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Home Publications Blogs Beat the Press Inequality and Mobility: Is the NYT Writing News Stories from Republican Talking Points?

Inequality and Mobility: Is the NYT Writing News Stories from Republican Talking Points?

Wednesday, 05 February 2014 05:21

That is what readers of a piece discussing President Obama's shift in emphasis from the word "inequality" to "opportunity" will undoubtedly think. The piece notes that President Obama is using the word "opportunity" more and downplaying talk of inequality. It presents comments from several people saying that "inequality" raises the specter of class war and that it eliminates the possibility of compromise with Republicans.

Incredibly the piece presents the Republicans' official line uncritically, telling readers:

"Republicans generally argue that government should do little; a free market and a growing economy will create opportunity. Their ideas to overhaul education, job-training and safety-net programs often double as budget-cutting initiatives."

Of course Republicans argue that the government should do lots of things to redistribute income upward, they just don't highlight the fact that the government is doing these things. For example, they are strong supporters of government granted patent monopolies that increase drug prices by close to $300 billion a year, an amount that is roughly equal to 1.8 percent of GDP and almost four times the SNAP budget. They support keeping in place the protectionist measures that largely insulate doctors and lawyers and other highly paid professionals from the same sort of international competition faced by autoworkers and textile workers.

Republicans support keeping in place a tax code that is littered with tax breaks, the exploitation of which is the primary basis for the existence of the private equity industry. (See my colleague Eileen Appelbaum's forthcoming book on this topic.) Republicans support a special exemption of the financial industry from the sort of taxes that apply to other industries. This implicitly means higher taxes on other sectors of the economy and allows people to get ridiculously rich in finance. And they support a budget policy that keep millions of people out of work and puts downward pressure on the wages of most workers.

In short, it is absurd to say that the Republicans want the government to do little; they want the government to intervene in huge ways to redistribute income upward. Of course they don't openly say this, they would much rather pretend that all the policies they support that lead to an upward redistribution of income are just the natural workings of the market. In this way, the NYT has done them a great service in uncritically projecting the Republicans' romanticized image to readers as reflecting reality. However this completely distorts the relevant issues at play.

The real question is whether either party is prepared to attack the policies that have shifted such a vast amount of income upward over the last three decades. For practical purposes, if these policies are not changed, the agenda on mobility is just silly happy talk and everyone knows it. If the current policies promoting inequality are left in place there is nothing that Washington can do that can affect in more than a trivial way the life prospects of those in the bottom half and especially the bottom quintile of the income distribution.

Comments (4)Add Comment
Cradle to Grave Big Government, Republican Style
written by Robert Salzberg, February 05, 2014 6:24
If R's were really for small government, why do many insist on telling women they have to carry the child of their rapist?

Why do R's insist on telling people who they can or cannot marry?

Why are more R's than D's against the freedom to smoke pot?

R's claim that government can't run a lemonade stand, but government always gets it right when they decide who's guilty and should be executed?

When oil wells explode, levies collapse and Wall Street crashes because of lack of properly enforced good regulation, doesn't that create the need for more government not less to pick up the pieces?

Doesn't strong, smart, Big Government regulation make the need for government smaller not larger?

In an exponentially expanding technological world where a single person with a few resources can cause ever greater damage, why exactly should we be shrinking government's reach?
The Great Inequality Lie: How Market Power Destroyed Opportunity
written by Last Mover, February 05, 2014 8:18

Inequality and opportunity are not difficult to understand. It can be explained in the same language used by economic predators who exploited the concept of inequality long ago, to justify growth of the highly concentrated rich donor class (read "highly inequal") who literally run the country with unearned income and wealth.

Start with legitimate inequality. Use sports as an example. Each player represents a specialized input for the team. When teams compete it drives the value of their combined specializations to the highest valued use reflected in scores earned.

In an economic context, each team and each of its members are "price takers" in terms of what cannot be changed in terms of a level playing field used by both teams.

If any team or team member attempts to "take" more than he or she is worth from another "maker" in terms of potential score gain, the other team or another team member with more score-earning productivity will move in and take (earn) that score gain instead.

This is what is meant by the standard conservative line that unfettered free markets depend on unequal outcomes created by equal opportunity to create maximum growth.

For them, the critical assumptions necessary for free market competition to work and arrive at this conclusion is barely an afterthought, as though it's an obvious fact of life like gravity and a round earth. Never mind market power, except the kind exercised by government of course.

Economic Predator Version of Inequality
In the sports metaphor above, change "price takers" to "price makers". Design the sport so only two teams at the top, known as the One Percent League, draw most of the paying crowds to watch the "best" players, carefully cultivated from teams below in stairstep fashion called "mobility".

In this version of sports, carefully control the scores earned by the two teams in the One Percent League to make it appear the "winners take all" are instead "competing" for scores.

Use every crooked manipulation in the book such as restricting entry, hidden subsidies for sports arenas, bribe players to lose, bribe referees to make false calls, encourage doping, hype superstars, etcetera. Be sure to avoid lopsided scores, always make the "unequal outcome" look close to justify the artificial "equal opportunity" that creates them.

Here's the clincher. Everytime a player or team below - or even within the One Percent League - moves up the economic ladder into a better position in occupational terms, jump up and down and scream with glee that this is free market competition at work, creating yet another unequal outcome for the economic benefit of mankind by virtue of equal opportunity on the entry side.

Never, ever admit that what you are actually doing amounts to a neo-fascist cheering on economic predators making their way up the economic ladder by taking - not making more economic gains at the margin.

What America, you think Obama is talking about fixing free markets that don't work and cannot possibly work without ridding them of economic predators ... because now he is talking about "opportunity" instead of "inequality"?
It's Not About Republicans, It's About the Dupopoly
written by Jeff M, February 05, 2014 10:10

Your examples are all accurate, but taxing productive labor instead of speculation, trade barriers for the wealthy, patent protection and many other forms of upward redistribution enjoy fully bipartisan support.

You do a disservice by perpetuating the illusion that Democrats offer something much different in this realm.

Obama and the Democrats had control of both the White House and Congress his first two years and did nothing of consequence to stop upward redistribution. Do you think Rs would let a filibuster stop them?
Market price for doctors.
written by Ralph Musgrave, February 06, 2014 1:14

Re doctors, in the old Soviet Union they used to be paid about the same as truck drivers. Given the excessive numbers who want to become doctors, that could easily be the free market price for their services.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.