Washington Post Gets Behind Republican Economic Agenda

In a major business section article on President Obama's plans to address inequality, the Washington Post (a.k.a. Fox on 15th Street) came down squarely on the side of the Republicans. The Republican slant starts with the headline, "Obama's push to revive middle class will clash with long-term trends." This one undoubtedly had people all over the metro area saying, "duh."

Of course it will clash with long-term trends, that would be the point. No one thinks that the 1 percent just got all of our money yesterday. The process of upward redistribution has been going on for more than three decades.

"Republicans, both in Congress and on the campaign trail, favor a far different approach than Obama has embraced. They generally regard government efforts to promote equality and strengthen the middle class as counterproductive. By this thinking, reducing taxes and shrinking the government’s role in the economy will free up capital that entrepreneurs can invest, creating good new jobs."

Actually, the Post has no idea how Republicans "regard" government efforts to promote equality. Nor does it know whether in their "thinking" lower taxes for the wealthy actually translates into "good new jobs."

What the Post knows is what Republican politicians and spokespeople say. A serious newspaper sticks to what is visible and knowable, it does not do mind reading for the benefit of its readers.

The piece also includes a number of assertions that are unsupported by anything. For example, it tells readers:

"But it is not clear that the measures [those proposed by President Obama]— or any others — could compensate for the factors behind the decline of the middle class, including the rise of nations with abundant cheap labor and the development of new technologies that allow companies to operate with far fewer workers."

Actually, the abundant supply of cheap labor could do much to make middle class workers wealthier if it were allowed to compete freely with the most highly educated workers in the United States. There is no shortage of smart people in China, India, and other developing countries who could train to be doctors in the United States. If we eliminated the barriers that make it difficult for foreign doctors who meet U.S. standards from practicing in the United States, it would would substantially reduce the pay of physicians.

If the salaries of doctors fell to European levels it would mean a dividend for the middle class (in the form of lower health care bills) of close to $100 billion a year, almost twice the amount at stake in extending President Bush's tax cuts to the wealthy. There would be comparable gains from opening up law and other high-paying professions to people from the developing world.

The reason that globalization has put downward pressure on the living standards of the middle class is that it has been deliberate policy under both Republican and Democratic administrations to force middle class workers to compete with their low-paid counterparts in the developing world, while protecting the most highly educated workers from the same competition. The predicted and actual result of this policy has been an enormous upward redistribution of income.

A serious piece on inequality would have made this point. It also would have discussed other ways in which conscious policy decisions (e.g. greater legal hostility to unions) have resulted in upward redistribution, instead of telling readers it was all just the natural workings of the economy.

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written by skeptonomist, January 31, 2012 8:36 AM

Many physicians may belong to the 1%, but the 0.1% which has really gotten rich consists of capitalists and upper managers (who are usually capitalists because of the way they are compensated). When nations are brought into competition in a true free-market, profits should be reduced and leveled as well as wages. This has clearly not happened, because of the political ability of capitalists to restrict competition. Education has little to do with it - it's a matter of who has the money to influence governments.

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written by Ron Alley, January 31, 2012 9:46 AM

Dean,

When are you going to admit the obvious.

There is only one political party - the crony-capitalist Corporate Party of America. There are two wings, the Republican Right Wing and the Democratic Left Wing. The elected representatives of the Corporate Party of American compete for sponsorship from their cronies who control corporations and private wealth. Once they are elected, they trip over one another in their zeal to sacrifice the interests of the 99% who actually cast the votes and to serve the interests of the >1% who bankrolled their campaigns.

I realize this sounds shrill -- most inconvenient truths do.

Demand and prices.
written by Gerry Flaychy, January 31, 2012 10:51 AM

To reduce the pay of the most highly educated workers is to decrease the prices of services to consumers, thus increasing the quantity of money in the hands of these consumers so they can buy more of other things, and by there increasing production and employment.

This is another way of increasing the 'demand'.

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written by bmz, January 31, 2012 11:15 AM

"It also would have discussed other ways in which conscious policy decisions (e.g. greater legal hostility to unions) have resulted in upward redistribution, instead of telling readers it was all just the natural workings of the economy."

Absolutely: http://99percentmanifesto.blog...festo.html

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written by sherparick, January 31, 2012 12:02 PM

As Brad Delong says, the WaPo cannot go out of business fast enough. Of course with Politico around, there will be no lack of VSP concerns trolling for progressives and liberasl will continue.e

Labor Surplus and Competition Go Together Like Geese of a Feather
written by izzatzo, January 31, 2012 1:55 PM

Actually, the abundant supply of cheap labor could do much to make middle class workers wealthier if it were allowed to compete freely with the most highly educated workers in the United States.

Exactly. Entry level white collar jobs are no different than video gamers using their superior reflex skills to get a first job in the military flying multi-million dollar aircraft.

Other than a quick ramp up of similar skills for other white collar jobs all that's left is to choose your parents and a few rich friends and you'll be on the glide path of Guilded Golden Geese in no time.

Stupid liberals.

-1

@Ron
written by Kat, January 31, 2012 3:42 PM

There is only one political party - the crony-capitalist Corporate Party of America. There are two wings, the Republican Right Wing and the Democratic Left Wing. The elected representatives of the Corporate Party of American compete for sponsorship from their cronies who control corporations and private wealth. Once they are elected, they trip over one another in their zeal to sacrifice the interests of the 99% who actually cast the votes and to serve the interests of the >1% who bankrolled their campaigns.

Did you read the New Yorker article: The Obama Memos? The author claims that the gap between the two parties is too great (and that Obama underestimated this gap). If only! First I laughed. Then I fought the urge to chuck the magazine across the room. I certainly did not finish reading it.

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written by urban legend, January 31, 2012 11:11 PM

Why race to the bottom on even the professions? No other country does that, does it? How about not allowing the race to the bottom on any occupations? This constantly recurring suggestion of Dean's strikes me as preternaturally stupid -- give still more money away to other countries? The problem, too, is less with the professions than, besides reducing the progressiveness of taxation, the financial and corporate elites exploiting defective corporate governance processes to steal money from the system.

The countries that maintain high employment use industrial policies to do so. Let's stick to what these countries know, and every American political generation before Reagan knew, works, instead of doubling down on one-way free trade as Dean would have us do.

If We Don't Sell Anything, Then Foreigners Have Given Goods Away to Us
written by Dean, February 01, 2012 3:51 AM

Urban Legend,

the wages of professionals are a cost to everyone else. If they are paid less for their services, then living standards rise for non-professionals. They understand this, which is why they put non-college educated workers in direct competition with workers in the developing world. If we refuse to learn the trick and do the same to them, then we lose, end of story.
In terms of foreign trade, please think through the logic. If they just sell us stuff and never buy anything from us, then they lose. We can all hang out on the beach and give them pieces of paper for everything we need.

In the real world, they probably won't like this one. The dollar will fall, which will make some of our products competitive again. We will buy them ourselves and sell them to our trading partners.

Washington Post Gets Behind Republican Economic Agenda

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