setting business elite, that serious problems might be present in the world today but they can be solved without much disruption to existing ideas and institutions.

The conclusion is particularly stark with respect to the United States:

ON AUGUST 31ST 1910 Theodore Roosevelt, by then America’s ex-president, addressed a crowd of 30,000 at a civil-war commemoration in Osawatomie, Kansas. In one of America’s most famous political speeches, he laid out his progressive philosophy. The federal government had a responsibility to promote equality of opportunity and attack special privilege and vested interests. “In every wise struggle for human betterment,” he argued, “one of the main objects, and often the only object, has been to achieve in large measure equality of opportunity.” . . .

The most shocking shortcomings are in America, the rich country where income gaps are biggest and have increased fastest. The Republicans are right to say that Medicare, America’s health-care system for the old, must be overhauled. But by slashing government spending on basic services such as education and advocating yet more tax cuts at the top, they undermine equality of opportunity.

The Democrats are little better. Barack Obama gave his own speech at Osawatomie last year, wrapping himself in Roosevelt’s mantle. Inequality, he said, was the “defining issue of our time”. But his response, from raising the top income-tax rate to increasing college-tuition subsidies, was just a laundry list of small initiatives. Roosevelt would have been appalled at the timidity. A subject of such importance requires something much bolder.

Indeed!

*However, none of that information will be particularly new to regular readers of this blog.

Whither the white working-class?

Of late, I have been making the argument that Obama will win the election, and he’ll win the election without the support of the white working-class.

If that were true, the results of this election would have important long-run implications for the Democratic Party and for political alignments more generally in the United States.

A new survey and report from the Public Religion and Research Institute, entitled “Beyond God and Guns,” is a valuable corrective to many of the stereotypes about the white working-class, including ones I hold and have invoked in discussions with friends and colleagues.

First off, the definition:

this report defines the white working class using a combination of race (white), ethnicity (non-Hispanic), education (less than a 4-year college degree), and occupation pay type (an occupation that pays hourly or by the job and is not salaried).

My own view, for that it’s worth, is that their definition is too restrictive. My preference would be to include some workers who  receive salaries and/or have 4-year college degrees, as long as they don’t work in a supervisory capacity. That would expand the white working-class beyond the one-third (36 percent) of all Americans and more than half (53 percent) of all whites the authors use in their report.

But still the report does serve to puncture five main myths about the white working-class in the United States:

Myth 1. White working-class Americans strongly identify with the Tea Party movement.

White working-class Americans (13 percent) are no more likely than white college-educated Americans (10 percent) to say they consider themselves part of the Tea Party. White working-class Americans (34 percent) are also about equally as likely as white college-educated Americans (31 percent) to say the Tea Party movement shares their values.

Myth 2. White working-class Americans have abandoned traditional religiosity and a strong work ethic.

White working-class Americans are more likely than Americans overall to identify as white evangelical Protestants (36 percent vs. 21 percent). They do not attend religious services less frequently than Americans overall (48 percent vs. 50 percent attend at least once a month), and do not report that religion is less important in their lives (60 percent vs. 59 percent say religion is important in their lives). White working-class Americans also work hard, averaging more hours per week than white college-educated Americans (51 vs. 46).

Myth 3. White working-class Americans vote against their economic interests.

White working-class Americans are more likely than white college-educated Americans to report that a lack of good jobs (67 percent vs. 52 percent) and a lack of opportunities for young people (56 percent vs. 46 percent) are major problems facing their communities. White working-class Americans are also significantly more likely than white college-educated Americans to report that home foreclosures (49 percent vs. 36 percent), crime (32 percent vs. 19 percent), illegal immigration (29 percent vs. 19 percent), and racial tensions (17 percent vs. 9 percent) are major problems facing their communities. In addition, low-income white working-class Americans and white working-class Americans who have received food stamps within the last two years were significantly less likely to support Romney, whose economic plan would reduce funding for government programs like food stamps.

Myth 4. White working-class Americans are animated by culture war issues like abortion or same-sex marriage.

Only 1-in-20 white working-class Americans say that either abortion (3 percent) or same-sex marriage (2 percent) is the most important issue to their vote. By contrast, a majority (53 percent) of white working-class Americans say the economy is their most important voting issue.

Myth 5. White working-class Americans embrace unfettered free market capitalism.

Seven-in-ten (70 percent) white working-class Americans believe the economic system in this country unfairly favors the wealthy, and a majority (53 percent) say that one of the biggest problems in this country is that we don’t give everyone an equal chance in life. A plurality (46 percent) of white working-class Americans believe that capitalism and the free market system are at odds with Christian values, while 38 percent disagree. Nearly 8-in-10 white working-class Americans say that corporations moving American jobs overseas are somewhat (25 percent) or very (53 percent) responsible for Americans’ current economic distress. Over 6-in-10 (62 percent) white working-class Americans favor raising the tax rate on Americans with household incomes of over $1 million per year.

As it turns out, Romney’s lead among white working-class voters holds only in the South:

In mid-August, Romney held a commanding 40-point lead over Obama among white working-class voters in the South (62% vs. 22%). However, neither candidate held a statistically significant lead among white working-class voters in the West (46% Romney vs. 41% Obama), Northeast (42% Romney vs. 38% Obama), or the Midwest (36% Romney vs. 44% Obama).

As John Sides notes, “particularly noteworthy in this report are the large and important differences within the white working class—by age, region, gender, and party, to name a few.” Moreover, “political participation remains highly stratified by social class and, moreover, only the views of the upper class appear to affect whether policies are enacted in law.”

His conclusion?

the problem isn’t that the white working class is trending Republican or that it votes against its economic interests or that it’s being hoodwinked by social issues. The problem is that no matter what the white working class thinks, no one is listening.

Poverty and exploitation

What would happen if the concept of exploitation became the entry point into our analyses of poverty?

According to Thomas B. Edsall, Matthew Desmond, an assistant professor of sociology at Harvard, asked exactly that question at a recent symposium on inequality at Yale:

If exploitation long has helped to create the slum and its inhabitants, if it long has been a clear, direct, and systematic, cause of poverty and social suffering, why, then, has this ugly word — exploitation — been erased from current theories of urban poverty?

who could argue that the urban poor today are not just as exploited as they were in generations past, what with the acceleration of rents throughout the housing crisis; the proliferation of pawn shops, the number of which doubled in the 1990s; the emergence of the payday lending industry, boasting of more stores across the U.S. than McDonald’s restaurants and netting upwards of $7 billion annually in fees; and the colossal expansion of the subprime lending industry, which was generating upwards of $100 billion in annual revenues at the peak of the housing bubble? And yet conventional accounts of inequality, structural and cultural approaches alike, continue to view urban poverty strictly as the result of some inanity. How different our theories would be — and with them our policy prescriptions — if we began viewing poverty as the result of a kind of robbery.

And Edsall himself poses a related, and perhaps even more significant, question:

How different would the nation’s politics be if either party, or at least the Democrats, added the concept of economic exploitation to its repertoire?