Monday, October 5, 2009

Speaking truth to power

One of the two issues that made me teeter on the edge of voting Democratic in the elections last year was the fact that income inequality is increasing in this country.* As I said back in August, writing about the Democratic National Convention:

Bill Clinton is the only speaker I heard raise the issue that makes me most uncomfortable about voting Republican: the increasing income inequity. Reasonable people can reasonably disagree about almost every issue and reasonable people can reasonably disagree about whether the country is, as a whole, heading in the right direction. But an increasing gap between have and have-nots is simply wrong. The problem is I fear the Democrat’s approach will not close the gap by making the have-nots better off but by attempting to make the haves worse off. That’s not helpful. On the other hand, if the Republicans approach simply widens the gap further that’s not helpful either.

Now comes Ross Douthat writing about the same issue and making a convincing argument that other policies I favor - school choice and limited immigration - and a behavior I favor - raising children in stable two-parent households - are factors that could do far more than tax policy and other forms of income redistribution to narrow the income gap.

I believe we would be better served in this country by a government that focused on getting the economy going again and left issues like cap-and-trade and major health care overhaul until the financial picture improved and steps had been taken to help those on the bottom rungs of the economic ladder hoist themselves up. Steps like school choice and limited immigration and explaining clearly that a single-parent household is almost always a good predictor of poverty:

The report found that sons and daughters have approximately the same likelihood of moving up or down the economic ladder. The exception is women whose parents were at the bottom of the income distribution. Partly because they are more likely to be single mothers, nearly half (47 percent) of daughters born to parents at the bottom remain at the bottom, compared to 35 percent of sons.

For those who cannot stomach such policy and behavior changes, Douthat does offer another path to income equality:

There is, however, one way that a Democrat majority can plausibly bring down inequality: Just let government keep growing. [snip]

The European experience suggests that ... [i]f you funnel enough of a nation’s gross domestic product through a bureaucracy, the gap between the upper class and everybody else usually compresses.

But economic growth often compresses along with it. This is already the logic of our current fiscal trajectory: ever-larger government, and ever-slower growth.

That combination could eventually create the more egalitarian America that Democrats have long promised to deliver. The question is whether Americans will thank them for it.

Thank them for it? Me, not so much. I’d prefer a nation in which those who are not sharing in the American dream are given the education they need to succed; are protected from unfair competition caused by an unending stream of immigrants willing to work for lower wages (yes, I would be willing to pay more for goods like hotels and strawberries); and clearly understand** that they do themselves and their children no favors by raising those children in an environment where success is far more difficult than it needs to be. That seems to me to be a formula for a more egalitarian America with greater economic growth for everyone.

(Via JustOneMinute.)


* There is, of course, another side to the income inequality argument: a rising tide lifts all boats. I’ll have something to say about that in the next day or so.

** I am not arguing that single parents who do not carefully consider the economic effects of raising children alone - whether because the child is born our of wedlock or because of divorce - are stupid. Rather they are ill-served by the representations of single-parenthood they see around them. I watched “Private Practice” last week. The show has two single parents - one father, one mother. When the single father told his employer he was struggling to cope with getting his daughter settled in his household, the employer said it would be fine if he took some time off. I anticipate that when the single mother returns to work she will be able to cut back on her hours (despite a previous plot line about her firm desperately needing more income); flex her hours as she pleases; and bring her newborn to work.

The real world doesn’t work that way. Not even close. Employers are going to have limited sympathy - in some case, no sympathy - for a single parent who cannot make it to work because of childcare issues or who wants to bring his or her children to work or who gives a job less than adequate attention because of constant child-related distractions. Furthermore neither the sheer cost of having children nor the incredible drain on time and energy of having children is likely to be raised in popular depictions: television, movies, novels. Combine this with the idea that someone somewhere (or everyone everywhere) - the government, your employer, your co-workers, your neighbors - should and will help you bear the burden and you get an extremely unrealistic view of what single parenthood is like; of the financial constraints it puts on the parent; and of the barriers it raises to the children’s eventual success. This applies as much to a parent whose financial situation is worsened by divorce as it does to a parent who has a child without ever being married.


