[T]he Piketty-Saez data on income... show that the share of the bottom 90 percent in income excluding capital gains fell from 54.7 percent in 2000 to 50.4 percent in 2012. This means that the income of the bottom 90 is about 8 percent lower than it would have been if inequality had remained stable. Meanwhile, estimates of the output gap -- the extent to which our economy is operating below capacity -- are generally less than 6 percent. So in raw numerical terms, rising inequality has done more than the slump to depress middle-class incomes... [A] case for assigning... blame for the economic crisis to rising inequality... [goes] like this: high saving by the 1 percent, with demand sustained only by rapidly rising debt further down the scale -- and with this borrowing itself partly driven by inequality... leads to expenditure cascades and so on.As I said, he's thinking it through in real-time in the blog. But that is a bit more substance on the macroeconomics than the summary from the column, in which he confines his comments to this --
For the bottom 90 percent of families... impoverishment reflects both a shrinking economic pie and a declining share of that pie... [I]nequality is rising so fast that over the past six years it has been as big a drag on ordinary American incomes as poor economic performance, even though those years include the worst economic slump since the 1930s. And if you take a longer perspective, rising inequality becomes by far the most important single factor behind lagging middle-class incomes.-- and then to this --
[R]ising household debt helped set the stage for our economic crisis; this debt surge coincided with rising inequality... After the crisis struck, the continuing shift of income away from the middle class toward a small elite was a drag on consumer demand, so that inequality is linked to both the economic crisis and the weakness of the recovery that followed.But it is the impact of rising inequality and wealth concentration on our notionally democratic systems of governance that is the key to our ongoing crisis. Again, he has been talking about this in his blog a lot lately, but I think the formulations in his column are the most assured:
In the years before the crisis, there was a remarkable bipartisan consensus in Washington in favor of financial deregulation — a consensus justified by neither theory nor history. When crisis struck, there was a rush to rescue the banks. But as soon as that was done, a new consensus emerged, one that involved turning away from job creation and focusing on the alleged threat from budget deficits. What do the pre- and post-crisis consensuses have in common? Both were economically destructive: Deregulation helped make the crisis possible, and the premature turn to fiscal austerity has done more than anything else to hobble recovery. Both consensuses [ugh!], however, corresponded to the interests and prejudices of an economic elite whose political influence had surged along with its wealth... Washington, in the midst of a continuing jobs crisis, somehow became obsessed with the supposed need for cuts in Social Security and Medicare. This obsession never made economic sense: In a depressed economy with record low interest rates, the government should be spending more, not less, and an era of mass unemployment is no time to be focusing on potential fiscal problems decades in the future. Nor did the attack on these programs reflect public demands. Surveys of the very wealthy have, however, shown that they -- unlike the general public -- consider budget deficits a crucial issue and favor big cuts in safety-net programs. And... elite priorities took over our policy discourse... Underlying some of the backlash against inequality talk... is the desire of some pundits to depoliticize our economic discourse, to make it technocratic and nonpartisan... Even on what may look like purely technocratic issues, class and inequality end up shaping -- and distorting -- the debate. So the president was right. Inequality is, indeed, the defining challenge of our time. Will we do anything to meet that challenge?The "backlash" refers, of course, to the unexpectedly loud public squabble between Wall Street funded corporatist-Democratic think-tank Third Way in response to Democratic Senator Elizabeth Warren's increasingly effective economic populism, which has been echoed -- and not for the first time -- by public pronouncements by the President, to which Krugman alludes in his closing comments. The mainstream corporatist commentariat has been expressing cynicism about Democratic New York Mayor-elect Bill de Blasio's comparable economically populist public statements as well. Astoundingly enough, like the victorious de Blasio, Elizabeth Warren has gotten the better of Third Way in this contest so far -- which is to say that the corporatists have slunk back to their Criminal Dens and are plotting who knows what awful next move while Republican obstructionism ensures that Democrats cannot enact any of the popular and effective populist remedies Warren and the President propose, come what may. This is what is frustrating about Krugman's concluding gesture -- will we do anything?
