Sometimes articles are so exasperating there is no sense in even attempting a response, but usually these don’t appear in the Wall Street Journal. Selection from Thomas Frank:
What has overtaken America’s working people is not a natural disaster like “globalization,” and not even some kind of societal atavism in which countries regress mysteriously to their 19th-century selves. This is a man-made catastrophe, a result that proceeded directly from the deliberate beatdown of organized labor and the wrecking of the liberal state.
It is, in other words, a political disaster, with tax cuts, trade agreements, deregulatory measures, and enforcement decisions all finely crafted to benefit one part of society and leave the rest behind. Few of the voters who gave Ronald Reagan his landslide victories, it is fair to say, intended for this to be the outcome. They wanted their country to stand tall again, certainly; they wanted the scary regulators off their backs, maybe; but I can recall no conservative who trumpeted those long-ago elections – or any of the succeeding contests, for that matter – as a referendum on plutocracy.
So let us have one now. Instead of pleasant talk about “change” and feats of beer drinking at the corner tavern, let us hear our candidates address this greatest issue of them all: What kind of country are we to be? A land of equality? Or a bankers’ utopia – where the law of the land has achieved mystical oneness with the higher law of classical economics, and devil take the bottom 80%.
So far as I can tell, the calamity discussed here owes entirely to the one statistic he thinks proves his case: the real hourly wages in the US for most workers has risen only 1% since 1979, where as the richest 20% of the country made more than the rest of the country combined. But perhaps we should consider how much less wages would have risen had the rich not permitted to become so, or maybe this is due not to the merciful loss of union’s grip on the economy but rather to such forces as inflation. And as for the supposed dismantling of the interventionist state and the “tax cuts” and de-regulation, well, I guess people are just happy to make up the reality that they want to see.
It’s true that the government policy is configured to help the rich and powerful of course but it is hard to see how putting government even more in charge of our economic lives is going to fix that. .
{ 10 comments }
It’s true that the government policy is configured to help the rich and powerful of course but it is hard to see how putting government even more in charge of our economic lives is going to fix that.
Now there’s an understatement. I tend to be less charitable. I suppose it is a character flaw of mine.
This sort of proposal is SO OBVIOUSLY a ploy to give more power to the already-powerful that I don’t see this sort of agitprop for more government as anything other than a cynical sham.
Any government program that is sold to voters as a means of helping the “little guy” will be co-opted. It is either a mechanism to benefit the State directly, or a means for the well-connected to obtain special favors from the State, or both.
I’m still working on “natural disaster like globalization…” First, don’t these types tend to think that natural disasters are good? Second, well, what?
“and the wrecking of the liberal state.”
Good riddance, then, to the “liberal” state.
As for wages falling, haven’t other benefits increased? Why do these faux-revolutionaries always fail to account for this? Their biggest problem is unequal increases in wealth, even if everyone is made richer (or at least, no poorer.) That is the true atavism.
Unfortunately I can’t remember any of the specifics, but there was a great deconstruction of this “inequality rising” stuff in…the WSJ a few months ago.
E.g. the guy argued that part of what is happening is that dirt poor people keep immigrating into the country. So if our (relatively) free market allows everybody to get richer over time, but really poor people keep coming in at the bottom, then over time you would see the type of statistics that people are throwing around to prove how unfair our system is.
Try Land of the Free?
I have to agree with Frank that wages aren’t growing as they should. Frank just has the wrong solution because he doesn’t understand the cause. The primary cause of slow wage growth is price inflation caused by monetary inflation. Nominal wages have grown quite a bit, but price inflation has grown faster. Price inflation transfers wealth from poor and middle class wage earners to the wealthy who receive the new money first and invest it in ways that protect them from the harmful effects of price inflation. In addition, price inflation and state regulation reduce the money that companies have for investing in new plants and equipment. Only new plants and equipment can raise worker productivity, which is the only way to raise real wages.
Not American, so just guessing – didn’t the immigration of tens of millions of Mexicans with low skills and education have an effect on impairing wage growth?
Miklos: “didn’t the immigration of tens of millions of Mexicans with low skills and education have an effect on impairing wage growth?”
You would think so, and I’m sure it has had some impact. but average wages began to rise in about 1990 and continued to rise until 2001, a period of very high immigration.
Miklos: “didn’t the immigration of tens of millions of Mexicans with low skills and education have an effect on impairing wage growth?”
You would think so, and I’m sure it has had some impact. but average wages began to rise in about 1990 and continued to rise until 2001, a period of very high immigration.
These people talk about “the rich” to stir up class hatred to encourage the distribution of wealth. But ironically, they desperately want to cling to the fiat money system that funds their programs. Yet, it is the rich who always benefit from this fraud while everybody else always gets stuck with inflation and debt.
Comments on this entry are closed.