WLindsayWheeler said...

You've forgotten the single most important factor of all!


Tariffs protected jobs at home! Tariffs protect manufacturing jobs that put people to work!

I live in Battle Creek Michigan---we have lost many manufacturing jobs to China and Mexico! The Kellogg Company, moved its plant here in Battle Creek to Mexico! Why? Because of Unions and its Free Trade/Globalist Multicultural ideology! That is why the poor keep on getting poorer! That is why there is NO middle class. Free Trade has killed America. Both Democrats and Republicans are for Free Trade because in the end it is about Globalization. There is No loyalty to one's kinsmen.

What you are talking about has only a partial bearing on pay inequality. For the loss of the middle class is the loss of manufacturing jobs. And the essence of the problem has to do with Tariffs and the globalist capitalist mentality of our judas goats.

Beard said...

How about if we make it a national priority to provide a job to everyone who wants one?

Suppose we say that, if you can't work, we provide a not-very-pleasant low-baseline income that makes it possible not to starve. (And enough health-care so you don't get a disease that infects your neighbors.)

If you want to work, and you want the government to provide you with a job, it will. The wages will be low, but higher than the not-working alternative. And the experience gets you hungry for making more, while giving you the change to acquire skills to compete for jobs with private employers.

To make this work better than "welfare reform", I would make special provision for mothers of small children, so raising the children to school age is recognized as being a job. Though quite possibly, to be recognized as a job, you need to join with others in a mutual support network, not just stay home with the kids and watch TV together. (Needs debugging, no doubt, but it's a start.)

Some of the better created jobs would be supervisory positions, supervising those who need it.

Why does the government need to do this? Why don't people just go out and get a job?

Look at the definition of "productivity". It's the amount of goods and services produced, divided by the amount of labor that goes into it. (Surely there are other factors, but these are the big ones.) So, one major way for a company (or an economy) to increase productivity is to decrease the amount labor that goes into production. That is, eliminate jobs. Private enterprise will create jobs for people with skills, but not for the poor.

It's a truism that automation has always created more jobs than it eliminates, but I don't think that makes it true, and certainly not eternal.

We are getting ever better at automating (or outsourcing) work. What if we end up with not enough work for our people to do? We may be there already.

The economic definition of "productivity" doesn't recognize it, but people need to work. Without work, people become irresponsible and predatory.

So, if we as a society need more work, and the economy isn't generating it, how do we get it? The only solution I see is for the government to manufacture it. This had some value during the Great Depression in the 1930s. Maybe we need it again.

Grim said...

The CCC was a great experience for the young men who worked on it. I worked on a documentary about it, some time ago; got to interview a bunch of them. All of them said it was the second greatest experience of their lives -- right after fighting in WWII.

Of course, they were just as poor at the end of the CCC experience as before it. But they appreciated getting to work together on a team, and do things they could see last for many years after.

The CCC was run by the US Army. Currently, our Army is a little busy. If we were to increase the size of the US military, though, we might be able to provide a civilian equivalent like the CCC to undertake various projects. Or, we could just dispense with the CCC, and institute a mandatory military service program like most of Europe does.

Now, the question is, how do we pay for it? The Federal government's current commitments have more than bankrupted it -- we're just waiting for Social Security, Medicare, and the Federal Pension crises to hit all at the same time. Tax the world? We'll have a big enough army!

WLindsayWheeler said...

I totally disagree with Beard and Grim!

There is work--How about ending Immigration!?! Has anybody said anything about that?

Or howabout ending the snobbery going on in the Middle Class ---that their sons and daughters are TOOOOOOO good to work with their hands----they HAVE to go to college! I was in the Military; what we got were the dregs, while men went off to college; do you think that Warfare needs high intelligence? It certainly does. But with Colleges siphoning off everything what is left?