Will We "Do Something"? It should be needless to say, but I will say it:
[one] the President has offered up his Jobs Bill to increase public sector employment and hiring thousands and thousands more to address our failing infrastructure and begin work on renewable energy and transportation infrastructure and the overwhelming majority of Democrats support that bill -- just asQuick caveats: To circumvent charges of Obamabotism and Poor Benighted Liberal Toolism, let me say, again, again, again, I am a democratic socialist feminist who advocates steeply progressive property and income taxes to fund universal basic income, healthcare, and lifelong education to maintain a legible scene of informed non-duressed consent to the terms of interpersonal commerce and the nationalization of public and common goods to overcome the structural violence of their exploitation and the inequitable distribution of their costs, risks, and benefits, not to mention an environmentalist who advocates the criminalization of pollution (including carbon pollution) and resource descent, and a queer feminist who advocates the most capacious imaginable defense of pro-choice politics connecting free safe abortion services, assistive reproductive techniques, an end to the racist war on drugs, to prosthetic/polycultural bodily self-determination within the contingent bounds of legible informed non-duressed consent and nonviolence. So, yes, I think there is more to be done than what I delineated above, but I actually think what most Democrats want to do is, well, pretty good and maybe is even enough to be equal to our present distress, and certainly is enough to set the stage for managing to do the more I would also like to do. Yes, I still believe with American socialist Michael Harrington that "the best liberalism leads toward socialism. I’m a radical, but... I want to be on the left wing of the possible." If you don't like that, fine, if you still think I'm a naif, fine, if you think your radicalism has better results than mine, show me or shut up about it. Also, by the way, I am far from denying the historical complicity of Democrats -- in especially their Clintonian phase, and let us hope another Clinton Presidency redresses those grievances rather than adding to their number -- in many of the catastrophic market fundamentalist experiments I mention above. But adjudicating the past is only useful to the extent that it mobilizes and shapes our response to our present distress. It pays to recall, in making this point, that it is only among Democrats that you will find elected protests and productive responses to these experiments nonetheless, that Republicans were and remain monolithic in the support of these catastrophes and actually demand their extension and amplification right here and right now, and, for what it's worth, it was New Deal, New Frontier, and Great Society Democrats who saved the world for these Republicans and corporatist Democrats to destroy in the first place.
[two] most Democrats support comprehensive immigration reform with a pathway to citizenship that would infuse the tax base with productive citizens presently informal, exploited, precarious -- just as
[three] Democrats want to preserve food stamp and unemployment benefits for the struggling and long-term unemployed which are not only indispensable to ameliorate the suffering of our fellow citizens but invest depressed areas of the economy with stimulative spending to insulate them from catastrophic failures that yield depressive multipliers and vicious circles incomparably more costly to address -- just as
[four] Democrats want to raise taxes on the wealthiest to pay for public investments in education and medical and other scientific research and infrastructure and jobs growth -- just as
[five] Democrats continue to support the Affordable Care Act which is shifting millions of the poorest and most precarious citizens onto the incomparably more cost-effective and healthcare-effective Medicaid system while regulating the worst abuses of the private insurance industry which, in edition to its many egregious immoralities, was causing a personal bankruptcy crisis and generating an unstoppable spiral of rising healthcare costs which were the greatest spur to long-term deficit growth (which is already reversing even before the ACA is fully implemented) -- just as
[six] (key) Democrats continue to defend the most stringent interpretations of the Dodd-Frank Wall Street Reform and Consumer Protection Act to end too big to fail banks, administer consumer protection watchdog agencies, and many advocate a direct response to the catastrophically failed market-fundamentalist experiment of bank deregulation by re-imposing the generationally effective New Deal's Glass-Steagall Act in addition to or at least to the extent of championing the Volcker Rule (yes, I know corporatist Democrats are among the ones dragging their feet and muting as many of these reforms as they can in the face of financial industry lobbying, but it remains true that Democrats are the only ones involved in the regulatory process who are still fighting for strong reform and that they are supported by many Democrats and almost only by Democrats and, best of all, by growing numbers of Democrats) -- just as
[seven] ever more Democrats are insisting that raising the taxable income cap and expanding Social Security benefits (via CPT-E or otherwise) will not only preserve for centuries this most popular and successful protection against poverty among the retired, injured, and disabled (readers know that I generally prefer the term "differently enabled" but I'll go with the conventional usage in the context of unemployment support) and protect millions from the catastrophically failed market-fundamentalist experiment of mostly worthless IRAs replacing generations of secure defined benefit pensions.
