Matt Yglesias made a keen observation about the State of the Union address, Sorry, Equal Opportunity Isn’t Good Enough. It’s about how both Obama and Cathy McMorris Rodgers (in her “response” to him) focused on “equality of opportunity.” It’s true: people just love the idea of opportunity. It’s like motherhood: no one is against it. And as such, it is meaningless to talk about.

Yglesias focuses on the general idea that just because someone is born slow and stupid doesn’t mean they should be relegated to a short and painful life. There is something fundamentally wrong with that idea. Just the same, you don’t want to give everyone the same amount or a random amount of wealth. This would suck the vitality out of the society. Incentives really do matter.

The randomly distributed wealth example is a good one. I think it is more or less the system we now have. I know that conservatives want to think that money stays in certain families because of great genes. But that isn’t my experience. I find that people’s abilities are mostly due to their environments. Look at Bush the Younger. There is no doubt that born to poor or middle class parents, he would not be rich. Yglesias discusses the random distribution case and notes that it would provide bad incentives for people. That’s true. And I think we are seeing much the same thing in our economy. People don’t generally think, “I’m going to work hard at this entry level job because I want to be Bill Gates!” They think that the entry level job may lead to a reasonable life. But that expectation is looking more and more like wishing to become Bill Gates.

It does seem to me that Yglesias poses the question right. There are two things that we are trying to maximize: fairness and incentives. An economy where everyone gets the same would not provide anything in incentives. An economy that allowed a small group to get the vast majority of wealth would not provide fairness. We should look for something in the middle that provides both fairness and incentives. I don’t have the ultimate solution as to what that might be. I’m not even sure there is a single system. But one thing is certain: our society is tilted entirely toward the incentives.

What’s especially bad is that if Bill Gates were worth only $30 billion instead of $60 billion, I don’t see that he or anyone else would feel more incentivized to work. There is a point of inequality past which we don’t get any extra incentives. And we are well past that point in the United States and in the world. So our society could provide a whole lot more fairness without losing any incentives for the young up-and-comers. Truly, I think a 99% tax on wealth above a billion dollars would have no negative effects on the society. But clearly, less extreme measures wouldn’t.

I like Yglesias’ framing of the issue. But there is a deeper issue: there cannot be anything close to equality of opportunity when absolute equality is so far out of whack. This sets up a situation where the children of the rich get every conceivable advantage, even apart for actual cash payments. This is not a meritocracy. This is, as I’ve discussed before, inviting the poor in to play your Monopoly game after all the properties have been purchased. I wish we could cut the crap, but that seems unlikely. Conservatives argue about these issues the same way they argue about global warming. First they argue that there is no inequality problem. Then they argue that there is inequality, but the real issue is mobility and that is fine. Then they argue that equality just means laws that specifically stop people from doing something. Then they argue that mobility doesn’t matter. If they were honest, they would just admit that they like the way things are and they have no reason.

The bottom line to all of this is that talk of opportunity is a distraction. We all believe in it. Hooray! We don’t ever have to talk about it again. But if we really care about it—if we want to provide it to everyone—we need to do something about inequality. This isn’t class warfare. In fact, it is just the opposite. It is an effort to lessen class distinctions. Regardless, discussing opportunity without income and wealth inequality is just lip service. It means nothing.

Are you ready for some more outrageous Wall Street banking behavior? You may have heard last week that JPMorgan Chase CEO Jamie Dimon got a 74% raise. This is after the London Whale trade lost the company $6 billion in 2012. Then, last year, the company was fined $20 billion for financial misbehavior—also known as fraud or “stuff that would get regular people thrown in jail.” But Dimon got a huge raise. Hooray for capitalism!

Matt Taibbi wrote a great article yesterday, Jamie Dimon’s Raise Proves US Regulatory Strategy is a Joke. He noted that the “record” fine against the company didn’t make its board and top management repentant, but it did cause them to layoff 7,500 non-CEO class of line employees. And they froze the pay of the people who remained.

Taibbi goes into some depth about the problem. If we didn’t already know before, we should have known after the 2008 financial crisis: the CEO class does not run its companies in the long-term interests of those companies. Instead, they run them in the short-term interests of themselves. All the top people who caused the 2008 crisis went away with tens of millions of dollars. What does it matter to them what ruin they leave in their wake?

It would be one thing if these people were socially ostracized. That might make them less inclined toward their dirty dealings. But all of them do it. What’s more, no level of fine is ever going to make Jamie Dimon unwelcome on CNBC. These people are our royalty, so anything they do is acceptable, with a minor exception for a Bernard Madoff sort of scam. (Although even there, I think if Madoff had controlled the kind of money that JPMorgan Chase does, it might have been different.)

