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Thursday, October 27, 2016

We’re in the middle of the worst economic disaster in modern history and we’re doing almost nothing about it, warns UC Berkeley Economist J. Bradford DeLong.

“So unless something — and it will need to be something major — returns the U.S. to its pre-2008 growth trajectory, future economic historians will not regard the Great Depression as the worst business-cycle disaster of the industrial age,” he writes. “It is we who are living in their worst case.”

The former Clinton administration official wonders why a disaster that “robs the average American family of four of $36,000 per year in useful goods and services, and that threatens to keep Americans poorer than they might have been for decades,” isn’t motivating policymakers to act.

“One would think that America’s leaders would be clambering to formulate policies aimed at returning the economy to its pre-2008 growth path: putting people back to work, cleaning up underwater mortgages, restoring financial markets’ risk-bearing capacity, and boosting investment,” he says.

Instead, Congress is debating about how much our investments should be reduced, how few weeks we should help the unemployed, how much food stamps should be cut.

The reason why we aren’t acting is clear to DeLong: “…at the top, there is no crisis.” While the incomes of the bottom 90 percent have stagnated for decades, the top has flourished. “The incomes of America’s top 10 percent are two-thirds higher than those of their counterparts 20 years ago, while the incomes of the top 1 percent have more than doubled,” he writes.

This inequality isn’t an accident of history or the result of rapid technological advancement, as conservatives like to pretend.

It’s the result of the class war the right has been waging for decades.

“Among developed countries, the U.S. does have the most unequal distribution of disposable income after taxes and transfer payments,” writes economist Laura Tyson, former chair of the President’s Council of Economic Advisers.

Our tax system is more progressive than most European countries that rely on a value-added tax but we spend far less on programs that help families and keep inequality low.

This is the victory of a conservative movement that caters to the richest Americans and seems to have no problem with a recovery that is only benefiting the richest 10 percent. Actually, it seeks to maintain the advantage for the richest by opposing policies like Medicaid expansion and assailing the labor movement.

The Republican Party doesn’t even feel the need to bother with solutions to problems that plague the lower 90 percent, like unemployment, says New York magazine’s Jonathan Chait.

“Republican thought on mass unemployment is a restaurant with tiny portions that taste terrible,” he writes.

The problem for the left is that Republicans can run and win on policies that directly increase income inequality. They can resist Democratic initiatives — even wildly popular ideas like raising the minimum wage, which would reduce poverty and increase consumer spending — and still be on track to hold the House of Representatives, while possibly even wining the Senate.

Why doesn’t the Republican Party act to reverse the greatest economic disaster in at least half a century, a disaster they could prevent?

Rep. Paul Ryan (R-WI) can reveal his secret passion for alleviating poverty over and over again while promoting policies that increase it. And still be taken seriously.

Republicans don’t care about improving the economy for the bottom 90 percent for one simple reason.

They don’t have to.

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Copyright 2014 The National Memo
  • sigrid28

    We’re going to have to have the fight of the 21st century before it’s barely begun if Democrats are going to keep the Senate and take back the House in 2014–or the rest of the century will be a return to the Middle Ages.

  • Dominick Vila

    Why aren’t we doing something to change, or at least mitigate the effects, of economic policies put in place during the last 3 decades that have made income inequality in the USA one of the worst in the industrialized world, and press Congress to invest in infrastructure, R&D, education, and modernization so that we can keep up with other industrial powers and compete effectively? Because the ability of the GOP to take control of the Senate and keep the House in 2014 depends on economic uncertainty. The last thing the GOP wants is a robust and profitable economy, and happy consumers. They need social unrest, uncertainty, and doom and gloom to win, and they are doing everything they can to ensure that is the political climate that will prevail in November 2014. Are they concerned about the damage they are doing to the country? I doubt it, for them the end results justify the means.

    • sigrid28

      This economic uncertainty you identify as a condition for Republicans to keep the House and possibly win back the Senate in 2014 cannot be fixed with the current Congress. The only hope is messaging by Democrats that drowns out the messaging by Republicans who want to capitalize on the social unrest they have brought about, as well as an unprecedented movement by Democrats to get out the vote. I’ve mentioned direct action on the legal front to hamper incursions on voting rights wherever possible. What else can be done, Dominick, to turn things around?

      • Dominick Vila

        The administration has to do a better job at highlighting the policies that prevented the economic collapse predicted by former President Bush in 2008, and it must also do a better job at explaining the impact of obstructionism on economic recovery.
        President Obama is, clearly, a non-confrontational person who believes the intellect of the American people will ultimately prevail. We need someone who pulls no punches doing the dirty fighting, while the President holds the high ground.

