The end of his story

By Carl 

Back in 1992, all-around idiot Francis Fukuyama posited the end of history. His rationale was, now that the Soviet Union was dead and the then-nascent Chinese economy was tooling up to be globally competitive, the ideology of liberal democracy married to capitalism would take hold and the world would enter a glorious era of unicorns and bunnies.

Twenty years on, it seems more a warped Peter Pan nightmarish scenario. Even America has lost the thread of that ridiculous ideology that Fukuyama posited after twelve years of Reagan/Bush.

Now, no one is disputing that more of the world has tended towards democracy in the past twenty years. One only need look back over the past decade, even just the past year, to see dictatorship after dictatorship topple and fall, either from internal forces such as the Arab Spring or external forces as the Gulf Wars.

But Fukuyama's point, that democracy is somehow the best political system for a nation's economics, has been thrown into disrepute, even just in America. The past twelve years have seen 99% of the nation fall far behind corporatist economic growth and since corporations control the democracy... well, would anyone posit that having the lowest possible tax rates on corporations has done anything to improve either the democracy or the economy?

Enter Josh Barro of Bloomberg. His dad is Robert Barro, one of the signal figures in macroeconomic policy, a man so adept at the field that it's his text book students read. A man who is now working on trying to codify how religion fits into the macroeconomic picture. So he has a deep background in economics.

Josh is a former fellow at the Manhattan Institute, a conservative think-tank -- the board of directors includes Bill Kristol -- so he's hardly a socialist. He seems to get it:

Conservatives do not have economic ideas that are good for the middle class. Since the 1970s, wage gains have decoupled from productivity gains and the median family has therefore reaped a disproportionately small share of the benefits of growth. Conservatives are left without anything to say about this problem.

What can they say about it? I have a few ideas, though I don't think conservatives are likely to like any of them too much.

Read more »

Francisco Franco is still dead, and Mitt Romney is still a lying liar

By Richard K. Barry 

How big was it again, Mitt?

Well, we can't say that Romney didn't warn us. We can't say that he didn't tell us that he would try to lie his way to the White House. But I'm a little surprised by this one, if only by its magnitude.

The man is so desperate to secure the Republican presidential nomination that he is now engaging in Glenn Beck levels of hysterics. Exhibit A is a speech by Romney delivered in New Hampshire last night, and posted earlier today by Steve Benen at Washington Monthly. Here's what Mitt had to say:

Just a couple of weeks ago in Kansas, President Obama lectured us about Teddy Roosevelt’s philosophy of government. But he failed to mention the important difference between Teddy Roosevelt and Barack Obama. Roosevelt believed that government should level the playing field to create equal opportunities. President Obama believes that government should create equal outcomes.

In an entitlement society, everyone receives the same or similar rewards, regardless of education, effort, and willingness to take risk. That which is earned by some is redistributed to the others. And the only people who truly enjoy any real rewards are those who do the redistributing — the government.

The truth is that everyone may get the same rewards, but virtually everyone will be worse off.

Here's Jon Chait's take on Romney's turn towards the dark side, although I suspect Romney has always had this kind of bullshit in him.

This isn't just a casual line. In eight sentences, Romney asserts over and over again that Obama wants to create "equal outcomes" and give everybody the "same rewards." This is nuts, Glenn Beck–level insane. Restoring Clinton-era taxes is not a plan to equalize outcomes, or even close. It's not even a plan to stop rising inequality. Obama's America will continue to be the most unequal society in the advanced world — only slightly less so. The alternative proposals accelerate inequality even further.

Steve Benen makes a point, though, that I would like to emphasize, which is that anyone who has even a passing interest in reality or civil discourse needs to be outraged by Romney's statement. If those who imagine themselves in leadership roles in their respective parties aren't even going to make a passing effort at integrity, where does that leave us?

We have all come to expect this kind of thing from Beck, Limbaugh, Hannity, and even Palin, but from the guy who bills himself as the sober voice of Republican reason?

I know I shouldn't expect any better, but if the general election ahead ends up being full of this kind of rhetoric, this kind of lying, it will be a very dark time for democracy in America.

Hey, PolitiFact, this is what a real fucking lie looks like. And the year isn't even over, so maybe it's not too late to change your mind.

(Cross-posted at Lippmann's Ghost.)

Who actually is the Middle Class?

By LindaBeth

(See here for part 1.)

So who is the middle class?

McCain and Palin have a conception of who the middle class, "average" Americans are. Their statements struck me because their conception does not at all correspond to the reality of Americans' lives.