But I’m focused on that 74% raise. In my work life, I’ve had employers who were hugely impressed with my work. I’ve been given ostentation raises. But I’ve never gotten any raise even close to 74%. I’ve talked to people, and no one I know has ever gotten a raise like that. Supposedly, raises are given to stop an employee from leaving. But that clearly isn’t the case with Dimon. He certainly wasn’t going anywhere. It is just that people in our society assume that the rich are better and thus deserving of ridiculous compensation packages. And this is with Dimon already making gobs of money.

Of course, as Taibbi notes, JPMorgan Chase was “sending a message” to the justice department. Not only are they not cowed, but they are also willing to inflict a bunch of harm on innocent employees if the government messes with them. After six years of watching the bankers flip off the rest of society, it isn’t surprising. But it seems that the Obama administration is determined to be naive in these matters. A proper government would have thrown people in jail. Or at least tried!

The last five years have told the people of the United States everything they need to know about justice in America. If you reveal our torture program to the press, you must go to jail. But if you rip off people for billions of dollars, cause a financial crisis, and generally screw up the economy for a decade or more, you’re in the clear. In fact, you are probably rich and well respected!

American justice in action!

And the la-hand of the Freeeeee!
And the hoooome, of thhhhhe, braaaave!

Last night on The Daily Show, Samantha Bee did a segment on the minimum wage. In it, she talked to investment banker Peter Schiff. He perfectly captures the essence of the patient aristocrat explaining the way the world works to the silly commoner. You could almost hear him sigh as he laid out the conservative narrative against the minimum wage, “There’s a law in economics—supply and demand—that’s something that you learn in Econ 101. If you increase the price of something you decrease the demand. And wages, that’s the price of labor. The higher you make the minimum wage, the more jobs are going to be destroyed.” You see, it’s a law! Except, it isn’t. Our economy is far more complex than that. The actual data indicate that it would at most cause minor job losses and at best create jobs.

Schiff goes on to imply that if you doubled the minimum wage, it would double the price of a hamburger. In the past, I would just pass off what he says to his keen desire to believe the fairy tales that support his ideology. But more and more I think the real problem is that rich people just aren’t that smart. Or maybe it is more accurate to say that they don’t think deeply about these issues. They grab onto a very simplistic narrative that happens to tell them that they deserve their $70 million net worth, and that is the end of their thinking.

Matt Yglesias wrote a great article following on the stupid Tom Perkins letter to The Wall Street Journal, Stop Listening to Rich People. He says:

The deference is the killer. There’s an interesting contrast. Hollywood stars also have opinions on policy. And they get a certain level of attention paid to them. But Obama never meets with them to discuss policy. And the funny thing is that since actors know that they are not experts, they are more likely to know what they’re talking about than are business people. Otherwise, there is no more reason to think a businessman would have insights into policy than an actor or, for that matter, grocery clerk.

I’m not saying that successful business people are stupid. But in my experience, they are rarely brilliant. In business, I think an over-abundance of brains can be a distinct liability. It makes a person less decisive and more easily bored. But let’s face it: economics isn’t that hard. It is not beyond any of these people to understand that the labor market is a monopsony and so simple ideas about supply and demand just aren’t valid.

But if I were drowning in cash, I might not care either. I might just latch onto any convenient theory that said that I was great because I was rich and the poor sucked. All of that is to say that I might have a much worse understanding of the macroeconomy than I do now. But if I were rich, people would listen to me and think I made sense, even though my ideas would be worse. We really are a culture in crisis and Peter Schiff (Who is pushing gold!) is a symptom.

I watched the State of the Union address last night. It was typical of such speeches: a hodgepodge of policies that sound more like a pep rally than a policy speech. And given the political realities, how could it be anything else? We don’t have a parliamentary system were the party in control can actually get stuff done. So what we get is a lot of pretending. It may well be why in America we don’t do things so much as we appear to do things.

A big part of this is the political rhetoric we use. Especially on the right, it is perpetually vague. My favorite example of this last night was when the president said, “But the budget compromise should leave us freer to focus on creating new jobs, not creating new crises.” I know what he means. When liberals talk about creating jobs, they mean infrastructure spending, job training, tax incentives for businesses to hire. There are all kinds of things, but they mostly cost money. When conservatives talk about creating jobs, they mean cutting taxes on the rich and regulations on business.

Of course, what the conservatives want has nothing to do with creating jobs. Tax cuts for the rich have very little effect on the economy and if they are matched by cuts to other programs, they actually have a negative impact. Cutting regulation in a depressed economy is just a way to make businesses more profitable—it doesn’t do anything to encourage hiring. A depressed economy is the perfect time to force businesses to clean up their factories and plants because it will create jobs. Cutting taxes on the rich and regulations on businesses are things conservatives always want to do because they consider them ends in themselves.