        • sigrid28

          Precisely, Dominick, the president needs effective surrogates. But event the most effective surrogates will not be able to pull off the success the country needs in 2014 without a brilliant ground game and the help of the courts.

  • Mark Forsyth

    The gop does not want to do anything to fix the economy.Well imagine that.Neither do the crooks who drilled a hole into the bank vault want to see the hole patched.No surprises there.

  • charleo1

    This may surprise no one. But, it’s always a good habit to peruse across the isle,
    and read what they are telling their minions. The short answer is, Barack Obama,
    has been able to cobble together a majority, using minorities now, of voters that
    really aren’t interested in what’s good for the Country. But, have been bribed to
    vote for Democrats, because that’s the Party they figure will give them things.
    So over on the Right, they don’t have the time to worry about wealth inequity, jobs,
    a lack of upward mobility, shrinking incomes of the Middle Class, or the rising
    numbers of people being pushed into poverty. With the odds growing longer,
    with each passing day, of ever pulling themselves, or their families out of it.
    Of course, all the while, they manage to adhere to their core mission issues.
    No, in Republican Land, the house is on fire! The Liberals started it, and it’s up
    real Americans, the ones, according to them, that built the Country, to save it.
    Dovetailing perfectly their assurances that the economy, as well as the Country
    itself is going to Hell in a hand basket. And soon, if we don’t eliminate most all regulations, drastically cut the taxes on the highest incomes, and corporations.
    And stop running up the debt on programs the poor, and a hammered Middle
    Class depend on. Like unemployment insurance, subsidized healthcare for the
    working poor, and Head-start programs, that help the low income single parent.
    So, I thought I would include a short excerpt found on the widely read, Red
    State. Com. to see how they are couching these issues, And why their definitely
    non-rich, core constituencies, don’t care if their politicians ever address these
    “No one likes to talk about it, but we could be facing the cold reality of financial collapse, a slow-motion train wreck that will devastate everyone. Think riots and mayhem. They may not be far away. If it is not too late, the key to a possible comeback is that Obama is wrong, and conservatives are right about the issues. Conservatives are right about free markets stimulating the business sector, about deregulation, about decreasing taxes, about reducing spending, and about rolling back the debt. Socialism does not work. As the economic misery Obama imposes upon us gets worse, eventually the masses may be willing to hear the conservative message. Commentator Dick Morris points out that either Barack Obama’s policies are correct, or conservative policies of lower government spending and higher economic growth are correct. It can’t be both. So which is it? If conservatives are right, Obama’s economy will wither and through painful experience, people will return to free-market economics that conservatives espouse. If Obama is right, the economy will recover and Barack Obama will forever be a hero. Sensible people already know the answer to that question. Who knows, the economic contraction
    in the next few years could make it clear to Democrat voters that Obama’s policies have hurt them enormously. Perhaps, it could be so severe that it could break the grip Democrats have had on the voter groups that have supported them over the years. We can only hope. As it is now, the election marks a critical turning point. America has changed, and the future is uncertain. It will take many years and much work to return the cultural and political center of the nation to the right.
    Are conservatives supposed to stop fighting, stop resisting, stop speaking out?
    The left would hope so. God help us if we do. No, we should never give up. We should not accept what Barack Obama calls truth. Freedom is too important.”

    • sigrid28

      I love how the right has latched onto the term “train wreck,” probably because Ted Cruz popularized it by referring ad infinitum to “that train wreck that is Obamacare.” It’s of a piece with WND advertising daily specials on gas masks for the whole family and the NRA promoting weapons arsenals for the coming war between the . . . what is it this week? It’s just the same fear-mongering by an aggrieved minority that has always dominated Republican talking points and messaging, but has taken on this particular vernacular since President Obama was elected five years ago. No matter how hard they try, however, these strident voices indicate the deep concern on the right about the gradual improvement of the economy, the growing number of Americans of good will and tolerance (particularly among the young), and the impending success of Obamacare. The greater hyperbole in their talk exposes their anxiety over forces by which they know they will be not so much conquered as left behind.

      • charleo1

        They are masters of the catch phrase, are they not? “Train Wreck,”
        “job creators,” “wealth redistribution,” death panels,” to name but
        a few. They are also master of the narrative. And, they are not very
        concerned about one narrative like, “businesses need certainty,” conflicting with another, “If Obama doesn’t agree to defund the
        healthcare law, we’ll shut down the government. Or, we’ll risk
        a default, if Democrats won’t agree to cut the safety net, and make
        the Bush tax cuts permanent.” In acting out on both these issues,
        the GOP is directly responsible for costing the Country, and the
        economy, somewhere in the 50 billion dollar range, for essentially
        being very ideological, unreasonable, and acting unstable. As if
        to communicate, oh, don’t think we won’t do this. or that, we’re
        in panic mode up here, and you should be too! Their overall strategy for motivating their base, has been laughable at times. If it were not for the real life hardships going on in the Country, as they play act for their frightened, and worried elderly constituents. And, their angry, and vitriolic, White 40 somethings. Seething at the prospect that Obama, in spite of everything, was not going to fail.