The Tax Foundation has an excellent paper on income distribution in the United States that sheds light on the "middle class" definition problem, and the income statistics might shock you. First, the paper very rightly points to the fact that "middle class" is an imprecise, political term, meant to appeal to those people who "feel" they are middle class, average Americans, not the statistical average or median income earners. As such, middle class becomes a political term that serves as shorthand for not-millionaires and the not-poor; indeed, those individuals are invisible in American politics. It indicates policies that are supposed to be for "regular" Americans, regular being defined as not uber-rich and not for "welfare dependents."

Almost 80% of people see themselves as middle class and only 2% of people see themselves as "upper class." So clearly, many Americans don't recognize their economic privilege in defining themselves as "average" when they are much better off than most. Yet these folks are feeling a financial strain in our tough economic times. I'm not denying their plight, but if so many Americans see themselves as financially burdened, average Americans, when they are in fact not at all average, then an awful lot of people have a warped conception of what the plight is of the actual middle class, working class and working poor!

To bring this point home, let's look at who actually is middle class, or more accurately put, middle income. There are two different ways that economists describe middle income: either the middle 20% (the 3rd quintile), with 40% higher (4th and 5th quintiles) and 40% lower (1st and 2nd quintiles), or as the middle 60%, with 20% higher and 20% lower.

According to the 2006 U.S. Census, among all households (married, single, with and without children),

Median income among all U.S. households in 2006 was $48,201. The middle 20 percent ranged from about $38,000 to $60,000; and the middle 60 percent—the "Baucus middle class"—stretched from about $20,000 to $97,000 [...] The range of the middle 20 percent [of married households] was approximately $57,000 to $83,000, and the range of the "Baucus middle class"—the middle 60 percent—was about $35,500 to $122,000. This $122,000 figure, then, represents the highest possible income that a married household could accurately call middle income, or "middle class."

By contrast, for all single households, the middle 20 percent of incomes fell between $22,000 and $36,000 with a median of $29,000. That's less than half of the median for married households. The middle 60 percent stretched from about $12,000 to $60,000. (emphasis added)

Did you catch that? Half of married households earn less than $69,716; half of single people earn less than $29,000. The most you can earn as a married household and call yourself middle class is $122,000; the most you can earn as a middle class single person is $60,000. If you make over those incomes, you are earning more than 80% of those in your household type. And we had a presidential candidate suggesting that married households earning over $250,000 weren't rich? And that singles making over $200,000 weren't either? Say what?! Saying those incomes are not rich, and Palin suggesting she is middle class, makes a mockery of the actual middle class, not to mention makes the working class and the poor completely invisible, as if they don't exist.

Regarding Sarah Palin's middle-class-ness: clearly her income puts her outside of what qualifies as middle income. But from a sociological perspective, class isn't all about income; rather, it includes wealth (net worth), education, and prestige. And with her college education, job as governor with associated prestige and power, as well as her $1 million+ net worth, she is clearly and upper-middle class American.

Next parts: socialism, poverty, and the right's rhetoric on those who pay no income tax.

(Cross-posted to Speak Truth to Power.)

Income disparity and "Middle Class" assumptions

By LindaBeth

(Part one of several.)

I had wanted to write about the concept of the middle class and "who counts" back when McCain was criticizing Obama's tax plans and Palin was self-labeling as a middle class American to explain why those media elites are against her, you betcha. At the same time, I have been teaching Sociology 101 for the first time (after majoring in it in undergrad), which obviously involves a lot of discussion over class, economic inequality, the meritocracy myth, the race-class connection, among other things that are the elephant in the room when addressing income, poverty, and taxation in the United States.

But teaching kept me super busy at the time, so I missed the opportunity to write about the realities of American income back then, but I have been given another chance with a recent Factcheck.org update, raising the issue of taxes and the poor that I want to discuss. I also thought it would be the perfect lead-in for my new blog, "Speak Truth to Power," which will focus on social justice and issues of institutional inequality that I am interested in, but seem out of place on Don't Ya Wish Your Girlfriend Was Smart Like Me?, my gender-sexuality cultural analysis blog.

So without further ado, I want to delineate a few thoughts about income, the "middle class," average Americans, and economic disparity. This first part goes back to those campaign moments that bothered me so. The second part takes a look at who exactly are the middle class. And the next parts will touch on issues of taxation, poverty, entitlement, and socialism that came up in the campaign and will not die.

1. During the first presidential debate, McCain made the following comment:

I know that the worst thing we could possibly do is to raise taxes on anybody, and a lot of people might be interested in Senator Obama's definition of "rich." (you can simultaneously read the transcript and watch the video here; clip begins at 11: 25 and the exact comment is made at 18:55).