All that said -- Krugman's "Will We Do Something?" depends entirely on what he and me... and we... might mean by the "We." If the "We" is "We Democrats," say, then most of us have done and continue doing much of the "Something" that can conceivably be done and which might even amount to doing enough to succeed. If the "We" is "We Americans" through the collective recourse of activism, pressure, voting, mobilizing our imperfectly representative governing institutions, then of course the answer is that "We Will NOT Do Anything" and certainly not enough. Democrats have been proposing and supporting legislation to do all the things that could be done within the legible horizons of consensus American governance, and Republicans have and continue monolithically and absolutely to obstruct these efforts. Given the Republican majority in the House of Representatives and obstructive procedures available to the minority in the Senate (Republican abuses of these procedures are leading to their slow, reluctant, piecemeal dismantlement, as we all know) it is not possible to pass any of the measures Democrats are committed to, the implementation of which would save the economy, improve millions of lives and probably save no small number of them, and possibly save the world, or at any rate set the stage for America's partnership as an exceptionally rich and diverse and resourceful exceptional nation in a planetary program to build a more sustainable and equitable and diverse world.
Apart from continuing to advocate as clearly and concisely and relentless as we can for progressive (meaning: more sustainable, more equitable, more diverse) solutions in our activism, our teaching, our discourse, and by voting for Democrats -- always more, and better, Democrats -- there is nothing We Can Do. So do that.
So. Do. That.
I know it is a year away, but are you voting in the upcoming mid-term elections? The mid-terms could, but almost certainly will not, overturn Republican control over the House, and should, but rather terrifyingly might not, preserve Democratic control of the Senate... the results of which will entirely circumscribe the terrain of Administrative and government agency to fight for the Jobs Act and Immigration Reform and taxes on the wealthiest and all the rest? Are all the people in your family to whom you actually speak voting in the upcoming mid-term elections? Are all of your friends, classmates, neighbors voting in the upcoming mid-term elections? Are you capable of communicating the stakes of these elections in terms that will inspire them to vote for the Democrats or at any rate educate them to engage more critically with the deceptive and debased terms through which Republicans and corporatists of both parties communicate the issues that will be shaped by the upcoming mid-term elections? Do you have the money to support a Democratic candidate in a winnable district, or a particularly effective communicator of progressive ideas even in a presumably "unwinnable" district (if only the DNC itself understood better the long- and even medium-term educational, agitational, organizational force of such candidates!) -- or, lacking extra money in these terrible distressed and disastrous times -- do you have the time to make phone calls, knock on doors, register voters, sign and distribute petitions for progressive initiatives? Ever thought about running yourself? I write and teach now, but when I was younger there was no more rewarding thing in my life than the time I spent with a diversity of passionate activists working on issues that mattered to me. There are not only things to do, but things you can do. But, honestly, vote for the Democrats in the upcoming mid-term elections, and advocate as clearly and widely as you can that everybody do the same. I know it may seem hopelessly quixotic or unspeakably compromised -- but it is a doing that is almost surely available to you, a doing that is doing something that can lead to the doing of something more, possibly even the doing of enough to make doing even more possible. Do it, do it, do it.