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.