The point is that politicians of any political flavor can go around and talk about creating jobs without any sense of cognitive dissonance. Most ordinary people don’t think of tax cuts for the wealthy as a jobs program, but this is a matter of faith on the right. That’s why I think liberals are ill advised to talk in vague terms. It’s similar to the healthcare debate, where every couple of months some conservative wonk will say, “The Republicans do too have healthcare reform ideas!” And they list them and then it is clear that Republicans have no healthcare reform ideas.

None of this is to say that Obama’s speech was bad. He did mention a number of specific things that I quite liked: research funding, patent reform, the ridiculousness of $4 billion in subsidies to the oil companies each year. And it compared well to Cathy McMorris Rodgers’ speech. She said that of course the Republicans have plans to address income inequality, “Republicans have plans to close the gap—plans that focus on jobs first without more spending, government bailouts, and red tape.” So they have unstated plans that don’t cost any money and won’t require anything of the private sector. What could this be? Oh, that’s right: cutting taxes on the rich and regulations on business. You know, “Job creation!”

Back on the 21st, exactly one week ago, BART Police officers were searching a suspect’s apartment when one of them accidentally shot and killed another. Michael Maes, a 26-year veteran, shot Sgt Tom Smith, a 20-year veteran who was the head of their detective bureau. BART has defended itself, noting that in its 42-year history, this is the first officer to be killed on duty. Sadly, the same could not be said of BART customers. Regardless, it is a tragic accident.

The question is why it happened. All kinds of details have been provided. For example, we know the suspect was in jail. We know that Smith had particularly bad luck in that the bullet went through a gap in his body armor. There is even speculation that Smith surprised Maes, by coming through a different door than the crew had originally come through. I assume this means that Smith went out the back door without Maes noticing, and when Smith came back in, Maes was startled and shot. What we don’t know is a general overview of what happened, or how many officers were in the apartment.

Given that they were wearing body armor, I assume that the officers—quite rightly—were cautious entering the apartment. They couldn’t know that it wasn’t occupied. But once inside, they were performing a search. Why did one of them have his gun out? But even if it was during the initial entry, the whole thing screams out as another example of over-stimulated officers making mistakes.

This is a common problem with the police. When the adrenaline is pumping, officers are at their worst. This is what leads to unacceptable behavior like the Rodney King beating. And I assume that whether Smith was killed while entering the apartment or when he unexpectedly came through the back door or at some other time, the primary cause was that Maes was in an agitated state. This is not meant as any special criticism of him, but it might be some criticism of his training and police training in general.

What bothers me about this case is how it generalizes. In the long ago past, a “probation search” would have been done without much ado. But now we have a paramilitary approach, with guns drawn and officers in body armor. That breads the feeling that what the officers are doing is very dangerous—much more dangerous than it actually is. It helps to put them into an agitated state where mistakes are made. We really ought to look at these unnecessary tragedies and think about what our changing policing efforts are doing to us and the officers themselves. I’m not at all certain that they are making us safer and they certainly didn’t make Sgt Smith safer.

I saw on The Daily Show that New York Governor Andrew Cuomo recently said that “extreme conservatives” don’t belong in the state. This has caused a firestorm in the right wing media. It’s a great moment for them. Conservatives always knew that liberals were non-inclusive snobs and now they have the proof. It’s typical of the Ring Wing Outrage Machine, and that’s probably why whole thing happened over two weeks ago without my noticing it.

But I’m curious how Cuomo defines “extreme conservatives.” It is very telling. They are people who are anti-choice, anti-gay, and pro-assault riffle. What stands out there is that there are no economic issues. That doesn’t surprise me, of course. In general, liberalism in the United States is defined by these kind of social issues. And Cuomo is the ultimate example of the New Democrat. On economic issues, he’s a Wall Street marionette.

I’m almost to the point of giving up. The Democratic Party has ceded so much ground on economic issues that it is now a conservative party. It is true that the Republicans now hold economic views that would fit right into a Bizarro comic. But this is what happens when the “liberal” party takes over the position of the conservative party. There is no ideological oxygen on the right and so its policies have become brain damaged.

I don’t so much see the conservative positions Cuomo mentioned as all that extreme. At least they have a reasonably large constituency, unlike many of Cuomo’s Wall Street economic policies. Gay rights is great, but I have to say, the Democrats are only about ten years ahead of the Republicans on the issue. There are still a lot of conservative Christians who have a problem with it for religious reasons—or so they’ve been told. Regardless, this absolutely will not be an issue in 20 years.

Abortion is a very similar thing, although the argument against rights is a whole lot stronger. Regardless, no one likes abortion. Americans’ opinions on the issue are nuanced to say the least. So again, there are a lot of people who are anti-choice. And a smaller, but still large, set are absolutists. As with gay rights, I think these opponents are profoundly misguided. But that doesn’t mean they don’t exist—even in New York.

