Stagnation is Still All Income Inequality

Larry SummersPaul Krugman has written quite a laudatory article about a recent talk given by Larry Summers. I think part of this is just an attempt for Krugman to make nice after being fairly critical of Summers as a possible Federal Reserve chair. But there is no denying that what Summers has to say is interesting. You can read Krugman’s description of it, Secular Stagnation, Coalmines, Bubbles, and Larry Summers. But the basic idea is pretty simple. And troubling.

What Summers noted was that since Reagan, the only time that our economy has been at full employment has been when some kind of bubble is going on. Part of this goes along with our huge increase in private debt over that time. But it is has not caused inflation. Summers suggests that we have a new normal where the economy is depressed. The takeaway from all of this is what we already know: individual saving during bad economic times is bad for the economy generally. Given that individuals won’t spend, the government ought to be spending more. This is all very basic Keynesian theory.

But having read the article, one thought immediately occurred to me. The real problem here is not how the economy is working on average. The problem is how the economy is being divided up. You may remember a TED Talk by Nick Hanauer that I wrote about last year. In his lecture he talks about how if workers had the same share of the economy as they had in 1970, they would make almost twice as much as they do today. Just imagine what that kind of extra buying power would do for our economy! Instead, we have rich individuals and corporations sitting on huge piles of money—money that could be spent on salaries for the unemployed.

I didn’t come up with this idea all by myself. It came from reading Dean Baker for years. So I was interested to see what he had to say about Summers’ talk. He made four points, Bubbles Are Not Funny. First, when bubbles burst, they tend to cause wealth to trickle upwards—they make income inequality worse. Second, he talks about income inequality. Third, he mentions how our trade deficit harms us (and how it is partly the fault of Summers’ strong dollar policy). And finally, he talks about a very big issue for him: work sharing. The truth is that part of our problem is that Americans work too many hours and don’t take vacations. If they worked less, more people could have jobs.

To me, the biggest issue by far is what I originally spoke about: productivity gains over the last 35 years have not been equitably shared (in fact, to a large extent, they haven’t been shared at all). As Baker noted, “The upward redistribution in the last three decades, from middle and lower end wage earners to the high end wage earners in the 80s and 90s, and to corporate profits in the last decade, likely had an effect in depressing consumption.” Simply by increasing the total taxes paid by the rich, and providing better services at the bottom would greatly help the poor and middle classes. This actually gets to a point that Matt Yglesias makes a lot: if companies can’t think of anything creative to do with their piles of cash, then maybe they should just lower their prices. Well, if the rich can’t think of anything creative to do with their cash, I can think of a lot of creative things the government can do with it.

As Krugman hammers on all the time: economics is not a morality tale. All the Ayn Rand sycophants can talk all they want about “makers and takers.” But the fact is that the bad economy hurts the rich as well as the poor. The rich are not concerned, as Rand always claimed they needed to be, with their enlightened self-interest. The rich are as short sighted as anyone. We need to do what is best for the economy as a whole. And that works out well, because it also means that the economy works well for everyone inside it.

Update (17 November 2013 9:57 pm)

Krugman wrote a column based on the same stuff, A Permanent Slump?

Where’s My Third Lost Skeleton Film?!

The Lost Skeleton of CadavraMy friend, can your heart stand the shocking facts of another “Lost Skeleton” film? Well, even if it can’t, I don’t know if it matters. I’ll discuss it in a moment. But first, you may ask, “What does he mean by this ‘Lost Skeleton’ film of which he speaks?” It is a natural question that a person with questions such as yourself might naturally ask. Since I am a man of the type that enjoys the answering of questions that a person with questions will find themselves liking to ask, I will enjoy answering for you.

In 2001, Larry Blamire wrote and directed a film, The Lost Skeleton of Cadavra, a parody of low budget science fiction films of the late 1950s. Until that time, I had never seen a movie that was so silly. Here is the trailer for it, but I will warn you, the overpowering glory of its silliness can only be experienced by watching the whole film:

Blamire shot the film with a group of his friends, including established actors Brian Howe, Fay Masterson, and Andrew Parks. So after the first took off among film geeks, the band got back together in 2008 to create the sequel, The Lost Skeleton Returns Again. Unlike the original, it is beautifully shot, going after that studio B-picture look. Actually, it does a lot better than that. When the film is not chin-deep in silliness, it is presenting really beautiful shots. Here is the trailer with what I thought was the funniest monologue in the film:

That laugh in the middle of the monologue is priceless. And the back-lighting! Everyone’s working so hard on it: actor, director, cinematographer. Unfortunately, the writer just phoned it in, and he was really drunk.

Well, it is 2013 and we’ve been promised another “Lost Skeleton” film. Larry Blamire teamed up with special effects artist Cleve Hall to produce, The Lost Skeleton Walks Among Us. Last year at this time, Blamire tweeted out the following image to announce the collaboration:

The Lost Skeleton Walks Among Us - Cleve Hall

Then on 18 January of this year, Blamire released the following image to announce that they would soon be announcing a kickstarter drive:

The Lost Skeleton Walks Among Us -  Kickstarter

And then… Nothing! But don’t worry. I’m on the case. There will be updates! My friend, can your heart stand the wait?

Update (17 November 2013 3:46)

I just saw that The Lost Skeleton of Cadavra is currently streaming on Netflix. But the DVD has lots of nice extras. Regardless, if you haven’t seen it and you have Netflix, you owe it to yourself to watch it.

Update (18 November 2013 10:32)

Larry Blamire responded:

John Rawls and Disingenuousness

John RawlsI’m in the process of reading John Rawls’ Justice as Fairness. It is not easy reading. But still, I’m sure you’ll hear me talking more and more about Rawls as time goes on. That’s the way I am.

