Robert Reich made a really good video about the Federal Reserve. I don’t pay that much attention to Reich anymore, because I fully understand everything he has to say. But he really is a great communicator. And unlike a lot of people, he doesn’t lose site of what most people — even politically engaged people — know. I know that I often take stuff for granted when writing about politics and economics. It’s easy enough to do when you spend so much time reading other writers who know as much or more than you do. But a lot of these issues are really important and not widely understood.

The Federal Reserve is an especially important and obscure topic. It’s important because it really does determine if you are going to get a raise — or even have a job. And it is obscure because very few people know what it does. There was the time during the 2004 Democratic debate when Al Sharpton totally blew a question about what the Fed does. So let me clear that up: the Fed controls the flow of money in the economy. Yeah, it does other things. But that’s the most important. And it is in this regard, that it has the power to decide if you have a job or not.

The two things that the Fed looks at are employment and inflation. But given whose interests the Fed actually looks after, it is far more focused on the latter issue. Everyone in the power elite seems constantly concerned that we are going to go back to the mid and late 1970s when inflation got almost as high as 15%. But the Fed was able to fix this by increasing unemployment. So it isn’t necessary now to “head off” inflation by killing jobs ahead of time.

The other thing about the economy of the 1970s is that the inflation problems were mostly the result of oil price shocks. So how is that an issue right now? It isn’t. What’s really going on is that the power elite think that it is much safer to allow American workers to continue to see their wages stagnate and to lose jobs rather than for the rich to see the slightest threat to their wealth. And that is what this is really all about. Like so much else in the United States, workers have accepted the world view of the power elite, even though it is not in the interests of workers.

What Reich talks about in this video is that the Federal Reserve should not raise interest rates until we clearly see inflation. It does seem to be the case that the Fed desperately wants to raise rates. They are just looking for an excuse to do it. But they haven’t raised rates because there is literally no indication of inflation. Worker wages are not going up. But to me, it is as simple as this: our unemployment rate is 5.3%. This is almost certainly artificially low because of involuntary part-time workers and others who have just given up looking for a job because they can’t find one. But even if that wasn’t the case, in 2000, the unemployment rate got down to below 4%, yet we didn’t have inflation. It makes no sense that the Fed can remember back 40 years, but can’t remember back 15 years.

Check out the video, it is very informative — and entertaining.

Almost a month ago, Noah Smith wrote an article that really struck me, Free-Market Ideology and the Burden of Proof. I’m kind of shocked that it took me this long to write about it, but I think I had to let it sit in my mind for a while. It’s one of those things where what he is saying is obvious in retrospect. Basically, he posits that the Reagan revolution was super keen. All that lowering of taxes and cutting of regulation worked great and it created a great economy. (This is not true, of course.) But even if that’s true, why should we think it is still true? If cutting taxes in half caused an economic boom, why would cutting them in half again do the same thing?

The thing is that we have had a history since Reagan. Both Democrats and Republicans have done the same things. Clinton deregulated the financial industry and it didn’t help, except in allowing a huge housing bubble to form that brought down the entire economy. And Bush’s big tax cuts created incredibly disappointing economic growth. As Smith put it, “Reagan probably picked a lot of the low-hanging fruit.” But as Paul Krugman put it last Friday in regard to a different Noah Smith article, “In terms of the economy, his record is trumped by Bill Clinton’s on every front: GDP growth, job creation, family incomes.”

What’s shocking is that the Republican Party is stuck at Ronald Reagan. I commonly hear Republican politicians claim that Democrats are stuck in the past and have no new ideas. Clearly, it is the Republicans who just refuse to listen and are still hearing what George McGovern ran on in 1972. As for what ideas the Republicans have, they are exactly what Reagan and Kemp were pushing. It’s still supply-side economics: if only we make it easier for the rich, it will help everyone.

In the meantime, the Democrats went through a revolution of thought. I’m not keen on it, and I’m glad to see it receding to some extent. But it is still true that Democrats are very open to neoliberal ideas. If they can solve a social problem through the private sector, they will. Just look at Obamacare. The only way that Republicans have changed is in that they are now simply against solving any social problem. They are more focused on trying to turn back time and destroy everything that was done in the New Deal and the Great Society.

