The congressional budget office has just released a new report on the increasing inequality in the US. (You can get the full report in PDF at the link.) What is particularly interesting about the above chart is that if I read it rightly it indicates that all of the increase in inequality is due to the increase in income for the top 1%. I am disappointed that they don't include the wage income for individuals, because there the picture looks far worse. The middle class made up for stagnant wages by having both husband and wife work. And then we used our inflated house prices to keep above water. Now when are the journalists going to ask Republicans why Republican policies produced this?

Crackpot Economics and the Republi-CON

As Will points out in yesterday's post, evidence contradicts the idea that regulation is responsible for unemployment. In addition, as Dean Baker has pointed out, evidence also contradicts the idea that "uncertainty" about the future federal budget and regulation, rather than lack of demand, is why businesses are not hiring. He points out that the hours worked by existing employees have not gone up. If the problem were uncertainty about the future, then we would expect hours to go up, but employers to hold back from hiring more people. But hours are still down. Hence the problem is lack of demand, as most economists say.

All this is further evidence that the Republicons are so addicted to a thoroughly refuted ideology—that deregulation and tax cutting and shrinking government will lead to a boom—that they are delusional. The most prominent evidence of this, though, is the respectful reception that Herman Cain's 9-9-9 plan had in the Republican debates. It was obviously a crackpot idea. The only one who said it would work were Cain and his "economist" who wasn't an economist. No others, liberal or conservative, were backing it.

The fact that Cain rose to number one in the polls among Republicans is the biggest evidence that the Republican electorate is out of touch with reality. The latest, most thorough analysis from the Tax Policy Center makes clear just how big a disaster Cain's plan would be, and how far it is from what he claims. 84% of Americans would pay more taxes, and the top income earners would pay massively less. So Cain's plan would strike a body blow against consumer demand, and in turn massively increase unemployment.

The Republi-CON is not only Cain, but all of them, including Romney. The success of the Democrats in 2012 is going to depend on their discrediting the whole Republi-CON, in the way that Cain is now discredited. Cain will now sink in the polls, I believe. If only Obama and other Democratic leaders would bring the argument to bear on the whole Republican con!

Lay-offs Caused by Over-regulation

Another major Republicon talking point is the notion that government regulation is absolutely job destroying. Were that the case, of course, we might expect to hear that complaint from businesses themselves. As Bruce Bartlett points out based upon Bureau of Labor Statistics data for 2008, 2009, 2010, and the first half of this year, lay-offs (private, non-farm separations) due to regulations were miniscule - accounting for about 2/10ths of one percent of the reasons for separation. (http://economix.blogs.nytimes.com/2011/10/04/regulation-and-unemployment/). "Lack of demand" on the other hand contributed to 30.6 percent of these seaparations in 2010 !!! Surveys of economists and small business owners overwhelmingly demonstrate the same truth - namely, that the notion that regulation is strangling our otherwise vibrant economy is an absolute canard. It's "lack of demand" stupid !!!

An especially intriguing and thoughtful analysis of this conservative regulation argument was provided by a professor at Montclair State's Sociology Department. As Jay Livingston cleverly ( http://montclairsoci.blogspot.com/2011/09/that-uncertain-feeling.html) hypothesizes - if it is true that regulation is job-killing, then the highest regulated industries should be those that suffer the highest unemployment rates during this recession... The prime candidates he identifies are 1) Mining, Oil, Gas Extraction; 2) Financial Activities; 3) Education and health Services. Will it surprise you gentle reader to discover that these are the economic sectors with the lowest unemployment rates during this recession ????

In short, the entire Republicon political platform lacks any empirical economic basis and their strategies provide no serious effort to assist the American people during some very difficult times. The miracle to me is that so many people can continue to believe some of this tripe..