Reading this book got me thinking of another of his books, Political Liberalism where he tries to answer the question of political legitimacy. Basically: why should we even accept “justice as fairness” as the basis of our society? Why not just accept the idea that what it says in some holy book as the basis of our society? His answer is universality. Only people who accept the book as the word of God think, for example, that God cries whenever a sperm is wasted. But no one can reasonably argue that beating up innocent children is a good thing to do. (Actually, the Bible is pretty big on that too!)

As a society, we accept this. So in general, you don’t see people arguing against gay marriage because “God” is against it. Instead, you see arguments cloaked in a patina of universality when the actual point is simply a plea to a particular religious or cultural doctrine. So they argue (against all actual facts) that same sex couples are bad for children. Sure, their holy book is very clear that God hates fags, but that has nothing to do with their argument. It’s just about the children!

What this all comes down to is the fact that policy debates usually have a high percentage of content that is disingenuous. What’s more, those arguments come mostly from the conservative side. Consider abortion. The only argument against abortion rights is that the fetus should be considered a full citizen. But this isn’t a reasonable argument when you are talking about a zygote that has no brain. Again: it is a religious argument about souls masquerading as a universalist argument about protecting the innocent.

It isn’t just social issues either. Almost every conservative economic argument I hear is based upon the aristocratic idea that the rich really are better than the rest of us. It is a belief of pure faith and is completely unsupported by the facts. But the argument is rarely put in this way. Instead of “the rich are better” we get the Job Creator myth. By this myth, the poor will only have jobs if we let the rich keep all their money. Again: a disingenuous argument intended to hide the real argument.

Related to this is the evolution debate. In the 19th century and through much of the 20th, the argument was purely religious: God said it was seven days, dontcha know! But over time, the creationists realized they were losing the battle with all this religious talk. So they got disingenuous. They started making scientific-like arguments against evolution. They developed Intelligent Design. But regardless of how much mumbo jumbo you pile on, it is still Genesis 1.

I love theoretical discussions and I think John Rawls is brilliant and adds a lot of insight into my thinking about these things. But such serious discussions don’t mean much in the practical world. The conservatives know how to play the game, even if they don’t really understand the game. And as a fairly practical guy, I want to know how to deal with all this disingenuousness. I wish the Christians would just go back to their old way of arguing: God said it; I believe it; that settles it. At least it’s truthful.


I would never try to prove natural selection by offering Bible verses. I really do not understand why they think it is alright to pollute my science as they do. They think they have the whole truth. If it were me and I just knew that after I died God was going to take me to heaven for eternity, I wouldn’t care much about this life. I know there are Christians like that out in the world. But most American Christians seem awfully angry when they talk about anything but how much Jesus loves them. Why does it matter to them what I believe? By their way of thinking, the best that’s going to happen to me is that I’m going to cease to exist. Given I only get one go at this, why not at least let me have my science and politics unpolluted by their faith-based disingenuousness?

Lightfoot, Scorsese, and Others

Gordon LightfootOn this day in 1503, the great Italian Mannerist painter Bronzino was born. I love his work, but I’m especially taken with his name. Because “Bronzino” was not his last name. His actual name was Agnolo di Cosimo. He apparently went by Bronzino because of his dark skin. It’s like if John Boehner were a painter, he might sign them, “Orange Man.”

The mathematician August Ferdinand Mobius was born in 1790. He is best known for the Mobius strip, which is a three-dimensional object that has only one side. When people are introduced to it in grammar school, it is usually referred to as “one sided piece of paper.” Mobius was a student of Gauss, which is generally enough to make anyone famous. But of course, most of his work was highly technical and not really suitable for children or basically anyone educated in the United States. His main work was in projective geometry and number theory. He also apparently did work in astronomy, but I don’t know what it was.

The great comedian Peter Cook was born in 1937. Here he is doing a great bit as a coal miner talking about his work, “My Experiences Down the Mine.” It is very funny:

The great film director Martin Scorsese is 71 today. I specifically did not give him the day because I don’t especially like him for the things that other people like him for. Most notably: Raging Bull and Goodfellas. I don’t like how Taxi Driver is widely misunderstood. But he’s directed some of my favorite films: Kundun and Bringing Out the Dead most especially. But what I most like about Scorsese is his appreciation of film. You can hardly watch a documentary about a film without Scorsese there saying the most insightful things. He really loves film—and in a way that resonates for me. If he had not been a filmmaker, he could have been a truly great film critic—like Roger Ebert in his love for the art form but with far greater insight. (Of course, he wouldn’t necessarily have been as good a writer; Ebert’s prose was really good.)

And just for JMF, Jeff Buckley was born in 1966. Here he is doing “Hallelujah”:

Other birthdays: Grace Abbott (1878); philosopher Mikhail Bakhtin (1895); actor Lee Strasberg (1901); historian Shelby Foote (1916); actor Rock Hudson (1925); singer-songwriter Gene Clark (1944); actor Danny DeVito (69); television producer Lorne Michaels (59); baseball player Tom Seaver (59); actor Mary Elizabeth Mastrantonio (55); and actor Rachel McAdams (35).

The day, however, belongs to the singer-songwriter Gordon Lightfoot who is 75 today. I tend to like folk music of his type because I like stories. And he always sounds kind of sad and wrote “Rainy Day People.” In general, I can listen to him for a fair amount of time before he starts to annoy me. Now I’m going to play one of his big hits, “The Wreck of the Edmund Fitzgerald.” But understand this: I think the song could have used a few more rewrites. The story itself is so compelling that the song works. But the lyrics are weak and the music could be a whole lot less plodding. So given that rousing introduction, here it is!

Happy birthday Gordon Lightfoot!