I worked in the Construction industry as well. Do you think the construction industry needs highly intelligent people? But Ohhh no, that my son is tooooo goood to be a construction worker---he has to go to college!

So what ends up happening is that thousands of IMMIGRANTS are in the military and in the Construction fields!

The Bible teaches "Hate not thou Laborious work". Yet that seems to be the case in America. The breeding of effeminacy in men and how many men escape the rigours of the military and of construction by going off to panzy marxist colleges?

How many gas stations, convenience stores and hotels are run by Pakis, Muslims, and Asian Indians? How about putting our own homegrown people to work instead of IMPORTING thousands of third worlders!

How about that!!! for putting America back to work!

End IMMIGRATION. End the scandalous 1965 Immigration Act. Rescind anchor baby status!

We don't need CC or any government programs. What we need is COMMON SENSE. But that is scarcity in America. Immigrants are doing all sorts of jobs that born in American people can do! How about that!!!!!

Grim said...

" you think that Warfare needs high intelligence? It certainly does."

Indeed it does. I've met a few Brigade commanders. They aren't as openly intellectual as your average university professor, of whom I've also met a few.

Nevertheless, their job is rather more mentally challenging than any professorship. No disrespect to scientists or high doctors of the liberal arts: but they have the advantage of being specialists. The Brigade commander has to know everything about everything that affects his people, the area they are assigned, or the enemy trying to kill his people. He has to make things happen every day, combine military operations with diplomacy. If he gets something wrong, a young man or woman dies, and it's his fault.

And he knows it.

Elise said...

I'm torn about tariffs. On the one hand, I do believe economists who say that a nation open to global trade is going to be more prosperous overall than a nation that walls itself in with tariffs. On the other hand, if that additional prosperity flows to the top 1% or 10% or even 25% while at the same time destroying the jobs of those lower on the economic ladder, the overall number isn't much good to most of us. The counter-argument is that the rich will create more jobs for all of us but I'm not convinced that always happens - one reason they're getting rich is because they're creating jobs overseas where pay is cheap and benefits are cheaper. So it may be that the jobs they create here are service jobs - like getting their nails done and driving their cars - are not really ones that bootstrap either the economy as a whole or the people on the lower rungs. So I'm torn. I'd need to do a lot of headache-inducing research to figure out what position to take on tariffs.

This also ties into the Wal-Mart paradox. Wal-Mart sells stuff really cheap so people who are less well off can buy more stuff for less money. At the same time, Wal-Mart sells stuff cheap because they buy it from China which means there are fewer American jobs that could make those less well off people better off. And, if I may inject an aesthetic or possibly moral note, is it really a good thing that we can now all buy lots and lots of, say, Christmas decorations every year when they're so crummy we have to throw them away on January 1 - and buy more next year? My parents used the same strings of big, fat Christmas lights for ages. And they were a lot prettier than the small, plastic ones that start malfunctioning on Boxing Day.

Elise said...

Jobs for everyone who wants one. This can work temporarily but if the need for government jobs goes on too long then those people getting experience in government work simply won't be able to find jobs with private companies. It may be that make-work is better than no work but I don't think that will be true for long particularly if the alternative is surviving adequately without doing any work at all.

I do, however, sometimes wonder with Beard if we're reaching a point where there simply aren't enough jobs for all the people. Is there a limit to how high you can build a pyramid that depends - at base - on an exchange where I make baskets (because I'm a good basket-maker) while you grow food (because you're a good farmer) and I trade you baskets to carry your food in exchange for some of that food for myself?

Elise said...

Actually, WLW, I do talk about immigration in my post - and Douthat talks about it in his article.

As for snobbery about what jobs are acceptable, I agree there may be some. It's also interesting to read Anglachel's condemnation of Whole Foods Nation (the "progressives" who voted for Obama) - she has no patience with their contempt for the working class men and women who were the backbone of the Democratic Party for so long.