  • latebloomingrandma

    You never know about how things really are unless you “walk a mile in their shoes.” Remember that movie “Trading Places”, starring Eddie Murphy and Dan Ackroyd? I would love to see some of the clueless, judgmental rich guys go undercover as a poor person, with only $5 in their pocket to start out with, live in a homeless shelter, don’t shower or shave for days at a time, eat lousy food—for say 6 months. One week or month would not be enough. Let’s see how they get out of this. With no help from family or trust funds, no credit cards and clothes from the Goodwill. I doubt anyone would be up to that challenge.

  • daniel bostdorf

    I agree with Jason that this is and frankly ahs always been class warfare. We fought our first civil war in 1860’s centered around economic slavery. Wee are fighting a second civil war centered around class warfare and corporate greed, avarice and economic enslavement of another generation of American workers (of all colors) with unliveable wages.

    Jason further states accurately: “This is the victory of a conservative movement that caters to the richest Americans and seems to have no problem with a recovery that is
    only benefiting the richest 10 percent. Actually, it seeks to maintain the advantage for the richest by opposing policies like Medicaid expansion and assailing the labor movement.”

    The GOP/Koch brothers attempted to thwart democratic processes of governing. They don’t want partisanship. They tried electing Romney and failed. Grooming Paul Ryan/Rand Paul and other puppets of their propaganda to attempt a coup d’etat . They don’t want a progressive social society’s choice of a black man as president. This has and still is an attempt by the multi-billonaire elite of this country, both personal and corporate wealth, to take over this country.

    That is why the GOP/Teaparty doesn’t worry.
    Vulture vampire capitalism at its grossest level.

    And made legal by a Supreme Court that has given blessing through “citizens united” that far right monetary fascism is equivilent to free speech.

    Jason is also is right about gaining Senate control…If the obstructionist GOP and its billionaire corporations win the Senate….America’s 70 year long experiment at a PROGRESSIVE “social democracy” is over. It will be organized fascism in charge complete with the suspension of a pluralistuc society monitored by the elite police state that is already in place.

    The movie V FOR VENDETTA” comes to mind as the only citizen’s response.

    Moer about “V” here:

  • centerroad

    Brad Delong is over quoted and over referenced considering his dearth of heavyweight economic analysis, and is a poor representative of the left view considering his unabashed support of Larry Summers for Fed chair. However, his ability to ingratiate himself with both Summers and Krugman at the same time is truly remarkable.

    Instead of following Krugman’s vassals around perhaps the author would occasionally seek an opinion from some real heavy weight left thinkers like Stiglitz, Shiller (his work blows up Friedman), or Rohmer.

    • centerroad

      My above comment may not have effectively made my point, which is this:

      The left lost the economics discussion because we let guys like Laffer (trickle down economics), Friedman (no regulations), and other right wing often incorrect economists take the bully pulpit, who’s theories have been elevated and eloquently displayed for the world to understand. The left is simply unable to project its economists in the same glowing light (krugman notwithstanding).

      When we are able to put together a pol like Warren or Clinton with an established exciting economic theory that has worked and creates wealth, then we win the battle.

      Fact is, the stats are pretty overwhelming, the dem econ policies have crushed the gop in both job creation and gnp growth since FDR, but we are unable to communicate the beauty and sexiness of these policies in a positive light. Instead we spend most of our time sounding like whiners about the gop plans, with Krugman becoming the pedantic whiner in chief.

  • howa4x

    The economy that supports the GOP with funding is doing great. The stock mkt. is above 16,000, Buffet laughs as he talks about making 37 million/day. The 1% is still 756% richer so why should republicans worry? The big banks are back, corporations are flush with cash, so what’s the problem? The GOP sector of the economy is fine. The rest of the population must be lazy or stupid if they can’t make it and belong to the 47% of takers who want to be on the government dole, whether getting food stamps, unemployment extensions, or Medicaid expansion. This is what the republicans tell themselves, and are backed up by right wing media bubble. Republicans want to country to adopt the Koch bros plan of the work for less economy with no benefits that will teach everyone what a dollar is worth.
    Do they really expect to run for national office with these ideas?

  • mommadillo

    Paul Ryan went to college on the government’s charity. Now that he’s got his, he wants to pull up the ladder and make sure nobody else gets any help. I’ve seen some slimeballs in my day, but he takes the cake.