So the question is why we continue to accept this rhetoric from conservatives. The economy was pretty good under Reagan. This was mostly due to the Federal Reserve, but I understand that most people give credit to Reagan and his policies. But Clinton raised taxes and had an even bigger boom. And then Bush ran the whole Reagan playbook and had mediocre results — even before the economic crisis. So why is it that Bush’s brother is considered a reasonable candidate, when he is pushing the same stuff? It seems like as voters, we are willing to let our political leaders do anything at all. It’s like we are playing a game of craps rather than electing people based upon policies.

Regular readers know that I hate Ted Nugent. It is mostly just that he has an easy partisanship that is pure tribal identity. But there are so many facets to what is vile about him. And one thing that really bugs me is that he can make death threats regarding the president and nothing happens to him. Back in 2007 he said, “Obama, he’s a piece of shit, and I told him to suck on my machine gun.” And then in 2012 he said, “If Barack Obama becomes the president in November, again, I will either be dead or in jail by this time next year.” That is a clear threat. But nothing happens to him because he’s white and rich.

Let me be clear: I think he should be allowed to say such things. I don’t think they mean anything. I do think they coarsen political debate. And they do have bad effects on people who are even more unstable than Nugent. But I’m pretty much a free speech absolutist. Regardless, I don’t see that the state’s interest in protecting individuals comes anywhere near its interest in allowing for the free exchange of ideas. I certainly think that Nugent and others should be socially ostracized. The fact that Mike Huckabee is a friend of his should make Huckabee unqualified for the presidency. But we all know that the right wing of this country is crazy, so clearly, I am asking for too much.

The problem is that if Ted Nugent were a Muslim with the same statements, he would have spent years in jail — twice. And all that says is that America has free speech as long as the speech is popular enough. And that means that we don’t actually have free speech. I am in the situation where the things I want to say are clearly inside the range of acceptable speech. But that’s hardly surprising. I’m a white male who grew up in the middle class. I don’t stray too far from that. I am the kind of liberal that such a background creates. So the fact that I feel unconstrained, means absolutely nothing.

The issue isn’t confined to the United States, of course. It is a problem in the west generally. Everywhere that countries congratulate themselves on their embrace of free speech, you will actually find incredible hypocrisy. This was well on display early this year with all the “Je Suis Charlie” protests. At the same time people were marching in the streets for “free speech,” the French government was going after a comedian. It certainly wasn’t because he was offensive. After all, wasn’t that what everyone was marching for?! It was rather because he was offending the wrong people. You see, Charlie Hebdo was offending Muslims, and the comedian was a Muslim offending non-Muslims.

Now we have another example, in the UK this time, A Quiz for the West’s Great Free Speech Advocates and Supporters of Anjem Choudary’s Arrest. It does indeed seem that Anjem Choudary is a vile guy. But then so are Nazis and Klansmen. But I support their rights too. In the article, Glenn Greenwald points out the ridiculous double standard that we commonly use in the west. Choudary gives speeches saying that he supports the Islamic State. Thus, the UK government claims that this is inciting violence. Okay. But so is the following that never got anyone arrested:

Greenwald provides many other examples. But it’s clear. This is just a double standard. It’s like all the FBI “sting” operations where the FBI takes mentally unstable Muslims and gets them to pretend to start a jihad. I wonder what would happen if the FBI had similar “sting” operations with unstable Ted Nugent fans. But we’ll never know, because the FBI would never do that. Because Muslims are the enemy. Not Ted Nugent or Sarah Palin fans. And not Alex Jones, whose listeners have been incited to think that Jade Helm 15 is an existential threat to America. Because we are hypocrites. Because we do not have free speech.

Some conservative ideas are bad like raising the retirement age. It is just a way of cutting social security benefits without actually saying so. And given that the poor don’t live as long as the rich, it is an extremely regressive way of cutting social security. It would be far more fair to just cut how much money people get. But that would be admitting that it is a cut. Obviously, we need to call this sort of thing out. Delaying retirement by two years is what all the Republican candidates (except Trump) want to do. But at least it would save money.

