Real Solutions to Income Inequality — Not Tax Cuts

Lawrence MishelLawrence Mishel of the Economic Policy Institute is such a sensible economist that I could quote him every day. But it is exasperating in a way. He is known as a “liberal” economist. But there is nothing especially liberal about him. He is just what my father would call “common sense.” This is just part of the decay of political debate that has been going on my entire life. It is now the case that what used to be entirely conventional economic policy is now considered liberal or even “radical.” Just look at the situation in Greece. The new Greek government is making all kinds of sense, but it is the totally unreasonable German government that is considered respectable.

Yesterday, Mishel wrote, Even Better Than a Tax Cut. The “big news” is that both the Democratic and Republican parties are keen to attack income inequality with… tax cuts. Oh yeah, the woman working at Walmart for minimum wage for 29 hours per week (So they don’t have to provide any benefits!) already doesn’t pay any federal income taxes. So just how is it that reducing taxes is going to help her? Are we going to see a reduction in the payroll tax? What would it be replaced with? And increase on the cap? Don’t count on it.

The main aspect of this is just that there is no way that we are going to get tax cuts that don’t disproportionately help the rich. Why do I say that? Because tax cuts are always proposed as being focused on the middle and lower classes, and they always end up enriching the rich. But Mishel is correct that the Democratic plans — “expanded child care credits or a secondary earner tax break” — could at least help in the short term — if they got enacted as proposed (and they wouldn’t). But tax breaks just aren’t going to change the basic situation. As Mishel noted, “What has hurt workers’ paychecks is not what the government takes out, but what their employers no longer put in — a dynamic that tax cuts cannot eliminate.”

Of course, the Republican plans are a total joke:

Republican tax proposals, like the reforms put forward by Representative Paul D Ryan of Wisconsin, focus on lowering individual and corporate tax rates alongside revenue-saving efforts to simplify the tax code. But this same approach has been tried for decades — the same decades in which wages have continued to stagnate. Instead, these cuts have helped corporations, shareholders and the top 1 percent capture a larger share of economic growth.

Similarly, President George W Bush’s 2001 and 2003 tax cuts, which likewise promised to increase middle-class income, were followed by slower productivity and wage stagnation. The latest proposed Republican cuts won’t even provide much short-term relief, as they tend to be targeted at the highest-income households. For example, under a much-touted proposal by Representative Dave Camp of Michigan, the middle fifth would gain just $279 in tax relief a year, according to the Tax Policy Center, while the top 0.1 percent would garner the largest rate cut, valued at $248,000.

Mishel’s main point is not to knock the tax cut proposals. The truth is that they are laughable and why anyone takes them seriously at this point amazes me. Mishel’s main point is to discuss policies that actually would decrease income inequality. And the list ought to sound pretty familiar to people who read this blog:

  • The Federal Reserve needs to liberalize itself and stop holding back the economy with its excessive focus on inflation.
  • Don’t do any more job killing, rent enhancing trade deals like the TPP and TTIP.
  • Raise the minimum wage so that it is equal to half the average American wage ($12.50 by 2020).
  • Raise the amount a worker can make and still qualify for over-time pay.
  • Protect and expand worker’s rights: including the right to unionize, which has been decimated.
  • Enhance laws against businesses that steal from their employees.

That’s a funny list. There isn’t a single item there that wouldn’t get a super-majority if we polled the American people. But precisely because these are measures that would decrease income inequality, the power elite are against them. And as a result, no one will talk about this stuff in the 2016 general election. Instead, we will get “Tax cuts!” And “Reduced regulations!” And “Education!” None of it will help to fix the problem, but it’s something for politicians to talk about while income inequality grows.

Mishel ends with one the clearest descriptions of the problems we face:

Contrary to conventional wisdom, wage stagnation is not a result of forces beyond our control. It is a result of a policy regime that has undercut the individual and collective bargaining power of most workers. Because wage stagnation was caused by policy, it can be reversed by policy, too.

But that’s not what the power elite want us to talk about. So instead, we will get these pretend solutions that are meant to do nothing other than stall while nothing is done.

Tony Judt on Israel as Anachronism

Tony JudtThe Middle East peace process is finished. It did not die: it was killed. Mahmoud Abbas was undermined by the President of the Palestinian Authority and humiliated by the Prime Minister of Israel. His successor awaits a similar fate. Israel continues to mock its American patron, building illegal settlements in cynical disregard of the “road map.” The President of the United States of America has been reduced to a ventriloquist’s dummy, pitifully reciting the Israeli cabinet line: “It’s all Arafat’s fault.” Israelis themselves grimly await the next bomber. Palestinian Arabs, corralled into shrinking Bantustans, subsist on EU handouts. On the corpse-strewn landscape of the Fertile Crescent, Ariel Sharon, Yasser Arafat, and a handful of terrorists can all claim victory, and they do. Have we reached the end of the road? What is to be done?

At the dawn of the twentieth century, in the twilight of the continental empires, Europe’s subject peoples dreamed of forming “nation-states,” territorial homelands where Poles, Czechs, Serbs, Armenians, and others might live free, masters of their own fate. When the Habsburg and Romanov empires collapsed after World War I, their leaders seized the opportunity. A flurry of new states emerged; and the first thing they did was set about privileging their national, “ethnic” majority — defined by language, or religion, or antiquity, or all three — at the expense of inconvenient local minorities, who were consigned to second-class status: permanently resident strangers in their own home.