The assault weapon issue is just laughable. We have a huge gun problem in this country. But that problem is with handguns, not assault rifles. The focus on them is the Democratic Party desperate to do something about guns and thrashing about looking for any legislation that they might be able to pass. Look, if we liberals want to do something, we should be talking seriously about what needs to be done and not making largely symbolic legislation that motivates conservatives to come out and vote against us.

I’m sure that among the Wall Street bankers with whom Cuomo spends a lot of time, these issues are beyond the pale. But that doesn’t make them extreme. What Cuomo is doing is what New Democrats have been doing for decades: signally that he is liberal with selected social issues to distract from his economic conservatism. That’s the real story about what Cuomo said, not that such anti-gay politicians don’t fit in with New York voters. That is largely true of the bright blue state.

Today at Political Animal, Ed Kilgore wrote, Atlas Whined. In it, he discusses “venture capitalist Tom Perkins much-mocked letter to The Wall Street Journal comparing people like him to the persecuted German Jews .” And he notes that Ayn Rand would be very disappointed with such “fearful titans.” He notes, “How could she worship the Creative Capitalist if he’s cowering in his mansion?”

This is not entirely correct. Rand was very angry at the “business leaders” of her day. They then, as they had for generations before, believed that in order to stay in good standing in polite society, it was necessary to give money back to good causes. A good analogy is the way that Hollywood stars now have particular charitable causes that they support. To Rand, this screamed, “Altruism!” She wanted them to get rid of what she saw as hypocrisy.

The business community of today would be a great improvement from her perspective. What’s more, half of the political spectrum now says that by pursuing their own self interest, business owners are doing a great service to the society as Job Creators. The depth of Ayn Rand’s economic knowledge was the same as her philosophical knowledge (shallow), so she saw this as a direct outcome of her philosophy.

The truth is that the Perkins whine about the 1% being vilified by the collectivists could be taken right out of one of her essays. She would agree with Perkins and say what he wrote was only self-defense. What, after all, is John Galt’s speech, but an eight hour whine about how all the “takers” don’t understand the beneficence that all the “makers” are bringing to them? And of course, in Atlas Shrugged, that is the case. In the real world, it simply isn’t. (See Property Right for a short introduction.)

The only thing that Ayn Rand would quibble over is that venture capitalists like Tom Perkins even make the case that they are Job Creators. She would prefer them to understand her philosophy that says that people should only look out for their own self-interest. (See Enlightened Self Interest for her all-purpose caveat.) But yelling at liberals and calling them Nazis? That was Ayn Rand’s stock-in-trade.

Oh, how America, day by day, becomes what conservatives most desire: the Dickensian utopia where the rich are treated as titans and the poor know their place.

This morning, Jonathan Chait reports, Obama’s Plan to End Discrimination Against the Long-term Unemployed. Chait seems to be reasonably impressed. But as plan’s go, I file it along with things like the plan to impress a a rich man by befriending his dog and other Horatio Alger myths.

The situation for the long-term unemployed is indeed bad. As Chait shows in a graph from a new study, recently unemployed people with no experience in a particular field are four times as likely to get a call back as long-term unemployed people with experience. What’s going on is simple enough to explain. Employers just assume that if someone has been unemployed for a long time, there must be a reason. And this creates a feedback loop where the longer someone is unemployed, the harder it is for them to get a job.

Obama’s plan is to have major employers commit to not discriminating against workers in this way. And sure, even bringing up the issue is a good thing. The more people know about their biases, the better they can manage them. But it is weak tea. It reminds me of Oliver Twist saying, “Please, sir, I want some more.” But in this case, it is, “Please great and powerful Job Creator, give me at least a chance to compete against people who don’t have any of my skills.”

This touches on a broader issue with American business. In my experience, businesses would much rather hire fools and incompetents than hire one of those weirdos with skills and brains. Conservatives always claim that the government is bureaucratic, but in my experience, corporate America is even worse. What they want above all is nothing that will upset their little worlds. So despite the fact that we constantly hear that there are jobs out there but people don’t have the skills for them, the truth is that employers don’t really care. That is crystal clear when unskilled workers are called back far more than skilled workers over an issue as vague as the amount of time unemployed.

Of course, I don’t blame Obama. Actual policy to improve the economy can’t pass Congress. But fobbing off responsibility of aid for the unemployed to the rich is hardly the answer. But as answers go, it is the ultimate conservative approach: let the poor go cap-in-hand to the rich and beg like the servile dogs they are. But the long-term unemployed are not children. They are adults. Many of them are 50-somethings—middle managers and other skilled workers who any civilized society would value as the backbone of the middle class.

“Please, sir, I want some more.”