But there is a whole other level of wrongness. I thought Chris Christie put out the proposal very well at last Thursday’s debate. After saying that we must “first” raise the retirement age because, hey, everyone’s doing it, he said, “Secondly, we would [means] test Social Security for those who are making over $200,000 dollars a year in retirement income, and have $4 to $5 million dollars in liquid assets saved.” This is what passes for hard nosed thinking in the Republican Party. It sounds good because obviously such people wouldn’t be hurt. And it seems to say, “See: I’m going after the rich!” But it really doesn’t.

Look at the numbers he’s proposed. Just making a quarter million dollars per year isn’t enough to make someone too rich to need Social Security. They must also have $4 million is liquid assets. So supposed you just bought Bill Gate’s $63 million mansion. So you are only left with three and a half million dollars in cash. And you only get about a million per year in retirement income. Then don’t worry, you are still going to get your $2,663 check every month. Because Chris Christie isn’t a monster! Clearly, Christie has put together his plan so it won’t actually apply to anyone, but it sounds like he’s coming down hard on the rich.

But the worst thing about this plan is that even if it were real, it is meaningless. Dean Baker has been writing about this for years. Unless we want to eliminate Social Security for everyone with retirement benefits of $40,000 per year and more, there really is no savings. All it would do is make the accounting more difficult (something that Republicans are supposedly against) and make people less inclined to support the program (something that Republicans are very keen for). Even if Christie set a single standard of $200,000, it would be meaningless.

There are two parts of Social Security. The “pay in” is highly regressive — mostly between the upper class (who make around $100,000) per year, and the truly rich who make many hundreds of thousands or more. But it is nonetheless true that the upper class pay a lot of money into social security. The “pay out” is far more egalitarian. So there is money to be gained by soaking the rich — but it isn’t on the “pay out” side; it is on the “pay in” side. Of course, no conservative is willing to eliminate the payroll tax cap — or even increase it. That actually would cause a little pain for the rich, so it is not even discussed.

I don’t think this is a conspiracy. For one thing, I don’t think that Chris Christie is smart enough to say to his people, “I want to propose increasing the retirement age, which is a regressive benefit cut; what can I come up with that makes it looks like I’m hurting the rich too, but which doesn’t actually hurt the rich?” But I do think that people like Christie have advisers who know that anything at all is okay as long as it doesn’t hurt the rich. So if Christie ever got it into his head to raise the payroll tax cap, there would be someone close by to explain that he can’t do that. The problem is more systemic: the Republicans are in the can for the rich. And that’s the only reason they exist.

Dan Balz is the very definition of a Villager. The only time I’ve written about him was last year when he was making the same old, tired argument that the Republicans needed to pass immigration reform in order to reach out to the Latino community. I’ve long argued that it makes no sense for the Republicans to pass immigration reform, given that their attitude is, “Once we do this for you, it’s over! Don’t expect anything else!” But people like Balz think that immigration reform is critical for the same reason that all other Villagers do: because its what “everyone else” thinks.

Well, over the weekend, I saw a new Balz article, GOP Debate Contenders Give Democrats Reason to Worry. His main claim is that Democrats are hoping that Trump becomes the nominee so they will have an easy election. While it is true that few Democrats would mind that outcome, I do not know of a single Democrat who thinks that Trump is going to be the Republican nominee. What’s more, have we heard Clinton or Sanders attacking Trump? Not at all. Everyone still thinks the eventual nominee will be Bush or Walker or maybe Rubio. But that’s the think with Villagers: they don’t let facts stand in the way of whatever narrative they’ve decided to push.

According to Blaz, in private, Democrats don’t feel as good about running against Rubio as they do about running against Trump. Oh, what a surprise! Does that mean that any Democrats are seriously worried about running against Marco Rubio? But Blaz says that Rubio “declared forcefully early in the debate that he would present the starkest future-vs.-past contrast to Clinton.” This is just repeating Rubio’s own claims. In truth, Rubio is pushing exactly the same supply side policies that every Republican since Reagan has. There is nothing new about what Rubio is pushing.