Obama's Passivity

In a previous editorial, Bill commented upon Obama's tendency to cater to "establishment" figures esp. in regard to economic issues. I could not concur more. While there are a variety of explanations for this behavior, I will confess that I feel a bit like Maureen Dowd in having recourse to an explanation which is both pyschological and cultural, and not political, or structural. In the New York Magazine article of August 12, 2011, Janny Scott (author of "A Singular Woman: The Untold Story of Barack Obama's Mother") reveals some amazing facts about Obama's upbringing between the age of six and ten in Jakarta, Indonesia before he was sent to live with his grandparents in Hawaii.

According to Scott, there were aspects of Indonesia's culture which were daunting. Specifically, as a friend of the Obamas recalled:

Over lunch, Barry [Barack], who was 9 at the time, sat at the dining table and listened intently but did not speak. When he asked to be excused, Ann [Obama's mother] directed him to ask the hostess for permission. Permission granted, he got down on the floor and played with Bryant’s son, who was 13 months old. After lunch, the group took a walk, with Barry running ahead. A flock of Indonesian children began lobbing rocks in his direction. They ducked behind a wall and shouted racial epithets. He seemed unfazed, dancing around as though playing dodge ball “with unseen players,” Bryant said. Ann did not react. Assuming she must not have understood the words, Bryant offered to intervene. “No, he’s O.K.,” Ann said. “He’s used to it.”

“We were floored that she’d bring a half-black child to Indonesia, knowing the disrespect they have for blacks,” Bryant said. At the same time, she admired Ann for teaching her boy to be fearless. A child in Indonesia needed to be raised that way — for self-preservation, Bryant decided. Ann also seemed to be teaching Barry respect. He had all the politeness that Indonesian children displayed toward their parents. He seemed to be learning Indonesian ways.

“I think this is one reason he’s so halus,” Bryant said of the pres­ident, using the Indonesian adjective that means “polite, refined, or courteous,” referring to qualities some see as distinctively Javanese. “He has the manners of Asians and the ways of Americans — being halus, being patient, calm, a good listener. If you’re not a good listener in Indonesia, you’d better leave.”

In short, it seems clear that Obama's cultural upbringing taught him to behave with an almost overweaning civility and respect to authority figures. Arguably, this trait, which epitomizes his civility and basic morality, has damaged his ability to portray himself as an effective transactional leader (in the bureaucratic form envisioned by Max Weber). While he may be an incredible charismatic leader, that type of leadership is not enough. When your opponents are uncivil, insist upon economic theories which are unworkable in a recession; when they work arduously to suppress voter registration of minority groups and low income populations; and persist in arguing that massive growth in wealth inequality is "O.K" or perhaps indicative of a lazy attitude among workers, it behooves a real leader to stand up and use the bully pulpit. Obama has been weak-kneed in doing so. (Oh, and by the way, if Republicans persist in acting as if Article 6 of the Constituion - which prohibits any test for the office of the President based upon religion - does not exist, the forth estate needs to inform them of therror of their ways. It's not happening.)

Alan Grayson summarizes Occupy Wall Street

Pretty good summary of what's gone wrong, that the Republi-CONS are ignoring.

March on Washington (mini)

I just attended the "Jobs not Cuts" rally near the Capitol. It was good, but too small—300 people or so. I hope it gets press coverage. I talked to a reporter from the conservative Weekly Standard, and gave him an earful, which I'm pretty sure he won't report. Afterward I spoke briefly with someone who has attended the "Rebuilding the American Dream" conference. He was optimistic that progressives will come together for 2012 and is himself running for congress. He said that there will be progressive candidates throughout the country in 2012. I hope there are, and they get elected.

DC Rally against austerity and for jobs to happen

Ok, fans, my call here for a march on Washington flopped, but it seems that a lot of others had the same idea. Here's the organizing site for a rally this Wednesday.

Time honored tactic for gutting the effective of government

In a nice piece of reporting, Martin Bashir exposes the Republi-con cutting of food safety inspectors effectively gutting the new law passed under Obama, and leading to deaths from food poisoning. Of course they did the same thing W. Bush to the SEC. That worked out well for the thieves. Explain to me why I'm wrong about calling it the Republi-con...