But one nationalist movement, Zionism, was frustrated in its ambitions. The dream of an appropriately sited Jewish national home in the middle of the defunct Turkish Empire had to wait upon the retreat of imperial Britain: a process that took three more decades and a second world war. And thus it was only in 1948 that a Jewish nation-state was established in formerly Ottoman Palestine. But the founders of the Jewish state had been influenced by the same concepts and categories as their fin-de-siècle contemporaries back in Warsaw, or Odessa, or Bucharest; not surprisingly, Israel’s ethno-religious self-definition, and its discrimination against internal “foreigners,” has always had more in common with, say, the practices of post-Habsburg Romania than either party might care to acknowledge.

The problem with Israel, in short, is not — as is sometimes suggested — that it is a European “enclave” in the Arab world; but rather that it arrived too late. It has imported a characteristically late-nineteenth-century separatist project into a world that has moved on, a world of individual rights, open frontiers, and international law. The very idea of a “Jewish state” — a state in which Jews and the Jewish religion have exclusive privileges from which non-Jewish citizens are forever excluded — is rooted in another time and place. Israel, in short, is an anachronism.

—Tony Judt
Israel: The Alternative (2003)
In When the Facts Change: Essays 1995-2010

American Christianity as Cultural Signifier

Elizabeth Stoker BruenigElizabeth Stoker Bruenig wrote a very thought provoking article, Is Obama a Christian or Not? It’s Almost Impossible to Say. It is following off Scott Walker’s comment that he didn’t know if Obama was a Christian. Bruenig is a PhD student in religion at Brown University. I’ve quoted her before. She’s brilliant on issues of religion. And she is very insightful here. Basically, she says there is no way to know if anyone is a Christian unless you know them really well. But then she goes on to discuss just how poorly defined “Christian” is. Although I appreciate what’s she’s getting at, I think she is missing the point because she takes religion far more seriously than Americans in general.

If you ask them, you will see that roughly three-quarters of Americans consider themselves Christians. That’s too high a figure to mean anything. That’s “do you believe that motherhood is a good thing” range. If we drilled down into those numbers, we would find that almost to a person Christians disagree about what it is to be a fellow traveler. Ask one of the Jehovah’s Witnesses and they will tell that pretty much none of those other so called Christians qualify. Most mainstream protestants don’t accept Mormonism as Christianity. When I look out on the great sea of American Christianity, I see nothing but indifference and heresy.

So the question is not, “What is it to be a Christian?” The question is, “What is it to be an American Christian?” Because Christianity in American public life has almost nothing to do with religion. “Christianity” is just what all right thinking Americans believe. There is increasing room for other faiths — especially other Abrahamic faiths. But there is really no room to speak of with regard to someone like me: a mystic atheist. If I wanted to go into politics, I simply couldn’t. What I am is, to be blunt, far too theological for the American electorate. They aren’t interested in a discussion of ontology and morality; they just want to hear the magic words, “I’m one of you.”

In this environment, what it means to be a Christian is that one claims to be a Christian. I am not a Christian because I don’t claim to be. You might have some problems with Graham Greene — an avowed atheist — who still called himself a Christian and continued to go through the rituals to his death. But Obama is not questionable at all. He claims to be a Christian. He has a history of going to church. He publicly talks about God in the same way that other American Christians do.

The conservatives can’t have it both ways. They claim that America is a Christian country even though most Christians never go to church and have the vaguest form of faith. (I once heard a “Christian” say he didn’t believe Jesus was the son of God!) But then they want to nullify any given Christian because she doesn’t worship in what the conservatives think is the right way. It’s nonsense. American Christianity is far more a cultural signifier than an actual religion. So looking for clues to prove that Obama isn’t a “real” Christian is just nonsense. And ultimately, it is part of the whole racist “birther” movement that wants to say that Obama is not a “real” American.

Morning Music: Benson & DeVito

Open Heart - Robby BensonYesterday, I posted a live performance of the Meat Loaf classic, “Paradise By The Dashboard Light.” In it, the Ellen Foley part was performed by Karla DeVito. DeVito has been married to Robby Benson since 1982. I had no idea that he was such an accomplished musician and songwriter. Here the two of them are doing his song, “If I Had the Wings…” It is from the album Open Heart, which contains the songs from the musical of the same name that he wrote for her:

Birthday Post: Winslow Homer

Winslow HomerOn this day in 1836, the great painter Winslow Homer was born. He is one of those unfortunate artists who has been so copied that it is hard to see his work as fresh. But does it ever deserve to be seen with fresh eyes! He was such a brilliant painter — most especially regarding his seascapes — but really in all of his work. And it is interesting to see his work develop. In his twenties and thirties, I find his work somewhat stilted — still very much tied to his work as a commercial illustrator. But this is when he visits Paris and is inspired by some of the work being done by Gustave Courbet, Jean-François Millet, and Manet. Slowly, his work becomes more fluid and realistic into his forties and fifties. And at its greatest in his sixties.

This is not the way the art world seems to look at Homer, however. They seem to think him at his best in his late thirties and early forties. And I’ll admit: it is fine work. Here is one I like from that period, Fresh Eggs:

Fresh Eggs - Winslow Homer

But I much prefer The Fisher Girl from twenty years later. And it isn’t just this painting. His work during the 1890s is just exceptional.

The Fisher Girl - Winslow Homer

Happy birthday Winslow Homer!