He also went on to talk about Scott Walker. But it was curious. Check this out, “He has been a divisive leader in Wisconsin, but he has the potential to unite the establishment and tea party wings of the Republican Party…” All that means is that Walker could get the Republican presidential nomination. It says nothing at all about how that might make him a particularly impressive general election candidate. So Democrats should worry why, exactly? There really is nothing behind the claim. The article reads like it was based on a press release from Reince Priebus.

But I fear the article also comes from the Clinton haters. Democrats are “nervous about Clinton.” Republicans could “mount a stiff challenge” to “a vulnerable” Clinton. Why are people nervous? How exactly is she vulnerable? Is she having an affair with her videographer? Balz doesn’t say, but it’s pretty clear that he doesn’t have any reasons at all. Partisans are always worried that the person who runs is going to turn out to be a problem. But in Clinton’s case, we have two advantages. First, her life has been so picked over that it’s hard to believe that there is any major scandal lurking. Second, we know that she will fight back at least as hard as her husband did.

It boggles my mind that people like Dan Balz get paid large amounts of money to peddle this nonsense. It’s not just that it’s wrong. It is that it is predictable. Of course some Villager was going to write a story about how Thursday’s debate spelled trouble for Hillary Clinton specifically and the Democratic Party generally. That was a given long before the debate.

If you listen to economists and politicians — especially those on the right — you will hear them talk excessively about economic growth. Jeb Bush recently got a lot of attention by claiming that he would increase growth to 4% — partly by making people work longer hours. That was silly, but not any more so than the standard argument about economic growth. When Republicans are asked how they will reduce inequality, they cast aside things like the minimum wage and labor unions. Instead, they push one thing and one thing only, “We need to increase economic growth so that everyone does better!” The problem is that this just isn’t the way the economy has worked for the past 40 years.

I wrote about this issue quite explicitly recently, No Trade Deals Until Our Economy Is Fixed. From the end of World War II to the mid-1970s, wages increased right along with productivity. But since that time, the two things have become uncoupled. Wages have been basically stagnant, while productivity has continued upward. My point was and still is that productivity doesn’t matter in the least so long as we have an economy in which all the gains go to the people at the top. But the truth is that conservatives refuse to engage with this fact.

Last week at The Fiscal Times, David Dayen wrote about another side of this issue, Why Conservatives Are So Desperate to Debunk One Hillary Clinton Chart. What he is talking about is a concerted effort among conservative economists to claim that, “If only you look at the data correctly, you will see that workers have done great!” But they haven’t. And many mainstream economists have been all over this. Mark Thoma has highlighted a lot of them over at his blog, Economist’s View. But here is the chart — it ain’t complicated:

A good example of how conservatives are trying to deny this reality comes from Harvard economist Robert Lawrence. He argued that you couldn’t just look at workers. So they threw in the management class. Obviously, this is begging the question. Why not throw in every person? Then, by definition, there would be no inequality. What Lawrence has done is to get rid of the median income and replace it with an average income. The difference is huge. And as Dayen pointed out: the fact that the average and median are so different is itself an indication of a large amount of inequality, “Using average rather than median compensation is like taking the average salary of five workers in a room when one of them is Bill Gates. The average salary will look pretty robust even if the other four workers in that room are struggling.”

But even with that adjustment, Lawrence only managed to make up part of the difference. So he was forced to look at total compensation and fiddle with different inflation indices — all in a totally disingenuous way. This is just what Christian apologist William Lane Craig does: start with the conclusion and work backwards. I’ve written about this a lot. Lawrence started with the idea that workers are doing just great and he cobbled together an argument to prove it.

Dayen’s article started with a anecdote, that I thought was very telling:

Pretty much everything that was wrong with Clinton economics was the result of Robert Rubin. Still, he was ostensibly a liberal economist. But he “didn’t know” that wages and productivity had been decoupled. Economists are lost in their own models. American workers don’t need the chart to know that their lives as workers are not turning out the same as their parents’. But economists are locked into assumptions like “a rising tide lifts all boats.” Well, maybe in the mythical free market — but not in our political environment where the rich can buy special privileges. Luckily, a lot of economists are waking up. But the conservatives will hold onto this ideology forever — or at least until the economy falls apart.