According to Factcheck.org:

• Obama's plan will cut the taxes for 95% of families with children and 81.3% of households overall. (citation)
• "Obama's plan would raise taxes only on individuals making more than $200,000 a year, or couples or families making more than $250,000." (citation)
• "Those reporting adjusted gross income of more than $250,000 to the IRS are projected to make up 2 percent of households next year [...] Joint returns with more than $250,000 adjusted gross income and single returns with more than $125,000 adjusted gross income together are estimated to make up 3.1 percent of households next year." (citation)

So when McCain says we'd be surprised who Obama considers rich, I wonder who he considers rich, if it's not the mere 3.1% of households making $125,000+ per capita (adult).

But the even bigger question in my mind is that if McCain thinks that singles/families with incomes of $125/$250k are not rich, then who does he think the poor or even the middle class are?

2. Sarah Palin at an October rally (via The Washington Independent):

I know what Americans are going through,” she said after the stock markets took another dive last week. “Todd and I, heck, we’re going through that right now even as we speak — which may put me again kind of on the outs of those Washington elite who don’t like the idea of just an everyday, working-class American running for such an office. (emphasis added)

And Palin at the vice-presidential debate:

Now you said recently that higher taxes or asking for higher taxes or paying higher taxes is patriotic. In the middle class of America which is where Todd and I have been all of our lives, that's not patriotic [...] We're going to fight for the middle-class, average, everyday American family like mine.

The Palins earned about $250,000 in 2007, according to The Washington Post. Their family net worth is over $1 million.

Is this what a "middle-class, average, everyday American family" looks like? Who a "working class" American is?

See Sunday, November 16th for part two: "Who is the Middle Class?"

(Cross-posted to Speak Truth to Power.)

Redistributor cap

By Carl

Much has been said in the past week or so regarding Barack Obama's "spread the wealth" comments. Suddenly, he's been called a "redistributionist in chief".

Well, Senators, time to analyze just what "spread the wealth" is all about.

First, let's define some terms. Since the occasional right wing conservative scans this blog (I know, because I've read bits of my writing taken word for word in other places that I'd be ashamed to link to), I think its important they get some edumacation.

Capitalism, loosely defined, is the redistribution of wealth! Think about it: I have a little bit of wealth, and I have a need. You have a product or service that satisfies that need. I give you a little bit of my wealth in exchange for the satisfaction of my need.

What gets exchanged?" Wealth. Where does it go? From me, who had some you didn't have, to you, who now has accumulated more. It has been redistributed!

Nothing wrong with that. I don't know of many rational people who don't get that the free market in theory works pretty well.

In this example, wealth is nothing more than a pile of rocks accumulated from other people. Eventually, the rocks aggregate and make a pile so high, it's hard to toss more on top, and some end up trickling down.

What supply side economics does, in theory, is say, "Look, we'll pour more rocks on top of the highest piles, and some will tumble to the ground where the poor and middle class can scavenge for the pebbles and stone dust.

It's like the old joke about the priest who takes the money from the collection plate and tosses it in the air: whatever God can catch, he can keep.

What Obama proposes to do is simple: take the highest rocks off the highest piles, and give them to the people still with piles closer to the ground.

Not in the direct sense of actually giving money to the poor and middle class, but in allowing those classes (sadly, or maybe not so much, I'm not part of the classes who would benefit from Obama's tax cuts, but I'll get to that in a moment) to keep more of their stones.

So what happens then? Well, the core cost of living is the same no matter how much money you have: you need food, you need clothing (sadly), you need shelter. You need transportation. People with fewer rocks will spend a higher proportion of their rocks on these necessities. Whatever is left, one hopes, they will put in a bank but given our consumerist society, they will end up spending those rocks on comforts.

In other words, they'll get their rocks off.

But remember the first example I spoke about? I have a little bit of wealth and a need (or want) and I share my wealth with you in order to have you satisfy that hole in my life?

Look what happens now: those same rocks that the capitalists would have gotten directly from the government thru lower tax rates, rocks they likely would have off-shored in some Cayman Islands investment corporation, are now repurposed to have benefitted millions of Americans first, before getting back essentially to the same place they were going to end up in the first place! In the pockets of the rich like me!

In effect, the wealthy have lent out their wealth AND gotten a higher return from the American economy AND seen the American economy get stronger as a result, than they would have seen squirreling their rocks away on some island offshore.

Lest you think that this concept has been lost on Republicans, take a look at some of John McCain's proposals:

- Increased defense spending, including ramping up troop levels.

- a $5,000 tax credit for buying zero emission cars.

- $2 billion to "clean" coal technology.

- a $5,000 tax credit for health insurance to every American family.

None of these are anything except governmental solutions to free market problems. In other words, a redistribution of wealth.

To periphrase Animal Farm, "All rocks are equal, but some rocks are more equal than others".

(crossposted to Simply Left Behind)