Progressive Opinion

nytimes.com — Lately inequality has re-entered the national conversation. Occupy Wall Street gave the issue visibility, while the Congressional Budget Office supplied hard data on the widening income gap. And the myth of a classless society has been exposed: Among rich countries, America stands out as the place where economic and social status is most likely to be inherited. So you knew what was going to happen next. Suddenly, conservatives are telling us that it’s not really about money; it’s about morals. Never mind wage stagnation and all that, the real problem is the collapse of working-class family values, which is somehow the fault of liberals. But is it really all about morals? No, it’s mainly about money.

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brookings.edu — In a New York Times op-ed, Christina Romer, the former chair of President Obama’s Council of Economic Advisors, argues—contra her former boss—that there is no compelling justification for policies aimed at supporting U.S. manufacturing. She lays out and rejects a few theoretical justifications for supporting manufacturing, including the idea that there are large positive externalities—large social benefits relative to what private companies can capture—tied to the sector. Her arguments are unconvincing. Most important, there are large social benefits associated with innovation and manufacturing plays an outsized role in creating them. In so doing, manufacturing makes a disproportionate contribution to economic growth.

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prospect.org — The GOP presidential primary has offered some odd debates on who cares about the "very poor" and whether there should be a "safety net" or a "trampoline" to help people get out of poverty. Meanwhile, in Kansas, it seems Governor Sam Brownback is hoping to dig a bigger hole for the poor fall into. Between his tax plans and his approaches to school funding, Brownback's agenda overtly boosts the wealthy and makes things harder for the poor. While many liberals speculate this to be a secret goal, Brownback is hardly making a secret of his agenda.

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progressive.org — This week, conservatives will be gathering in Washington, D.C., to attend the Conservative Political Action Conference (CPAC). Dubbed “Mardi Gras for the Right” by one rightwing reporter, the three-day festival “celebrates everything conservatives hold dear, including free-market capitalism.” Conservatives hold Wisconsin dear, as two Republican Badgers are giving keynote speeches. Representative Paul Ryan from Janesville takes the stage Thursday night, while Governor Scott Walker addresses the crowd on Friday night.

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jaredbernsteinblog.com — As others have noted, conservatives who’d like bash the President on the economy are having an awfully hard time right now, as the recovery proceeds apace.  So, they’re stuck with “yeah, things are getting better, but if we were in charge, they’d be even better!” This, of course, is the flipside of a rap with which I’m intimately familiar: “sure, things are bad — but without our actions, they’d be even worse!” Neither are convincing to most people, because most people don’t engage in the economist’s counterfactual: the path the economy would have taken absent your interventions.  Thing is, I know and believe my counterfactual.  It comes from tried and true modeling based on the historical relationships of how advanced economies respond to stimulus. What I don’t get is their counterfactual. Other than unconvincingly waving hands, muttering how things should be better, how the EPA and OSHA rules are killing businesses, yada, yada — let’s see some analysis.

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newdeal20.org — Last week’s job numbers were generally positive. Now if those numbers pick up steam, if the housing market begins to recover, if Europe doesn’t sink the U.S. economy, if the situation in the Middle East and especially Iran doesn’t cause oil prices to spike, and if we don’t immediately disrupt government spending through premature austerity, we could see some major job growth in 2012.
What about those who still have a job? We focus on the unemployed for many good reasons. But the economy also has major problems for those with jobs. Personally, many friends of mine have discussed how they want to move on and quit their current jobs and were putting in the energy to find new ones. They’ve mostly failed and are taking it as a personal failure. Except it’s less a personal failure than a macroeconomic one.

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washingtonpost.com — The January jobs report — 243,000 jobs added — was greeted with widespread relief. The economists over at the Wall Street Journal were virtually giddy. The best news of the day was not just the upside surprise of the jobs numbers, but the reaction of President Obama. He joined commentators in hailing the good news: “the economy is growing stronger. The recovery is speeding up.” But he wasn’t proclaiming “recovery winter,” a reference to the ruinous White House plan to campaign on the recovery in the summer of 2010, after prematurely turning to deficit reduction in the State of the Union that year. Instead, the president greeted the jobs report by pushing for more action. “We must do everything in our power to keep it [jobs growth] going.” This stance is both good policy and good politics.

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epi.org — The Tax Policy Center’s new report on the distribution of tax expenditures strengthens the case for increasing tax progressivity and raising needed revenue by ending the preferential treatment of capital income (subject to a 15 percent tax rate versus a top marginal income tax rate of 35 percent). TPC’s analysis looks at seven broad categories of individual income tax expenditures: exclusions, above-the-line deductions, the preferential treatment of capital gains and dividends, itemized deductions, nonrefundable tax credits, refundable tax credits, and other miscellaneous tax expenditures. Guess which category of tax expenditure provides by far the most lopsided benefit to upper-income households?

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jaredbernsteinblog.com — I’ve always thought the national minimum wage is a lot more important than most people tend to think. By definition, it sets a floor on the low end of the job market, though to their credit, many states now set their minimums above the federal level of $7.25. Lots of low-wage workers and their families depend on it, and its long slide, as shown in the figure below, especially over the Reagan years, contributed to wage losses and working poverty for many who toil to this day in low-end services. Of course, when someone raises the idea of a raise, you hear a huge outcry from some in the business lobby. Such workers, they say, will now be “priced out of the labor market.” Yet, you hear the opposite from groups that represent low-wage workers interests, groups like the National Employment Law Project, or NELP (proud disclosure: I’m on their board). Hmmm…who you gonna believe?

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truth-out.org — The historical record shows that $3.4 trillion in Bush-era tax cuts, given mostly to business and investors, were not associated with job creation during his term. The U.S. economy, and taxpayers, paid $3.4 trillion to lose over 650,000 jobs. Three years later, in December 2011 and after another year's extension of the Bush tax cuts, there were about 109.9 million private-sector jobs. And still, Republicans continue to beat their broken drum that "tax cuts create jobs." The S&P-Fortune 500 largest corporations today sit on more than $2 trillion in cash, and they refuse to spend and invest it in America and create jobs here at home. If big banks and big business refuse to create jobs with their cumulative $4 trillion bailout cash hoard, then the government must tax it, take it back from them and directly create jobs itself.

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